Senate
5 November 1975

29th Parliament · 1st Session

  1. Senate
  2. 29th Parliament
  3. 1975

The PRESIDENT (Senator the Hon. Justin O’Byrne) took the chair at 10.30 a.m., and read prayers.

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PETITIONS

Loan and Appropriation Bills

Senator CAVANAGH:
Minister for Police and Customs · SOUTH AUSTRALIA · ALP

– I present the following petition from 1 3 citizens of Australia:

To the honourable the President and Members of the Senate in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth:

That we are fearful that any further delay by the Senate of the Loan Bill and Appropriation Bills will bring Australia into a constitutional, economic and social crisis, leaving indelible scars on our democratic institutions.

Your Petitioners most humbly pray that the Senate, in Parliament assembled, should proceed forthwith to allow passage of these Bills so that the government, legitimately formed by a majority of the. members of the people’s House (the House of Representatives) may proceed with its administration without further disruption.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Nursing Home Benefits

Senator GUILFOYLE:
VICTORIA

– I present the following petition from 443 citizens of Australia:

To the Honourable the President and Members of the Senate, in Parliament assembled. The Petition of the undersigned, respectfully showeth:

That the decision contained in the 1975-76 Federal Budget to increase nursing home benefits in three States only, New South Wales, Queensland and Western Australia, has placed Victorian patients into an impossible financial position.

Victorian patients are having to pay amounts ranging from $35 and up to $70 per week over and above the payment of the patients’ whole pension and the Nursing Home Benefit to receive appropriate nursing home care.

We also submit that the Federal Government’s intention to eliminate the differentials in Nursing Home Benefits between States, is an action contrary to the Labor Governments’ 1974 policy speech on Social Security Benefits and Welfare Services, delivered at the Fitzroy Town Hall on May 1 , 1 974 on which it was elected to Govern.

Your petitioners most humbly pray that the Senate, in Parliament assembled should:-

Increase the Ordinary Care Nursing Home benefits in Victoria to a level which will permit patients to meet the State Average Nursing Home fee, and retain $4.00 per week from their pension and

Continue to recognise the costs associated with the running of a Victorian Nursing Home in line with the Victorian State Government’s Regulation laid down by the Hospital and Charities Commission of Victoria

And your petitioners as in duty bound will ever pray.

Petition received and read.

Pensions

Senator BUNTON:
NEW SOUTH WALES

– I present the following petition from 100 citizens of Australia:

To the Honourable the President and Members of the Senate in Parliament assembled the Petition of the undersigned citizens of Australia respectfully showeth:

That the decisions of the Australian Government,

To depart from its 1972 election promise that basic pensions would be related to average weekly earnings and never be allowed to fall below 25 per cent thereof, and

To increase postage costs and the costs of installation and annual rental of telephones, will seriously add to the economic burdens now borne by those citizens who are wholly or mainly dependent on their pensions.

Your petitioners are impelled by these facts to call upon the Australian Government as a matter of urgency to review the abovementioned decisions (a) and (b), and to determine

That pensions be related to average earnings as promised by the Prime Minister in his 1972 policy speech, and

That no charge be made for installation or rental on the telephones of those pensioners entitled to a P.M.S. card.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Loan and Appropriation Bills

Senator McLAREN:
SOUTH AUSTRALIA

– I present the following petition from 269 citizens of Australia:

To the Honourable President and Members of the Senate in Parliament assembled: The Humble Petition of the undersigned citizens of Australia respectfully showeth:

That the Senate’s delay of the Loan Bill and Appropriation Bills will bring Australia into a constitutional, economic and social crisis, leaving indelible scars on our democratic institutions.

That the Senate should proceed forthwith to allow passage of these Bills so that the government, legitimately formed by a majority of the members of the people’s House (the House of Representatives) may proceed with its administration without further disruption.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Loan and Appropriation Bills

Senator DONALD CAMERON:
Minister for Science and Consumer Affairs · SOUTH AUSTRALIA · ALP

– I present the following petition from 383 citizens of Australia:

To the honourable the President and Members of the Senate in Parliament assembled: The Humble Petition of the undersigned citizens of Australia respectfully showeth:

That the Senate’s delay of the Loan Bill and Appropriation Bills will bring Australia into a constitutional, economic and social crisis, leaving indelible scars on our democratic institutions.

That the Senate should proceed forthwith to allow passage of these Bills so that the government, legitimately formed by a majority of the members of the people ‘s House ( the House of Representatives) may proceed with its administration without further disruption.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Loan and Appropriation Bills

Senator BROWN:
VICTORIA · ALP

– I present the following petition from 47 citizens of Australia:

To the Honourable the President and Members of the Senate in Parliament assembled: The Humble Petition of the undersigned citizens of Australia respectfully showeth:

That we are fearful that any further delay by the Senate of the Loan Bill and Appropriation Bills will bring Australia into a constitutional, economic and social crisis, leaving indelible scars on cur democratic institutions.

Your Petitioners most humbly pray that the Senate, in Parliament assembled, should proceed forthwith to allow passage of these Bills so that the government, legitimately formed by a majority of the members of the people’s House (the House of Representatives) may proceed with its administration without further disruption.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Loan and Appropriation Bills

Senator GIETZELT:
NEW SOUTH WALES

– I present the following petition from 35 citizens of Australia:

To the honourable the President and Members of the Senate in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth:

That we are fearful that any further delay by the Senate of the Loan Bill and Appropriation Bills will bring Australia into a constitutional, economic and social crisis, leaving indelible scars on our democratic institutions.

Your petitioners most humbly pray that the Senate, in Parliament assembled, should proceed forthwith to allow passage of these Bills so that the government, legitimately formed by a majority of the members of the people’s House (the House of Representatives) may proceed with its administration without further disruption.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Budget Bills

Senator GIETZELT:

– I present the following petition from 87 citizens of Australia:

To the Honourable the President and Members of the Senate of the Commonwealth of Australia in Parliament assembled the Petition of the undersigned citizens of Australia respectfully showeth:

That, in the matter of the approval by the Senate of Bills for Supply to the Australian Government, certain decisions and declared intentions of Senators of the parties of the Opposition in Parliament are placing in jeopardy the welfare and basic human rights of those citizens who are aged or disabled and thereby dependent upon pensions payable by the Australian Government.

Your petitioners are impelled by these facts to call upon all Honourable Senators to forthwith determine as a matter of urgency that approval of the Bills for Supply be no longer delayed in order that the Government shall continue to adequately provide for the welfare rights of Australian citizens.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Budget Bills

Senator KEEFFE:
QUEENSLAND

– I present the following petition from 22 citizens of Australia:

To the Honourable the President and Members of the Senate in Parliament Assembled. The humble Petition of the undersigned Citizens of Australia respectfully shows:

That we protest at the Opposition’s campaign to force a General Election by their decision to prevent the passage of Supply Bills.

Your Petitioners humbly pray that the Opposition will allow the passage of the Supply Bills and cease their campaign for a General Election forthwith.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Fraser Island

Senator STEELE HALL:
SOUTH AUSTRALIA

– I present the following petition from 37 citizens of Australia:

To the Honourable the President and Members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:

That whereas the natural environment of Fraser Island is so outstanding that it should be identified as pan of the world natural heritage, and whereas the Island should be conserved for the enjoyment of this and future generations, your petitioners humbly pray that the members, in Parliament assembled, will take the most urgent steps to ensure:

That the Australian Government uses its constitutional powers to prohibit the export of any mineral sands from Fraser Island; and

That the Australian Government uses its constitutional authority to assist the Queensland Government and any other properly constituted body to develop and conserve the recreational, educational and scientific potentials of the natural environment of Fraser Island for the long term benefit of the people of Australia.

And your petitioners as in duty bound will ever pray.

Petition received and read.

The Clerk:

– The following petitions have been lodged for presentation:

Loan and Appropriation Bills

To the Honourable the President and Members of the Senate in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth:

That the Senate’s delay of the Loan Bill and Appropriation Bills will bring Australia into a constitutional, economic and social crisis, leaving indelible scars on our democratic institutions.

That the Senate should proceed forthwith to allow passage of these Bills so that the government, legitimately formed by a majority of the members of the people’s House (the House of Representatives) may proceed with its administration without further disruption.

And your petitioners as in duty bound will ever pray. by Senators Wriedt, James McClelland and Mcintosh.

Petition received.

Loan and Appropriation Bills

To the Honourable the President and Members of the Senate in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth:

That we are fearful that any further delay by the Senate of the Loan Bill and Appropriation Bills will bring Australia into a constitutional, economic and social crisis, leaving indelible scars on our democratic institutions.

Your Petitioners most humbly pray that the Senate, in Parliament assembled, should proceed forthwith to allow passage of these Bills so that the government, legitimately formed by a majority of the members of the people ‘s House (the House of Representatives) may proceed with its administration without further disruption.

And your petitioners as in duty bound will ever pray. by Senators Mcintosh and Georges (3 petitions).

Petitions received.

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DAYS AND HOURS OF MEETING

Notice of Motion

Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

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

That, unless otherwise ordered, the times of meeting of the Senate next week shall be as follows:

1 ) Tuesday- 1 1 .30 to 1 p.m.; 2 p.m. to 6 p.m. Wednesday- 10.30 a.m. to 1 p.m.; 2 p.m. to 6 p.m. Thursday- 10.30 a.m. to 1 p.m.; 2 p.m. to 5 p.m.

2 ) That the sessional order relating to the adjournment of the Senate have effect at the terminating time each day.

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QUESTION

QUESTIONS WITHOUT NOTICE

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QUESTION

METHOD OF FINANCING GOVERNMENT OPERATIONS

Senator GREENWOOD:
VICTORIA

-Will the Leader of the Government in the Senate explain to the Senate and the people of Australia what are the claimed legal and constitutional means by which this Government proposes to hang on to power without the passage of Appropriation Bills? If not, will he explain why the Government keeps its procedures secret? Will he also confirm that the rumoured method of bank advances at the request of the Government will mean that bank advances cannot be honoured by the Government without the passage of the Appropriation Bills?

Senator WRIEDT:
Minister for Minerals and Energy · TASMANIA · ALP

– I indicated yesterday in general terms that the Government is considering ways and means whereby Government employees and suppliers of goods and services to the Government can be paid during the currency of the Opposition’s lunatic attitude towards the passage of the Appropriation Bills. Yesterday, the Prime Minister also indicated that negotiations are being conducted with the private banks in order to reach an arrangement whereby such a scheme can be put into effect. I am not in a position to say precisely what those arrangements will be. It is obvious that the broad concept of what the Government will be doing is quite apparent. It has also been said quite emphatically, and I restate it again, that whatever is done will be done legally, constitutionally and with the necessary authority of the Parliament.

Senator GREENWOOD:

– I wish to direct a supplementary question to the Leader of the Government in the Senate. If bank advances are used, how will the banks be repaid without appropriations by the Parliament?

Senator WRIEDT:

– That is a matter of advice which the Parliament will receive in due course.

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QUESTION

PROFITS AND PRICE INCREASES

Senator POYSER:
VICTORIA

– My question is addressed to the Special Minister of State. I draw his attention to an article by Kenneth Davidson in the Age of Tuesday 4 November, in which Mr Davidson said:

Even today, when the PJT (like the Government) understands the true role of profits and has taken a very permissive attitude to price increases, many firms have not felt able to increase their prices to the full extent allowed by the PJT.

Does the Minister agree that the Prices Justification Tribunal understands the true role of profits and, in so doing, has taken a ‘very permissive attitude to price increases ‘?

Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

-My Department has drawn to my attention the article to which the honourable senator has referred and in particular the passage that he has cited in his question. I think it is fair to say that it is perfectly true that the Prices Justification Tribunal understands the true role of profits. In fact, the Tribunal made clear in its annual report for the last financial year that its attitude is not to prevent companies from earning reasonable profits. However, the Tribunal’s report said also that it believes it has a significant role to play in examining the prices proposed by companies so as to satisfy itself that unreasonably high profits are not being made at the expense of consumers, and also that unnecessarily high costs either as a result of inefficiency or other unjustified reasons are not being passed into prices.

Senator Webster:

– What about the profits made by the Australian Postal Commission as a result of its increased charges?

Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

– I draw Senator Webster’s attention to a remark made by Sir Warwick Fairfax last week that if there is to be wage restraint there has to be prices restraint. In that respect the Prices Justification Tribunal is playing a very significant part in curbing inflation in this country. Continuing my answer to Senator Poyser, I suggest that it is therefore scarcely appropriate to apply the word ‘permissive’ to the approach that is being used by the Tribunal. As I indicated recently in answer to a question on food prices, there have also been cases in which the Tribunal, after careful examination of a proposed price increase, has found some increase to be justified but market forces have prevented the company concerned from charging the full increase that has been allowed by the Tribunal.

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QUESTION

THIRD PARTY INSURANCE

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA

– Is the Minister for Repatriation and Compensation aware that some sections of the community are firmly opposed to any proposal, under a national com-, pensation scheme, to replace third party insurance premiums with an additional excise on petrol and dieseline fuel? Does the Minister concede that vehicle users living in isolated areas and those engaged in business involving regular long distance travel would be considerably disadvantaged by such a scheme? Will the Government’s proposals include some form of concession to these groups?

Senator WHEELDON:
Minister for Repatriation and Compensation · WESTERN AUSTRALIA · ALP

-Last week I tabled the reports of the working parties which had been studying various aspects of the proposed national rehabilitation and compensation scheme. One of the matters which was dealt with very thoroughly in those reports was the proposed financing of the scheme. The working parties recommended that the existing compulsory workers compensation insurance premiums and the compulsory third party motor vehicle insurance premiums be abolished and replaced. They recommended a new levy on employers to replace workers compensation insurance and that motorists or owners of motor vehicles pay an impost on the price of petrol to replace the third party motor vehicle insurance premiums. If one studies the documents which were tabled it emerges that certain people living in country areas would not have the same relative advantages which they now have in respect of motor vehicle insurance when compared with people living in the cities. Nonetheless they will be better off than they are now. If one compares the rates of third party motor vehicle insurance premiums in the country with those that are payable in the city it will be found that there will be some people who will not benefit from the proposal but they will be very few, a microscopic percentage of the total.

Certainly the overwhelming majority of people in the country, although the relative position with regard to city motor vehicle users will not be preserved, will be considerably better off than they are now. That is to say, farmers living in an isolated area and running a car or a truck, as a result of a 5c or 6c levy per gallon of petrol will be paying considerably less than they are paying now, in almost every instance, for compulsory third party motor vehicle insurance. When one adds these facts to the lack of administrative expenses which are involved in a levy, which is a much more simple matter than the imposition of the compulsory third party motor vehicle insurance, I think it will be found that almost every farmer and almost every resident of an isolated area will be financially better off than he is at the present time.

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QUESTION

WELFARE INSTITUTIONS

Senator DEVITT:
TASMANIA

-Is the Minister for the Social Security aware that in Tasmania on Sunday last the President of the Handicapped Citizens Assistance Association, Mr John McNicol, stated that many social welfare organisations which rely on Government subsidies, such as sheltered workshops, hostels, staff, and so on, would be seriously affected by a shortage of Government funds brought about by the refusal of Opposition senators to pass the Budget Appropriation Bills and calling upon the Opposition to pass the Budget? Is he further aware that Mr McNicol said that these institutions have had to resort to bank overdraft, necessitating heavy interest burdens, and to other credit arrangements to enable their work to go on? Can the Government provide assistance by way of guarantees to these organisations or some other form of underwriting of their loan commitments in order to enable them to continue to perform their extremely valuable function in the community?

Senator WHEELDON:
ALP

– I have seen the reported statement of Mr McNicol, who is the President of the Handicapped Citizens’ Association of the ACT, in which he points out the plight of the sheltered workshops which are associated with his Association and in which he calls on the Opposition to pass the Budget. The position at the present time is that the Department of Social Security needs about $ 1 3 m by the end of this month to meet its commitments for subsidies for aged persons’ homes, aged persons’ hostels and for what Mr McNicol would be particularly concerned about- sheltered workshops and accommodation for handicapped people, also accommodation and services for homeless people. I have made a request to the Treasury for an immediate $6m and another $7m within 2 weeks. If the Treasurer is able to make this available it would cover the situation until the end of this month but not beyond the end of this month.

The money is needed to meet claims from the organisations which have entered into commitments following approval of their projects for subsidy. Many of the projects involve the building of new accommodation or facilities for people who are aged, homeless or handicapped. A review of the claims lodged by the organisations 2 weeks ago showed that the Department of Social Security could meet only half of the claims which had been received at that time. The $2!6m that was then available has been spread among the organisations on the most equitable basis possible, although of course this does mean that a number of the organisations are not receiving anything and that some of them are receiving much less than they would normally expect to receive. Advice from the Treasury as to whether it can make these additional funds available is expected this week. In normal circumstances, if it had not been for the action of the Opposition, there would have been no delays in providing for these funds.

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QUESTION

AUSTRALIAN AIRCRAFT INDUSTRY

Senator SCOTT:
NEW SOUTH WALES

-I ask the Minister representing i;he Minister for Defence: When did the Government receive the Industries Assistance Commission’s report on its inquiry into the Australian aircraft industry, and when will the report be tabled in Parliament? Are the report and the Government’s decisions on the report’s recommendations crucial to the future of thousands of workers in this industry?

Senator BISHOP:
Postmaster-General · SOUTH AUSTRALIA · ALP

– I think the question relates mainly to aircraft production and ought to be answered by Senator James McClelland. I do not have the information required and I do not think that Senator James McClelland has it either. But we shall get the information for the honourable senator.

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QUESTION

PORTUGUESE TIMOR

Senator MELZER:
VICTORIA

– In addressing my question to the Minister for Foreign Affairs I refer to the Minister’s reply to a question from Senator

Everett yesterday concerning the discussions in Rome between the Indonesian and Portuguese Foreign Ministers on the future of Portuguese Timor. In his answer the Minister indicated that he had not received formal advice on the outcome of the discussions. Can the Minister now inform the Senate whether he has any further information on these talks?

Senator WILLESEE:
Minister for Foreign Affairs · WESTERN AUSTRALIA · ALP

– Yes, we have received the communique. In summary, the outcome of the talks is quite satisfactory. The joint communique expresses the support of the Governments of Portugal and Indonesia for the ‘principles of decolonisation as enunciated in the pertinent resolutions of the United Nations’ and for the ‘scrupulous safeguarding of the principle of respect for the will of the people of Portuguese Timor’. The communique notes the 2 Foreign Ministers’ agreement that ‘fundamental responsibility for the decolonisation of Portuguese Timor’ lies with Portugal which is to pledge itself to the ‘speedy and orderly implementation of the act of self determination by the people of Portuguese Timor’. There was agreement on the ‘urgent need to restore peace and order in the territory so as to enable its people freely to decide their own future’. It was further agreed that there should, ‘at the earliest possible time’, be a ‘meeting between Portugal and all the political parties of Portuguese Timor’ aimed at ‘ending armed strife and bringing about a peaceful and orderly process of decolonisation’.

There was also agreement on the need to solve the problem posed by the presence of refugees in Indonesian Timor and by the holding of 23 Portuguese soldiers by UDT. The communique noted agreement that in the process of decolonisation it would be essential ‘to safeguard the legitimate interests of the countries of the region, particularly the interests of Indonesia as the closest neighbouring country’. The communique concluded with agreement that close co-operation and consultation between the Portuguese and Indonesian governments should be maintained.

The communique is a highly promising document. It encompasses the sort of principles and procedures which the Australian Government has hoped that the Portuguese and Indonesian governments would be able to agree upon. The Government hopes that the principles and procedures outlined in the communique will be put into effect as soon as possible, especially talks between Portugal and the Timorese political parties. I seek leave to table a copy of the communique.

The PRESIDENT:

-Is leave granted? There being no objection, it is so ordered.

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QUESTION

INDUSTRIAL DISPUTES

Senator SHEIL:
QUEENSLAND

– My question is directed to the Minister for Labor and Immigration. It arises from figures from the Australian Bureau of Statistics showing that Australia suffered 340 industrial disputes in July- the highest number for a year. Is it a fact that the disputes were related mainly to claims for increased wages? If so, do the July facts support the Government’s claim that wage indexation has encouraged wage restraint?

Senator James McClelland:
NEW SOUTH WALES · ALP

– I do not have the figures with me but I have seen some figures recently which would suggest that there has been an abatement of industrial stoppages and that the figures for the period referred to by the honourable senator are, in fact, lower than previous years. In any event, the conclusion which he attempts to draw, that wage indexation is somehow or other a failure, just will not stand up. Figures are available- I will supply them to the honourable senator- showing that the rate of increase in wages this year is far below that for last year. If, in fact, there have been stoppages by some sections of the unions in an attempt to break through the guidelines of wage indexation I can assure the honourable senator that by and large such attempts have not been successful. If there is one matter about which this Government is entitled to be proud, it is that it has in fact achieved a considerable abatement in the rise of wages this year.

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QUESTION

MARITIME UNIONS: ROYAL COMMISSION

Senator McINTOSH:
WESTERN AUSTRALIA

-I ask the Special Minister of State a question about the Royal Commission on Alleged Payments to Maritime Unions. I am aware that the Royal Commissioner, Mr Justice Sweeney, presented an interim report which dealt with payments and demands by maritime unions on foreign vessels entering into the Australian coastal trade under permit. In that report, Mr Justice Sweeney indicated that the Royal Commission would go on to examine demands and payments in respect of certain work claimed to be that of shore labour being performed by ships’ crews. I ask the Minister: What progress has been made on this subsequent inquiry and when can the Commissioner’s report be expected?

Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

– I am informed that the Royal Commission will conclude its public hearings shortly and that the final addresses of counsel are expected to be given to the Commission in Sydney about the middle of this month. Once these hearings are completed the preparation of the report will begin. I am advised that a considerable amount of evidence and other material has been gathered by the Royal Commission. I am also informed that the analysis of this information, the development of the report and its recommendations probably will take some time. In addition, His Honour Mr Justice Sweeney foreshadowed, in the interim report that has been tendered, that he would be looking further at several issues and would include comments and conclusions on those matters in his final report. This aspect has to be completed as well and I understand, therefore, that it will probably be some time in February next year before the report of the Royal Commission is presented to the Governor-General.

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QUESTION

NATIONAL COMPENSATION SCHEME

Senator MAUNSELL:
QUEENSLAND

– My question is directed to the Minister for Repatriation and Compensation. Will the Minister assure the Senate that benefits under any new proposal for a national compensation scheme will not conflict with existing Repatriation Act benefits to the disadvantage of repatriation pensioners?

Senator WHEELDON:
ALP

– I am not quite clear what Senator Maunsell means by his question. Certainly there would be no conflict between any benefits which were obtainable by people who suffered an injury or were born with a congenital disability after the date on which the new Act came into effect and in no way would it preclude any persons from receiving any repatriation entitlements which they are receiving now. Once the national compensation scheme is established there probably will need to be another look at the repatriation system in its entirety. As the previous Government acknowledged, there has been a necessity for some reassessment of the whole repatriation system which was why Mr Justice Toose was appointed some years ago to inquire into this matter. No doubt in due course we will hear what Mr Justice Toose suggests. As the Woodhouse Committee of Inquiry, which was appointed after Mr Justice Toose was appointed, has brought down its report; the report has been debated; a Bill has been presented to the Parliament; the Senate committee of inquiry has been held; and another Bill is being prepared for presentation to the Parliament, I dare say Mr Justice Toose has been able to find time to look at the possible impact which a national compensation scheme would have on the repatriation system.

One of the possible anomalies which was drawn to my attention when I was at the National Congress of the Returned Servicemen’s League last week was that people who were injured in the future- for example, if somebody became totally incapacitated- could well receive benefits in excess of the present totally and permanently incapacitated pension which is payable to incapacitated ex-servicemen. That anomaly, if it is an anomaly, would arise from that fact that T & PI servicemen are people who would have been injured before the date on which the National Rehabilitation and Compensation Act came into effect. It would seem to me that if there were to be some additional benefit given to veterans who are totally and permanently incapacitated this would involve some amendments to the Repatriation Act rather than any provision being made within the national compensation scheme itself and that is why it is important that we learn as quickly as possible what proposals Mr Justice Toose has. One of the reasons it is proposed that the National Rehabilitation and Compensation Act- I am assuming that it will become an Act in one form or another- would not come into effect until 1 July 1977 would be to give the Parliament sufficient time to look at the repatriation laws and make any amendments so that veterans who are disabled would not be relatively disadvantaged as compared with civilians.

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QUESTION

MARITIME INDUSTRY COMMISSION OF INQUIRY

Senator PRIMMER:
VICTORIA

– I direct my question to the Special Minister of State and it concerns the appointment of the Maritime Industry Commission of Inquiry 2 years ago. I understand that during this time the Commission has travelled overseas on 2 occasions. In view of the duration of the operation of this Commission, I ask: What has been achieved to justify the cost involved?

Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

– It is true, as Senator Primmer has suggested in his question, that the Commission has been operating for some 2 years. I remind the honourable senator that the Commission has already presented 2 reports. The first report dealt with training requirements for sea-going personnel and resulted in an announcement being made earlier this year by the Prime Minister that a maritime college would be established in Launceston. Legislation giving effect to that announcement was presented to the Parliament earlier this session. The second report dealt with navigational aids systems and it is currently under consideration by the Government. At the moment I have a submission to Cabinet on the matter. I understand that the Commission expects to report on its remaining terms of reference by the middle of 1976. To date, time has been spent in gathering and sifting information and in formulating views on the different terms of reference. As I have said to the honourable senator, 2 reports already have been presented. I am given to understand that the next six or nine months are expected to see the culmination of the Royal Commission’s work with the presentation of some four or five additional reports.

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QUESTION

PREMISES OCCUPIED BY MEDIBANK

Senator MARRIOTT:
TASMANIA

– My question is addressed to the Minister for Social Security. At page 2706 of the House of Representatives Hansard of 30 October in answer to a question the Leader of the Opposition, the Honourable Malcolm Fraser, was informed by the Minister in that place representing the Minister for Social Security, as follows:

All Medibank premises are leased; the Health Insurance Commission does not own any premises.

Will the Mininster inform the Senate who owns the building occupied by Medibank in Hobart? To whom is the rent paid? What is the annual rental?

Senator WHEELDON:
ALP

-Senator Marriott was good enough to let me know that he would be asking this question. As the honourable senator has said, the answer to which he has referred was given by Mr Stewart in the House of Representatives. In fact, I think that a similar answer was given by me in the Senate to a similar question. The building at 77 Collins Street, Hobart, which is occupied by the Health Insurance Commission Medibank- is owned by the Australian Government. It is not the property of the Health Insurance Commission. There is an annual rental of $62,000. This was previously payable to the Department of Services and Property whose role in this area has now been assumed by the Department of Urban and Regional Development. The Health Insurance Commission has shown some interest in buying this building. In order to see whether some successful negotiations can be made on this matter I have written to the relevant Minister proposing purchase of the premises during the next financial year and a reduced rental during the interim period. As at this stage, the premises are not owned by the Health Insurance Commission. They are rented by the Health Insurance Commission from the Australian Government.

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QUESTION

PRIVATE INQUIRY AGENTS

Senator MULVIHILL:
NEW SOUTH WALES

– I direct a question to the Minister for Police and Customs. What power does the Minister exercise over the operations of private inquiry agents in the Australian Capital Territory? What recognition is given to such Australian Capital Territory private inquiry operators in possession of either New South Wales or Victorian registration? Will the Minister ascertain whether senior members of the staff of the Deputy Leader of the Liberal Party, Phillip Lynch, had such registered credentials when they embarked on the pick up operation involving overseas financier Khemlani? Does the Minister feel that we can condone a private enterprise operation using a government car? Will he see, in regard to the latter contingency, whether the Minister for Administrative Services can have these individuals surcharged for this operation?

Senator CAVANAGH:
ALP

– My Department is not the licensing agent for private inquiry agents. But of course the Australia Police has a responsibility to inquire into any unlawful or improper conduct by inquiry agents, as it does in regard to any citizen. This could well bring this inquiry agency under the supervision of my Department. I do not think anyone claims that this was a proper exercise by an inquiry agency.

Senator Young:

– Will the Minister also inquire into Mr Clyde Cameron’s car being used by Khemlani when he was coming out here on visits? You want to be careful. There are photographs of Khemlani getting into that car at the Lakeside Hotel. Be careful.

Senator CAVANAGH:

– At the request of Senator Young we will make full inquiries as to whether it was a proper use of the car. I think that the whole business was a Gilbert and Sullivan comedy exercise which desperate men were hoping would bring forward something, but what it brought forward after all that was a statutory declaration, a copy of which I received only as I came into the chamber. From reading it, I think the thing which my Department must be interested in is the contradiction between what is stated in the statutory declaration and the statements made by Mr Karidis who was on oath when he appeared before the Senate. Obviously both statements cannot be correct when there is such a contradiction.

Senator Durack:

– Did you have a look at the document signed by Mr Karidis?

Senator CAVANAGH:

– Yes, I have copies of the document read out here by Mr Karidis. The noticeable thing about the statutory declaration is that Mr Khemlani states that he did not know until October that the authority to borrow had been revoked by the Australian Government.

Senator Guilfoyle:

– He did not get a letter from the Government revoking it.

Senator CAVANAGH:

– According to the statutory declaration, he did not know until October when he came here.

Senator Durack:

– Why did you not write and tell him?

The PRESIDENT:

– Order! We do not want this matter debated.

Senator CAVANAGH:

– I am querying whether Mr Khemlani ‘s statutory declaration is truthful. As there are contradictions between some of the statements he has made and the evidence given by Mr Karidis, it is of interest to my Department to find out who was in breach of his particular oath.

Senator Guilfoyle:

– But if you were taken around Adelaide would you not have some doubts too?

The PRESIDENT:

– Order! I ask Senator Cavanagh to answer the question which has been directed to him by Senator Mulvihill. Please disregard the interjections.

Senator CAVANAGH:

-There have been a lot of interruptions and I have a very weak voice. I cannot overcome the interjections. I am trying to tell Senator Mulvihill that my Department will have some interest in these conflicting statements which would suggest that Mr Khemlani is possibly in error on the question. It would appear that he claims that he did not know until October that the authority to borrow had been revoked when he was still discussing the borrowing of the loan with Mr Karidis on 2 September in Sydney. Mr Karidis did not advise him of that fact, and Mr Karidis was called before the Senate to answer questions on 22 July. So all of that questioning of Mr Karidis about Adelaide did not convey to him the impression, despite a definite question asked by Senator Hall in that regard, that the authority to borrow had been revoked. Discussions were continuing with Mr Khemlani on 2 September. So I think the fact that one of the statements is false is justification for a police inquiry and perhaps the calling for the AttorneyGeneral’s opinion in relation to our capabilities of enforcing the observance of our law on someone who comes here, makes a statement and then runs away.

page 1747

QUESTION

CANNING FRUIT INDUSTRY

Senator LAUCKE:
SOUTH AUSTRALIA

– My question, which is directed to the Minister representing the Minister for Agriculture, refers to the difficulties being experienced by the Australian canning fruit industry in meeting outstanding financial commitments to growers for fruit delivered in the 1975 season. Have discussions with industry leaders as yet led to determinations to meet this situation and also that in respect of the prospective 1976 crop? Is it governmental intention to ensure that all available apricots, peaches and pears in 1976 be processed, or is consideration being given to a mandatory reduction in the tonnage to be processed? When will an announcement be made to the industry in clarification of these matters?

Senator WRIEDT:
ALP

- Senator Laucke has raised this matter before. I cannot add much more to what I told him a fortnight or so ago. It is true that the canned fruit industry is in considerable difficulties, primarily in New South Wales, Victoria and South Australia. The position is essentially one of over-supply. This is not new. It has been with us for years. The previous government had the same problem as we have now and as we have had for 3 years. That problem relates to the need for loans and grants to the canners to enable them to pay the producers. The problem arises simply because the market over a long period has not been able to provide the returns to producers and canners that are necessary in order to make this a profitable operation.

I am not aware of the current position as to an announcement concerning assistance again this year. I indicated in earlier replies that the Australian Industry Development Corporation is studying the quite comprehensive proposal for rationalisation of the canning fruit industry in order to make it an economic proposition, in which it would not need government subvention on a fairly continuing basis as has been the case for many years. As to the precise position in respect of any plans that Dr Patterson may have to provide further assistance again this year, I will have to find out that information from the Minister. I vail provide the honourable senator with the up to date information.

page 1747

QUESTION

TELEPHONES: ASSISTANCE TO DEAF PEOPLE

Senator DRURY:
SOUTH AUSTRALIA

– Has the PostmasterGeneral seen an article in a weekend newspaper which referred to a device being developed by Datatronics to assist deaf people to communicate over the telephone system? Is the Australian

Telecommunications Commission aware of these developments?

Senator BISHOP:
ALP

– The Australian Telecommunications Commission has been in touch with a firm called Datatronics. It has discussed the new device which is a unit that is a small keyboard similar to that of a typewriter and an electronic display unit which at any one time can display a message of 6 words to 8 words and provide a communication medium for deaf people. We have been told by the manager that his firm proposes to submit the system to various government departments with a view to getting some assistance for users of these units. At present, the Telecommunications Commission does not have the device for examination or approval but it expects that it will receive these units within a few months’ time.

page 1747

QUESTION

RACIAL DISCRIMINATION

Senator BONNER:
QUEENSLAND

– My question is directed to the Minister representing the Prime Minister or the Minister for Foreign Affairs, whoever is appropriate. I refer to the International Convention on the Elimination of all Forms of Racial Discrimination. I ask: 1. Has the 27th instrument of ratification referred to in article 19 of the Convention been lodged with the Secretary-General of the United Nations? 2. If so, on what date was the 27th instrument lodged? 3. If not, how many have been lodged? 4. Has Australia lodged its instrument of ratification pursuant to section 7 of the Racial Discrimination Act?

Senator WILLESEE:
ALP

-I ask Senator Bonner to put his question on the notice paper and I will get the details for him.

page 1747

QUESTION

BUSHFIRE CONTROL

Senator WALSH:
WESTERN AUSTRALIA

– My question is addressed to the Minister representing the Minister for Defence. Can the Minister supply any further information relevant to the question that I raised last month as to the possibility of using the Australian Army Reserve unit stationed in Kalgoorlie for bushfire control?

Senator BISHOP:
ALP

– I have a full answer from Mr Morrison. Perhaps I could best serve the substance of Senator Walsh’s question by quoting the substantial parts of that answer. The Minister has advised:

As I indicated in the Parliament, it is Government policy to allow greater use of the Defence Force in natural disasters. To the extent that it proves practical for them to be available this also applies to the Army Reserve, some elements of which for example assisted in Darwin in March 1975 after cyclone Tracy.

Consideration is therefore being given to amending current legislation to allow greater use of reserves for natural disasters and civil emergencies. However, the actual requirement to utilise reserve units will naturally be dependent on the adequacy of the other means available.

The advice goes on: in the event of a major national disaster, and when the resources of the regular components of the Armed Services are inadequate to support State Emergency Services to the extent required, it would seem useful for the Government to have the power to make reserves available.

In respect of the question raised about the local issue, the advice states: it would not be normal policy to expect that the Army Reserve unit at Kambalda-Kalgoorlie would be made available for bush fire fighting duties in that area.

page 1748

QUESTION

DIFFERENTIAL PAY RATES: AUSTRALIAN DEFENCE FORCES

Senator MISSEN:
VICTORIA

– My question is addressed to the Minister for Labor and Immigration. Is the Minister aware of a differential of up to 25 per cent in rates of pay for men and women in the Australian defence forces? Is the National Committee on Discrimination in Employment and Occupation consulted in the formulation of rates of pay for members of the Services? If not, why not? Has the Department of Labor and Immigration been involved in any studies of the usefulness or work value of women in the defence forces?

Senator James McClelland:
NEW SOUTH WALES · ALP

– I was not aware that the discrepancy is as large as that suggested by the honourable senator. I will refer the matter to my colleague the Minister for Defence and I will have my Department make an intensive study of the facts as alleged by the honourable senator. I will let him have a considered reply.

page 1748

QUESTION

THIRD PARTY INSURANCE

Senator EVERETT:
TASMANIA

– I direct my question to the Minister for Repatriation and Compensation. Is the Minister aware of the announcement today that third party insurance premiums in Tasmania are to rise by over 70 per cent, that is, from $35 per annum to $60 per annum? Is this a further indication that the existing system is moving inexorably to extinction and must be replaced by a proper alternative?

Senator WHEELDON:
ALP

– I have seen the reports of the increase in premiums for compulsory third party insurance in Tasmania, a State which had the record of having the lowest third party insurance premiums in Australia. The increase follows very closely upon an increase of, I think, over 50 per cent in compulsory third party insurance premiums in Western Australia, another State which had a relatively good record compared with a number of the eastern States, apart from Tasmania, so far as these premiums are concerned. This is a pattern which is being found throughout both of the major fields of compulsory insurance- third party motor vehicle insurance and workers compensation insurance -both of which have reached an almost desperate level. In fact, so far as workers compensation insurance is concerned, a number of enterprises have contemplated closing down because they are unable to afford to pay the premiums. The pattern is marked in both of these fields.

I would agree with the proposition put forward by Senator Everett that there has to be some radical change in the basis of compulsory insurance for personal injury which is found at present in motor vehicle third party insurance and workers’ compensation insurance. I believe . that Australia is faced with a position that in the very near future there is likely to be a collapse of both of these systems and it is essential that they should be replaced by some more rational system. In fact, earlier this year, Mr Lewis, the Premier of New South Wales, although subsequently he seems to have changed his mind, called for some sort of national compensation scheme to get his Government Insurance Office out of the difficulties it was in with workers compensation insurance. I believe that the proposed national rehabilitation and compensation scheme is the most proper and suitable means of overcoming the ever-increasing difficulties of insurers throughout Australia in both of these fields, which are of vital importance to all Australian people.

page 1748

QUESTION

DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA EMBASSY

Senator SIM:
WESTERN AUSTRALIA

– I direct my question to the Minister for Foreign Affairs. In view of considerable public speculation about the recent departure of the Embassy of the Democratic People’s Republic of Korea from Canberra, will the Minister inform the Senate of the reasons for the Embassy’s removal and the attitude to it of the Australian Government? Has he received any reports that the embassy has left unpaid debts behind in Canberra? If he has, what action is being taken to ensure that Australians are not financially disadvantaged by the departure of the North Korean diplomats?

Senator WILLESEE:
ALP

-On the morning of Thursday, 30 October 1975, officers of my Department learned by chance that the staff of the Embassy of the Democratic People ‘s Republic of Korea were travelling to Sydney by a commercial flight and that they were to leave Australia by an international flight at 1 p.m. on the same day. No explanation or communication of any kind was received from the DPRK Embassy until the following day when 2 Notes were received addressed to the Department of Foreign Affairs. One purported to give reasons for the withdrawal of their Embassy. The Government regrets the unsubstantiated and baseless assertions which have been made by the Government of the DPRK. These have been formally rejected by the Australian Government. The second Note assigns responsibilities in regard to the DPRK property to another embassy.

The DPRK Embassy’s Note and actions do not amount to severance of relations. This is also the view of the DPRK. We are, of course, making further inquiries, including inquiries regarding the status of our Embassy and staff in Pyongyang. I do not think that it is appropriate to make further comment on that except to say that our Embassy reports all is normal in Pyongyang. Mr President, I seek leave to incorporate in Hansard the reply that we sent to the DPRK in answer to those notes.

The PRESIDENT:

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

AUSTRALIAN NOTE OF 3 NOVEMBER

The Australian Embassy presents its compliments to the Foreign Ministry of the Democratic People’s Republic of Korea and has the honour to refer to the Note No. 843 of 30 October sent by the Embassy of the Democratic People’s Republic of Korea to the Australian Department of Foreign Affairs advising the withdrawal of the Embassy of the Democratic People’s Republic of Korea from Australia.

The Australian Embassy is directed to advise that the Australian Government rejects the statements in paras 3 and 4 of the Embassy of the Democratic People’s Republic of Korea’s note of 30 October and denies that the Australian Government has adopted an unfriendly attitude, committed intolerable provocative acts, or imposed any restraints of a nature which would have prevented the Embassy of the Democratic People’s Republic of Korea from performing its functions as a diplomatic mission.

The Australian Government expresses surprise and regret that the Embassy of the Democratic People’s Republic of Korea should make allegations which are untrue and inconsistent with the friendly relations existing between Australia and the Democratic People’s Republic of Korea.

The Australian Government also regrets that the Embassy of the Democratic People’s Republic of Korea was withdrawn without prior notice of any kind, contrary to customary international practice.

The Australian Embassy avails itself of this opportunity to renew to the Foreign Ministry of the Democratic People’s Republic of Korea the assurances of its highest consideration.

Senator WILLESEE:

– To deal more specifically with the second part of Senator Sim’s question, I have to say that my Department has not received any formal advice which would indicate that the DPRK Embassy left behind any unpaid accounts. No retail establishments or other enterprises have made any formal approach to my Department concerning debts owed by the Embassy. Perhaps Senator Sim may be referring to a question answered by Mr Crean in the other place yesterday. In answering a question in the House of Representatives regarding the DPRK’s external trade relations, Mr Crean said:

I think it is well established that North Korea does face serious balance of payments problems. There have been one or two instances of difficulties involving payment to Australian exporters. Those matters have been taken up within my Department -

That is Mr Crean ‘s Department- in an endeavour to secure a satisfactory solution. Nevertheless the balance of payments situation is acute and, I believe, deteriorating in North Korea.

page 1749

QUESTION

NATIONAL APPRENTICESHIP ASSISTANCE SCHEME

Senator COLEMAN:
WESTERN AUSTRALIA

-Is the Minister for Labor and Immigration aware of the problems which have been caused, particularly in country areas, by the announcement of the termination of the living away from home allowance for apprentices under the National Apprenticeship Assistance Scheme? In many cases these allowances have meant the difference between trade training or unemployment for young people from the country. Can the Minister advise the Senate of any steps that his Department is taking to assist young people from rural areas who wish to take up apprenticeships?

Senator James McClelland:
NEW SOUTH WALES · ALP

– I am aware of the concern which has been expressed following the Treasurer’s announcement in his Budget Speech which was:

Allowances available to first and second year apprentices living away from home under NAAS -

That is the National Apprenticeship Assistance Scheme- are to be terminated in 1975-76. This is estimated to yield a saving of $2.7m.

Although I accepted the need for reductions in the rate of government expenditure in the context of the overall Budget strategy of reducing inflation, I was concerned that this reduction could cause considerable hardship, especially for young people from country areas serving apprenticeships in cities. Employment prospects for school leavers from the country who wish to train in apprenticeship trades have been kept under close review by my Department. In the light of my Department’s advice regarding possible hardship for country apprentices if their living away from home allowances are phased out, I raised this matter, subsequent to the presentation of the Budget, with my colleague the Treasurer to see whether the allowances could be retained. I am pleased to advise the Senate that the Treasurer has agreed with my submission that the living away from home allowance be retained. Eligible apprentices will continue to receive the allowance of $12.50 a week for first year apprentices and $5 a week for second year apprentices. I had directed my Department to continue processing claims pending the review of this matter. I had also directed my Department to see whether commensurate savings in expenditure could be made in other areas. It is a measure of this Government’s concern for the future of our young people that this form of assistance, the living away from home allowance for country apprentices, is to be continued. I will be making a more detailed announcement on this matter in the near future. In the meantime, school leavers or apprentices who feel they may be eligible for the allowance should make application through the local office of the Commonwealth Employment Service.

page 1750

QUESTION

GOLD

Senator DURACK:

– My question is directed to the Minister for Minerals and Energy. I refer to the question which I asked him last week concerning the plight of the gold mining industry in Western Australia and the particular problem of Kalgoorlie. I refer to the likely retrenchment of many workers and the wide scale unemployment in that town. Has the Government considered the matter further? Does it intend to do anything to assist in the matter?

Senator WRIEDT:
ALP

-The Industries Assistance Commission has reported on the production of gold in Australia. I think any fair reading of that report would indicate that there are very serious economic problems for the gold mining area of Kalgoorlie in Western Australia. The Government is obliged to consider that report, and it is currently awaiting an interdepartmental committee report. I understand from my colleague Senator Douglas McClelland that the report will be available either today or tomorrow. I understand that notices are being issued to about 400 workers at Kalgoorlie Lake View Pty Ltd today.

Senator Durack:

– Today is the last day.

Senator WRIEDT:

– I understand that they are being issued today and that a fortnight’s notice is being given. Whether or not those notices will be issued I could not say, but it is my understanding that they will be. The Government realises that there would be some social consequences in Kalgoorlie if this number of workers was dismissed from the mine. However, there have been dismissals in the past and there have been made redundant from the industry workers who have been absorbed into other activities.

Senator Durack:

– Not on this scale.

Senator WRIEDT:

-It is true that this is a larger scale, but the Government has to consider the overall consequences of the economic viability of the industry. There are problems in the industry, as I am sure Senator Durack is fully aware. I cannot give any more definitive answer until such time as the report of the interdepartmental committee has been considered. I have discussed the report with Senator Douglas McClelland this morning, and I am hopeful that by having that report either today or tomorrow I will be in a position to put a recommendation to Cabinet, probably on Monday.

page 1750

QUESTION

ASSISTANCE TO MIGRANTS

Senator GRIMES:
NEW SOUTH WALES

– My question is directed to the Minister for Social Security. I refer the Minister to the article in the Australian on 3 1 October by Professor Sackville entitled ‘Poverty and The Law’ in which the professor is reported as drawing attention to the difficulties of people who cannot speak or read English when they apply for social security benefits. Professor Sackville also drew attention to the shortage of interpreting facilities in State and Federal departments. Can the Minister inform the Senate of the steps taken by his department to ensure that migrants have a clear understanding of their social security entitlements?

Senator WHEELDON:
ALP

-The Department of Social Security has been aware of the problems which Senator Sackville has illuminated. He has been much more aware of them than many of us were previously.

Senator Poyser:

– Professor Sackville, not Senator Sackville.

Senator WHEELDON:

-Professor Sackville, I am sorry. I apologise to him. One thing we have been doing is dealing with the matter of printed publicity.

Senator Baume:

– You will be making him a Minister next.

Senator WHEELDON:

– I suppose he is sort of between a senator and a Minister. The Department has been preparing pamphlets and booklets and publishing advertisements in the various foreign language publications, of which there are now quite a lot in Australia. Seven publications in 1 5 different languages used by immigrants in Australia are now in the course of production. As well as that we have introduced the system of having welfare rights officers whose role is to spread as far as possible amongst all residents, including those people who do not speak English, advice as to their rights under the various social welfare laws of Australia. Something which has been extremely successful has been the telephone interpreter service, which is now operating in Sydney, Melbourne and Perth, lt operates 7 days a week. Services are given in over 100 languages and dialects and I think, as I have been able to inform the Senate in previous answers, the service has been used very widely by people in those cities where the telephone interpreter service has already been established. We hope to be able to extend the telephone interpreter service to the other State capitals and also to various provincial cities.

I think it is worth commenting on the fact that Professor Henderson did say in his report that steps have already been taken by some administrationsnotably the Department of Social Security and the Department of Labor and Immigration- to disseminate literature and to advertise through the Press, radio and television in Australia in. order to sell social services to the public through a wide range of media and to ensure that people know of their entitlements and where to get further information when they need to do so. Despite those kind words from Professor Sackville I do not believe that anything like sufficient has been done. This Government does believe that we should have a plural society and what we have done already we admit to be only the first step towards seeing that all of those people who live in this country will be entitled to the rights to which they should be entitled, will be able to receive assistance to which they are entitled and will be able to understand what they are being told through being able to deal with officers who can speak the languages that are of the countries of their origin.

page 1751

QUESTION

JACKSON COMMITTEE REPORT

Senator WRIGHT:
TASMANIA

– In addressing my question to the Minister representing the Minister for Manufacturing Industry I read the first few words of the Jackson Committee report that was published last week:

Australian manufacturing industry is in acute financial crisis. Unemployment is high. Factories are running below capacity. Many firms have borrowed to the hilt, with capacity under trust deeds and credit standing eroded.

I ask the Minister whether he has ever read a more melancholy report with regard to manufacturing industry. Insofar as 3 important contributories to that depressed situation of industry are taxation, tariff and high wage costs, all of which are the direct responsibility of government, will the Minister make a comment as to steps that the Government proposes to take to improve the position?

Senator James McClelland:
NEW SOUTH WALES · ALP

– Yes, I would agree with the comment just cited by the honourable senator that the picture of manufacturing industry in this country is indeed a gloomy one. It did not start yesterday or last year, however. The picture of manufacturing industry in this country has been of declining use of resources over a period of some eight to ten years. The cures are manifold and I think are pointed to by the report from which the honourable senator quoted. Certainly I think there is room for some reform of the taxation scale to provide some relief to manufacturers along the lines suggested by the Mathews Committee. 1 would have liked to see some such relief given in this year’s Budget but I was persuaded that, for a variety of reasons, it would not be possible to give the sort of relief that may have been desirable.

I think that tariffs present a much more complicated picture than is often realised. I think, in fact, that a lot of Australian industries over a lengthy period have been over-protected. This has contributed to inefficiencies which are now endemic in our manufacturing industry. Of course, an enlightened tariff policy is part of the program of upgrading the efficiency of manufacturing industry. However, recent experience with the 25 per cent tariff cut shows that this has to be approached probably more gradually and with complementary measures than was attempted by this Government. I think that we can learn important lessons from the partial failure of the 25 per cent tariff cut. I hope that these lessons will be taken to heart by governments in the future.

I certainly would agree that the wages explosion of last year contributed greatly to the erosion of the profits of manufacturing industry. Of course, it is notorious that this Government has attempted to do something to prevent a similar wages explosion this year. It has espoused not the total cure, not the panacea, but the expedient of wage indexation in an attempt to confine wage increases to rises in the cost of living and it is having some success. The figures show that the ratio of profits to wages and salaries which deteriorated so drastically last year against the entrepreneurs is, to a large extent, being reversed this year. In short, I would agree with the honourable senator that the picture of manufacturing industry was in the recent past and still is a melancholy one and one from which none of us can take any comfort. I hope that the measures which the Government has taken are beginning to have effect and that the coming year will be a brighter year for manufacturing industry than the last one was.

page 1752

QUESTION

PORTUGUESE TIMOR

Senator GIETZELT:

– My question is directed to the Minister for Foreign Affairs. I refer to the communique which was issued from Rome yesterday and which was received by the Government. I refer also to the reply he gave to a question asked by Senator Melzer today. Is the Minister satisfied that Portugal will now accept its responsibility to the Timorese people and will immediately provide aid and technical assistance to that country? Is the Minister prepared, following his statement made in the Senate last Thursday, to offer facilities in Australia for talks between the Portuguese Government and the parties in Portuguese Timor? In these circumstances, does the Minister believe that the Indonesian involvement in the various incursions in Portuguese Timor at Batugade, Balibo and Maliana should now cease?

Senator WILLESEE:
ALP

– The first part of the honourable senator’s question asks for my opinion as to how Portugal may behave following the signing of the communique. I do not think 1 am in a position to express an opinion. It is dangerous to offer gratuitous opinions which may be praiseworthy or which may in time prove to be wrong. In any event, a Minister should not be asked for opinions in this place. The honourable senator asked whether the Australian Government is prepared to offer facilities in Australia for talks to be held between the relevant parties. I repeat what I said the other day. If the parties involved desire such talks to be held in Australia we would certainly make a venue available to them. In relation to the question asked about the various incursions at Batugade and Balibo, I do not want to add anything at this stage. I made a comprehensive statement last Thursday. I do not want to be a hindrance in this matter; I want to be helpful and I do not want in any way to upset talks that may take place. I believe I ought not add to the summing up I gave last Thursday.

page 1752

AUSTRALIAN AGRICULTURAL COUNCIL

Senator WRIEDT:
Minister for Minerals and Energy · Tasmania · ALP

– For the information of honourable senators I present the resolutions of the ninety-third meeting of the Australian Agricultural Council held in Canberra on 4 August 1975.

page 1752

MUSEUMS AND NATIONAL COLLECTIONS

Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

– For the information of honourable senators I present the report of the Committee of Inquiry on Museums and National Collections including the report of the Planning Committee on the Gallery of Aboriginal Australia.

page 1752

MOTOR VEHICLES-IMPORT RESTRICTIONS

Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

– For the information of honourable senators I present the report of the Industries Assistance Commission on motor vehicles- import restrictions. Due to the limited number available at this time reference copies of this report have been placed in the Parliamentary Library. Printed copies of the report will be distributed to honourable senators as soon as they become available.

page 1752

AUSTRALIAN TOURIST COMMISSION

Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

– On behalf of the Minister for Tourism and Recreation, pursuant to section 29 of the Australian Tourist Commission Act 1967-74, I present the annual report of the Australian Tourist Commission for the year ended 30 June 1975.

page 1752

BROADCASTING

Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

– On behalf of the Minister for the Media, for the information of honourable senators I present the report of the working party on broadcasting. Due to the limited number available, reference copies of this report have been placed in the Parliamentary Library.

page 1752

DECENTRALISATION

Senator CAVANAGH:
South AustraliaMinister for Police and Customs · ALP

– For the information of honourable senators, I present a volume of studies commissioned by the Committee of Commonwealth-State Officials on Decentralisation.

page 1753

AUSTRALIAN HERITAGE COMMISSION BILL (No. 2) 1975

Motion (by Senator Cavanagh) agreed to:

That leave be given to introduce a Bill Tor an Act to amend the Australian Heritage Commission Act 1 975.

Bill presented, and read a first time.

Ordered that the Bill may be taken through all its stages without delay.

Second Reading

Senator CAVANAGH:
South AustraliaMinister for Police and Customs · ALP

– I move:

In the debate: in the Senate on the Australian Heritage Commission Bill on 5 June 1975 I gave an undertaking from the 2 Ministers involved that they would, at the earliest possible time, introduce an amendment requiring the Commission ‘to consider and report to the Minister on the circumstances in which compensation should be payable to persons affected by action to conserve the national estate, the nature of the compensation and the method of determining the compensation’. The Bill now before the Senate honours that undertaking. 1 commend the Bill to the Senate.

Debate (on motion by Senator Carrick) adjourned.

page 1753

QUESTION

DELEGATION FROM THE NORTHERN TERRITORY LEGISLATIVE ASSEMBLY TO BE HEARD BEFORE THE BAR OF THE SENATE

The PRESIDENT:

-Is notice of motion No. 18 formal or not formal?

Senator Webster:

– Formal.

Senator Poyser:

– Not formal.

Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

– Not formal.

page 1753

LEAVE OF ABSENCE

Motion (by Senator Withers)- by leaveagreed to :

That leave of absence for the period of one month be granted to Senator Field.

page 1753

APPROPRIATION BILL (No. 1) 1975-76

page 1753

APPROPRIATION BILL (No. 2) 1975-76

Restoration to the Notice Paper

Debate resumed from 4 November on motion by Senator Wriedt:

That, notwithstanding anything contained in the Standing Orders, the Order of the Day for the Second Reading of the Appropriation Bill (No.1) 1975-76 and the Order of the Day for the Second Reading of the Appropriation Bill (No. 2) 1975-76 be now restored to the Notice Paper and that they be Orders of the Day for a later hour this day.

Upon which Senator Cotton had moved by way of amendment:

Leave out all words after ‘That’, insert-

the Senate having considered Message No. 392 of the House of Representatives- rejects the assertion made in paragraph (a), rejects the allegation made in paragraph (b), and asserts that, as to the matters contained in paragraphs (c) and (d), the true position is given in the Senate Resolution as communicated to the House of Representatives in Message No. 279.

That the foregoing Resolution be communicated to the House of Representatives by Message. ‘

Senator WHEELDON:
Western AustraliaMinister for Social Security and Minister for Repatriation and Compensation · ALP

- Mr President, the debate on this matter yesterday was rather enlivened by the presentation of some statutory declarations to the Senate by Senator Withers. The honourable senator very carefully said that he did not vouch for the truth or for the falsehood- although it may have been easier to do the latter rather than the former- of the matters contained in those declarations. It seems, from reading the Press, as one of my colleagues has pointed out, that the declarations have been written off like a bad debt. They follow an endless sequence of manoeuvres which the Opposition has pursued in order to remove a democratically elected Government from office. Ever since we have been in office we have been told- we have been well aware of it- that we are under threat. Owing to manoeuvres which have taken place outside the Senate even the original number of 29 honourable senators which we had following the election and which we gained owing to the idiosyncrasies of the electoral laws of this country has been reduced. Although in the last Senate election we polled some 200 000 votes more than our opposing parties, we received less than a majority in this place. We have been in the position of not being able to carry out government; we have had office but we have not had government. We have not been able to pursue many of the programs on which we were elected and for which the Australian people voted for us.

Despite that the Opposition parties have been determined to see that this Government will not even remain in office. Those efforts reached their culmination last year when the Opposition forced a double dissolution of both Houses of the Australian Parliament which resulted in a repudiation by the Australian people of the tactics which the Liberal and Country Parties followed and the return of this Government to office for a second time within 1 8 months. Now the Opposition is pursuing the same tactics. Even the gallup polls which are published in the Sydney Bulletin, which seem notoriously to show a certain bias, whether intentional or otherwise, against the Australian Labor Party, indicate that the percentage of the Australian people who are supporting this Government is galloping ahead while the percentage of the Australian people who support the defunct parties which sit opposite us is falling like the leaves of autumn.

Along with that we see the most curious of all events. The Leader of the Opposition (Mr Malcolm Fraser), having achieved that high office only recently, now has the approval of only 29 per cent of the Australian people. Here is somebody who has been elected to the leadership of the Liberal Party- admittedly he has attained that high office by stepping over innumerable corpses- coming into that position at a time when there is a world-wide economic recession and when there is inflation and unemployment in this country. There is every reason why even the most popular and the most efficient government should be held in some sort of disrepute, as has been shown in the case of the Government of Helmut Schmidt, for example, in West Germany. There would be no more efficient, no more dedicated government in the world, but even it has been suffering defeats in various provincial elections and by-elections which have been held in that country and which followed of necessity from the dissatisfaction which people feel when there are inflation and unemployment. They naturally blame the government rather than blame the system which has created that state of affairs.

But despite having all of those things going for him, despite the fact that he had a honeymoon period as Leader of the Opposition- one would think that he would still be enjoying that nuptial bliss- we find that the Leader of the Opposition has fallen to a record low of approval at 29 per cent. Why have his stocks so declined? Why have the stocks of the Opposition parties so declined? They have declined because the Australian people realise that so enthusiastic, so neglectful, and so insensitive is the Opposition to the feelings of the Australian people and the democratically expressed will of the overwhelming majority of the Australian people that it is prepared to come at anything in order to get back on to the Treasury bench.

Since we have been in office we have been told about an endless series of scandals. Before the last double dissolution we heard about the Gair affair. The unfortunate former senator Gair was once the toast of Toorak. I do not think they would ever actually invite him to dinner; they might have had a shock if they did. But he was the toast of those people because he, along with his colleagues in the Democratic Labor Party, kept them in office for many years and gave them their majority in the Senate. No sooner was he appointed to an office representing this country in the Republic of Ireland, a country for which I feel the greatest affection, than Senator Gair was immediately wiped off by the Opposition. The Opposition said that the appointment of this man, whom it had revered and at whose feet it had sat for so many years receiving sage words of advice, was a scandalous one and that Senator Gair should never have been sent to represent this country abroad, whereas it was quite happy to allow Senator Gair to exercise quite inordinate influence in the conduct of the affairs of this country.

Then we have the so-called loans affair, which is one of the most involved, complex and confusing matters which has ever afflicted this Parliament. The confusion has largely come from the fact that it has been almost impossible to work out what it is that the Opposition has been saying. It has said a great many things and it has said them over and over again. Sometimes it has varied them and sometimes it has changed them. A photocopy of the passport of Mr Khemlani has been produced to the Senate. He seems to have been coming and going with remarkable rapidity. He would seem to be the Urdu version of the Flying Dutchman. But his travels, his peregrinations, it would seem, would not be very much greater than those of the members of the staff of Mr Lynch and of Mr Lynch himself. They have also been travelling backwards and forwards advising us in a manner reminiscent of the end of an episode of one of those serials which used to be shown at the Saturday afternoon matinees and which I attended as an unathletic adolescent. Here is the hero in danger but will he be snatched from disaster? The Opposition has kept on warning us of revelations to come but so far we have received no revelations. Although the scandal is apparently still going on, the Opposition has decided to change the scandal.

For a while it was the ACTU-Solo Enterprises Pty Ltd scandal. The ACTU-Solo scandal seems to have been a very unscandalous scandal because we have not heard much about that recently. Senator Greenwood made various representations to a royal commission. With what effect he did so, one does not know. Then there was another alleged scandal that Mr Hayden had given some information of a confidential nature to Mr Hawke, the President of the Australian Council of Trade Unions. That was a very sensible step towards achieving the co-operation of the trade union movement. He provided that information in the same way as he provided certain information to various State Premiers, including quite bitter opponents of this Government such as Mr Bjelke-Petersen. That was an issue for a few days, but the Opposition seems to have dropped the discussion which took place between Mr Hayden and Mr Hawke.

Then only last week Mr Khemlani returned and made a sort of a Dick Tracy foray into the national capital, flitting from hotel to motel accompanied by his legal adviser and 8 suitcases full of documents which were perused by various eminent legal men who belong to the Opposition parties. As a result of wading through all of those documents the unfortunate Mr Ellicott Q.C., who must well regret the day that he took down his shingle and came into this place, said that there was nothing which seemed to involve the Prime Minister (Mr Whitlam) in any of this affair. He was then brought down to Canberra and given additional riding instructions. He then said that maybe there was and maybe there was not. His taciturn solicitor colleague, Mr Howard, who was apparently instructing him on these matters, has preserved a manly silence throughout. I think that nothing more whatsoever has been heard from Mr Howard who also had the painful task of sifting through these 8 suitcases full of documents.

As a result of all that we were presented yesterday with a stack of statutory declarations. One was from a very colourful and picturesque figure, a Mr Alan James Crawford. Most of the characters who seem to have been involved in this episode have had rather chequered careers, to put it mildly. Mr Crawford, it may well be remembered, is a very versatile person. He conducted a pirate radio station in England. He was prominent in scientological circles. In addition to that, one of his more significant coups in the world of business was to sell to certain unsuspecting Americans tickets for the first flight to the moon. I think that the statutory declaration which he gave to Senator Withers and which was tabled yesterday would have about as much redeemable value as a ticket on the first flight to the moon. From a perusal of the statutory declaration which Mr Crawford has allowed us to read one finds that very little light is shed on anything in particular. In fact, one would only be more confused than ever if one were to read it all.

However, there is a declaration from Mr Khemlani. I had often thought that there was very little in this talk about the inscrutible orient, but there are inscrutible oriental statutory declarations because it is very hard indeed to follow what point Mr Khemlani is trying to make other than that something was up somewhere. He goes on at considerable length about telexes which have been passing backwards and forwards between all sorts of people, and about mysterious meetings in the middle of the night with high government officials. Mr Karidis, who so distinguished himself before this chamber only a few months ago and who apparently was present with Mr Khemlani when this mysterious nocturnal meeting took place, informs us that what Mr Khemlani tells us is not true. Mr Khemlani has left the country, but he does say some interesting things in his declaration. One thing particularly attracted my attention. My attention was attracted to page 56 of the statutory declaration by Mr Khemlani because it would seem from reading that page that some Ministers receive preferential treatment over others. Mr Khemlani referred to a conversation which he alleges he was having with Mr Connor. Let me quote first from paragraph 160 on page 55 of the statutory declaration. I would like to read this because it is entertaining in a sort of Sexton Blake way. It goes as follows:

So I came to Canberra -

That has a Biblical ring about it: . . and, after registering at the Canberra Rex Hotel, went to Mr Connor’s office at Parliament House. Mr Connor was of course expecting me. The only persons present at the conference were Mr Connor, Mr Karidis and myself. We discussed again the matter and I told the Minister at his request all the information that I had conveyed to Sir Lenox. The Minister said he was very happy and then went on to say, ‘If the confirmation comes we need the Prime Minister to stand by so we can send the formal acceptance immediately.’

I am not quite clear what that means. But it is apparently what Mr Connor was alleged to have said. The statutory declaration continues:

He then said to me, ‘What time do you expect the acceptance to come?’ I said, ‘It could come any time from 9.00 to 5.00 London time.’

He was apparently still suffering from jet lag:

Mr Connor then said, ‘Well I had better phone the Prime Minister right away and tell him that the confirmation should come any time from 9.00 to 5.00 London time and request him to stand by.’

Apparently the Prime Minister was going to remain riveted in an upright position for 8 hours, London time, waiting for the confirmation to come. The statutory declaration continues:

He said, ‘1 think 1 had better also request him to have the Governor-General, Sir John Kerr, standing by also in case we need him.’

Senator Primmer:

– To repel boarders or what?

Senator WHEELDON:

-Yes, to repel boarders, it sounds like; but I do not think by that he means boarders at the Canberra Rex Hotel. According to the declaration, Mr Connor continued:

I also better get the Prime Minister to have the Governor of the Reserve Bank standing by too.’

It sounds like the Russian Army awaiting the charge of the Light Brigade. The statutory declaration continues:

Mr Connor then used his telephone and dialled a number -

That is not an unusual practice for someone who is using a telephone:

  1. . and said, ‘This is Connor here, put me through to the Prime Minister. ‘

My word, there is a man of decision. Mr Khemlani is awake up. He recorded all of this. He was not going to let one word go unrecorded. As the statutory declaration states:

This is Connor here, put me through to the Prime Minister.’ Mr Karidis and myself then got up and went outside the door -

As opposed apparently to going outside the window; they went outside the door, not the window.

  1. . into the next office. We closed the door -

That was awfully discreet of someone who is not always discreet:

  1. . and I noticed that the light had come on above the door.

One might have thought that that was the beatific vision, but it was not. He continues:

I had noticed this light previously- 1 think that this text stands on its own merits without any interpolation. The statutory declaration states:

I had noticed this light previously and I knew from prior experience -

What sort of prior experience, he does not tell us:

  1. . that that light was always on whenever he was speaking to the Prime Minister or to any other Minister.

I was rather hurt. That is what attracted my attention. I have a very dull and pedestrian office. When I am talking to the Prime Minister, any other Minister or anybody else, no light comes on. I wondered why this preferential treatment was being given to Mr Connor. He is a man for whom I have the greatest respect, but I could not see why he should get a light if I did not get a light. I also wondered what the significance of the light was unless possibly during some period of crisis messages could be sent in Morse code. The statutory declaration says:

I had noticed this light previously and I knew from prior experience that the light was always on whenever he was speaking to the Prime Minister or any other Minister. About tcn of fifteen minutes later -

I think the ‘of should be ‘or’: . . he called us back into the room. He said, ‘Everything has been arranged, the Prime Minister is very happy’.

The Prime Minister is always very happy. I do not know why he comments on that. The Prime Minister has a great deal to be happy about when he can look at the Leader of the Opposition (Mr Malcolm Fraser). Who would not be a happy Prime Minister with a Leader of the Opposition like the one that Mr Whitlam has to face. The statutory declaration continues:

You had better go back to your hotel and have a rest and come back about 4 o’clock’.

This does not specify whether this is Canberra time or London time. The declaration continues:

We then left Mr Connor’s office and Mr Karidis and 1 went back to my hotel. I then telephoned London and spoke to Mr Kumar and Mr Derenpont of Dolmac Consultants. I told both of them to let me know immediately if there were any problems or any difficulties whatsoever.

I merely mention those extracts because this seems to have been a very significant moment when these conversations were taking place and the Prime Minister was very happy. I have since made inquiries, mainly, as I say, out of envy because I do not have any lights which come on when I am talking to anybody. I discover that there are no such lights at all which come on. In fact, I have had inquiries made and I am told that there are some lights. I will admit that. But I do not have these lights. There are 3 lights on the wall of the outer office now occupied by Mr Lionel Bowen and which used to be occupied by Mr Connor. They show whether the Minister or either of his secretaries is on the telephone, but they do not show to whom the Minister is talking, whether it is the Prime Minister, any other Minister or anybody else. All they show is that somebody is using the telephone; they do not show whether the caller is talking to the Prime Minister.

I would not want to take up the time of the Senate discussing these flashing lights and what the flashing lights are supposed to show, whether they are on port or on starboard, or whether they are standing by or not standing by. I only mention the matter because it is part of this piffling document with which the Leader of the Opposition insulted the intelligence of the Senate by laying it before us yesterday. I believe that the document has been treated with contempt by anybody who has had an opportunity to have a look at it and that it ought to be treated with contempt.

Mr President, it is a shameful state of affairs that the business of the nation is brought to a standstill because of statutory declarations from a scientologist who sells tickets for the first trip to the moon and somebody else who tells us of flashing lights which indicate whether Mr Connor is talking to the Prime Minister. The Opposition, through its irresponsible actions and through its lunatic actions which have been repudiated by an increasing number of the Australian people and by an overwhelming majority of the Australian people, is grasping at any excuse in order to seize government. In fact, we even find the most comical situation now of the Leader of the Opposition in the other place as he finds himself sinking deeper and deeper into the mire saying that if we will have an election some time before the middle of next year he will let the Budget go through. What an extraordinary thing to say. First of all he said that the Budget was a tragedy and should not be passed. Now he says that he will pass the Budget. Then he says there is a crisis and that there is such a crisis that the Government has to be removed immediately. Now he say that it is only a sort of crisis; it is a crisis which the Opposition Parties will allow to jog along for another 8 months until May or June of next year.

I put it to you, Mr President: Can we really take these people seriously? Can we take them any more seriously than the great public outside takes them? Are they any more than jokesrather malevolent jokes but nonetheless jokesand the sort of people who in order to go through this ludicrous charade are prepared to take steps which will deprive the pensioners of this country, the public servants of this country and the people who are living in sheltered workshops of those moneys to which they are entitled? These the sort of people we have facing us. They are prepared to hold up the business of this country, to jeopardise the economy of the country, to jeopardise the defence of the country and to jeopardise the whole democratic structure of this country, all because of some information or alleged information which is obtained in these ludicrous documents including statements about flashing lights, London times, and the Prime Minister, the Governor-General and the Governor of the Reserve Bank all standing by.

Mr President, Opposition members have shown to all of us as they have shown to the Australian people what a bankrupt collection of mountebanks they are. The Australian people have repudiated them in the same way as they repudiated them last year when they forced this country to a double dissolution and in the same way as ultimately they will repudiate them when in good time, in accordance with proper constitutional conventions, this Government does go to the people. Then the Opposition Parties will get their answer. Then they will see just what the Australian people think of those who would be prepared to prostitute Parliament by presenting this piffle as an excuse for not allowing a democratically elected government to carry out the business of the country.

Senator SCOTT:
New South Wales

- Mr Deputy President, I rise to support the attitude of the Opposition to the Appropriation Bills. In listening to Senator Wheeldon ‘s quite humorous contribution, one or two things appeared to me to be somewhat strange. In view of his certainty of the performance of his Government and also in view of his analysis of the polls, which have so thrilled him, it seems strange that Senator Wheeldon prefers to sit in his seat in this Senate and not go out and obtain the benefit of the extraordinary advantage that he asserts he has today in the Australian electorate. I am sure we all thought at one stage that he may well have thrown the documents aside and produced pure poetry. He was tremendously close to doing that.

Senator Wheeldon found the whole of the Khemlani papers, or the parts that he read, extraordinarily amusing. I merely make the point that this man whom Senator Wheeldon found so amusing, this man whose production brought almost poetry from his lips, is the man that the honourable senator’s own Government had provided as its man to seek loans of $4,000m. I think it is a quite remarkable turn of events that in the Senate we should find Senator Wheeldon being intensely amused at the performance of that man and attempting to ridicule him, being intensely amused by the man who is his own operator. If that is the case, surely the Minister is throwing some sort of shadow over the Government itself for appointing and dealing with these sorts of shady characters in shady places all around the world. Senator Wheeldon asserted that Mr Khemlani had claimed that the Prime Minister (Mr Whitlam) was standing by while these negotiations were going on; that even the GovernorGeneral was standing by. I was very impressed with that. But I did notice that the Loan Council was not standing by, and it seems to me somewhat amazing, from a government that is so concerned with the constitutional issues of the day, that the Loan Council, which the Government obviously was circumventing on the strange assumption that 20 years was a temporary period, was not standing by in this crucial moment.

I believe that the action the Opposition has taken in the debate on the Appropriation Bills is the responsible exercise of its powers in the Australian Parliament. Today as never before there is a very crucial role for the Senate to play. Today, after 3 years of socialist government in this country, the immensity of the gulf that divides the philosophies of the two major political entities is apparent to the entire Australian population. In that circumstance the role of the Senate as the people’s brake, as the people’s area of restraint on the House of legislature, is far more crucial than it has ever been in the history of this country. I believe that it is a responsible exercise of the Senate’s proper power and of the people’s brake that the Opposition should adopt the attitude and take the action that it has. Let me say that in this circumstance responsibility applies not only to the Opposition. It applies to the Opposition quite clearly in this area because the Opposition is prepared and must be prepared to face the judgment of the people when it acts as a restraining force on their behalf. If it seeks to bring a government to the people, then obviously the Opposition has to accept the responsibility involved. But there is also a responsibility on the Government in this issue, in this crisis. It has been called a crisis by many people- differing crises surely- but in this crisis the responsibility on the Government must be immense.

It was Senator Georges who said that the simple solution to the crisis- the word comes up constantly- is for the Opposition to pass Supply. In a sense that would be a solution, but it would be a very short-term solution. It would not be a solution that would satisfy the Australian people because the crisis surely must be relevant to the Government’s performance. That is how the crisis arose. The crisis has not just become what it has been intimated to be- a constitutional or conventional crisis. It is a crisis that is totally relevant, I believe, to the performance of the Government. There would be no question of the Senate Opposition taking this sort of action if indeed the Government had been performing in a way which ensured that the economy of this country improved constantly, or was holding its own in terms of world economics. The crisis that the Opposition seeks to solve by asking the masters of the Government, the people, to give judgment is directly relevant to the performance of the Government itself. I believe that we should not be led astray, we should not be led off the track, by assuming that the solution lies purely in the area of Mr Khemlani or in the area of a constitutional or conventional issue. The crisis is relevant to the performance or lack of performance of the Government itself.

The Senate, through the Opposition, exercises its proper power of restraint, its proper power of review, on behalf of all the people because it, as well as the House of Representatives, is a people ‘s House. It has a different structure, it has different objectives, but nevertheless it has a proper and significant part to play in the parliamentary structure of this country as a people’s brake, as a people’s restraining force. It is because the Prime Minister finds that the Senate seeks, through the constitutional powers that it possesses, to refer the performance of this Government to its masters, the people, that his reaction now is quite different to his reaction only 18 months ago, quite different to the action that he advocated in this Parliament for many years. The Prime Minister now suggests that he will set out to smash the powers of the Senate. That is his answer to the parliamentary crisis that confronts Australians. He seeks to smash the powers of the Senate, to make it a rubber stamp, a useless chamber in this parliamentary system. The mass of people in Australia recognise in the Senate the only source of braking power that they have on any government, whether it is extreme right or extreme left. It is the people’s source of braking power; it is their source of restraint. I do not believe that the people are going to accept as a solution to the problems that confront us today the suggestion of the Prime Minister that he will now set out to smash the powers of the Senate.

At this point, of course, deferral is the proper course, for it only remains for the Prime Minister to take the action that he took 1 8 months ago, and has recommended on many occasions as the proper action, for the Supply Bills which have been laid aside to be passed forthwith. So deferral is the correct attitude at this point, and it only remains for the Prime Minister to continue the course of action that he promoted actively in 1974, and indeed promoted through debate in the House on various occasions, when he said that if a government is defeated in the Parliament on a major taxation Bill it should resign. That is exactly what the Prime Minister did in 1974. We heard this morning the exuberance of Senator Wheeldon at the results of the opinion polls which he has been reading. Thus, it is difficult to follow the reasoning of the Prime Minister, when suddenly he decides that he will not take that former line of action, but rather that he will take another line of action, which is that he must smash the power of the institution that has made it possible that he may well have to face his masters. It has been properly said that whilst a government is prepared to face the people- its masters- then and then only is democracy safe; then and then only is democracy not at stake. These are the circumstances that apply today.

Let me say very briefly that I believe there is no doubt as to the Senate’s power to take the course of action which it proposes to take in these circumstances. People with political views and backgrounds as far apart and as totally divorced as Sir Robert Menzies, Mr Justice Murphy and, indeed, Mr Whitlam have indicated that they believe that the powers of assent and veto of the Senate are the same as those powers in the House of Representatives. So there we have authorities who, although basically of differing political philosophies, are agreed that the power that is exhibited by the Opposition in the Senate today is a proper, meaningful and necessary power.

Senator Cavanagh:

– There is nothing to say that a government has to resign.

Senator SCOTT:

– No, except its recognition of the course of action that would be considered to be the normal and proper course of action in this circumstance of a deadlocked Parliament. If the Government were responsible it would accept the circumstance of deadlock and seek properly to overcome it. The deadlock could be overcome properly by the Government presenting itself to the people.

Besides the views of Mr Justice Murphy, Sir Robert Menzies and Mr Whitlam, we have the view of Quick and Garran, the interpreters of the Constitution, the view of Mr Odgers in his book Australian Senate Practice, and the views of a number of professors of law, of prominent Queen’s counsel and of many other people interested in the constitutional circumstances of this country. In all these views there is a strong consensus that the sort of power that is being used by the Senate today is a proper and responsible power to use on behalf of the Australian people. In what other way could there be a check on a government- no matter what the government called itself- that may be careering in any of half a dozen different directions? I believe it is important that I should remind the Senate that there is a great measure of responsibility in the Opposition talcing this course. The burden of its decision, as I intimated earlier, must ultimately lie with its capacity to be proven by the people to have done the fit and proper thing. Ultimately it is for the people to decide whether the circumstances which have promoted this action and this crisis are circumstances which were properly recognised and assessed by the Opposition on behalf of the people for whom it operates as a braking force.

In reference to that matter, may I say that this action has occurred in Australia in the Federal scene only once- in 1974. It has occurred in State circumstances on 2 occasions. They were in 1947 and 1952 when the Upper House in Victoria, through the rejection of a money Bill, forced the Parliament of that State to the people. Incidentally, the money Bill was rejected on one occasion by the Liberal Party in opposition in the Upper House and on the other occasion by the Labor Party in opposition in the Upper House. On both occasions it is significant to note that the action and the views that were taken by the Upper House were confirmed by the people at the elections. I know that Government supporters will say, perhaps with some measure of reason, that this was not the case in 1974 when once again the Opposition in the Federal Parliament forced the Government to the people. Indeed, I would be the first to admit, and why would I not admit, that the Government was returned to power.

But in fairness, let us face the circumstances and measure those circumstances. I suggest that the Government was returned to power with a reduced majority from nine to five, which has now been reduced further to three, in the House of Representatives and was unable to gain control of the people’s house of review- the Senate, the people’s brake on legislature. The Government was unable in the circumstances to gain control of that House. Consequently, it was confronted as a result of the 1 974 election with the possibility- indeed, the ultimate probabilityof a deadlocked Parliament. Surely that sort of re-election should have been accepted by a responsible government as a real measure of reflection on its performance and as an indication that the Government had better take considerable heed of its policies and attitudes and sharpen up its performance. If this was not a measure of stern warning then I fail to interpret the result of an election which saw a government returned with a lesser majority in one House, and being unable to control the house of review. So I believe that even the 1974 circumstance should have held for the Government a real measure of warning and should be regarded by Australians as the proper exercise of a responsible Opposition in the house of review.

I said earlier that the crisis that confronts us is a crisis that is relevant to the performance of a government. We can forget in some measure about constitutional issues which are virtually settled and agreed to by all sides. We can forget, if need be, about the evidence that was tabled in this place only yesterday, although it does seem extraordinary to witness, as we did yesterday, the total objection of the Government to the tabling of those documents which Senator Wheeldon saw fit only to ridicule this morning. If, indeed, those documents were only a source of humour, why on earth did the Government attempt to continue to block their presentation in this place?

I turn to perhaps some matters that have created this crisis. I refer to matters that are relevant to the performance of the Government, because that is what it is all about. That is why the crisis has arisen. That is why a responsible Opposition has seen fit to take this quite desperate action on behalf of the people it represents. We, too, in this chamber are a people’s House. I remarked only the other day about an article in one of the leading newspapers in which the Prime Minister had referred to trumpery charges and phoney scandals referable to the Khemlani affair. If they were trumpery and phoney they were referable to the Government’s man, Mr Khemlani. They were trumpery and phoney enough for Mr Whitlam to cut down yet another of his senior Ministers.

How can the Australian people have confidence in a government which has shown the sort of internal instability of personnel that has been the history of this Government, including 3 Deputy Prime Ministers in 3 years and the sacking of 2 Acting Prime Ministers? I will not go through the whole story, but I repeat, 3 Treasurers in 3 years. With the performance of the present Treasurer in revealing the Budget details to a man of considerable commercial enterprise, Mr Hawke, five or six hours before it was revealed to the Parliament, it must surely be a possibility, if the bottom of the bucket has not already been scraped, that the Treasurer could well be in some measure of danger. The Prime Minister may well be looking now for a fourth man to take that portfolio.

I move on to the area of the Senate in its role as a defender of the people from the possibility of a dictatorial house of legislature. I believe it is important to realise that Australians are concerned as a result of 3 years of socialist government. Australians are concerned at the revelation of the immense ideological gap that lies between the major entities. They are aware after 3 years, as they have never been before, that major issues are at stake- basic philosophic issues- including the issue of whether the state is to be their master or their servant. They are aware of this. They are aware of the threat of centralism. They are aware of the gradual destruction of the sovereign powers of the States. They are aware of the immense problems that are being placed on local government, of the priorities and attitudes of the people on the spot.

These matters have become totally and clearly evident in the last 3 years and they are the concern of Australian people today. They are relevant to the performance of this government, and they are relevant to the attitude of this Opposition in seeking to use its proper power to enable the people to decide whether this is the direction in which they want this great Australian evolutionary society to proceed. Since the inception of this Government there has been a constant rush towards establishing an ideological circumstance totally regardless of the socioeconomic problems that are contained in that sort of policy. I believe that Australians are aware of this today as they have never been before.

Before I close I should like to refer to one or two areas of rural Australia in which there is a very real measure of concern as to the performance of this Government. In the year 1974-75 the cost of input into the rural area of this country increased by 33 per cent. In that same year the prices of the major products fell by more than 15 per cent. In the area of beef the figure was 74 per cent, and in the area of wool it was 34 per cent. It was only the buoyancy of the wheat market around the world that enabled Australia” to remain only 14 per cent or 15 per cent down in the price of its products.

It is in the area of small business, commercial enterprises and small farms, that we have seen the greatest measure of destruction and concern as a result of the policies of the socialists over the last 3 years. It is a section of the community related to decentralisation. It is a section of the community which employs no fewer than 42 per cent of the total Australian work force. What has been the contribution of the wool industry? It is struggling once again out of a trough. Wool reached a peak in 1973, fell rather significantly in price, a drop of 34 per cent in the year 1 974-75, and struggled magnificently to a point in May of this year where the Australian Wool Corporation was buying only 2 per cent of the clip. The base price had moved forward from 250c to 275c a kilo. It had reached that point when the Government, for some extraordinary reason, flew a kite that it would be necessary to reduce the base price to 200c. Fortunately the enormous concern all around the world as well as in the producing areas of this country was such that the Government did not follow that course.

However, the mere suggestion of it was sufficient to bring that great industry- it is probably more basic to balance in the Australian rural scene than any other industry- back to a position where it was selling only 50 to 60 per cent to the trade. The Corporation was buying the rest. It brought the base price from 275c back to the absolute minimum of 200c. Fortunately it is now moving slowly forward again. The Australian rural community in towns, on farms and in provincial cities alike can ill afford the sort of circumstances that follow from such unpredictable and irresponsible action as occurred at that stage. We have sought in this chamber the assurance of this Government that in the face of possible exchange rate changes it would immediately move the base price of wool in the direction indicated by the change in the rate in the value of the currency, in line with the performance of the Government of South Africa and the performance of the Government of New Zealand. We have not succeeded in getting any sort of categorical assurance on that relatively simple and basic issue.

In the area of the beef industry this Government sought an Industries Assistance Commission investigation and recommendation on that industry which was in dire straits. The Government said: ‘No, we do not want it in 30 days, we will be quite happy if you take 90 days’. It is interesting to note that the result of that investigation was a series of recommendations which are virtually identical to the promotions which had been the promotions of the Opposition with reference to the beef industry in Australia for many months. Yet the industry has been denied a quick result, and it is still denied any sort of real action. In the wheat industry there has been an enormous area of rising prices due to the world market situation, and this has led that industry to bolster the sagging rural circumstance. Even in that industry today, with the costs that are accruing in the area of superphosphate, labor, machinery, repairs, freight and chemicals- in all these things- we are looking at increases varying from 50 per cent to 100 per cent. In the long term the effect on productivity in this country will be crucial.

The crisis that we face in this country today is directly referable to the performance of this Government. The reasons revolve around deceit, deception of the Parliament and deceitful operations. Government supporters can try to laugh off Mr Khemlani if they like, but he is just one instance of deceit and deception. These sorts of things, plus the problems of inflation and unemploymen t, plus the problems of increasing industrial unrest and the internal and external instability through which this country is becoming a piece of flotsam and jetsam, joined in some sort of poetic way to some imaginary third world- these are the circumstances that have caused a responsible Opposition to take responsible action on behalf of the Australian people.

Senator BROWN:
VICTORIA · ALP

-The main basis upon which Senator Scott mounted his attack on the Government on the one hand and attempted to justify the Opposition’s unprecedented action in blocking the Government’s Budget on the other hand rested on what he called ‘the exercise of the responsible powers of the Senate by the Opposition’. He then attempted to justify the Opposition’s actions as being responsible by asserting that the present crisis- it is a crisis that Australia faces at the moment- is the direct result of, and relevant to, the Government’s performance. Senator Scott went on to say that this was a desperate action that was being taken by the Opposition. These are his own words. It certainly is a desperate action; it is a desperate action by desperate men who can be seen for what they are in their grab for power. But I am pleased that Senator Scott did make the contribution he did because it fits in precisely with what I wanted to say in the course of this debate.

I think it is essential in the interests of the Australian public to understand precisely what has happened since the Australian people elected the Labor Government in December 1972. On examining the catalogue of events which discloses the conduct of the Opposition from that point of time until this present moment, when as Senator Scott has stated, the country has been brought to a crisis by a desperate decision made by desperate men, it will been seen who in fact is responsible for that crisis. The Australian people elected the Labor Government on 2 December 1972. It was abundantly evident when the Parliament met for the first time in the autumn period of 1973 that the Opposition did not accept- I repeat ‘did not accept’- the decision of the people on 2 December 1972. Even in those early stages of the new Parliament veiled threats were made by the Opposition to destroy this Government at the earliest opportunity. Those threats were repeated in the Budget session of 1973 and in fact were carried out in the autumn period of 1974.

I think I should do well to recount precisely what happened during that period. On 10 April 1974 when we were dealing with Appropriation Bill (No. 4) 1973-74 Senator Willesee proposed a motion that the resumption of the debate on this Bill be made an order of the day for a later hour that day. Senator Withers, the Leader of the Opposition, moved an amendment to that motion, which appears at page 884 of Senate Hansard for 10 April and reads as follows:

At end of motion add - but not before the Government agrees to submit itself to the judgment of the people at the same time as the forthcoming Senate election, the Senate being of the opinion . . .

I shall not weary the Senate or the listening audience by retailing the reasons that the Opposition gave on that occasion for moving that motion, which has been described as an unprecedented action by the Senate in 74 years, which indicated that the Opposition was prepared to refuse Supply. It is interesting to compare that motion with the motion that was moved by the Opposition on 15 October last during the debate on the first Loan Bill, which read as follows:

Leave out all words after ‘that’ insert: this Bill be not further proceeded with until the Government agrees to submit itself to the judgment of the people, the Senate being of the opinion . . . and so on. So the same sort of technique and tactic is being employed this year by the Opposition as was employed last year. The verbiage is slightly different and the circumstances are slightly different but the end result is the same. One needs to look then at what Senator Withers is reported to have said at page 9 10 of the Senate Hansard of 10 April 1974 because when the Opposition put down its motion to block Supply the Government took the initiative- a prerogative to which it is entitled- and suggested to the Governor-General that there be a double dissolution. Senator Withers is reported in Hansard as saying the following on the evening of 10 April 1974:

If we did not grant Supply the situation would be rather farcical.

Senator Withers was aware at that stage that the Government had decided to ask for, and had been granted by the Governor-General, a double dissolution. I repeat Senator Withers’ remark:

If we did not grant Supply the situation would be rather farcical. We embarked on a course some 12 months ago- I am not trying to be provocative- to bring about a House of Representatives election. That has now been achieved.

What does that mean? It means briefly this: If we take into account that this statement was made on 10 April 1974 and if we traverse back the period of 12 months which was referred to by Senator Withers it is seen that the Government which was elected on 2 December 1972 was not even half-way through its first autumn period of the new Parliament when the Opposition determined to destroy that Government. That is only one instance. Subsequently a double dissolution was held and the Government was returned to office in the House of Representatives, which is the only place in which a government can be formed. The Government increased its representation in the Senate from 26 to 29 members and attracted 200 000 votes in excess of the combined vote of the Opposition senators. It is important to remember that.

Then in early July 1 974 we had the first ever Joint Sitting to process those Bills which were the subject matter of the double dissolution. Following the Joint Sitting we then had the spectacle of several States- with non-Labor State governments, of course- challenging various pieces of legislation that had been processed legitimately through this parliamentary system at the national level. I shall cite two or three of the pieces of legislation involved. One was the legislation for the Australian Assistance Plan. From memory I believe there was an attempt to challenge the Regional Employment Development scheme but I understand the States decided subsequently to withdraw from that challenge. Then there was the more recent challenge to the Senate (Representation of Territories) Bill. Honourable senators are aware that the High Court unanimously upheld the validity of that piece of legislation. I understand that a decision by the High Court on the off-shore oil legislation is still pending. I have mentioned only two or three instances in passing. Then Senator Murphy was elevated to the High Court, which created -

Sitting suspended from 1 tol p.m.

Senator BROWN:
VICTORIA · ALP

– Before the suspension of the sitting I was about to cite the circumstances of the elevation of Senator Murphy to the High Court as a justice. This created a casual vacancy in the Senate for the State of New South Wales, which he represented. The New South Wales Premier then breached a long established convention. This was the first break with the custom that had been followed and, as a consequence of its acceptance over a number of years, it established what was referred to as a convention. I think the most succinct way this could be described can be found in the editorial of the Canberra Times of 13 February 1975 from which I will quote briefly. It said: the tragedy is that even if Mr Lewis and his committee piously decide in the interests of the nation not to go ahead with their plan a great deal of irreparable harm has already been done. A man who flashes a toy gun at a hold-up has to be treated as if the gun is loaded. Mr Lewis may not yet have broken the convention- and it is the fervent hope of this newspaper that he will not- but he has made it unsafe. Because a convention is a matter of honour and trust it cannot stand the assaults of political brigands. Mr Lewis has demonstrated that, even if he is bluffing, he is not a man to be trusted in such matters.

Of course, that preceded the ultimate decision that was made by the Premier of New South Wales and his Government. They subsequently appointed a person other than a representative of the Australian Labor Party to fill that casual vacancy. It is not a reflection on the person who filled that vacancy but rather it is a reflection on the Government of that State- a non-Labor Government- because the result of the decision of that Government was to deprive the New South Wales electors of the right of proper representation in this Senate.

Then we had the casual vacancy caused by the untimely and unfortunate demise of our colleague, Senator Bert Milliner of Queensland. All honourable senators on both sides of the chamber would be familiar with the conduct of the Premier of Queensland and his Government. In spite of the overtures that were made to him by leading members of the Liberal-National Country Party coalition at the national level and also at the State level, the Premier of Queensland finally compounded the original breach of the convention by Premier Lewis of New South Wales. The Premier of Queensland breached that convention by the appointment of a nondescript to represent the people of Queensland in this Senate. Here again, of course, that action means in effect that the Queensland people have been deprived of a person to properly represent them in this Senate because the person appointed by the Queensland Government is not of the party to which Senator Milliner belonged.

The next major breach of a constitutional convention was the decision made by the Opposition on 16 October to defer consideration of those Bills which make up the totality of the Budget until such time as the Government submitted itself to the people. This has been described as one of the most outlandish and unprecedented acts ever taken and it threatens the political stability of this nation and the future well being of its people. Then, of course, we had an example of the extremes to which some people will go in pursuing a cause. The Opposition, as I said earlier, has made calculated attempts and has planned a program to destroy this Government at the earliest opportunity. We have the example of the Governor of Queensland, Sir Colin Hannah, who entered the political field. This is unprecedented in the history of our nation. The Premier of Queensland compounded that breach of etiquette by supporting the State Governor’s utterances in the political field.

Taken either singly or together the breaches I have mentioned show conclusively that the ground rules and the conventions which support the ground rules for the proper conduct of the affairs of this nation which can be truly said to be the handwork of conservative elements in this community- the Australian Labor Party has enjoyed such short periods in office, particularly at the national level- are conventions of convenience. They will be followed while it suits the purpose of those who are responsible for their original composition and construction to do so. Let us look for a moment at what was said by a number of leading members of the Opposition. I can think of no one better to quote than the present Leader of the Opposition (Mr Malcolm Fraser). I do not know how long he is likely to remain the Leader of the Liberal Party. 1 will refer to the remarks of Mr Malcolm Fraser which he made during a radio broadcast on 2 March 1975. He was laying great emphasis on the adherence to convention- the very thing that he and his colleagues are prepared to disregard not only on this occasion but have disregarded during the past 3 years in particular. He said:

If the Parliament becomes unworkable by destruction of convention, democracy itself becomes unworkable because democracy rests much more on adherence to convention than to the rigid application of rules and laws.

That is a statement by no other than Mr Malcolm Fraser. I repeat that it is quite evident that these are conventions of convenience to be followed when they suit the occasion. One who was particularly outspoken when the Opposition indicated that it may refuse Supply in 1974 was none other than a man who appears to have changed course dramatically in recent weeks. I refer to Mr Jim Killen, the honourable member for Moreton. Mr Killen wrote an article which appeared at page 4 of the Melbourne Herald on 9 April 1 974. Honourable senators will recall that that was before the Opposition moved the motion which had the effect of deferring Supply until such time as an election was held. That threat was applied then as it is now. The article by Mr Jim Killen was headed: ‘It’s a threat to our parliamentary system’. It stated:

If the Senate can reject a Supply Bill . . . it would mean that the terms of one section of the Constitution were being trampled upon. The Senate would not have equal power with the House of Representatives. It would have greater power.

That was the substance and the theme of the whole article. Let us look at some other remarks made by Mr Killen. In a broadcast of the radio program AM on 22 September 1975- the substance of his remarks was similar to those to which I have just referred- he said:

While it commands respect in the House of Representatives a government has the right to be granted Supply. And this applies to all governments no matter what their politics.

The Senate has the right to reject Bills which enable the provisions relating to a double dissolution to take force. A Supply or Appropriation Bill is not in that category.

In an article which appeared in the Australian on 19 October 1973, he said: 1 have made my attitude quite clear, that refusal of Supply to force an election is not the Senate ‘s right.

On 1 1 April 1974 an article in the Sydney Morning Herald said:

The Senate has the power to force the House of Representatives to the people, but the House of Representatives cannot force the Senate to the people. Such a notion was never within the contemplation of the founders of the Commonwealth Constitution. It is a proposition which the overwhelming majority of Australians would regard as absurd.

An article in the Australian on 3 January 1975 said:

A Senate rejection of supply would place at risk the maintenance of constitutional government in this country.

I think they are reasonable observations to make and to have recorded in the Hansard of this Senate. What does the Opposition claim to be the justification for the unprecedented action it has taken which was condemned as late as 2 March 1975 by its leader and likewise condemned by one of its leading spokesmen, the front bencher Mr Jim Killen? First of all, the Opposition cited the Gair affair. I must confess that I would not rate it high in terms of political achievement but the fact remains that since that incident there was a double dissolution in May 1974 and the people spoke and returned the Labor Government. This may not necessarily be in order of happening but in recent days the Opposition has raised the briefing of the President of the Australian Council of Trade Unions on the Budget before its presentation to Parliament. I frankly doubt the wisdom of that. The Opposition has also in recent days raised questions in relation to ACTU-Solo Enterprises Pty Ltd. This has been the subject of inquiry by a royal commission headed by Mr Justice Collins and I understand that since Senator Greenwood last referred to this matter he has made submissions to that commission in Adelaide- I think it was on Monday- seeking to have certain aspects of the hearing in respect to the specifics of the ACTU-Solo matter reopened. I understand that Mr Justice Collins has reserved his decision on that matter.

What concerns me is what I would describe as an unwarranted attempt by Senator Greenwood, using the privileges and protection of this place, to attack the findings of that commission. That in itself is a reflection on the gentleman who happens to be the head of that royal commission.

However, that matter can be settled in another place.

Finally the Opposition has raised what is referred to as the loans affair. Nobody will contest that a government, irrespective of its political character, is entitled to probe the money markets of the world. We were conscious of the fact that in a very short space of time, by reason of methods employed by the Arab nations, there had been a tremendous shift in the money market. I understand that there was a quantity of money in the region of $60,000m transferred from the normal money markets to what are referred to as the Arab States. The Government in its wisdom decided to attempt to ascertain whether any of that money could be made available to the Australian Government. I will not enter into a debate on the character of Mr Khemlani. Time and events will prove that and I hope that subsequently some other vehicle will be used to probe that area. However, the fact remains that Mr Khemlani himself, before he left Australia on the occasion prior to his latest departure to wherever he was going, said in an interview at Mascot Airport 2 things which I believe are very significant. One -was that he was satisfied that the Government had acted properly and the other, in answer to a question, was that he made it perfectly clear that he did not expect any payment whatsoever. That is Mr Khemlani himself saying those things.

I know that there are other things that could be said about one or all of the 4 issues which appear to have been used as the major reasons for this extraordinary decision by the Opposition but, taken singly or collectively, do they constitute what Mr Fraser has suggested, that is, reprehensible conduct or circumstances which would justify the extreme and, as Senator Scott said, desperate measures which have been taken by the Opposition? I had a number of extracts from newspaper articles to read to the Senate on other matters but I will simply say this: Not one newspaper in Australia to my knowledge has supported Mr Fraser ‘s contention. Not one academic, and numerous academics have spoken out on this question, has supported Mr Fraser ‘s contention. Not one political commentator has supported Mr Fraser’ contention, not to mention the gallup polls which show an overwhelming criticism and rejection of the decision of Mr Fraser and his colleagues to block the Budget.

In recent days Mr Fraser has offered a compromise and I want to quote briefly something which sums up what I believe is really the position in respect of that compromise and what it means. It appears in an editorial in today’s Canberra Times and reads:

The sorry fac;s are that the Senate, through its threatened refusal to pass Supply last year, went a long way towards creating a precedent that threatens Australia ‘s long-term stability, and that its success in forcing the Government to the polls this year, or early in 1 976, would make that precedent a regular element in Australia’s constitutional system. Given the inevitable close balance between the parties in the Senate, and the fact that irresponsible minorities such as sectional parties and casual appointees may at any time tip the balance, for Mr Whitlam to accept the Opposition’s ‘compromise’ would do as much to guarantee that long-term instability as to have caved in to the original demand for an immediate poll. Mr Fraser appears to have accepted the unreality of that demand. The statesmanlike, as well as the practical, response to the facts that confront him is not that he offer meaningless ‘compromises’, but that he withdraw completely from the destructive confrontation he has precipitated.

In other words, Mr Fraser now recognises that he has compromised himself and his colleagues and is attempting by his offer to compromise this Government and the Australian people. Worse still, he is prepared to compromise the future stability and wellbeing of this nation. We will not have a bar of.it and I am sure that the Australian community will not have a bar of it either.

Senator WOOD:
Queensland

– I listened with very great interest to Senator Brown, whom I always respect for his views. I was interested to hear him say that the Labor Government would not have a bar of this idea of the Senate throwing out a money Bill and the Government going to the country. This is a complete change of tune and I refer to what took place in 1970. I have had sent to me a very interesting speech by Mr John Greenwood, the member for Ashgrove in the Queensland Parliament, in which he said:

I refer first to the Senate debates of 18 June 1970, at page 2647, where the Leader of the ALP Opposition in the Senate, then Senator Murphy, presumably in expressing the considered view of the ALP in the Senate, said this-

The Opposition will oppose these measures ‘ (the States receipts duties). ‘ In doing this the Opposition is pursuing a tradition which is well established, but in view of some doubt recently cast on it in this Chamber, perhaps I should re-state the position.

The Senate is entitled and expected to exercise resolutely but with discretion its power to refuse its concurrence to any financial measure, including a tax Bill. There are no limitations on the Senate in the use of its constitutional powers, except the limitations imposed by discretion and reason. The Aus tralian Labor Party has acted consistently in accordance with the tradition that we will oppose in the Senate any tax or money Bill or other financial measure whenever necessary to carry out our principles and policies.’

Mr Greenwood goes on to state:

How very different from the attitude adopted by the Liberal and National Parties! For us it must be a matter of the utmost rarity- one requiring exceptional circumstances or the gravest danger to this nation- before the Senate should exercise its power and block Supply. Senator Murphy and the ALP are prepared to block any tax or money Bill or any other financial measure whenever necessary to carry out the ALP ‘s principles and policies.

Of course Mr Whitlam, who is now rivalling Senator Hall as one of Australia’s greatest somersaulters, said that he was more than happy to see the Senate reject the measure. Mr Greenwood states that Mr Whitlam, in the first column of his speech, had this to say:

This Bill and its associated Bills will be rejected by the Parliament. ‘ Later, at page 3495, he says-

Any Government which is defeated by the Parliament on a major taxation Bill should resign. The sooner this Government resigns, the sooner the people can elect a Government which can make a reasonable financial agreement with the States and can take into account the still more severe financial situation of the States’ creationstheir local government and semi-government authorities.’

There Mr Whitlam, the leader, was the architect of this device in encouraging and urging the Senate to reject this money Bill with a view to forcing the House of Representatives to the polls. This is the very proposition that he now denies.

That indicates very clearly that it depends on which side you are, which way the wind is blowing, whether you believe that what the Senate does is right. All this argument which is being put forward about the Senate not having this power is a lot of nonsense. A great deal of time was given to the consideration of the powers of the Senate. The amount of debate and time taken in the creation of the Australian Parliament in this respect was considerable. It is very interesting to hear from people who talk about our position in relation to the position of the House of Commons. I shall read another extract from this address by Mr John Greenwood which was delivered in the State House. This chamber has always been featured as being like the House of Commons. What honourable senators should realise is the great power which was given to this chamber by the people who created it. I say here and now that the Constitution of this country is wrapped around the Senate. If there had not been a Senate there would not be an Australian Parliament today. Mr Greenwood in his speech stated:

When we discuss this question, the events of 1911 and their effect on the powers of the House of Lords tend to colour our thinking, and it is something that we should be wary of because we should remember two things. The first thing we should remember is that those who framed our Constitution intended to create a Chamber far more powerful than the House of Lords and, indeed, far more powerful than any other second Chamber in the world. The second thing that we should remember is that, even if the framers of our Constitution had intended to limit the powers of the Senate to reject Supply to be co-extensive with the powers enjoyed by the House of Lords, they would have been thinking of the powers enjoyed by the House of Lords in 190 1 and not thinking of the limited powers which the Lords were left with after the events of 1 9 10 and 1911 and the passage of the Parliament Act. On the first point- the point that the fathers of our Constitution wished to create a Senate far more powerful than any other second House- I would simply refer to a statement by the Right Honourable Sir Edmund Barton, the Leader of the Australasian Federal Convention 1897-98, the first Prime Minister and a justice of the High Court of Australia. He said this-

We cannot fail to remember that the Consitution designed the Senate to be a House of greater power than any ordinary second chamber. Not only by its express powers, but by the equality of its representation of the States, the Senate was intended to be able to protect the States from aggression’.

I think that indicates very clearly what was behind the minds of the people who framed the Constitution at that time. The Senate has that power, and it has the right to exercise it. Because the Senate has not used this convention, that right does not wither. In these days one talks about a matter of convention which could possibly have arisen. But the situation has never arisen and nobody has desired to take such action. I stand on the right which the Constitution gives us. Mr Greenwood in his speech also goes to great lengths to point out that even in regard to money Bills and the amendment of them, the power of the Senate is such that if a request is sent to the House of Representatives and if the House of Representatives does not agree, this chamber still has the power to send back that request.

In dealing with this problem which we have before us now I think that we have to think of the power of this chamber. It is rather interesting to see the changes in our Prime Minister. As I said before, he is almost outdoing Senator Hall as Australia’s No. 1 somersaulter. In 1974 when the Senate merely threatened to stop Supply the Prime Minister raced to the Governor-General and asked for a double dissolution. Now in 1975 a similar situation has arisen but it turns out to be a great constitutional crisis. Why the difference? I heard an Australian Broadcasting Commission man talking to Mr Whitlam a while ago. He was asking him questions. When I saw the ABC man in the corridor I said to him: ‘The one question you failed to ask Mr Whitlam was why the difference in 1974 when compared with 1975. Instead of racing to a double dissolution he is racing towards a great crisis’.

Senator Steele Hall:

– Does the honourable senator take the same standards as Mr Whitlam?

Senator WOOD:

– The other somersaulter has come into the chamber. The reply was: ‘You know why he raced for a double dissolution in

May 1974. It was because he felt he had a chance of getting back.’ Mr Whitlam knows that he would not have got back if he had gone straight to the people when we knocked back the Budget Bills. He would have been decimated. There is no question about it. He knew that situation. Since then he has put up a fanfare for which, unfortunately, some people have fallen. We now find honourable senators of the Labor Party are trotting out stories about opinion polls. It is very interesting to know that those opinion polls do not extend beyond the major cities; that is the cities of Newcastle and Canberra. But if honourable senators go into the country areas they will find a different situation altogether. Let us be realistic about this matter. If honourable senators opposite want an opinion poll let us take one on a wider scale. I know that publicity has been churned out by the numerous Press people who work for the Labor Party. It is a publicity campaign. The Press Gallery is slanted to the Labor Party. Since Whitlam has been in office the members of the Press Gallery have been the greatest bunch of Cook’s tourists that we have had in the history of Australia. A senior Press man told me that this was why they were all pro- Whitlam. They are as slanted as can be. This morning, Creighton Burns, who is a great disciple of the Australian Labor Party, talked about the Opposition knocking this legislation over in the Senate. He is as far off the truth as is Whitlam himself when he says that he is not in favour of the Senate knocking over money Bills.

There should not be any error by thinking that Mr Whitlam is a prime favourite of everybody. Honourable senators opposite know what they feel about him. I believe that Mr Whitlam is not fair dinkum. As a matter of fact, I will tell honourable senators this straight: He is not even a Labor man. Why, his own uncle was reported in the Brisbane Sunday Mail as having said on his birthday a few months ago: ‘We have never had a Labor man in the family. How he ever became a Labor man I do not know’. He said: What is more, he is the worst Prime Minister we have ever had’. A person that I know in the legal profession- his uncle knew him- said when he nominated for the Labor Party: ‘What are you nominating for the Labor Party for? You are not Labor, Gough’. He replied: ‘I know I am not’. The other person said: ‘What are you going Labor for?’ He said: ‘They are only a lot of old mokes, of not much quality. I can become leader, and if I can become leader I can become Prime Minister’. He is a phoney Labor man. Do not tell me that he did not think that about his colleagues. He told me on an aeroplane coming to Canberra from Sydney one day: ‘The Labor senators are a bunch of loafers’. I do not tell lies. That is what he told me.

Senator Steele Hall:

– You are pretty gullible.

Senator WOOD:

– I am not so gullible.

Senator McAuliffe:

– He was pulling your leg and you did not know it.

Senator WOOD:

– I have been around this place a long time and I know when I am having my leg pulled. I know what he thinks, and I know what many Labor senators think about him. I am not going to reveal a thing.

Senator McAuliffe:

– Did you tell him?

Senator WOOD:

– What is that?

Senator McAuliffe:

– He told you that only because he thought you might tell another senator friend of yours. Did you tell him?

Senator WOOD:

– Like smoke. Do not worry about that. He was fair dinkum. I know what he thinks about you. He said that Labor senators are a lot of loafers and he told this other man that Labor senators are only a lot of old mokes. He did not say that only to me; he said it to others as well. That is what he thinks about honourable senators opposite. As I said, he is not a fair dinkum Labor man. Ben Chifley would turn in his grave if he knew that Mr Whitlam was Leader of the Labor Party. He has been Prime Minister for nearly 3 years. It is trotted out that he has had only 1 8 months and so on. He has had 3 years as Prime Minister. What has been achieved under this Government? We have arrived at record unemployment, record inflation and a record number of strikes. The economy of this country is far from being in a satisfactory position. Because of the current circumstances and the incidents that have taken place recently the people on this side of the chamber have the right to indicate that it is time that the Government was again judged by the people of this country. Nobody can say that the Government has been running the country smoothly in relation to these matters.

We are now told that by the time the school leavers are taken into account we will have up to half a million unemployed. I can remember when we had a little over 100 000 unemployed. Because of the dance that went on in the House of Representatives particularly and in this chamber one would have thought that we had a million people unemployed. There was no reason why we should have that level of unemployment in this country. What is the result today? The position is worse than ever. We find that businesses are collapsing and industry is struggling along. A report which has just been published today, I think, indicates that things could become much more serious. I believe that the situation has been arrived at when honourable senators on this side of the chamber can quite worthily say that we can knock back a money Bill and that the Government should go to the people. That is the right of this chamber if it thinks that the Government is not running the country properly; it should have the right to send the Government to the people.

Senator Steele Hall:

– Do you say that at any time?

Senator WOOD:

-When it feels that it has arrived at a certain situation, it can. Do not tell me that a government has to run its term of 3 years. What happened when Senator Hall was Premier of South Australia? He was going to be the big shot and he redesigned the electoral boundaries. Did he wait for 3 years before he came out and called an election? No, he did not. He came out well before his 3 years. He thought that he would be landslided into office; he got landslided out of office. Senator Hall is always telling us on this side of the chamber how to run a party successfully. Look at what he did. He took a double header and he has been in the ocean ever since. This Senate has the right to send the Government to the people if it feels that things are going wrong.

One of the big issues that has been brought before the chamber is the matter of the raising of this money. I am not concerned about the matter of the raising of the money; what really brings about a serious situation is what was done. We have in the Constitution what is known as the financial agreement provisions. In authorising the Executive Council minute to raise the money in the manner in which it did the Government, I understand from the experts, breached section 105 A of the financial agreement provisions of the Constitution. Apparently that is a very serious matter. The States are supposed to take part in such financial agreements, but they knew nothing about it. So we get down to a fundamental basis of argument: Why did the Government of the day do such a thing knowing that it was wrong? What it did was not in accordance with the action which is required by these financial agreement provisions. The Government set out to raise this money. In how many places did it set out to raise the money?

Mr Khemlani has been very prominent in the news. He was a scout for money for the Government. Over a period of time he maintained that he had it and it was not taken and so on. He has been to this country and he has challenged Mr Whitlam to set up a royal commission. Honourable senators opposite and Mr Whitlam are asking us what we have done about it. The challenge was made to Mr Whitlam, Mr Khemlani challenged him to set up a royal commission. If the Government was in the clear in relation to this matter, why did it not set up a royal commission?

Senator Gietzelt:

– You would be wanting us to set up a royal commission every week.

Senator WOOD:

– This is a very important matter, Senator Gietzelt, and you know as well as I do that it is. So on this particular issue Mr Whitlam squibbed once again. He did nothing about it. Now he throws it at us and asks why we did not do something. Mr Khemlani ‘s name is now being bandied around this chamber as being a person who is treated as a joke. Yet in the debate which took place in the House of Representatives on 9 July the Prime Minister said about the Government’s action:

The proper checks were made on the bona fides of the gentleman involved.

In saying that the bona fides of the gentleman involved were properly checked, Mr Whitlam was holding him up as a man of standing and authority and honesty. Why are honourable senators opposite trying to make a joke of him? Mr Connor said also:

Treasury inquiries . . . revealed the man’s integrity.

If Treasury inquiries revealed Mr Khemlani ‘s integrity, why are honourable senators opposite dumping him how? It should be remembered that we on this side of the chamber did not engage Mr Khemlani; it was the people opposite who engaged him. So do not try to throw him back on to us, because we did not bring him here. The people opposite brought him here. Mr Khemlani came to this country. He has now left a document which has been tabled. He has asked for the right to speak in this Senate or before a committee. If he thinks that he has been wrongfully accused or put in a wrongful position, I as a democratic person believe that he should have the right to appear before a committee. I think that is the way in which to give him justice. If he comes here and nothing comes out of it he has had his request acceded to and he has had a fair deal. But if some wrongful action comes out of it, that action should be revealed to the public and the Government should pay the penalty. I think that is common justice. Surely if” he asks to be given that right his request should be acceded to.

It amazes me that in relation to the amount of money involved we have got up to the figure of $8,000m, which is the figure about which Mr

Khemlani talks. I want to know in how many areas that money was being raised. I know that Mr Dan Thompson in Sydney was associated with the raising of money for the Government for quite a long time, running back considerably into the latter part of last year. First, the figure that I heard started at $2,000m. Then it was $4,000m. Ultimately, the figure had reached $9,000m.

What happened? Mr Dan Thompson told me that his company obtained the money for the Government in America. The first draw down was to be in early December. I know that Dr J. F. Cairns went over to America and was to give the imprint of authority after attending a conference in one of the American countries. But what was the result? The money was eventually obtained, as I said, and the draw down was to take place in December. But it was not taken up, I understand, because Dr Cairns had such a dislike for the United States of America. At that time, the money was to be obtained from Treasury Bonds which were to have been reduced to gold. At that time gold was worth $US 1 30 an ounce. Later the value of gold rose to SUS200 an ounce. The Government could have made a profit in that situation. But it did not take up the funds.

What happened next? The next move was for the Government to chase around after money from the oil sheiks. Over a period, the money was obtained, but with what results? Dr Cairns was in Iran. There were delays. The people who said that they had the money became impatient. Mr Dan Thompson told me on that Monday night that there was terrific annoyance on his part and on the part of other negotiators because the Government was dumping them. After this group had established contacts with those who had the funds that the Government was seeking, eventually when Dr Cairns returned to Australia, instead of taking the money, the Government was trying to deal direct and no doubt to cut these people out of the commission. That was the sort of thing that was going on.

Was the Khemlani group different from the other group with which Mr Thompson was associated? If it was, in how many other areas was this Government trying to raise money? Honourable senators will recall that Mr Khemlani said in one of his statements that one of the things about which he was concerned was that he found that the Government was seeking around amongst other people looking for money. It seems to me that the search by this Government for money has ranged in various areas. Were these searches in the same areas with the same groups or were they in different areas with different groups altogether?

As far as I am concerned, Mr Thompson who on several occasions spoke to me about this matter said quite voluntarily to me on the Monday night by telephone: ‘As far as I am concerned, I will release all the papers and blow the whole story open’. The whole story included the point that there we:re several Ministers who were going to be in on a cut-up of the commission. That is what Mr Thompson told me, not once but several times.

Senator Georges:

– That is a very grave charge.

Senator WOOD:

– I know. I know that it was a very grave charge when I accused many years ago a Minister for Lands in Queensland who was a member of the then Queensland Labor Government. I was accused of getting down into the gutter by a Labor senator. That was the accusation against me then. But what happened when the report of the royal commission was presented? That royal commission found that the Minister for Lands was guilty. I was vindicated. So, I am telling honourable senators now the story that I know: There were several Ministers supposed to be in the cut-up. Mr Thompson at that time volunteered that he would reveal the papers. Since then, he has been shilly-shallying because a couple of other negotiators with him are afraid to release those papers. But I believe that a committee of the Senate could bring these people here and could elicit the right information.

My concern is not with the Government trying to raise money from other sources. I think that the whole matter has developed into a very smelly subject. The indications as far as I can see them are such that, with the financial position of this country as it is today, with its record unemployment, record inflation and its record number of strikes, when we were promised peace by this Government, and now the smelly loans subject, it is well timed that the people should have the opportunity of re-assessing this Government.

The fact that its second term of office has not completely finished is no indication at all that that term should be finished. A number of governments have shortened their terms for reasons that suited them. Mr Whitlam has become one of the greatest somersaulters in this country. It is only a little while ago that the Prime Minister put to the people of this country a constitution alteration proposal by which he wanted the terms of the Senate and the House of Representatives to coincide. He has been a great believer in simultaneous elections for both

Houses. Yet, when Mr Fraser put the proposition to him that he should hold Senate and House of Representatives elections in May of next year, the Prime Minister turned a somersault on the issue. There is no question about it: He is a somersaulter and he will not tell the truth on these matters.

The position is this: We find a smearing campaign against Mr Fraser, the leader of the Liberal Party. We find a smear campaign also against Mr Anthony. This sort of campaign has even reached the point where allegations are even raked up about the wife of a parliamentarian receiving a necklace for launching a ship or something of that nature. Where will this end? This is cheap stuff -

Senator Georges:

– But you just did the same thing. You were accusing Ministers of getting commissions.

Senator WOOD:

– No. I am talking about ‘ principles in this Parliament. I have heard talk about Mr Fraser undermining his leader to become leader of the Liberal Party. Let me say this as a member of the Liberal Party: I do not believe that Mr Fraser had anything to do with that. With neither move did Mr Fraser have any association. I know that people themselves discussed this action. If honourable senators want -

Senator Walsh:

– Do you believe in fairies?

Senator WOOD:

-Senator Walsh, the bag of wind from Western Australia, interjects. He is always the woodie in the wheat. If honourable senators want to know anything about undermining, let them answer this question: Who is the best underminer and best scalper in this nation? It is Goof Whitlam, the man who has goofed everything in the country. What did he do to Arthur Calwell? Did he scheme to undermine Arthur Calwell?

Senator Webster:

– Not much.

Senator Wood:

– Not much! What did Arthur Calwell think of him?

Senator Webster:

– Not much.

Senator WOOD:

– Not much. I know Whitlam was out to undermine Arthur Calwell. Arthur Calwell was a really good Australian; I have said that before. I have always said from a personal point of view that if Arthur Calwell had been the Prime Minister of this country he would have been a good Australian Prime Minister because he had the sentiment of Australia in him. But I would not trust Whitlam because of what he did. And what of treachery? The most loyal Deputy Leader that anybody could have had was

Barnard. What did Whitlam do to him? He stabbed him in the back. Ask Lance Barnard what he really thinks about it.

I mention Frank Crean also. He is a very good economist and a most honest, sincere person. Honourable senators would not find a more sincere person anywhere. I have said this publicly. What did Whitlam do to him? He stabbed Frank Crean in the back. What about Jim Cope? He butchered him in front of everybody in the House of Representatives. Do not tell me that it was because Jim Cope was not a good Speaker. If he was not a good Speaker, why did the Labor Party re-elect him to that position for a second term? I could go on. We find Clyde Cameron, a man who worked very hard in Victoria to reorganise the Labor Party. He was shunted somewhere else where he did not want to go. We find such things happening all the time. As a matter of fact, Whitlam is a man to whom nobody should ever want to be close because it is his truest friends whom he stabs in the back. He stabs them all. It does not pay to be too close to him because one might get stabbed in the back.

On the serious aspect of this issue the Senate has the right to do what it is seeking to do. In carrying out this right, honourable senators are carrying out their duties as senators if they feel this way. All this nonsense which goes on about the Senate not having this right is just a political sham campaign. All we have heard in the last few weeks is this emotional stuff from Mr Whitlam that the Senate should not take this action and that his Government should be given a chance, and so on. The Government has had 3 years and it has run this country into a most desperate situation. Surely to goodness it is time that we had the opportunity to say to the people: Let us have a change. Let us try to get back to decent government. This Government has run this country in a little under 3 years into a position which you would not have expected. This fact is shown in a letter which appeared today in one newspaper- I think it was the Sydney Morning Herald- in which the writer quoted the rates of inflation and unemployment in different countries. Australia, since the Labor Government came into office, is a very sorry example.

I believe that, despite what Government senators say, under the previous 3 years of LiberalCountry Party Government we had progress and prosperity, we had a sound economy, we had one of the best and most progressive nations in the world. What is more, we had people in this country searching for minerals and oil which are essential requirements to our way of life. I know that members of the Labor Party talk about the multi-nationals coming in. They should come up to Mackay, where the multi-nationals have developed the coalfields, and ask the workers there, the people in the area, whether they would like the multi-nationals to go. Of course they would not. As far as the multi-nationals are concerned, the Labor Government was prepared to get $8,000m from the oil sheiks in the Arab countries and would have tied this country hand and foot with the repayments. It would have sold out the country to the Arabs.

The PRESIDENT:

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

Senator GREENWOOD:
Victoria

- Mr President, the note upon which Senator Wood has concluded is the keynote of the debate which has taken place in this chamber over the past few weeks. Fundamentally, it is a debate on whether the people of Australia are to be entitled to pass judgment on the Whitlam Government after 3 years. The Whitlam Government took office on 5 December 1972. It remained in office in the middle of 1974 on the basis which was pleaded at the time that it had not had a fair go. It asked for a continuing mandate to carry through the policies which it had set in motion. It received that mandate, and we now see the consequences of those policies. They are disastrous policies. The Whitlam Government has brought a prosperous nation to the present depressed condition in which Australia finds itself. Inflation and unemployment are at levels which are unprecedented in our history. We have 300 000 people unemployed. We have from the Government no assurance and every indication that that number is likely to reach 500 000 by early in the new year. Indeed, the Minister for Labor and Immigration (Senator James McClelland) related to the Sydney Trades and Labour Council within the last 2 months that if certain eventualities occurred it might be that that unemployment figure would reach one million.

We have an irresponsible Budget deficit of $2,800m, which is liable to rise to $3, 500m and conceivably $4,000m by the end of the financial year. We have a community in which business confidence has been destroyed, with all that flows from that. We have the virtual destruction of the building industry, with the realisation that it can come to life again only after a lead time of something like three to four years. We have a Government which has so reduced the economy that thousands of small businesses are going to the wall. We have a Government which said that because of its knowledge of the industrial unions and the industrial problems in Australia it could cope better with Australia’s industrial disputes. On the other hand, we have seen industrial unrest at record levels since the Government came into power. In short, we have a country which is in a shambles because of mismanagement by an incompetent Government, which adds to its inability to govern this country a developing tendency to hide its faults by deceit, by duplicity and by evasion. We have a Government which has shown that it is corrupt.

In those circumstances, our Westminster system of government has always had the means whereby a government could be sent to the people. The political debate which has been continuing obscures the vital decisions which have to be made. The real issue is not whether the amendment before the Senate is to be carried or whether the second reading of the Appropriation Bills is to be carried. They are the immediate issues upon which a vote will be taken, but underlying those issues is the fundamental question of whether the Australian people shall have the right to vote out this incompetent, corrupt and bad Government; or shall we for a period indefinitely into the future have to suffer a government on the apparent belief that there is no means of bringing its tenure of office to an end? It has always been one of the accepted virtues of the Westminster system of responsible government that a government can be taken to the people before its term of office has expired.

I recall reading in terms of the trauma which was hitting the United States after the corruption of the Nixon Government had become apparent how people in the United States wished that they had the power to take President Nixon and his Government to the people before the allotted period of 4 years had expired. Under the American system there is no means of cutting short the 4-year term of a President. Under the Westminster system, a government can be cut short. It is absolute nonsense and a misreading of history, the law and the Constitution to say that a government must last for 3 years. The Commonwealth Constitution in clause 28 states:

Every House of Representatives shall continue for three years from the first meeting of the House, and no longer, but may be sooner dissolved by the Governor-General.

That provision in the Constitution is a safeguard and a guarantee that no government, no Parliament, can perpetuate itself in office for a period longer than 3 years. But it is also a clause which acknowledges what is at the heart of our inherited system of government; that is, that the Governor-General has the power to dissolve a Parliament in a period of less than 3 years. That was done in the Commonwealth Parliament barely 10 years ago, when Sir Robert Menzies sought the dissolution of the House of Representatives and was granted that dissolution after approximately 22 months in Government. No one questioned at that time the right of the Prime Minister to take that course.

Indeed, there are few Parliaments in our history which have gone their full 3 years. Invariably they are terminated or dissolved at an earlier period. Senator Wood referred to the fact that Senator Steele Hall, who takes a somewhat different stance now, when he was Premier of South Australia chose to take his Government to the people of South Australia approximately 12 months before it was in due course to face the electors. Quite recently, a matter of some 4 months ago, the present Premier of South Australia, Mr Dunstan, chose to take his Government to the electors approximately 10 months before he ordinarily would have had to go to an election. Apparently it is all right when you are a Labor Premier or when you are supporting the Labor case to justify the earlier dissolution of a Legislative Assembly, but it is not all right to allow a dissolution to take place when you fear the result.

The sole reason that on this particular occasion there is no resort to the electorate is that Mr Whitlam fears the verdict of the people. Indeed, in 1974 when the precise course of action which the Senate is now taking was adopted by the Senate, Mr Whitlam accepted the propriety of what was being done. He said in his submission to the Governor-General that the conduct of the Senate had rendered the functioning and process of government inoperative and therefore he asked for a double dissolution. He accepted- though as he said at the time, he did not like the course being followed- the consequences of what was being done and so he sought an election. Consistently, he should take the same course now, but he chooses not to. I think that the only fair conclusion one can draw is that in 1974 he anticipated the result that he secured. In 1 975, he fears the result of what will take place.

Let it not be thought that the Prime Minister does not know what the position is. In 1970 he purported to follow this course and would have succeeded if he had persuaded the Australian Democratic Labor Party which held the balance of power in the Senate at that time to vote with him. The Prime Minister said in 1970 during the course of the Budget debate on the Appropriation Bills of that year:

Let us take this Budget and the Government, which produced it to the people themselves. The Parliament has already voted Supply to the end of November. By that time. there can be an election for both Houses. An election would therefore cause no disruption. The only thing that will cause disruption is the continuance of the Government.

I cite that quotation because it was made in August 1 970. That was some 8 months after the Gorton Government had been returned to office in October 1969. Mr Whitlam did not think it amiss or in any way wrong at that time to attempt to cut short the 3-year term which ordinarily a government expects to have. The plain fact is that where there is in the Parliament an Opposition which has power which it may lawfully and legitimately use, it has the right to force an election to take place. If a Senate forces an election which the people do not want, those who have forced that election will suffer as a consequence. If, on the other hand, they are correct in the course which they have followed; they will be vindicated. That is the fundamental position which is involved in what is happening now.

The clear intent and purpose of the Senate’s action- it has been made abundantly clear- is not to cause hardship or injury to anybody! The purpose of what the Senate is doing is to force an election. Why, in a democracy, should any democrat cavil at the people’s judgment? Is it not an example of the old truism that the people who oppose elections are the people who fear elections? Mr Whitlam is opposing an election because he fears the election. The essential feature of responsible government in our system is that if a government lacks the ability to have its money Bills passed through the Parliament it resigns and goes to the people as the government or it resigns and the Governor-General appoints a different Prime Minister. Mr Whitlam again said - 1 quote him because he knows the rules- in October 1970 in the House of Representatives:

We all know that in British parliaments the tradition is that if a money Bill is defeated … the Government goes to the people to seek their endorsement of its policies.

That course is not being followed. Mr Whitlam is hanging on to power, determined to use every day, month and year that he can maintain his hold which comes through being the Prime Minister of this country. One can say only in the circumstances in which this country is placed that he is not giving the people a fair go by giving them an opportunity to decide whether he is to continue in government or whether the Opposition is to be given an opportunity to see whether it can do better.

Senator Wriedt:

- Senator, do you feel that the Bills have been defeated?

Senator GREENWOOD:

– I certainly feel that if the Bill is to be defeated and as a consequence thereof there is to be an election, that certainly should be the course that is followed. But I have not understood the Prime Minister to say that if the Senate, instead of deferring the Bill until an election is held, were to reject it outright he would have an election forthwith. If the Prime Minister is saying that, I will be grateful for the Leader of the Government in the Senate (Senator Wriedt) to make that position quite clear. Then we would know what our course must be. But that is not, as I understand it, what the Prime Minister has said. I sense a desire on the part of the Leader of the Government in the Senate to interject or probe further. If he is prepared to say what I am inviting him to say, I trust that he will do it.

There has been added to the present political differences a dimension which is frightening in its implications. Last Friday evening on a television program the Prime Minister announced that even if the Appropriation Bills- the money Bills -did not go through the Parliament he believed that he could continue as Prime Minister. What he was saying was that he could continue to govern without the Budget Bills. The implications of that statement are that he will be able to govern without the authority to raise money which comes from the Parliament. It should be recognised that the. Parliament is the source of the moneys which are paid by government. The Appropriation Bills are passed each year in the ordinary course because they provide the sinews of government. The Supply Bills are passed in the middle of the year in order to enable the Government to have the finances to carry on pending the presentation and passing of the Budget Bills. There are other Bills which contain appropriation provisions which enable a continuing expenditure to take place. But unless those Bills have been passed by the Parliament there is no money to carry on government. As I have said, when the money supply is cut off by the Parliament, the ultimate recourse is an election. Of course, pending the result of the election, the Parliament accommodates the government of the day by ensuring that necessary finances are available for the requisite period.

But the Prime Minister has said that in some way, which he has not defined, he will be able to pay the expenses of government without having the money passed through the Parliament. If a man can do that, he is able to rule without parliament. The statements which have been made by Mr Fraser and other members of the Opposition that this is the path to ultimate dictatorship are only too true. People should not think that talk about dictatorship is glib and unreal in the Australian context. The greatest democracy in AsiaIndia -is acknowledged on all sides to have recently become a dictatorship. The transformation can easily occur, and it can easily occur in the most unexpected places. If we have a Prime Minister who claims to be able to govern without the Budget Bills- without the Appropriation Bills- he is pursuing a course which is fraught with peril for democracy. If parliament cannot control the expenditure of money, how can it control the government of the day?

If one examines the Constitution, one finds that there are certain courses which must be opposed by t he Prime Minister if he is to adhere to the statements which he made last Friday evening and which he has since confirmed in answers to questions. Section 81 of the Constitution makes it clear. It states:

All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution.

That is the clear section in the Constitution which states that where moneys are raised or revenues are received by a government, they go into the Consolidated. Revenue Fund. Money can be drawn from that Fund only in accordance with the Constitution. What does the Constitution say on that point? Section 83 states, in part:

No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law.

Therefore, if money is to be drawn from the Treasury, from the moneys which constitute the Consolidated Revenue Fund, this can be done only by a law passed by the Parliament. The normal laws under which money is drawn from the Treasury are the Appropriation Bills which are at present delayed. If the Appropriation Bills are not passed, where is the Government to derive the authority to carry on the government? The Prime Minister, the Leader of the Government in the Senate and the Treasurer (Mr Hayden) have declined to say. I should have thought that it is the right and entitlement of the Parliament to know what are the means by which the Government proposes to raise moneys and to spend moneys if it is not through laws passed by the Parliament.

Why does the Government choose to conceal the course which it is following? Why does it say simply that we will be told in good time? I would have thought that if a person has secret means or means which he is not prepared to reveal as to how he proposes to carry on the government, that is a threat to the whole institution of Parliament and the system under which we are governed. The Prime Minister ought to make known the course which he proposes to follow. If it is contrary to law there are steps which may be taken in the courts to prevent that course being followed. If it is in accordance with the law we are the wiser, and appropriate courses can be taken simply because we know what is being proposed and can make our judgment whether or not it is in accordance with the law. We ought not to be left in that position. The country should not be left in the position that no one can say which course the Government proposes simply because the Government chooses not to reveal the reasons. The Prime Minister says that it will be legal and constitutional and that no course which involves any breach of the law will be followed. Those are fine words, but how can they be tested unless the explanation is given? The Prime Minister has shown that he is prepared to be party to a massive illegality in the attempt to raise $4,000m by an Executive Council decision hidden from the Parliament and taken in contravention of the provisions of the Financial Agreement. A Prime Minister who can take that course of action is a Prime Minister who will not balk at lesser steps if it means that he can hang on to office. The Prime Minister has shown that his honesty and truthfulness must be suspect even in serious matters. On 1 5 October he said:

At no time has there been any allegation of improper conduct, of dishonest conduct, or reprehensible conduct, of illegal or corrupt conduct by any member of the Government. No such allegation or charges were made at the special sitting to discuss this matter on 9 July. No such charges were made in the Senate for all the Senate’s abuse of parliamentary privilege. No such charges are made now.

The Prime Minister repeated that statement 5 days later, on 20 October. The record is replete with allegations made inside and outside the Parliament, not only of reprehensible conduct but also of improper conduct and illegal conduct. It had been alleged against him that he was engaged in a massive illegality. The Leader of the Opposition, Mr Fraser, had said that the former Minister for Minerals and Energy appeared to have been a leading member of an illegal conspiracy to evade the Constitution. We know that conspiracy consisted of the 4 Ministers who signed an Executive Council minute in December of last year. Only one of those 4 Ministers now remains in the Government, and that is the Prime Minister. Just as Richard Nixon was the last to go in the United States, so will Gough Whitlam be the last to go in Australia.

The claim was made publicly and outside the privilege of the Parliament by myself and by others that what was disclosed by that Executive Council minute represented criminality. There was an attempt by unlawful means to subvert the Constitution, to bypass Parliament and to raise, so that one might govern without Parliament, $4,000m. Most lawyers know what Halsbury’s Laws of England say about the meaning of conspiracy. It says:

If two or more persons agree together to do something contrary to law . . . or to use unlawful means in the carrying out of an object not otherwise lawful, the persons who so agree commit the crime of conspiracy.

Sir Robert Menzies said of this same incident:

This Executive Council decision is scandalous. It was clearly and unblushingly designed to escape the obligation in the Constitution to go to the Loan Council under the Financial Agreement for approval.

Senator Walsh:

– Who said that?

Senator GREEN WOOD:
QUEENSLAND

-Sir Robert Menzies. He said:

It was a disreputable incident. It was designed to evade the constitutional obligations of the Commonwealth.

When the Prime Minister says that no allegation of illegal conduct, improper conduct or reprehensible conduct has been made, he is plainly not telling the truth. Therefore, when he says that the means which he will follow to govern without the Appropriation Bills will not be illegal and will not be unconstitutional, what credence or trust can be placed on his words? One could add this further question. Until the Government states the means by which it proposes to raise the thousands of millions of dollars with which to carry on government, how can one say whether the means will be legal and constitutional? Is the Government still surreptitiously endeavouring to raise by some unlawful Executive Council minute or authority thousands of millions of dollars on the international money market? What means are being adopted by the Government?

I speak at a late stage in this debate only because what has occurred since last Friday, in terms of the Prime Minister’s statements that he proposes to govern even if the Appropriation Bills do not go through, adds a new dimension to the whole situation which is frightening in its seriousness for parliamentary authority. The Government apparently is not concerned to inform the Parliament of what it is doing. If there were inadequate reasons in the past for why this Government should go to the people, the present threat by the Prime Minister adds a reason why this Government should be tested by the people. The basic and fundamental issue which we in the Opposition are asserting and will continue to assert is whether the people of Australia, in a democracy, shall have the right to vote. It is the Australian Labor Party which fears an election, it is the Australian Labor Party which is opposing an election.

Senator WRIEDT:
Leader of the Government in the Senate · Tasmania · ALP

– Again we come to the end of one of these rhetorical, flamboyant speeches of Senator Greenwood in which remarks such as ‘massive illegality and corruption’ are thrown around with wild abandon. As previously, there is no attempt by him or his colleagues to substantiate these generalisations. I was surprised that Senator Greenwood entered into this debate. After hearing him it is quite obvious that once again he has nothing new to add. He has just made those generalisations. He engaged in his normal and usual attack on this Government for its mishandling of the economy, for inflation, for unemployment, for the collapse of small businesses, and so on. Inevitably he came back to the loans issue and to the question of the Government’s staying in power. I thought one of his remarks was most significant. He said that the Government has been cavilling at its apparent rejection by the Australian people. The truth is that the Opposition has never accepted the people’s decision of December 1972. Despite the fact that we were legitimately elected for a 3-year period then, similar tactics were employed in May 1974 when the gallup polls in the early part of the year showed that the Government could be defeated. So the Opposition employed its numbers in this place to pull on an election in which it was subsequently defeated. This will happen again at the next election.

The Australian Government certainly took a great number of initiatives in its first 2 years. It is nearly 3 years now. We did so on the basis of a mandate- an authority that was given to us by the Australian people. We have instituted new policies which are now overwhelmingly accepted by the Australian people. Senator Greenwood is about to smile. I say to him that the only thing which has caused the fall in the fortunes of this Government in the past few months has been the corrupt campaign of the Opposition to deceive the Australian people about what this Government has been doing. I use the term ‘corruption’ without any inhibitions whatsoever. The Opposition has taken a corrupt line. Because Mr Connor, when Minister for Minerals and Energy, saw the need and had the wisdom to protect our resources in this country from exploitation by overseas interests he was condemnedcondemned because of the so-called methods he used to obtain finance for Australians, the Australian Government and Australian business interests to develop our resources ourselves. This was a crime as far as the Opposition was concerned. We had a great cloud of a story about telexes, a man called Khemlani, another man called Karidis and letters going to and from banking institutions in America and Europe, all designed to do no more than confuse the one basic point- and that basic point has been the initiative that this Government has taken and will continue to take to develop our resources for the benefit of Australians.

Senator Greenwood overlooks the fact, when he talks about inflation, that the economic downturn of 1974 was a worldwide phenomenon which neither Australia nor any other country could avoid. All the figures show that all of the Organisation for Economic Co-operation and Development countries which are comparable to Australia experienced the same downturn in their economies as we did. Senator Greenwood is leaving the chamber because he hates to hear the truth. In this country it was necessary for this Government to assist Australian industry to try to meet the ravages of that recession. Certainly we have had inflation problems and unemployment problems, but we have not had them on the scale that many comparable countries overseas have had to experience. Even today, on the latest figures available, in this country we still have a comparatively low rate of unemployment compared with our major trading partners, with the one outstanding exception, of course, of New Zealand, which is exceptional compared with all the countries concerned. But both the United States of America and Canada enjoy- or do not enjoy- unemployment rates higher than we have in Australia. The rate in the United States is 8.3 per cent and in Canada 7.2 per cent.

It is interesting to compare the growth in the gross domestic product which is taking place in this country compared with that of those other countries. Australia is miles ahead of all the other countries with which it legitimately can be compared. In the June quarter of this year Australia had a gross increase in the gross national product of no less than 12 per cent. The United States had an increase of 1.9 per cent, Canada 1.2 per cent, Japan 3.2 per cent, West Germany 0.6 per cent and the United Kingdom had a negative growth rate- minus 7.5 per cent. These are hardly figures which would substantiate the argument that the Australian economy is in any way comparable in its recession with the economies of other countries. That argument is misleading as, of course, is the argument about the closure of small businesses.

There is a continual campaign to try to give the impression that this Government is not concerned with the business community. I want to read some figures- to Senator Greenwood in particular because I am sure he will be interestedon the state of small businesses in Australia and their related bankruptcies. A survey which was undertaken by A. J. Williams of the University of Western Australia last year has established that in Australia approximately 69 per cent of new firms are closed by financial necessity within 5 years of beginning their operations. Sixty-nine per cent, no less! Over the 10-year period from 1960 to 1970 bankruptcies averaged about 2300 per year under a Liberal Government, and they reached a peak in 1965 of 2400. Let us compare the performance of small businesses under the Labor Government. I shall pick up the figures in 1971-72. Under a Liberal Government bankruptcies peaked again at 2684 in that year. In the first year of the Labor Government- 1972-73-the figure fell to 2254; in the second year of the Labor Government it fell to 1637. Last year it increased slightly to 2052. In other words, the performance of small businesses in Australia over the past 3 years is better than it was during the 13 years under a Liberal-Country Party Government prior to our advent to government.

Senator McLaren:

– That gives the lie to Senator Greenwood.

Senator WRIEDT:

– It does give the lie, because we have here official figures, which have been provided, which establish the fact that under this Government small business in Australia has performed better than it did under the Liberal-Country Party Government during the 13 years before this Government took office. The statements from the other side are the sorts of generalisations which have been bandied around for so long. I come now to the second part of Senator Greenwood ‘s speech in which he alleges illegality by this Government and asks how it is possible that the Government can continue without the authority of the Parliament. It has been stated several times that nobody is suggesting that the Government will act without the authority of the Parliament. I answered a question on that matter again this morning, and I indicated then that the necessary authority will be obtained. But the Government has quite properly taken the steps that it considers necessary to alleviate the hardship which will be brought about very shortly by the actions of the Opposition.

There has been a quite dramatic change in the results of public opinion surveys, in which the majority of Australians have now swung very strongly behind the Labor Government. I am not suggesting that that is because all of a sudden the people have grown to love us. Naturally the bulk of that vote is the traditional Labor vote and, as always, the traditional Liberal vote will still stand in its traditional position. But it is quite evident that a very significant percentage of the Australian people can see now the dire consequences of what the Opposition is doing to this country. We could see that, the day the Opposition decided not to pass the Appropriation Bills and, with the mandate to continue in government which was given to us last year by the Australian people we legitimately set about finding ways and means whereby we could continue to finance the operations of this Government. The details of that scheme will be made public and made available to the Parliament in due course. But of course this scheme will not go all the way. It will not subvert the law, the Constitution or the Parliament. What it will do will be to alleviate as much as we possibly can the consequences of what the Opposition has done.

I am not going to adopt the bravado stand that Senator Greenwood did in which he seemed to indicate that he thought that in the event of an election the Opposition would win and the Government would be defeated. I do not know. I have always had a very uncertain feeling about politics. I was asked on television 3 months ago, when the surveys showed the Labor Government to be in a very serious position, whether we would win the next election. I said: ‘Yes’. The reason I gave was that the situation in politics can change dramatically and quickly. That applies to both sides. Therefore I would not be one who would say which way a result would go. But an election fought on this fundamental issue is one which the Australian people will understand. It is quite obvious already that they understand the significance of what has been donethe precedent that has been set and the danger for the stability of future governments in this country, irrespective of whether they be Labor or Liberal. This is the issue on which the Australian people would decide an election, I believe. For that reason I do not think there are very great grounds for Senator Greenwood to be overly confident, any more than any of his colleagues should be. What we are concerned about is ensuring the minimum disruption to the Australian economy, the minimum hardship to the Australian people. I have no doubt that before very much longer the sheer pressure of public opinion will convince our friends in the Opposition that the course that they have set themselves is the wrong one and that they will see the error of their ways and will pass these Appropriation Bills. I regret, in closing this debate, that at this stage they have not come to that wisdom. But I have no doubt that in a very short space of time they will.

Question put:

That the words proposed to be left out (Senator Cotton’s amendment) be left out.

The Senate divided. (The President- Senator the Hon. Justin O ‘Byrne)

AYES: 30

NOES: 29

Majority……. 1

AYES

NOES

Question so resolved in the affirmative.

Question put:

That the words proposed to be inserted (Senator Cotton’s amendment) be inserted.

The Senate divided. (The President- Senator the Hon. Justin O ‘Byrne)

AYES: 30

NOES: 29

Majority……._ 1_

AYES

NOES

Question so resolved in the affirmative.

Question put:

That the motion, as amended, be agreed to.

The Senate divided. (The President- Senator the Hon. Justin O’Byrne)

AYES: 30

NOES: 29

Majority……. 1

AYES

NOES

Question so resolved in the affirmative.

page 1777

APPROPRIATION BILL (No. 1) 1975-76 [No. 3]

page 1777

APPROPRIATION BILL (No. 2) 1975-76 [No. 3]

Bills received from the House of Representatives.

Suspension of Standing Orders

Motion (by Senator Wriedt) agreed to:

That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of each of the Appropriation Bill (No. ) 1975-76 [No. 3] and Appropriation Bill (No. 2) 1975-76 [No. 3] being put in one motion at each stage, and the consideration of each of such Bills together in the Committee of the Whole, and as would prevent the reading of the short titles only on every order for the reading of the Bills.

Ordered that the Bills be taken through all their stages without delay.

First Reading

Bills (on motion by Senator Wriedt) read a first time.

Second Reading

Senator WRIEDT:
Minister for Minerals and Energy · Tasmania · ALP

– I move:

These Bills now before the Senate are in every respect similar to Appropriation Bill (No. 1) 1975-76 and Appropriation Bill (No. 2) 1975-76 which were presented by me to the Senate on 14 October and again on 22 October 1975 following the unprecedented step of their deferral on 16 October 1975. It is relevant to note also that the information contained in the Schedules to those Bills was tabled by me in the Senate on the occasion of the Budget on 19 August in the form of documents setting out particulars of proposed expenditures for the year.

In my Budget Speech, I outlined the economic policy background to the Government’s Budget proposals and announced at some length what those proposals were.

The details of the proposed expenditures were again referred to in my second reading speeches on previous occasions and I do not think it is necessary to restate them here.

The House of Representatives has now passed these important money Bills on 3 occasions. The matters contained in them have been debated at length both here and in the House. Both honourable senators here and members in the other place have had adequate opportunity to exhaustively examine the expenditure proposals they contain.

The Bills I have now introduced again seek the appropriation of $6,976,119,000 in Bill No. 1 and $2,268,980,000 in Bill No. 2 for the services of the Government for the financial year ending 30 June 1976.

The wide variety of expenditures for which appropriation is sought is set out in detail in the Second Schedule of each Bill. As I have said before they cover matters such as: Salary and wages for public servants and other employees of departments and of statutory authorities; student assistance programs; health services, including amounts for the operation of the Australian Capital Territory and Northern Territory hospitals; employment training and assistance and expenditure on projects for the relief of unemployment; maintenance of Australian representation abroad; payments to international organisations; aid programs; grants for aged persons homes and hostels; defence services; the reconstruction of Darwin.

In answers to questions here and in the House of Representatives it has been pointed out the consequences in terms of personal hardship and disruption which continual deferral of these Bills will produce. I commend the Bills to the Senate.

Debate (on motion by Senator Cotton) adjourned.

page 1778

LOAN BILL 1975 [No. 2]

Second Reading

Debate resumed from 28 October on motion by Senator Wriedt:

That the Bill be now read a second time.

Senator COTTON:
New South Wales

– The Loan Bill is one which we have discussed before in the Senate and as the Opposition has indicated on earlier occasions and will continue to indicate, its stance in regard to this Bill is part of its general position on the whole package of these measures. I again restate our simple proposition: We require the Government to present itself to the people before June 1976 and until it agrees to do that in the House of Representatives the Opposition’s view is that these measures should be deferred. We have undertaken to give the Bills passage immediately the Prime Minister (Mr Whitlam) and the Government agree to present themselves to the people in the proper way. The Opposition has an amendment which has been circulated and I propose to read that amendment out in case the memory of some of my Senate colleagues on the Government side has failed them. I move:

Senator Georges:

- Mr President, I raise a point of order. Surely this can be considered as tedious repetition. We have heard this statement on the part of Senator Cotton on 3 occasions. Surely he ought to be brought to order. Week after week we have been hearing the same argument, the same amendment, the same proposition and we have witnessed the same voting pattern. Under the Standing Orders, there must be some way in which you, Mr President, can rule.

The PRESIDENT:

– There is nothing in the Standing Orders to prevent the honourable senator from following the forms of the Senate.

Senator COTTON:

-I thought it was a natural courtesy on my part to refresh the minds of the honourable senators on the Government side. The amendment continues:

  1. the continuing incompetence, evasion, deceit and duplicity of the Prime Minister and his Ministers as exemplified in the overseas loan scandal which was an attempt by the Government to subvert the Constitution, to by-pass Parliament and to evade its responsibilities to the States and the Loan Council;
  2. the Prime Minister’s failure to maintain proper control over the activities of his Ministers and Government to the detriment of the Australian nation and people; and

  3. the continuing mismanagement of the Australian economy by the Prime Minister and this Government wilh policies which have caused a lack of confidence in this nation’s potential and created inflation and unemployment not experienced for 40 years.

    1. That the foregoing Resolution be communicated to the House of Representatives by Message.

In the Senate we have had a long and careful scrutiny of the Loan Bill. We have, as has been quite rightly noted to us, asked a great number of questions and, in the process, we have received a great number of answers. From time to time it has been observed by honourable senators on the Government side that the Senate has no right to engage in such scrutiny and that what we are doing is, in effect, unnecessary. We did not feel so. We do not feel so now. I believe that the Senate is entitled to carefully scrutinise measures. This Bill certainly has been subjected to such scrutiny. As an exercise in trying to help all of us later, I have taken the trouble to ask the Parliamentary Library, over some time, to produce for me a general paper on public finance. It contains possible reforms in the Australian parliamentary scrutiny of public finance, particularly in the Senate. This has been extremely well done by Mr Loane and Mr Bates of the Library. I believe that the Senate is indebted to them. I think that it is a very useful paper for the Senate. It is on the proposition of whether we are able adequately to scrutinise public finance. It asks whether there are any areas for improvement. Some of these areas are suggested. It is a useful paper. I suggest that I should be given leave to incorporate it in Hansard.

The PRESIDENT:

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

PUBLIC FINANCE

Request: Background paper on possible reforms in Aus tralian Parliamentary scrutiny of public finance.

Answer:

OUTLINE

Introduction.

Information-

Present Forms;

Program Budgeting;

Forward Estimates;

Deficit Financing;

Seasonality in Budget;

Revisions:

Political Problems

Economic Problems with Predictions;

Performance Measures;

Openness in Budget Formulation.

Powers of the Parliament- Budget Initiation and Amendment-

a ) Governor-General ‘s Warrant;

b) House of Representatives;

Senate;

‘Tacking’;

Enforcement of Constitution on Money Bills;

Amendable Expenditures;

Legislation for New Programs.

Timingof Legislation-

Legislation Outside Budget Time:

Special Appropriations:

Treasurer’s Advance;

Trust Accounts;

Loan Fund Expenditure:

Long-term borrowing:

Short-term borrowing;

Loan Raising;

Cash Balances;

Taxes.

b ) Timing of Presentation of Budget;

Changes Subsequent to Budget Presentation:

Revisions;

ii ) Switching Appropriations.

Parliamenta ry Committees-

Public Accounts Committee;

Senate Estimates Committees;

Proposals.

Influence of Outside Bodies-

Loan Council;

Economic Council;

A Rule for Monetary Policy;

State Income Taxes.

Introduction

The main purpose of this paper is to suggest the main areas and aspects of public finance which at present are not fully subject to monitoring by the Parliament.

The Parliament can involve itself in the budgetary process in the following ways-

studying relevant information published in a useful form by the Government;

debating budget measures;

changing budget measures by participation in formulation or by voting;

examination by Parliamentary Committees.

To exercise some influence, the Parliament needs opportunities at different stages of the budgetary process, including-

anticipatory- considering budget proposals;

monitoring current progress of execution of budget;

scrutinising historic budget statements to judge propriety, performance and efficiency of budget execution.

INFORMATION

Present Forms

At present the main regular information about future budget proposals is given in the set of annual Budget Papers, presented with the Budget Speech, and explanatory notes provided for the Senate Estimates Committees. Actual Budget progress in broad terms is shown in a monthly onepage Statement of Financial Transactions. Actual annual results are shown in the Budget Papers with further detail in the Treasurer’s Statement of Receipts and Expenditure, and the Auditor-General’s Report. Further statistics are provided after some time lag by the Australian Bureau of Statistics.

The forms in which information is presented in the Budget Papers, prepared mainly by the Treasury, has improved greatly over recent decades. In particular, advances have been made in providing budget classifications according to economic significance and broad functional significance.

Some possible areas for further improvement are suggested below:

Program Budgeting

It might be possible to show a more detailed classification of expenditures according to functional aim and program consolidated for all funds and appropriations. There is a broad functional split in Statement 3 of the 1 975-76 Budget Speech. However it would often be useful to know how much was being spent on smaller programs hidden at present within the broad figures, e.g. on administration of various government schemes dispensing moneys to individuals. There is on the other hand a detailed split of expenditures in the Appropriation Bills by appropriation division. Whilst occupying a considerable amount of space, these figures are of limited use since, below a fairly broad level of departmental divisions and bureaus, they classify expenditures only by nature of inputs or the category of cost or materials purchased, e.g. wages, postal services, stores, freight, etc., rather than by program or objective. They also have the drawback of including some service costs in the appropriation of the department arranging the service (e.g. furniture under Department of Housing and Construction) rather than the department using them.

There are certain obvious difficulties in attempting a detailed program classification. For example, the work of a section of the public service might serve several objectives at once (e.g. health and education) and it may be either conceptually misleading to allocate them to one or another; or a group might devote their time partly to one program and partly to others and it would be practically difficult to allocate their cost to the different objectives they serve.*

  1. Forward Estimates

Forward estimates of important expenditure programs for several years ahead would be useful for planning purposes. This has in fact been experimented with in the case of education, roads and defence. If the Government were to show the likely continuing and future costs of its programs, it would give a better guide as to how those costs should be distributed year by year, in the light of overall priorities and availability of resources. It would, for example, avoid the situation where a government might introduce a program with a small initial cost and not make clear that it would create a commitment for escalating costs later.

Forward estimates would show the Parliament and the people what the medium or long term objectives of the Government were, even though progress towards them would necessarily be limited by availability of resources.**

** See article by Sir Frederick Wheeler, ‘Forward Estimates of Commonwealth Budget Expenditures1. Australian Accountant, April 1973.

  1. Deficit Financing

Although the Budget Papers give details of estimated expenditure and broad estimates of tax. revenue, they give virtually no information about how the deficit (which usually occurs) is to be financed.*** Since the planned deficit of $2, 798m in 1975-76 was of an unprecedented size the Opposition were particularly concerned to know broadly how it would be financed. It would make a massive difference to monetary conditions in the economy if, on the one extreme the deficit were financed by creation of new money, or on the other, by long-term borrowing from the non-bank public. The first course would set a dangerous basis for increased inflation and the latter might drive up long-term interest rates and thereby discourage investment.

*** The only clues seem to be on page 19-20 of Budget Speech, 1975-76 Statement No. 2.

As befitted the special circumstances, the Government did give, in response to questions, more information than ever before about its intentions. (See answers to Senator Cotton’s questions No. 7 in Senate Hansard, 2 September 1975, page 419, and Nos 1 1-14 in Senate Hansard 10 September 1975, page 702.)

It is not really feasible to expect much greater precision in this area. The method of financing the deficit must be consistent with the government’s overall monetary policy (as should management of existing debt to a smaller extent). Monetary policy’ includes policy on interest rates, open market operations in government securities and bank lending, etc. At any given time, the government usually has a stated monetary stance in broad terms although it has never been explained in the past in any quantitative detail. The most appropriate monetary stance is probably even more subject to continual change than its budget receipts and expenditure, being dependent in particular on overseas capital flows, the demand for funds by the private sector, and the level of private savings, which are often hard to predict.

It cannot be expected that a government should strictly maintain a once-a-year formulation of even budgetary policy, let alone monetary policy. On the one hand some longer term planning over several years can be kept in mind, while on the other adjustments for short-term circumstances within a year may be necessary.

However, perhaps in the future, an outline of monetary stance in the sort of detail given in September 1975 could be given regularly as a matter of course.

  1. Seasonality in Budget

The Treasury’s ‘Statement of Financial Transactions’ shows monthly progress of budget outlays, receipts and financing transactions by broad category. Its usefulness for gauging the likely full-year result is limited since the pattern of distribution of some items, particularly some taxes and capital expenditures, is not even through the year.

It is not really feasible, however, to suggest that it be published on a seasonally adjusted basis, like many other statistics, since the seasonal variation of many items is not regular enough. All that can be expected, probably, is that the Treasury comments on unusual items and expected seasonal swings.

  1. Revisions

Revisions of budget expectations through the course of the year are lacking at present.

They would be of considerable help to Parliament in conditions such as in 1 974-75 when, subsequent to the passing of the Budget, the Government made numerous tax cuts and new expenditure commitments which increased the deficit from a planned $570m to an actual $2,567m. The Government did not provide any progressive revision of the overall budget situation, except occasionally a revised estimate of the budget deficit in response to Parliamentary questions. Most of the information was available in a fragmented form, as the Government gave estimates of the cost of tax cuts and some expenditure measures, in Appropriation Bills 3 to 6 at least. However, the failure to revise meant that the mass of detail and summaries in the Budget Papers became largely irrelevant.

The extra administrative burden and cost in preparing detailed monthly or quarterly revisions of the budget estimates in the form originally presented would undoubtedly not be worthwhile for the benefits gained. However, a brief statement, prepared regularly through the year or when the occasion warranted it, showing particular causes of budget revisions and their broad effect on receipts or expenditure would be useful to Parliament.

Political Problems

There may be some objections to budget revisions on the grounds that revisions made in good faith which later turn out to be misjudged may invite allegations against the public service or Government of tampering for political ends. Something of this nature occurred with the Treasury revisions published in the Treasury Information Bulletin in early 1973 which, as it turned out, overestimated the size of the deficit. It was alleged that this was done to frighten the Government into restrictive measures. However, the main problem was that some of the individual department’s estimates on which the Treasury has to reply, overstated how much money they would spend in the rest of the year.

However, similar problems and allegations may apply to the original budget estimates, so it is difficult to see why new evidence coming to light should not be taken into account in revised estimates.

Economic Problems with Predictions

In planning the Budget the government knows most about its own expenditure programs and tax rates over which it has control. The most difficult factors to predict are developments in the private sector over which the government has some influence but certainly no control but which nevertheless affect budget receipts and expenditure.

The problem of predicting these factors is complicated by the fact that the government’s predictions may themselves have an effect on. the actual course of the factors.

For example, for the purpose of estimating income tax revenue in 1975-76, the Government assumed a rate of increase in average earnings of 22 per cent. To many independent observers this estimate seemed to err on the high side, judged by recent industrial trends. If overestimated, it gave the Government the political advantage of presenting a smaller deficit than otherwise. On the other hand, it has the disadvantage of perhaps encouraging some unionists to purs ue wage claims of such an order, particularly if it is given wide publicity against the Treasury’s wishes. It could then prove to be almost a self-fulfilling prophecy. The best course perhaps would be to assume the lowest rate of increase of earnings that could be realistically achieved, taking into account its own effect on the actual rate.

Changes in economic activity and employment, imports, and the distribution of income between wages and profits all have important influences on revenue from various taxes. There again, if the Treasury assumes a very low rate of economic growth, it could tend to be self-fulfilling as businessmen would be more reluctant to invest and consumers reluctant to spend, fearing unemployment.

On the expenditure side, the estimates for particular expenditure items in Appropriation Bills 1 and 2 are based on costs and wage rates known at the time the Budget is being finalised (about July)* because the actual size of any future cost increases cannot be predicted even though it can be confidently predicted that there will be some. However, a lump-sum allowance of SI 50 million for likely salary increases (including those based on indexation) was included in the estimate of total expenditure.** This represented a further increase of about 8 per cent per employee, on top of about 7 per cent from salary increases already known and incorporated in the Appropriation Bills.

** See Budget Speech, Statement No. 3, page 103.

Although this practice means that particular expenditure items are certainly underestimated in money terms, it nevertheless has powerful advantages. If appropriations were made for particular expenditures based on an attempted realistic estimate of future costs, and this estimate subsequently turned out to be on the high side, it would mean that more money than necessary had been appropriated, but the government departments might tend to conceal the fact and spend the money anyway on items not originally intended. This already happens to some extent with misjudged appropriations.

Expenditure from certain other appropriations is estimated on a more realistic basis. For example estimated expenditure on pensions in 1975-76 was based on the expected rate of increase in the Consumer Price Index. Financial assistance grants to the States are based on a formula including anticipated increase in average weekly earnings.

  1. Performance Measures

To be able to judge the performance of the Government in its expenditure of public money, the Parliament ideally needs to know not only what was spent on various programs but what was achieved.

At present, the .information available on the Budget shows only how much money is spent. The examination by the Auditor-General and the Public Accounts Committee is mainly to ensure that there were no breaches of the law in spending money, or inefficiencies, carelessness and waste in spending.

What is lacking is information to determine the extent to which money spent with a particular objective goes towards achieving that objective. Some fragmented relevant information may be available in government reports and other sources.

The aims of different expenditures, for example, may be to improve educational standards, reduce inequalities, reduce waiting times for public services, reduce crime, retrain people etc. For most programs there would be several different objectives requiring different measures. However, grave difficulties must be faced in attempting to specify the relevant information. Some of the various objectives may be un-measurable in quantitative terms. Further, changes in underlying needs may render a measure of achievement meaningless.

  1. Openness in Budget Formulation

Formulation of the Australian Budget has traditionally been a secretive affair, culminating in its announcement as a fait accompli. The Parliament is given no information or opportunity to participate in Budget formulation nor can it amend the announced Budget. The secrecy and finality of the original Budget have been eroded somewhat under the Labor Government, but not in a formalised manner.

Some of the arguments in favour of secrecy are that it prevents profiteering on tax changes, it prevents undesirable speculation on alternatives under discussion and it gives less opportunity for pressure groups to mount campaigns.

These arguments are downgraded in an article by P. D. Groenewegen* which puts a case for greater disclosure of budget proposals.

  1. POWERS OF THE PARLIAMENT-BUDGET INITIATION AND AMENDMENT

    1. Governor-General ‘s Warrant

Only the government can initiate money Bills because of the requirement in Section 56 of the Constitution that appropriations be recommended by the Governor-General. Of course, such a recommendation would only be given in relation to government-initiated appropriations.

Other constitutional provisions distinguish between the two Houses of the Parliament in relation to money Bills. These provisions limit the effectiveness of the Senate’s scrutiny of public finance.

  1. The Senate

The Senate is constitutionally prohibited from initiating legislation appropriating revenue or moneys or imposing taxation; from amending Bills imposing taxation or appropriating revenue or moneys for the ordinary annual services of the Government; and from amending any Bill so as to increase a proposed charge or burden on the people.

While the Senate is denied the power to change certain Bills, it is specifically granted the power to request changes and impliedly (at least according to some people) the power to reject such Bills. Impliedly, too, it has equal power with the House of Representatives to debate and otherwise scrutinize such Bills.

The use of this power by the Senate has increased through its Estimates Committees especially since 1 970.

  1. House of Representatives

While the House of Representatives has greater powers than the Senate in relation to money Bills the scope for the exercise is much reduced by the control exercised by the government over the business of that House. A money Bill may be brought on before the House as a whole is ready to debate it, members who consider they have something useful to contribute may not get the opportunity to speak and the time available for speeches may be severely limited.

  1. Tacking

Other constitutional provisions dealing with money Bills are section 54 and 55. The aim of these provisions is to prevent ‘tacking’. Members of Parliament, without these provisions, could be put into a quandary were a Bill to contain an unacceptable measure combined with a very popular measure. Section 55 provides that laws imposing taxation shall deal only with the imposition of taxation and that any provision dealing with any other matter shall be of no effect. Section 54 provides that ‘the proposed law’ (not ‘laws’ as in section 55 ) which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation.

  1. Enforcement of Constitution on Money Bills

The High Court has decided that the provisions of the Constitution framed in terms of ‘proposed laws’ are directions to the Parliament about the conduct of its business: they are not provisions which the courts can police. The Court will rule on the validity of laws but not on the correctness of Parliamentary action concerning proposed laws.

If an attempt were made to ignore one of the constitutional directions it is not clear what the consequences would be. No doubt if it were proposed in the Senate to amend a Bill imposing taxation, the President would rule the proposal out of order as unconstitutional. Possibly if a tax Bill were passed and the Senate had purported to pass an amendment, the amendment would be ignored by the Governor-General and the Bill in its unamended form assented to by him. Certainly the High Court would refuse to entertain any action to prevent the Senate attempting to pass an unconstitutional amendment.

  1. Amendable Expenditures lt would appear that sections 53 and 54 in combination require that there be only one Bill appropriating revenue or moneys for the ordinary annual services of the Government, that that Bill deal with such appropriations and nothing else and that the Senate shall not amend that Bill.

The idea of separating Appropriation Bills Nos. 1 and 2 is that all the non-amendable expenditures- for ordinary annual services- be included in the former, and others, such as capital works, in the latter. The division between the two types is in some cases a subjective matter (e.g. defence).

The Constitution says nothing about the consequences of a failure to observe the direction contained in section 54. Unlike section 55, this section does not provide that any provision in a Bill appropriating for the ordinary annual services dealing with other matter is of no effect.

The result would appear to be that a Bill which does not comply with section 54 could become a valid law and one which the High Court would refuse to deal with even though the breach of section 54 reduces the scope of the Senate ‘s power to amend.

The difficulties which arise from sections 53 and 54 of the Constitution stem from the High Court’s refusal to enforce those sections and the lack of a definition in the Constitution itself and the absence of an interpretation from the High Court of the meaning of the phrase ‘the ordinary annual services of the Government’.

  1. Legislation for New Programs

Until recently it has not been the practice to initiate new programs simply by the provision of funds for them in a money Bill nor has it been the practice to provide for new programs in Supply Bills as distinct from Appropriation Bills.

The Australian Assistance Plan and the RED Scheme, however, have been set in operation with no other legislative support than by inclusion, with numerous other items, in an Appropriation Act. The High Court has rejected a challenge to this approach; its detailed reasons for judgment are not yet available. This approach reduces Parliamentary control since the legislation for new programs cannot be considered separately.

The practice of not initiating programs through Supply Bill is not one required by law.

  1. TIMING OF LEGISLATION

The Government requires authorisation by Act of Parliament in order to:

  1. appropriate money from the Treasury to spend (s.83 of Constitution) or

    1. raise money by taxation.

Although the Government’s Budget with spending and financing plans is presented annually, only part of the enabling legislation is voted upon at that time.

  1. Legislation Outside Budget Time

The Budget plans are presented with the introduction of Appropriation Bills Nos. 1 and 2, usually in August. The Parliament then has an opportunity to debate the Budget and vote on the Appropriation Bills. Authority to spend from these Acts expires at the end of the financial year. However, Appropriation Bills Nos. 1 and 2 cover only about 40 to 45 per cent of total Budget expenditure.* Some associated Bills for expenditures or taxes may come before the Parliament for voting at about the same time. However, a large proportion of expenditure cannot be voted upon at Budget time as it remains authorised by previously passed Acts of Parliament, although it is recorded in the Budget Papers and there may be various other opportunities to criticise it in Parliament. This might be seen as a problem if there are certain expenditures hidden amongst them that were approved by Parliament years before but have since lost their original relevance, or perhaps the need for them might be viewed differently in the light of current priorities.

It is doubtful as to whether Parliament would consider it advantageous for all money Acts to expire at the end of the financial year. In most cases, the advantage seen in ‘standing appropriations’ was that they would save the tiresome process of annual passage through Parliament. In some cases the Government might nave seen the main advantage in greater protection from rejection in later years.

A possible compromise would be to have a review of standing appropriations every few years.

The areas of expenditure and financing which are included in the Budget but cannot necessarily be voted on by the Parliament at Budget time are as follows:

  1. Special Appropriations from C.R.F. ( about 50 per cent of total expenditure)

The main ones are payments to or for the States, National Welfare Fund (which also passes through Trust Fund), bounties, salaries of statutory office holders. They are set out in Table 7 of ‘Budget Paper No. 4, “Estimates of Receipts and Summary of Estimated Expenditure “ ‘.*

These ‘standing appropriations’ have previously been authorised by an Act of Parliament and do not have to be voted on again unless there is, for example, a change of rates or method of payment to be made. In inflationary periods, changes in rates and amounts of payments are in fact highly likely.

  1. ii) Treasurer’s Advance from C.R.F.

One source of funds for the Government to spend money without specific Parliamentary authorisation is the Treasurer’s Advance. An amount is provided to the Treasurer in the Appropriation Bills to be spent on items not foreseen at the time the Budget was prepared. Expenditures from the Treasurer’s Advance are subject only to retrospective scrutiny.**

** Ibid, pages 25-26.

The amount allocated in each of Supply Bills Nos 1 and 2 has risen from $25m for 1972-73 to $120m for 1975-76. In 1974-75 it was used for, among other things. Darwin Cyclone relief and employment: relief grants.

  1. Trust Accounts- Expenditure and Receipts

Gross expenditure from Trust Fund in 1974-75 was $6,040m and receipts totalled $6,822m.***

*** From Treasurers ‘s Statement of Receipts and Expenditure, page 82.

Most of these moneys for gross outlays are also recorded as outlays from C.R.F. (e.g. for National Welfare Fund), and hence are detailed in budget expenditures, but in the case of a minor proportion, only the outlays net of receipts (e.g. superannuation contributions) are counted as part of budget expenditure.*

A list of the trust accounts forming the Trust Fund and their purposes, legal authorities and financial data is given in the Treasurer’s Statement of Receipts and Expenditure Seclion III, Supplement to Table 6. There are four categories of trust account:

  1. 1 ) Moneys held in trust for persons and authorities other than the Commonwealth Government (e.g. Aboriginal benefits, drought bonds);
  2. Working accounts covering certain factories, stores and services, (e.g. Post Office account);
  3. Other moneys held in trust under the authority of Parliament to meet future expenditure (e.g. funds for particular industry research);
  4. Funds and accounts not part of the Treasurer’s accounts but included for information in the Treasurer’s Statement of Receipts and Expenditure. (viz. National Debt Sinking Fund, Superannuation Fund).

Continuing expenditure from these funds is authorised by Acts passed previously.

  1. Loan Fund Expenditure

All loans raised by the Government (including borrowing from the Reserve Bank) must be brought to account in the Loan Fund.

Appropriations from the Loan Fund for spending purposes must be authorised by Act of Parliament. -Long-term borrowing

The authorising Act specifies the purposes for which the money can be spent. Loan moneys are mainly used for onlending to the States and transport authorities etc. for capital expenditure, for defence and redemption of bonds. A list of the relevant Acts for 1975-76 is given in Table 9 of Budget Paper No. 4 ‘Estimates of Receipts and Summary of Estimated Expenditure’.

Some of the Acts have been passed in earlier years and authorise continuing expenditure, e.g. Financial Agreement Act 1928-1966 authorises payments to the States each year.

Other Acts apply only to the current financial year and are introduced in association with the Budget, e.g. State Grants (Housing Assistance) Act.

Short-term Borrowing

There are also Acts which give continuing authorisation to short-term borrowing by the Government and expenditure from the moneys raised for the purposes of any appropriations made or to be made from the CRF, but limited by the fact that it must be a seasonal need.so the securities must be repaid by the end of the financial year, viz. Loan (Short-term Borrowings) Act 1959-1973 for borrowing from the private sector by Treasury Notes;

Loan (Temporary Revenue Deficits) Act 1953-1966 for borrowing from the Reserve Bank by Treasury Bills.

While these Acts remain on the Statute books, Executive Government is free to use them for short-term borrowing at its discretion without further reference to Parliament.

Both these Acts override section 57 of the Audit Act which requires a special Act detailing the nature and amount of the proposed expenditure from the Loan Fund. However, this precautionary clause in the Acts is probably unnecessary since the Acts could be said to satisfy section 57 of the Audit Act in any case, since the borrowing must be used for appropriations made from CRF.

  1. Loan Raisings

Specific legislative authority is not necessarily re/quired for borrowing by the Government although nearly all loan raisings are in fact authorised by an Act of Parliament, usually the same as that containing the associated appropriation (see section above).

The Japanese yen bond issue in 1972, for example, was made without statutory authority.

  1. Cash Balances

One form of financing that does not require parliamentary authorisation in the current year is that of running down cash balances. This is a limited but at times a useful source of funds. Government cash balances at the start of 1975-76 stood at $765m and by the end of September were down to $120m in the red, which had turned into a form of borrowing from the Reserve Bank.

To the extent that positive cash balances are available to run down, they are a residue of funds whose raising was authorised in previous years but which were not completely spent.**

** The overdraft on the Government’s public account in September 1975 does not represent an overall overdraft since it is outweighed by credits on other accounts (for statutory authorities, etc.). Section 20 of the Audit Act would authorise the Government to run an overall overdraft with the Reserve Bank.

  1. Taxes

The levying of taxes, etc., included in Budget revenues is authorised by Acts (e.g. Income Tax Act, Customs Tariff, Sales Tax Act) which are usually already on the Statute books although they may require amendment at Budget time to change rates or concessions, etc.

  1. Timing of Presentation of Budget

The Australian Government Budget has traditionally been presented in August, several weeks after the start of the financial year to which it relates, and is usually passed about October. To provide for expenditure between 1 July and the passing of the Budget, Supply Acts 1 and 2 are passed in the preceding April or May. They customarily provide only for continuing expenditure on programs already authorised by Parliament. However, there appears to be nothing in law to prevent them from being used as a vehicle for introducing new programs. If this were to be done, the Parliament would be being asked to approve the Budget in an even more fragmented way.

The proposition has been put forward that the Budget should be introduced in about April instead of August.* The advantage would be that the whole Budget would be presented to and passed by Parliament before the beginning of the financial year. Parliament would have the advantage of seeing the Budget for the year as a whole before having to vote on a pan of it as is in the Supply Bills. Execution of the Budget’s new measures could begin closer to the start of the financial year. Minor administrative savings would be achieved by eliminating the Supply Bills.

However, it is not clear that the benefits would be worth the administrative problems. In order to have the Budget debated and passed by 30 June, it would have to be presented in about April. Since the process of formulating the Budget takes at least five months, this would put the beginning back into the Christmas-New Year holiday period, and further back if more stages are added (e.g. consideration of forward estimates, Parliamentary committees.

The present timetable has the advantage that, for the latter stages of budget preparation, the full statistics for the previous year of the national accounts and the budget results are becoming available to the Treasury. If the preparation were earlier, earlier monthly and quarterly figures could be used for some statistics but at present these are not as comprehensive.

A reason given as to why the earlier scheduling would give little benefit is that new expenditure programs and tax rates usually take some months to put into practice anyway. Hence the present delay at the start of the year before the Budget is passed can be used to prepare to implement the new measures and to continue implementation of last year’s new measures. However, presumably these stages could equally well be moved a few months’ earlier so implementation coincided more closely with the financial year.

  1. Changes Subsequent to Budget Presentation

Public and Parliamentary scrutiny is hampered by changes made to the Budget after its original presentation.

Revisions

The problem of revisions arises particularly in times of rapid economic change when changes in, say, inflation rates, employment and social needs, may require changes to be made to the Budget plans for receipts and expenditures through the course of the year. This means that Parliament must debate and vote on the original budget without being able to anticipate later occurrences which, had they been anticipated, might have changed its attitude to some items in the original budget. Of course, the Government has the same problem of not being able to predict the future accurately.

Parliament does have an opportunity to vote on some of the later changes made to the Budget but not to all. For example, if additional expenditure for ordinary services of government is required due, for example, to a faster than expected rate of cost increase, it must be authorised by Appropriation Acts No. 3 and 4 and perhaps 5 and 6. On the revenue side, on the other hand, changes may take place due to developments in the private sector which do not require any enabling legislation but nevertheless affect the Budget. Usually these changes would not constitute an economic danger. For example, in 1975-76 if the deficit turns out to be greater than expected due to the rate of increase of earnings and hence income tax being smaller than expected, it would be a favourable economic development. However, in the light of that, Parliament might wish to reconsider some other components in the Budget.

It is difficult to think of a feasible and not time-consuming system by which Parliament could reconsider the whole Budget as circumstances changed.

The publication of revised information about the overall budget situation as mentioned earlier would assist Parliament’s consideration of Bills representing budget changes.

Switching Appropriations

The ability of the Government to shuffle expenditure from one purpose to another within the Appropriation Acts is restricted by the fact that it cannot spend money appropriated under a particular division or sub-division head on any other sub-division head, although switching from one item to another within a subdivision is permitted by section 37 of the Audit Act. This gives only a limited amount of flexibility to departments.

The extent of flexibility is of interest in a situation where supply is withheld by the Senate and the Government is trying to eke out its funds.

  1. PARLIAMENTARY COMMITTEES

Apart from the numerous ways in which matters of public finance among other matters may be examined before the full Senate and House there are two main regular avenues for Parliamentary scrutiny of public finance- the Public Accounts Committee and the Senate Estimates Committee.*

  1. Public Accounts Committee

Because of the provisions of the Public Accounts Committee Act which established the Joint Parliamentary Committee of Public Accounts it is certain that the representation of the Senate where the government party may not be the majority party will be in the minority and it is equally certain, though indirectly, that the government party will provide the majority of the representation of the House of Representatives. This obviously sets political limits to the Committee’s effectiveness in scrutinizing matters of public finance.

Other limitations arise from the specification of the Committee ‘s duties in its Act. It is required to report on the form of the public accounts and the method of keeping them and on the mode of receipt, control, issue or payment of public moneys. It is also required to report on any items or matters in the public accounts and on the Auditor-General’s report to which, in the opinion of the Committee, the attention of the Parliament should be directed.

The Public Accounts Committee has no power to bring about any changes in the matters in relation to which it has statutory duties and, given its likely political and Parliamentary composition, is likely to exercise its powers with caution. On the other hand the very existence of the Committee and the publicity of its hearings provides a measure of control on the government and particularly on those departments of the government concerned with the public accounts. It has advantages over Senate Estimates Committees in that it may operate throughout the year. Attached is an extract from a submission to the Royal Commission on Australian Government Administration by Gregory J. Terry and Patrick Weller dealing with the role and performance of the Public Accounts Committee.

  1. Senate Estimates Committees

Since the changes made in 1970 the Senate Estimates Committees have had a much increased scope for scrutinizing matters of public finance. Of particular importance has been the fact that members of the Senate are able to question officers of the public service directly.

The major delect of the Estimates Committees is that they operate for a relatively limited time and that they are in practice limited to the matters that appear in the annual appropriation Bills. In particular, matters that are the subject of special continuing appropriations are outside the scope of the Estimates Committee except indirectly.

  1. Proposals

The Joint Committee on the Parliamentary Committee System published an interim report in October 1975 which said:

But the weight of evidence favoured an expenditure committee in the Lower House which would carry out detailed inquiries into aspects of the government’s financial function and would examine priorities and forward planning of expenditure. This could render the Senate estimates committees superfluous. ‘*

Page 29 of report

As steps toward improving Parliamentary scrutiny, the Committee recommended that:

  1. a new strengthened Public Accounts Committee be appointed, consisting of members of the House of Representatives only:
  2. the Senate Estimates Committees continue, with better information and better support services.**

** Page 49-50 of report.

  1. INFLUENCE OF OUTSIDE BODIES

Outside bodies may be of relevance to Parliamentary scrutiny of public finance, either by acting as another check on the Government or by taking aspects of control away from the Australian Parliament.

  1. Loan Council

Under the Financial Agreement, the Loan Council must approve the loan program of the Commonwealth and State governments. However, this excludes borrowings for defence or temporary purposes or for conversion, renewal or redemption of existing debt.

By stretching the meaning of ‘temporary’ for example, there is a possibility of evading the Loan Council’s surveillance. Loan programs are supposed to include funding of revenue deficits but the Commonwealth can evade this by the mechanism used in the Loan Acts whereby, to avoid a deficit in CRF, part of defence expenditure is transferred from CRF to Loan Fund. Loan raising to cover this expenditure then bypasses the Loan Council, although the economic effects would have been the same if some other expenditures rather than defence had been transferred. The Government has said:

Over the years, successive governments have taken the view that it would not be appropriate for the Commonwealth ‘s machinery or housekeeping financial transactions to be brought within the ambit of the Loan Council ‘. (Senate Hansard, 2 I October 1975, page 233 1 ).

  1. Economic Council

Parliament’s influence is enhanced by adequate scrutiny of public finance by independent experts and bodies outside the Parliament. Parliament itself does not have any body of economic experts to make public assessments of the Budget, but its debates would be strengthened by publication of the views of an expert body.

Some outside comments of an independent nature about the Budget (other than from interest groups) come from academic economists and journalists but there is at present no formal arrangement or channel of communication which must be taken into account by the Government. At no stage do government officials have to engage in a dialogue with independent economists on their budget strategy, or indeed any economic policy.

Although the Budget Papers contain a mass of statistical and historical detail, they are usually rather sketchy when they come to the vital explanation of the relationship of the Budget measures, and possible alternatives, to the economic problems of the day (usually in Statement No. 2 of the Budget Speech). Even the Treasury’s traditional Annual White Paper on the Economy has not been published for the last two years.

In the past few years there have been several cases where there was disagreement from a number of prominent economists on certain aspects of the Budget, for example the contractionary stance in 1971-72, the large expenditure increases of 1973-74 and 1974-75, and more generally the attempted rapid shift of resources from the private to the public sector, and the indirect tax increases of 1975-76.

One suggestion is to establish an Economic Council comprising about six respected economists, including ones of different philosophical stances, to publish their assessments of economic policy needs and participate as independent agents in budget and economic policy formulation. An enforced dialogue would probably lead to a greater degree of consensus among them than has been apparent in the past when only individual views of economists are presented. Their participation would force the Treasury to take account of and discuss their ideas, and the publication of their views, even if not accepted by the Government, would give the Parliament a better basis for considering and criticising the Budget.

The Council would not be needed to give surveys of the state of the economy, on which there is already a considerable amount of material, official and private, nor to indulge in esoteric research, but to address itself directly to policy problems and feasible solutions.

The proposed council would resemble the German Council of Economic Experts described by Professor W. Kasper in his discussion paper for the Royal Commission on Australian Government Administration, ‘Formulation and Coordination of Economic Policy- Possible Models for Australia’, June 1975. (Page 66).

The suggestion for an economic council has much in common with the proposal, subsequently ignored, of the Committee of Economic Enquiry (“Vernon Report’) in 1963 for an economic council, and more recently recommended by Sir John Dunlop, Chairman of CSR.*

  1. A Rule for Monetary Policy

Although democratic participation in most areas of public finance is widely supported as desirable, it should be noted that a section of economists believe that control of the money supply should be taken out of the hands of politicians and governed by a simple rule. Control of the money supply to conform with the rule would be in the hands of an independent body. The ‘monetarist’ economists, mainly following Professor Milton Friedman, suggest that the annual growth of the money supply should be equal to the rate of real growth of the economy, averaging around 5 per cent. They believe that adherence to a simple rule, rather than attempts by government to intervene in response to the political needs of the moment, is the only way to ensure long-run stability, minimising both inflation and unemployment and ‘stop-go’ fluctuations.

An implication of this is that Parliament would have less or no influence over monetary policy, which includes the method of financing the Budget deficit.

  1. State Income Taxes

The Liberal Party recently announced a policy for revised Federal-State financial relations under which the States would get a fixed share of revenue and be able to levy their own income tax. This would tend to weaken the control of the Australian Government and Parliament over national economic policy by removing another area from their discretionary control.

ATTACHMENT

Treasury Control of Federal Government Expenditure in Australia- G.J. Terry and P. Weller.

The Treasury and the Parliament: The Parliamentary Accounts Committee

There are few institutions in the federal government with more potential power and less actual power than the Parliamentary Accounts Committee. The PAC is universally regarded as weak, misguided and ineffective. Departments in the main regard their appearances before the PAC as an administrative chore unproductive in management terms except perhaps as a general public relations exercise in the context of cultivating friends among the politicians. The PAC was not always so regarded. There have been times when, supported by an effective staff, it has been a significant factor in the overall machinery of expenditure control. That it is not so regarded now is the result of a number of factors the more important of which were created by the committee itself. Perhaps the most important factor has been the PAC’s perception of its own role. The doctrine emerged in the PAC that underspending was as bad as overspending and departments would be grilled on why they had failed to expend their appropriations. This ‘exact sum mentality’ was one of the factors which led to the notorious rush to commit funds before the end of the year and, presumably, to some consequent wasteful expenditure. It also shifted the focus of the committee’s attention from the broader issues of expenditure control to minutiae of expenditure on particular items. Not only did this mean that the PAC got lost in the trees but it also greatly simplified the task of departments in preparing their defences knowing that, providing their accounts were formally in good shape, fundamental reviews of their expenditure would be avoided. Officers recall particular members of the PAC who would invariably focus on one particular line of appropriation. This became so well known that departments could virtually concentrate on getting their house in order on those particular items. Senate Estimates Committees have not proved any more adept at meaningful investigation of departmental expenditure.

A second factor in the influence of the PAC is undoubtedly its prestige in the eyes of backbenchers. It is by no means seen as either a trendy endeavour which will carry electoral clout or a stepping stone to better things. As a result it does not always attract the most able backbenchers, nor indeed the most able staff officers. A third factor are the limitations on the terms of reference of the PAC, a matter about which the commission has received submissions.

A strong capability for parliamentary review, supported by an efficient, well qualified staff would seem to be an essential concomitant of changes in the appropriation system giving greater administrative flexibility and managerial discretion to departments. It may be that this could be achieved by changes in the terms of reference of the PAC and appropriate changes for its support staff. However, it is our view that modification of the existing committee may not meet this need. The parliamentary review mechanism needed if developments such as one-line appropriations and eventually programme budgeting are to be introduced will be of a fundamentally different character to the PAC. It will need a capability to review not merely accounting regularities but rather the management systems adopted by departments for programme development, objective setting and programme implementation. To achieve this revolution in the scope, attitudes and, importantly, the membership of the PAC may well require a fundamental break from the past and a rethinking of the parliamentary review mechanism from the base up. Certainly even in the present environment officials engaged in central control activities would welcome a more dynamic PAC concentrating on the broader issues of expenditure control. In a revised system they would regard such a body as essential.

Senator COTTON:

-I shall comment a little about the second reading speech of the Minister for Minerals and Energy (Senator Wriedt) which was given to us a little while ago. In that speech some comments are made which I think one could mention. The Minister stated:

Borrowings for defence purposes are specifically exempted from the provisions of the Financial Agreement relating to control by the Loan Council. The view has been taken, rightly in my estimation, that Loan Council involvement in the detailed financing arrangements of the Australian Government Budget should not be any greater than necessary.

That is a contestable view, both inside and outside the Parliament. Specific arrangements to exempt the Loan Council from many of these negotiating and financial areas ought to be examined a great deal more carefully later. I for one will not rely upon the estimation of somebody on the Government side if he does not want to do that. Then later in the Minister’s speech we have some references to questions with which we agree. We had reference to the fact that the Treasurer approved of his officials discussing matters with the Opposition and providing answers to questions. We acknowledge those discussions and answers. We feel that they were helpful. In the light of the paper to which I have referred, we think that answers given to questions add to the parliamentary knowledge of public finance. This is so observed in the paper which I have had incorporated in Hansard. Further in the speech we have some other comments about the limitations of the Bill which is now before the Senate. We have been given assurances that there is nothing sinister in those clauses. We take those assurances at this time, subject to further checks.

Senator Wriedt:

-May I ask what the honourable senator is quoting from?

Senator COTTON:

– I am quoting from the Minister’s second reading speech.

Senator Wriedt:

-Not the one that I have just given?

Senator COTTON:

-No. We are on the Loan Bill. The Minister mentions in his second reading speech that clause 3 does not state a specific amount. Despite that, there are necessarily 2 very important limitations They are cited in the second reading speech to satisfy the Senate, and the Opposition, that in effect a limitation is implied; it is not stated . The first limitation is said to be that the borrowing authority is limited to the extent of the anticipated deficit in the Consolidated Revenue Fund. That is a dangerous proposition because nobody on the Opposition side is at all satisfied that the deficit which is indicated as being in the Fund at the time of the Budget is likely not to be greatly exceeded later. We are therefore concerned about this situation. We said so when the matter was first discussed. It appears to us to be a very open valve. The deficit might grow to figures which are much greater than those indicated in the Budget figures. Therefore to us that limitation is not very good. The second limitation refers to the amount borrowable for defence purposes. It seems to us to be a stronger limitation, still leading perhaps to later checks and later judgments.

Further in the speech there is another comment to the effect that refusal to pass the Loan Bill does not of itself therefore prevent any expenditures being made. We are told that it simply means that some other less appropriate way of financing the Consolidated Revenue Fund deficit will be forced upon the Government at some future date. What would be very valuable to the Senate, the Parliament and the Australian public would be to learn at a very early date what are the measures which are proposed to be used to finance the Government expenditure in a situation in which parliamentary approval for those purposes is not forthcoming. The Senate will see from my brief remarks that the Opposition has the same view that it had at the beginning. It feels that this Loan Bill should not be passed. The amendment has been read out. I have moved it officially on behalf of the Opposition. I have no further com ment to make.

Senator WRIEDT:
Minister for Minerals and Energy · Tasmania · ALP

– in reply- I also say that the Government has exactly the same views as it had before in relation to the Loan Bill. The basic point I make, without going over all the ground which has been gone over for the third time on this Loan Bill, is that the Bill is not a Bill which is essential to the rejection of the Budget. This is a machinery measure which any government- no matter whether it be an Australian Labor Party government or a Liberal Party government- needs to have passed for normal government accounting purposes. I again state that this is a -

Senator Devitt:

– Technical?

Senator WRIEDT:

-Yes, a technical thing. I was going to use another word but probably it would not be proper for me to use it.

Senator Devitt:

– Unparliamentary?

Senator WRIEDT:

– Yes, unparliamentary. The Opposition has taken an action which is totally unnecessary. If it chooses to put its head on the chopping block and reject the Appropriation Bills that is another matter. That is a matter of political judgment. But that does not apply in the case of this Bill. This is a Bill which concerns the transfer of certain moneys from the Consolidated Revenue Fund to the Loan Fund. There is no earthly reason- no political reason either- why the Opposition should frustrate this piece of legislation.

The only other comment I make is that, as Senator Cotton raised the matter of scrutiny, 1 think that the paper which he has incorporated in Hansard and which was prepared by the Parliamentary Library is probably a very interesting document. We know of the excellent work which comes out of the Parliamentary Library. I for one will be interested to read the paper. I make it clear again, as I have in the past, in relation to the scrutiny of this Bill, that the information which was sought by the Opposition was the most detailed information which probably has been sought on this type of legislation in the history of the Parliament. The information was readily given in written form. It is in the Hansard record. All questions were probably answered. There has been no attempt by the Government at any stage not to provide the fullest information on this legislation. I hope that is something which is clearly understood and fully appreciated. I only add that I regret that once again the Opposition will use its numbers to defeat this legislation. This only makes the work of government all the more difficult, irrespective of the politics of the matter.

Question put:

Thai the words proposed to be left out (Senator Cotton’s amendment) be left out.

The Senate divided. (The President- Senator the Hon. Justin O’Byrne)

AYES: 30

NOES: 29

Majority……. 1

AYES

NOES

Question so resolved in the affirmative.

Question put:

That the words proposed to be inserted (Senator Cotton’s amendment) be inserted.

The Senate divided. (The President- Senator the Hon. Justin O ‘Byrne)

AYES: 30

NOES: 29

Majority……. 1

AYES

NOES

Question. so resolved in the affirmative.

Question put:

That the motion, as amended, be agreed to.

The Senate divided. (The President- Senator the Hon. Justin O ‘Byrne)

AYES: 30

NOES: 29

Majority……. 1

AYES

NOES

Question so resolved in the affirmative.

page 1788

CAPTAINS FLAT (ABATEMENT OF POLLUTION) AGREEMENT BILL 1975

Bill received from the House of Representatives.

Ordered that the Bill may be taken through all its stages without delay.

Bill (on motion by Senator Cavanagh) read a first time.

Second Reading

Senator CAVANAGH:
South AustraliaMinister for Police and Customs · ALP

– I move:

This Bill approves the execution of an agreement between the Australian Government and the New South Wales Government to provide financial assistance to abate pollution from mine wastes at Captains Flat. It provides an appropriation of funds for the purpose of the agreement. To give something of the background of this Bill, mining activities ceased at Captains Flat in 1962. This resulted in the accumulation of approximately 1.1 million cubic metres of tailings, slimes and fine dump materials on hillside areas above the Molonglo River to the west and south of Captains Flat township. These works have proved a continuing and consistent source of pollution of the Molonglo River. Major remedial works are required at the source of the pollution to safeguard the Molonglo-Murrumbidgee basin and Lake Burley Griffin. Quite clearly, prevention of this pollution is a major environmental undertaking for the Australian Capital Territory and for the adjacent areas of New South Wales.

My colleague, the Minister for Urban and Regional Development (Mr Uren) has had a number of consultations with the Minister for the Capital Territory (Mr Bryant) and the Minister for Environment (Mr Berinson) on this question. They met with representatives of the New South Wales Government early last year. As a result of that meeting, a Joint Government Technical Committee was set up to look at the Captains Flat pollution problem and recommend on the best ways of stopping it. When the Committee’s report was received, Ministers from both Governments got together and drew up a list of proposals to be put to both governments. The Bill and the attached agreement before the Parliament, makes the following provisions: financial assistance for programs approved by the Minister for Urban and Regional Development in consultation with the appropriate State Minister; arrangements for carrying out programs will be as agreed between Australia and New South Wales; financial assistance for capital works, not expected to exceed $2.5m on the basis of four-fifths grant and one-fifth loan, interest bearing and repayable (New South Wales will bc meeting 20 per cent of the capital costs); financial assistance for maintenance works with half the expenditure by way of noil -repayable, non-interest bearing grant ( New South Wales will be contributing the other SO percent of funds towards maintenance).

The terms of the proposed agreement are broadly acceptable to the New South Wales Government.

On the ground, trial embankments have been constructed and confirm the wisdom of the proposed works. The New South Wales Government plans to approve a contract in the next few weeks and this should allow remedial works to be completed in substantial measure before next winter. The works will prevent erosion and leaching from the mine waste dumps. They will minimise the flow of polluted mine water by restricting the water inflow to the mine from Forster ‘s Creek. The re-shaped dumps will be covered with layers of clay rock and soil and will be sown with new vegetation. The works to be undertaken also include measures to protect the environment during construction. In conclusion, I give praise to the co-operation between the Australian and New South Wales governments which has produced this agreement. A Joint Technical Committee made up of representatives of the 2 governments is continuing advisory work and will continue to report to both governments. I commend the Bill to the Senate.

Debate (on motion by Senator Carrick) adjourned.

page 1789

INCOME TAX ASSESSMENT BILL (No:2) 1975

Second Reading

Debate resumed from 28 October on motion by Senator Wriedt:

That the Bill be now read a second time.

Senator COTTON:
New South Wales

- Mr President, 3 Bills relating to income tax are listed for consideration. They are the Income Tax Assessment Bill (No. 2), the Income Tax Bill and the Income Tax (International Agreements) Bill. I suggest to the Minister in charge of the debate, the Special Minister of State (Senator Douglas McClelland) that it would be appropriate to debate those 3 Bills cognately.

Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

– Yes, the Government agrees to that proposal.

The PRESIDENT:

– I will allow that course to be followed.

Senator COTTON:

-I thank you, Mr President and I thank the Minister. I think that one of the best illustrations of the inaccuracies of the Budget is to be found in the proposal that it contains relief for personal income tax. I should say at the outset that it is no proposal of the Opposition to amend these Bills or to seek to defeat them. They are revenue measures. They add to the legislation now in existence the further details and adjustments which are in this year’s Budget for various measures that are supposed to provide taxation relief and to provide alterations in the deduction system. There are one or two comments that one might make in brief about these aspects. Other people want to speak on this matter and I am not anxious to take any more than my normal amount of time, so my remarks will be brief.

First, the income tax receipts estimated in the Budget are to increase by 34 per cent or, in effect, 45 per cent on a pay-as-you-earn basis. This percentage increase is equal to an amount of $2.6 billion. If we look at that as a general proposition and study the Government’s 3 Budgets in conjunction we find that personal income tax receipts have increased by 140 per cent in the period that this Government has been in office. In this respect I refer to comments of the Institute of Applied Economics and Social Research which, looking at this position, had this to say:

The change in the new tax schedules will if left unaltered increase the fiscal drag on the income tax system and further reduce the after tax gains to employees of indexation of wage and consumer prices. Wage indexation cannot be expected to function adequately with such a system and an early move to income tax indexation would now be imperative.

There are further comments on this general problem in the Mathews Committee report which states at page 26:

There is overwhelming support from all sections of the Australian community for the principle of personal tax indexation. Amongst those supporting indexation are trade union organisations, industrial associations representing rural, commercial, manufacturing and mining and service industries, many large and small companies, professional bodies and Australian and State government departments or agencies.

Yet on an analysis by those two bodies, plus a great number of others, the Government as a government has declined in any way to bring in a proposal for tax indexation. The feeling of the Opposition is that without tax indexation taxpayers will continue to be forced into higher and higher income brackets because of the manner in which inflation works in relation to the progressive tax system. Tax indexation is the only certain way in which taxpayers can be protected from the use of inflation as a silent taxation. Under this system, a taxpayer’s tax liability will increase only in circumstances where his real income increases. The Opposition has a clear policy to introduce tax indexation over a period. We regard it as economically wise. We also think it is of social importance. It is the Opposition ‘s view that tax indexation is one of the devices which, if introduced progressively and sensibly, could help a great deal in bringing down inflation, which many people have said, I think quite correctly, is a total problem for everybody in Australia. The Opposition believes that this is an initiative that could be taken by a government and will be taken by the Opposition when it becomes the government. It would bring about progressively a reduction in inflation.

As we now see it, the Opposition believes that what is going to happen is that inflation will continue to grow inexorably because of the way in which the economic system and the tax system are constructed. Using the Budget assumptions, a single taxpayer earning $5,000 per annum can expect, on the Budget’s own forecast, to earn $6,100 this financial year. On that basis his total tax, after allowing for a change in the rebate system, will increase from $550 to $1,055, an increase of $505 or almost 100 percent. That is a good illustration of the Opposition’s view that with inflation and with the way the Budget is structured and without tax indexation, in reality in many cases people are going to be a great deal worse off. No doubt other speakers will make detailed comments on other illustrations of the sort of thing I am talking about. I have prepared a number of tables to illustrate the comparable figures, and it will save time for everybody if I seek leave to have them incorporated in Hansard.

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

Senator COTTON:

-During the current year average weekly earnings are likely to increase by between 1 7 per cent and 1 8 per cent. This will mean lower receipts and without doubt it will mean an alteration in the revenue totals of the Government. It will also mean a slightly lower tax take for each taxpayer. I think I have covered the points relating to individuals. There are many other examples, but the general burden of proof would indicate that most taxpayers will not be better off but without doubt will be worse off when the financial year is completed and what they believed would be a tax benefit will be shown to be an illusion in their real comparable positions.

Senator Georges:

– What would happen if you had the same system as you have now?

Senator COTTON:

-Why do you not suggest to yourself when you speak that you might address yourself to that particular problem? What I am looking at also is the question of company tax legislation whereby the rate will be reduced by 2 k per cent. I do not think that goes anywhere at all towards overcoming a very great problem in the Australian corporate scene. Various analyses have been made by various people, but the one that I have available indicates that if adjustments are made on the Mathews system for stock valuations and additional depreciation flowing out of the tax laws, the Australian corporate scene, excluding the financing companies and the banks, is in a loss phase. In effect, it is paying dividends out of capital and is markedly deficient in its capital ability even to get itself back to a line ball. I suggest that the Government is not going to get this country back into high gear in employment and investment activity unless something a great deal more dramatic is done for the company structure around Australia. This is not a plea to help companies as such; it is simply a clear cut proposition to the Government that a great part of the employment in Australia in the private sector takes place in companies.

Senator Button:

– That is not the only reason for doing it, is it?

Senator COTTON:

-Just let me develop the argument, if you do not mind. A great part of employment does exist in companies. A great part of unemployment exists in the area of people who were employed by companies. If one looks at the total scene- I think these figures will stand up to examination; they can be obtained from the Institute of Applied Economic Research and others- the Australian company scene, which is employing a great part of the labour in the private sector, is in a loss phase. It does not have the capital required not only to carry on its business but to expand it. Out of all that, how is the Government going to get a revival in their confidence, in their investment, in their activity, and in their capacity to continue to employ increasing numbers of people? That is something to which the whole of the Senate should address its mind. If one is concerned about unemployment, and properly one ought to be concerned, then one wants to look at the engine of recovery for getting people back to work. I suggest that that means is to be found largely within the manufacturing sector and within the area of people employed by companies in the private sector. The Government needs to take a much more dramatic view of the corporate tax position and its capacity to have the Mathews system applied to it.

Some figures issued by the Organisation for Economic Co-operation and Development point out that company tax in Australia represents 1 5.6 per cent of total tax revenue, whereas the average for OECD countries is 8.5 per cent. There are a number of calculations available, but the Institute of Applied Economic Research has assessed that the average rate of company tax in Australia during 1973-74 was 66 per cent, or two-thirds, because cost appreciations were not following up the rates of depreciation or replacement costs. Again, I am saying simply that if employment is as important to the Government as it is to me and to the Opposition, the company scene has got to be looked at in relation to its tax position, its ability to revive itself and its opportunities once again to employ labour.

I am indebted, as always, to the Australian Taxation Office for an extremely good explanatory memorandum which covers the 3 Bills. The Income Tax Bill 1975, the Income Tax Assessment Bill (No. 2) 1975 and the Income Tax (International Agreements) Bill 1975 are amply covered in the memorandum. The details are available for those people who study these things, both in this place and outside. These are revenue measures and they are not opposed. They make changes; in effect they make adjustments to existing pieces of legislation that have been on the statute book for quite a long time. Basically, the concern of the Opposition is that it is an illusion that the Government in its last Budget really gave anybody as individuals any real tax benefit when allowance is made for inflation and the adjustments that come out of that. The Budget put companies, which employ many people, in a position where they find it harder and harder to revive themselves. I believe that at some point of time a very dramatic change will be needed in the taxation structure as it affects companies in this country. There will also need to be a massive injection of capital into those companies for them to be able even to stand still with the current inflationary and accelerated problems that they are encountering. I suggest to honourable senators present that while these Bills are not opposed, they relate to an area in which we might all engage ourselves seriously, either now or later. Within this group of legislation lies part of the ability for Australia to recover economically, if that is done properly and not in the style in which it has been done.

The principal proposition the Opposition would make is that there would have been much greater merit in having indexation, both personally and for companies, a great deal further down the road towards completion. That course was recommended by authorities who I think could be regarded as impartial. The Government would have been extremely wise, both for itself and for the nation, had it adopted those proposals at least in part.

Senator GEORGES:
Queensland

– I accept what Senator Cotton said as he concluded his speech, namely, that there needs to be considerable reform of the tax structure in this country. I do not place the same emphasis as he does on those matters which he considered to be important. However, although he conceded that the Opposition is not opposing these Bills, he seems to indicate that there has not been any significant change or significant advance as the result of this legislation. But there has been. I do not say that it is the end, but there have been some significant reforms. It should be accepted by the Opposition that what the Treasurer (Mr Hayden) proposes represents a very important advance. It certainly improves what has been the position to date, and what Senator Cotton has said merely emphasises what I am saying. If we were to remain under the present tax structure or the present means of the taxing of individuals and companies, both individuals and companies would be considerably worse off at the end of this year than they will be under these present reforms.

I accept, as Senator Cotton accepts, that there needs to be a continuing review of taxation. I accept that inflation adds to the burden that taxpayers have to face. But let us accept, although the Opposition is not prepared to accept it, that inflation is caused by several factors. Some of them are major factors over which we have no control. It is caused by significant changes in costs which result from decisions made overseas. It is agreed that as a result of our own economic decisions, inflation is affected here in Australia. I do not doubt that because of certain other reforms that have taken place, inflation has been speeded. In fact, I think that our change to the metric system of weights and measures has added considerably to costs and therefore to inflation. This generation bears the burden for what will be of benefit for coming generations. For that reason we ought not to pull away from the additional cost which is placed upon us now. There is no doubt that the costs of foodstuffs in particular have risen considerably because of the introduction of the metric system. Manufacturers and retailers have taken advantage of the changeover just as they took advantage of the change from sterling to the decimal system in currency.

There has also been a significant uplift in costs as a result of the new trade practices legislation which deprived many retailers of the advantage of long established discounts. Again, the manufacturers took advantage in the early stages of the application of this legislation to lift their prices. All these things add to inflation, and inflation increases wages and incomes. With that increase in wages and incomes, the tax gatherers have benefited considerably. We must be concerned about this because if the money is easily obtained by government through unfair taxation, that money which is easily obtained is easily spent and perhaps easily wasted. From time to time, honourable senators from both sides of the chamber have pointed to areas of gross misuse of public moneys. It must always be recognised, and public servants must always be reminded, that tax gathered from people should be used wisely. Some of these burgeoning new government departments must always be reminded that it is the taxpayers who pay for their expansion and that it is the taxpayers’ money which should be carefully husbanded so that there is no waste and no misuse.

Let me return to what the Treasurer is proposing with two of these Bills. I think that it would be wise for all taxpayers, whether they be private individuals, businessmen or corporate accountants, to obtain this document which is entitled New Personal Income Tax- Budget 1975-76, which was published on 19 August 1975. There is an introduction by the Treasurer, Bill Hayden, which reads as follows:

This year’s Budget introduces the most sweeping reform of the personal income tax ever undertaken in Australia. The new system is explained in the following pages.

The present system, which has persisted virtually unchanged for over two decades, is behind the times. Its shortcomings have become increasingly evident as the years have passed.

A thorough-going reform of the personal tax system is preferable to further piecemeal adjustments within the existing framework: no amount of tinkering can repair the defects of a structure which is basically unsound.

I think that that statement has the general agreement of honourable senators from both sides of the Senate. The Treasurer continues:

The new system of personal income tax is simpler, fairer, more flexible and more efficient than the system it replaces. It is also more in keeping with the Government’s social welfare objectives and programs, and more readily adaptable to the ever-changing requirements of economic management, revenue-raising and the containment of inflation.

I will not proceed into the document itself but merely advise that it is a document of which all taxpayers should take advantage, especially since the second reading speeches on both the Bills to which I have referred are inclined to be too technical and, to my mind perhaps because I have no knowledge in this area, too confusing. The document shows that there have been considerable changes in taxation and that considerable advantages have been given. I wish to quote what was stated in the second reading speech of the Minister for Minerals and Energy (Senator Wriedt) on the Income Tax Assessment Bill (No. 2). He said that there was no doubt that in a redistribution of the taxation burden there would be some gainers and some losers. He went on to say:

From the point of view of taxpayers collectively however, gains will exceed losses and the total amount of income tax to be paid annually by the individual taxpayers will be some $205m less under the new system than it would have been if the old system had continued.

A benefit of $205m will flow to all taxpayers. Senator Wriedt went on to state:

Considerations of equity demand that the gainers in the redistribution should be those people who, out of a modest income, maintain dependants with little or no income of their own. This will be achieved under the new system by the generous scale of rebates for dependants. Those who will pay more tax under the new system will, for the most part, be persons without family responsibilities or members of multiincome households.

Surely there can be no argument against the proposition that those who have the greater need will pay less than those who have the lesser need, who will pay more. This new tax reform will do that. It means that many people will gain and that some people will be disadvantaged. But those people who are to be disadvantaged are in the position to accept that disadvantage economically. About 3 million Australians- approximately two-thirds of all taxpayers- will receive substantial tax cuts under the Australian Labor Government’s new personal tax scheme, the scheme of which we are speaking now. The Australian family man with a dependant wife and 2 children is able to earn more than $100 a week free of tax. A substantial number of people in Australia still do not earn $100 a week. A substantial number of families in Australia are dependant upon a single income. Unfortunately, too many people must seek a second income. Many men either through inability or other extra responsibility at home, are unable to take advantage of overtime or of other means of employment. Under this scheme about 500 000 taxpayers are freed of the responsibility to pay tax. The tax grab from overtime payments and from other additional earnings will be slashed by almost 30 per cent for the average weekly wage earner. This involves those who must work overtime to make their way. Many have to do so. So the incentive to work harder is not in any way inhibited by heavy taxation on the amounts earned from hours worked above the normal hours of work. Without basically agreeing with the principle of such people having to work overtime, since it is a reality, one must accept that the proposal is a considerable improvement.

I turn now to the provision relating to parents without partners. There are many parents without partners these days- some through choice, others because of some disaster. They will receive a special tax reduction of almost $4 a week. One could have no argument against this. As we proceed through the Bills, we see definite advantages. Although Senator Cotton said that these advantages may be eroded by inflation- we hope that the rate of inflation will diminishthose people will be better off under this legislation than they would be if it were not passed.

Senator Devitt:

– The provision in relation to parents without partners applies only where they have some responsibility for the children.

Senator GEORGES:

-Yes. I refer now to the backdated rates. These are some of the highlights of the new tax scheme. They are possible only because of the fundamental changes in the tax system. The new tax rates will apply to the full financial year commencing 1 July 1975. The weekly tax cuts will become obvious on 1 January. I think the benefit of the new legislation will be apparent to people as from 1 January. I suggest that the pamphlet to which 1 referred previously be widely distributed for the benefit of all taxpayers. There will be considerable tax deductions in the first pay packet on or after 1 January. Tax cuts for the first half of the financial year will be reflected therein.

The new system will be simpler, fairer, more flexible and more efficient than the discredited scheme which it replaces, lt removes several serious tax anomalies which have attracted so much criticism in recent years. Ironically, the old system gave the biggest tax concessions to the richest, and the smallest benefits to the poorest. For example, a man with a taxable income of $40,000 a year got back $2 out of every $3 he claimed as deductions from his income. A man with a taxable income of $5,000 got back a little more than $ 1 out of every $3 he claimed on his tax return. I am quoting now from another document which, although there does not seem to be any authority for it, I believe is a document issued by the Treasury. It gives in a simpler way the message given by the other document to which I referred. I shall speak to it a little further. It states:

The wealthier man’s dependants were worth almost twice as much as the poorer man’s dependants! The new rebate system provides much more generous tax reductions for dependants, but the value to each taxpayer does not depend on the taxpayer’s income bracket.

The document speaks also of new tax rebates. Perhaps I could merely indicate just how substantial the tax cuts could be. I give only one or two examples, although there is a substantial scale here. The examples relate to a family man claiming for a dependent spouse and 2 children. Such a person with a weekly earning of $100 has a current weekly tax of $6.40. His new weekly tax will be nil. That person will have a saving of $6.40 a week- a substantial saving, a much needed saving. The current tax paid by a person on $140 a week is $19.95 a week. His new tax will be $14.10 a week. His weekly saving will be $5.85 a week. I go even further and take a person who is on $200 a week. His current weekly tax is $46.15. His new weekly tax will be $36.55. That is a saving of $9.60 a week. So one can see that for a family man claiming for a dependent spouse and 2 children the benefits flow up to a weekly income of $200. However, a single person without dependants earning $100 a week would suffer. He will have to pay an extra 70c a week. A single person without dependants on $180 a week pays $45.65 a week tax. His new weekly tax will be $43.50. His saving will be $2. 1 5 a week.

Therefore one can see that the system which the Treasurer proposes is a great advance and gives greater equity and greater justice to the taxpayer than the present system. No one will argue that the new scheme has gone as far as it should. No one will argue that it is complete. We must accept Senator Cotton’s statement that there is room for further improvement. I agree with Senator Cotton and those in the Opposition who agree with him that there needs to be continuing review, continuing reform and continuing amendment of our tax laws. There needs also to be very careful scrutiny. I think the Senate takes very responsibly its duties. There needs to be very careful scrutiny of the expenditures out of tax revenue. I think all senators who are members of Estimates committees would like to give further time to a closer scrutiny of expenditures by departments of moneys provided out of tax revenue. I think we do our best, but we are often limited by time.

In addition to the personal income tax provisions the Bill provides also for the accelerated income tax deductions for depreciation announced in the Budget Speech. I am talking now about the assistance to industry. It is accepted that industry must be relieved in some way of the burden of taxation. I noticed recently that in Queensland the payroll tax which was a considerable imposition, especially on a smaller businessman who was endeavouring to establish himself, has been reduced. It was not before time. It was an extra imposition by a State upon businesses which were heavily imposed upon already by Australian Government taxation. I have no hesitation in supporting the principle that small enterprise should be supported, that it should be assisted and that its tax burden should be reduced, especially since compensation premiums now tripled, seem to have imposed an added burden on small enterprise. Once small enterprise is able to develop to a stage where it can employ greater expertise of course it is in a better position to accept the taxes and to provide accordingly.

Nonetheless, this legislation does some significant things and it ought not to be denied that they are significant. The proposed measure in respect of depreciation represents a significant widening of the scope of the provision which was enacted last year to grant depreciation reductions at double ordinary rates in respect of new manufacturing and primary production plant. The new provision will apply to all new plant that is first used or installed ready for use, for the purpose of producing assessable income, on or after 1 July 1975, other than certain motor vehicles and plant that qualify for special statutory rates of depreciation. No time limit has been set for the operation of this provision. Taxpayers will be entitled to claim deductions on eligible plant at twice the rates normally applied for income tax purposes. The increased rates will continue to apply in the succeeding years until the cost of the plant has been written off or until the plant is sold or otherwise disposed of. Taxpayers may elect to forgo the accelerated allowance if they so wish.

Finally, the Bill provides for the provisional tax otherwise payable in respect of 1975-76 to be reduced or waived in certain circumstances. I shall not go any further on that. I merely indicate what the Treasurer (Mr Hayden) is endeavouring to do. The Treasurer is to be commended for these 2 Bills. It is a great pity that these 2 Bills, which the Opposition does not oppose, are part of the budgetary papers which the Opposition has decided to oppose. For the life of me I cannot understand why we as a Senate- I believe as a Senate as a whole- are being misused in this exercise. We are now on the merry-go-round. We have been there for three times round and it is quite possible that next week will be our fourth time round. I suggest to Opposition senators that they ought not let the Senate be misused; that they should see the need, the necessity, the responsibility to pass the Budget and let us proceed in allowing these 2 excellent Bills to have the fullest effect. At present they cannot proceed and again I cannot understand the Opposition’s position. These Bills cannot proceed to become effectively effective- using a double emphasisuntil the Budget is through. To me this shows the rather odd position in which the Opposition has placed itself. In not objecting to the Budget as such, it has passed certain other measures, and is about to pass an environmental issue dealing with certain pollution that is occurring. The Opposition is prepared to pass these budgetary measures but it is not prepared to pass the Budget itself. Its criticism does not appear to be against the Budget; its opposition appears to be against issues that the Opposition considers to be for Government’. The time for decision as to whether or not the people support the present Government is at the time of a normal election and that, I would say, is towards the end of next year or perhaps the beginning of 1 977.

I conclude by saying that these Bills and the associated literature ought to be scrutinised carefully by taxpayers. The accountants of a variety of firms no doubt will see the advantages of these Bills and will pass on those advantages to their clients.

Senator GUILFOYLE:
Victoria

- Senator Georges has made a thoughtful speech with regard to the provisions for both personal and company income taxation that are provided for in the Budget of this year. He concluded with some other comments with regard to the attitude of the Opposition towards these proposals and others of the Government. I do not intend to embark upon a debate of that nature because there are other appropriate Bills on which that type of debate can be conducted. Suffice it to say at this stage that the Opposition is using the mechanism of the Constitution to force the Government to an election by the people of Australia. It is doing this not by dealing individually with Bills at this stage but by using the Budget Bills as the means for endeavouring to ensure that the people of Australia are given the opportunity to vote on the continuation of this Government which has acted in an unconstitutional manner in a variety of ways. I shall not embark upon that discussion because I believe that these 3 Bills, which deal with the income taxes and this year’s Budget, should be the subject of the debate this afternoon.

As Senator Georges remarked, the provisions contained in these Bills with regard to income tax will take effect from 1 January 1976. 1 believe it is unfortunate that the benefits from the adjustments in personal income tax will not take effect until that stage. I believe that every taxpayer in Australia would accept at the present time that the rates of personal income tax are totally unsatisfactory and that personal incentive has been reduced by the application of the progressive tax scale in times of rapidly rising inflation. The fact that the take home pay of the average taxpayer and every other taxpayer in this country has been reduced by the application of this progressive tax scale is a matter that had to be faced as a matter of urgency. The delay in adjusting this tax scale until 1 January next year is something that could be a critical factor in inhibiting economic recovery and certainly would undermine the objective of government with regard to wage indexation. Without the restructuring of the tax rates or the application of tax indexation it is extremely difficult to ask industrial and other workers to accept wage indexation when they will find finally that their take home pay is being reduced rather than increased.

Some of the figures which were used by Senator Georges are figures that I would use also, but perhaps in some cases I would draw somewhat different conclusions. It is a statement of fact that the total revenue cost of the new taxation adjustments to be made after 1 January next year will be $395m for the 1975-76 fiscal year. But it should be recognised that this is a reduction of 3.7 per cent in forecast income tax revenue if such a change in rates had not been involved in this year’s Budget proposals. What should be stressed is that in this year’s Budget the net payasyouearn income tax revenue has been cast to increase 43 per cent whereas we find that the wages increase expected in this year’s Budget is something closer to 23 per cent. A tax proposal that increases revenue to government on payasyouearn taxation by 43 per cent on a rising wage expectation of 22.9 per cent is not something that in general terms could be regarded as a reduction in income tax collections or a reduction in income tax rates. I believe that that relativity is quite important when we are talking about wage indexation.

Senator James McClelland, in answer to a question this morning, did indicate that it is obvious at this stage that the increases in wages will not be as great this year as we experienced last year. I suggest that the expectation of the Government that wage increases will grow by approximately 23 per cent may not be realised. In this context it would have to be accepted that the tax collections will therefore not increase by 43 per cent. We would have to assume then that we are talking about a larger Budget deficit than was forecast by the Treasurer (Mr Hayden) when he drew up this year’s Budget on the tax scales which he introduced.

Senator Georges also mentioned that the normal full year cost to revenue of the proposals and the new tax rates is $20 5m. That is about 2 per cent of the current wage bill. Any extravagant claims for a reduction in tax rates would not be realistic. Whilst we may welcome the redistribution of some of the tax burden, I do not believe that we can claim that what has been achieved in this year is a general reduction in tax rates for the average Australian. I would also mention, as a matter of relativity, that in this year indirect taxes will increase significantly for the average wage earner, the average taxpayer. When we look at the higher excise duties that are expected to be collected- some $376m as they relate to beer, spirits and cigarettes, and $3 12m as they relate to petroleum products- we soon see that a reduction of $205m in a full year from these tax proposals would not mean that the average person is gaining any benefit in his take home pay or in the amount which he chooses to spend on goods which attract some of these additional excise charges.

The main beneficiaries of the income tax changes will be those on low incomes and the taxpayers with non-working wives and with children. The main losers will be single persons and working couples without children. I am sure that there would be people in all of those categories who could show justification for the reduction of tax on the single income family and the reduction of tax for those with low incomes. It would have to be regretted that those persons to whom Senator Georges referred as being single persons with an income of less than $100 a week, which is $5,000 a year, will not be the main beneficiaries from the recasting of the tax schedules. I find somewhat contestable the Treasurer’s claim that some 500 000 taxpayers will benefit from the increase in the minimum taxable income under the new system. The minimum taxable income will increase from $1,041 to $2,520 per annum. To suggest that there are 500 000 people in this country living on that rate of income hardly seems to me to warrant an exclamation of delight when there is a change in the tax scale. When we think that average weekly earnings on an annual basis in this country are reaching a level of about $8,000 per annum, we hardly need take any delight from the fact that 500 000 people will benefit from an increase of the minimum taxable income from $ 1,041 to $2,520.

Indeed, I would suggest that the numbers of people who are receiving unemployment benefits and income from the Government by a variety of supportive schemes will be many of those people who are classified in that 500 000 people who will benefit from what is claimed to be an increase of the minimum taxable income. It is not a statistic that I think should gain any applause from us. To find so many people in that very low income bracket is not something that should give credit to any government or should attract any applause from us. The minimum taxable income of a taxpayer with a dependent spouse and 2 children will be $5,229 per annum. I think that that taxable income level is the one in which we would want to see relief in the tax payable because that person on a single income with those family responsibilities is the person who is feeling the real effect of the inflated costs of those essential family items that need to be purchased. Relief in taxation in this area is something that should be commended.

We could go through a variety of ranges of salaries and find what appear to be anomalies. We could find that a taxpayer with a dependent wife and 2 children under 16 years of age on a net income of $8,000 may save 19 per cent of his tax liability. That should have a measure of support from all of us because a man on that income with those responsibilities was finding that taxation was eroding his take home pay in the past. When we start looking at levels of tax of taxpayers with no dependants we find that the single income person with a salary of $4,000 will have a 1 7.6 per cent increase in his tax. A person on $6,000 will have a 26.2 per cent increase in his tax; a person on $8,000 will have a 17.2 per cent increase in tax; a person on $10,000 will have a 5.2 per cent increase in tax; and a person on $ 12,000 will have a 3.9 per cent increase in tax.

These are the tax burdens that have been shifted from the family to the single income earner. I believe that it is a burden that will be heavily felt by those taxpayers in those salary ranges who will find increases in their tax after 1 January of next year. The young married couple, both of whom are working and are being taxed as single people, will find it increasingly difficult to save towards the deposit that they would be aiming for to purchase their own home. The burden of tax on those young married people who are being taxed as single people will place them further away from the opportunity to buy a home in this country.

I think that we also ought to look at the middle income range and see the differences in the rates that many of these people will pay. If we look at this as a total document, it seems that we can select some areas in which people are gaining a benefit from the new tax rates and there are others who are not gaining any benefit. If we look at the total picture of wages and salaries for the year 1972-73, we find that the payasyouearn taxation as a percentage of total wages and salaries in that year was 14.1 per cent. The following year it was 15.4 per cent. For the year 1974- 75 it was 17.3 per cent and in this year, 1975- 76, the pay-as-you-earn part of wages and salaries has risen to 19.8 per cent. If we look at that in totality I do not see that we can claim that there has been a reduction in tax rates for this year, nor has there been a benefit that will be felt right throughout the Australian community.

It seems to me that it is essential that we have clearly explained to us just how the Treasurer has compared the rates of tax as they applied last year to those that will apply this year. In many instances it is necessary to state clearly that we did not express tax last year in the same way as we are expressing it this year. It seems to me that in many of the comparisons that have been used the tax has been given as tax payable after deducting the universal $540 rebate, as expressed this year, whereas last year the Treasurer compared it with tax which applied before concessional deduction were taken from the taxable income. Unless we get these things in strict relativity it seems to me that many of our comparisons can be distorted.

What is the most disturbing feature of the tax proposals is the minimum concessional rebate of $540 for all taxpayers. As we understand it this had to be deducted so that the Treasurer could get recognition from the average income group that he is reducing tax payable in this year. The principle of allowing an automatic rebate at the high level of $540 1 believe is bad as far as incentive, self sufficiency and responsibility are concerned. To be able to deduct an amount of $1,350 as expenses for items such as school expenditure and insurance was an incentive for people to take care of many of their own responsibilities. Now to have a proposal where an automatic concessional rebate of $540 is applied regardless of whether the expenditure is incurred as a personal responsibility seems to me to militate against those who do accept responsibility and to favour those who are prepared to be totally dependent on government services. This could have quite a long-term effect on the capital market.

The fact that many people were induced to undertake personal life assurance and other investments that were deductible has been the way in which the capital market has been supplied with many of its resources in the past. I can suggest only that many people who can now deduct $540 as an automatic rebate without incurring expenditure would have less incentive to undertake the provisions for their own security that they had undertaken in the past, provisions which provide the source of funds for capital improvement in this country, capital improvement which was the result of many of those investments made through the life assurance and other insurance houses.

I want to say something about the Opposition’s policy on company taxation because this is vital if we are to restructure our economy and regain some economic growth in this year. The Opposition laid down a very definitive policy with regard to this part of the Budget proposals and I would like to restate some of the Opposition’s policy. The most important suggestion that came from the Opposition was that the recommendation of the Mathews Committee report for individuals and companies should be adopted. It is a commitment of the Opposition that it will be adopted when we are in the position to do so because we believe it is vital for the strengthening of the Australian economy and the growth that we would all expect to achieve in the future. We stated that we believed a 3-year program to reduce inflation needed to be undertaken and that this should commence this year with the implementation of the Mathews Committee recommendations, particularly with regard to tax indexation to be introduced over a 3-year period. We also wish to introduce the Mathews Committee recommendations as they apply to the company structure and the taxation proposals which are related to it. We believe that many of the proposals in the Mathews Committee report are the only ways in which we will be able to regain confidence in the investing part of our community and gain efficiency from the productive part of it.

Senator Button:

– And an election, Senator.

Senator GUILFOYLE:

– And an election, because the Government is not prepared to introduce the Mathews Committee recommendations. It is on this basis that we believe that personal and corporate confidence will not be engendered until there is a change of government with the object of introducing many of the excellent recommendations in the Mathews report. The major reform of the company taxation system based on the implementation of the Mathews Committee report is a vital matter. Senator Cotton referred briefly to some of the matters that were in the Mathews Committee report and I do not know that it is fully understood just how grim are the realities of the business sector and how much the recommendations of the Mathews Committee report were welcomed by those who understand the need to attract investment to service the business sector and make a profit for growth. The Mathews Committee report said:

Without wishing to over-dramatise the situation, the Committee believes that the taxing, accounting and pricing policies which have been adopted in relation to business enterprises, when combined with the rates of inflation which have recently been experienced in Australia, are incompatible with the continued existence of the private sector.

I do not think that anyone disagrees with that now because the speeches being made by the present Federal Treasurer give recognition to the dangers that do apply to the corporate sector and the need for a profitable private sector if we are to implement any of the policies and programs we want as a nation providing higher living standards for our people.

The analysis should be taken a little further. I believe that it is not recognised that real company profits before tax for 1 974-75 are likely to be only 35 per cent of reported pre-tax profits. Company income tax at 45 per cent is thus likely to absorb 129 per cent of real income. That is something that needs explanation and it can be done quite simply by looking at just a few figures as they relate to the estimated corporate profits for 1974-75. The reported pre-tax income estimate for that year is $4,763m. The adjustment that needs to be made for stock valuation is $2,090m and the adjustment for additional depreciation is $1,0 10m. This gives a real pre-tax income of $ 1,663m, not $4,763m which was the reported pre-tax income estimate. Then if we start expecting to pay dividends out of that because there was a reported pre-tax income of $4,763m, we finish up with tax as a percentage of our real pre-tax income being 129 per cent. This simply means that the corporate sector is paying dividends out of capital, paying tax on profits that are not realised and it can have only one inevitable conclusion and that is the total destruction of the private sector.

Senator Georges:

– How can it pay dividends out of capital?

Senator GUILFOYLE:

– Simply because the reported pre-tax income of large businesses paying dividends is not a real income when we take account of the adjustments for stock valuation and additional depreciation, the adjustments on an inflated value for replacement in accordance with the necessary decisions that will have to be taken. So there is this distortion in the private sector and businesses are paying tax on a profit that is a paper profit rather than one that is realised. They are paying dividends inevitably by reaching into capital and this is the distortion that was recognised by the Mathews Committee and I believe needs to be recognised by us all if we are to talk about a continuing private sector. It is not something which has been recognised in the past but it is something that is clearly recognised in the recommendations of the Mathews Committee report. If we are to talk of the future in any concrete terms some recognition of these matters needs to be given. The Government did as a proposal to assist the private sector reduce company tax in this year’s Budget from 45 per cent to 42.5 per cent but it is not that which will give assistance. Inflation accounting needs to be implemented so that figures in the future will have some meaning in real terms rather than there be a distortion that the inflation rate has been giving and the difficulties that this creates. I believe that the Mathews Committee recommendations are so costly and of such magnitude that they could not be introduced in the Budget proposals in one year of any government of this country. It is however a matter of recognising the difficulties that exist in the private sector at this time and in stages introducing the reforms that the Mathews Committee recommended and giving the investment allowance and accelerated depreciation and in other ways assisting the private sector to restructure its capital requirements and so allow it to continue. I want to quote something which the Treasurer said in his speech to the Melbourne Chamber of Commerce recently. He said:

The profit-based market system should be seen not as a way of life, some consecration of pecuniary values, but should be looked at as one of the main social institutions which our type of economy has for allocating scarce resources to meet numerous wants.

He gave a very interesting speech in which he talked about profits playing a private role in sustaining an adequate overall level of investment. Then he gave many of his own thoughts as they applied. I believe that it is important to relate this matter to something which was said by Senator Douglas McClelland this morning when he spoke of the Prices Justification Tribunal. He said that many companies in this country at the present time were unable to accept the price increases which would have been justified by the Tribunal in its findings for the simple reason that a consumer resistance has been developing in this country. It is not a matter of simply casting a price level which gives one a profit or which allows one to have some return on capital investment. It is also a matter now of inducing not only capital investment but also consumer participation in the growth which we want to see. The fact that the Prices Justification Tribunal is now prepared to justify price increases which can no longer be accepted by the private sector is something which I believe is very disquieting indeed.

The Treasurer referred to this in his speech and mentioned that this was another matter that needed to be taken into account. Whether for reasons of consumer resistance or for competition, a company can no longer cast its prices profitably. That seems to me to indicate that we are in another year of downturn in economic growth rather than in a year which shows the improvement which we all wanted to see. In dealing with the private sector, the commercial sector of this country, I believe that it is no longer sufficient simply to reduce the rate of company tax by 2.5 per cent. Rather, we have to face up to the reality that with inflation such as we are experiencing, stock valuations, which need to be shown in real terms, and all the other things, should be regarded as important in restructuring the way in which company profits are to be taxed by this Government in the future. These are matters to which the Opposition has drawn attention in its policies with regard to the recommendations of the Mathews report.

Our feeling is that we should do something about stock valuation adjustment proposals. We suggest that at this stage we could have implemented them at 50 per cent of the recommended rate for stock valuation, with company tax remaining at 45 per cent. That would have alleviated the difficulty which I have mentioned. I believe that that could have provided the basis for restoration of business confidence and induced business to plan for the future in a way which is not possible where a reduction in the rate of company tax is the only incentive which is given. With these remarks with regard to personal income tax and company tax, I indicate that the Opposition does not oppose these Bills which are the Government’s proposals for the 1975-76 Budget. I add, once again, that collections which are forecast to increase by 43 per cent the personal income tax are not something which seem to me to show a reduction in the tax for the majority of the Australian taxpayers. Company tax proposals, which do not recognise the long term difficulties in the present inflated economy, I believe should have received more recognition by the Government when it was bringing forward the Budget for this year.

Senator BUTTON:
Victoria

-I do not wish to speak at any great length in regard to these 3 Bills which the Senate is now debating and which relate to the taxation proposals announced by the Treasurer (Mr Hayden) when bringing down the Budget this year. I am a little perturbed, however, at the lectures which we have received from the Opposition side about the situation of private industry and, indeed, of private taxpayers. I would commend to the Opposition senators, if they are generally concerned about those matters, that they should read the Victorian Chamber of Manufactures newsletter of last week which said that one of the factors which would most adversely affect private industry in this country in the immediate future was the delaying of the Budget and the unavailability of funds from the Australian Government for private industry in certain areas. Of course, it is all very well to discuss these taxation proposals, as it were, in limbo as a sort of an academic exercise, but we must do it in the context of the current situation and realise that the delaying of the current Budget, of which these taxation proposals are in essence part, has a very adverse effect on the situation of private industry and on the situation of persons employed by private industry.

When speaking about the taxation restructuring proposals Senator Cotton used the word illusion’. He described the benefits which will flow to thousands upon thousands of taxpayers as an illusion. I long to be in the Senate on some occasion when Opposition spokesmen describe some government initiative as something other than an illusion or a delusion. The loans crisis, so called, is described as a delusion of this Government. Various other things in which the Government has been concerned are described as delusions. These proposals were hailed by independent commentators- I will refer to some of those testimonials, if I can call them that, in a moment -as being a very significant step forward in the restructuring of the tax scale, and now they are described as an illusion. It is an extraordinary exercise in Opposition politics for the debate on these matters to descend always to that level.

The essential points of the legislation now before the Senate are, as I mentioned, an alteration in the personal income tax structure and a reduction in the level of company tax. The effects of the alteration in the personal income tax rates are very substantial. For people like me, who always have arithmetical difficulties with these things, the first point which should be made is that the reduction of steps in the tax scale from fourteen to seven is in itself a welcomed thing, but the benefits which flow from that, and to which I will refer in a moment, are even more significant. I might just refer very briefly to the sorts of comments which were being made by commentators about this restructuring of the personal tax scale on the day after the Budget was introduced and indeed for several days after that. Commenting on the taxation proposals, the economics editor of the Melbourne Age, Mr Davidson, said this:

The restructuring of the income tax schedule was long overdue.

I interpolate there that the sorts of comments which have been made here today about the increasing slice of the cake taken by personal income tax from taxpayers have been made for as long as I can remember. There has been more justification for them in recent years in an inflationary situation, but they are nothing new. We have lived under the same tax scale for 23 years, 3 years of which have been a period of Labor government. Mr Davidson went on to make this comment in the Melbourne Age.

The lowering of the marginal rate for all levels of income for the average wage earner- the marginal rate has been brought down from a prospective 48 per cent under the old scale . . . to 35 per cent under the new scale- should have a positive effect on incentive.

By lowering marginal rates, the Government has gone a long way to meet the proponents of tax indexation.

The lower the marginal rate, the lower the additional tax paid through growth in money earnings due to inflation.

Thus the new scales should moderate the components of wage demands based on the need to meet higher tax commitments.

I should add at that point that it is extraordinary to me that persons criticise the proposed alteration of the tax scale on the basis that we live in an inflationary situation. I would have thought that that aspect was largely taken care of in the case of wage-earners by the very existence of wage indexation. True, there can be a political debate about the degree of money available to the private sector and so on. But, as I said, I would have thought that the argument about the level of the new tax rates was scarcely valid in the way it is sometimes put in the context of wage indexation.

A further comment made by Mr Davidson in the same article is simply this:

Mr Hayden ‘s income tax changes are innovative and definitely a move in the right direction.

That was all that was claimed for them by the Treasurer- nothing more than that. That is one of the significant aspects of the proposals because they do, by restructuring the tax scale, provide scope for a variety of initiatives which can be taken in subsequent budgets or indeed in subsequent yean; whether those initiatives be in a Budget or not. The conclusion that Mr Davidson reached in this article following the comments to which I have referred was simply this:

It will be difficult for the Opposition to refuse Supply in the Senate in November on the grounds that Mr Hayden ‘s first Budget is economically irresponsible.

I did not quote that passage to indicate that there is perhaps no validity in the first 2 views which Mr Davidson put. He perhaps did not have the gift of prophecy, but he did have the capacity to point out that it was difficult for an Opposition to refuse Supply on the ground that the Budget was irresponsible. As I understand it, that is not why Supply is in fact refused. It is much rather on the basis of other allegations about which we have heard in the Senate in the last 3 weeks.

I was referring to the benefits which flow to the ordinary taxpayers from the provisions of this proposed legislation. Firstly, nearly two-thirds of the taxpayers in Australia will receive significant tax cuts. I would like to come back to that aspect in a moment in case it be disputed. Secondly, some half a million lower income earners will be freed altogether of taxation obligations. It is true, thirdly, that the emphasis of these proposals and the proposed re-scheduling favours the family man with children. That is a value judgment which is contained in the Budget. I think that Senator Guilfoyle and others legitimately speak up for those single persons in the community and those without children who may have to pay a slightly higher marginal rate of taxation. But I answer their claims simply by saying: Well, of course, we are aware of that. That is a fact. That is so. But in bringing down the Budget, the Government was making a value judgment about where the burden should most properly lie and where relief from the burden of taxation should most appropriately be given. We on this side of the chamber make no apology for that situation.

Next, I would point out that the revised tax scales in fact operate from 1 July 1975, for this tax year. As a practical matter, they come into application on 1 January 1 976. The effect of the introduction of the revised scales on 1 January 1976 can be demonstrated in certain practical ways. I wish to refer to some figures in order to demonstrate what it will mean to the average Australian taxpayer after 1 January next year, and indeed after 30 June next year, when the effect of the revised tax scales for the first 6 months of this full financial year will be taken into account. Might I refer briefly to some figures indicating the situation of a family man with a dependent wife and 2 children. With weekly earnings of- $120, his current weekly tax is $12.60. The new weekly tax will be $7 and the weekly saving from 1 January will be $5.60. A man on $ 1 40 a week will have a weekly saving of $5.85; on $160 a weekly saving of $6.85; and on $200 a weekly saving of $9.60.

Those are real and significant savings when, in spite of a rapid increase in average earnings, we still talk about a $5 wage increase as being significant. That is the sort of amount which a man on $120 a week gets by way of tax relief. It is true, as Senator Guilfoyle said, that he may have to pay a little more for his cigarettes and beer because of indirect taxation, but again that is a value judgment written into the Budget proposals. The Government does not apologise for that, and I record the fervour and passion with which Senator Withers, the Leader of the Opposition, has spoken on this Budget on behalf of the beer drinkers of Australia. I must point out that there is an implicit judgment in what has been done. As I have said, the benefits are there for the family man with a wife and 2 children. Those benefits are substantial- less substantial, I suppose, if he is a drinking or smoking family man, but nonetheless they are there. He has the freedom of choice, which Senator Guilfoyle talked about in another context, to decide whether he takes that benefit or not. He can give up smoking, as I cannot, or he can give up drinking -

Senator Georges:

– Which you can.

Senator BUTTON:

– As Senator Georges cannot. He has the freedom to make that decision and to reap the benefits accordingly. I agree with Senator Guilfoyle that in the case of the single person without dependants the tax saving on the lower income is in fact negligible. Certainly it is nothing on a really low income. Even on a weekly income of $200 the tax saving is only approximately $3.20 a week, whereas a person on $120 a week in fact will lose $1.55 more than he loses now. As I have said, that is part of the value judgment which is inherent in the Budget proposals. I think it is important that we understand fully what is the real effect of the proposed alteration of the taxation scale and what it means for various people in the community.

Might I make 2 other comments about the Budget. The first relates to the question of making more money available to individuals because of the tax scale alterations. The Age of 22 August -and we have almost forgotten about this at this stage- commented:

The Leader of the Opposition (Mr Fraser) has been less enthusiastic about the new scheme. He argues that it will reduce overall income tax by only $205 m a year. Mr Fraser argues that because all taxpayers will get an automatic tax rebate of $540 a year, it will be an incentive for people to be spendthrift.

That is the point that Senator Guilfoyle took up. The article continues:

This argument sits uneasily with his earlier view that Governments should allow people to decide more for themselves how to spend their money.

That inconsistency, which was widely discussed when we were debating the Budget proposals in August, is sometimes overlooked. Another comment about the Budget from the finance editor of the Melbourne Age is as follows:

As a political document it is excellent. Consider the plight of the Liberals; they can hardly be expected to be taken too seriously if they lambast it for being irresponsible; they are in a difficult position if they reject it because the tax changes make this politically difficult although certainly not impossible.

Again, there is a hint of dubious prophecy in that comment. I wish to say something about one other aspect of this legislation which has been dealt with by previous speakers. That is the question of the lowering of the rate of company taxation. I personally take the view that the Government might have gone slightly further than it did in dealing with the company taxation rate. My off-the-cuff reaction at the time of the presentation of the Budget was that perhaps the rate should have been reduced to 40 per cent. Of course, there is room for an intelligent discussion about that within the overall parameters of the budgetary strategy. I think that the Treasurer made it quite clear that as a question of balance he felt that that was the appropriate rate. The finance editor of the Sydney Morning Herald agreed with him when he commented on the revised rate of company taxation. He described it as an aspirin Budget and referred to it in terms which I will outline. He was referring, of course, to the undoubted difficulties in which many businesses find themselves at the moment, and have found themselves in for some time. He said:

More than 18 months of a worsening migraine suffered by business is now promised some alleviation, although only experience will tell whether it will be fast, fast relief whether it will merely subdue the symptoms and leave the economic malady uncured.

That is very responsible comment about the proposals, distinct from the comments made by Opposition spokesmen the day after the Budget was presented when they said without any shadow of doubt that this Budget could do nothing to restore business confidence and that the proposals in relation to company tax were extraordinarily ungenerous. That finance editor goes on to state:

The aspirin comes in two Forms, both immediately soluble.

He refers to the 2lh per cent cut in company tax rates and the double depreciation concessions being continued and broadly extended. When we are discussing this question of the plight of private business, I think it is important that we should distinguish between various companies and various sections of business. I do not think that that is done often enough. Certainly, many businesses in Australia- we read this in the financial pages of the various newspapers- are doing very well at the moment. There are others in quite serious difficulties. Some of those companies in the past have been perhaps content to rely on pork-barrel politics to assist them out of difficulty and some have been used to going it on their own. I remind the Senate of the recent statement by Mr Martin, the general manager of General Motors-Holden’s Pty Ltd in which he made a very similar point. What he said, in effect- I paraphrase his remarks, and I hope that I do him no injustice- was that a lot of the business community should stop whinging and get on with the job. He said that such sections of the business community should learn to live with a government of slightly different complexion from the previous one and not seek to blame -

Senator Georges:

– Only slightly.

Senator BUTTON:

– It is only slightly different. After listening to Senator George’s speech this afternoon, I wondered whether it was different at all. They should get on with the task of running their businesses and stop bemoaning their fate- a bemoaning which seems so frequently encouraged rather than discouraged in a responsible way by the Opposition.

Senator Guilfoyle and her Leader, Mr Fraser, have adopted the Mathews Committee recommendations as the panacea for business problems, in a rather holus-bolus way. I think one important aspect of the Treasurer’s Budget Speech is his indication that the Mathews Committee proposals had been studied, that some of them could not be introduced this year for very practical reasons, which he gave, and that some of them would not be introduced because it appeared to the Treasurer and the Taxation Office that the proposals were probably wrong. I refer particularly to the suggestion of revaluation of business stocks and the difficulties which have been pointed out in administering a system of that kind. I am not saying that the Mathews Committee recommendations are wrong. Frankly, I do not know enough about them. I am not saying that the Taxation Office view of some of the proposals must necessarily be right. I do not know enough about that. All I am saying is that as an observer, if I could put it that way, I am suspicious of the way in which the Opposition has adopted the Mathews Committee proposals in what seems to be a very uncritical sort of way.

Senator Mulvihill:

– Have they become above that?

Senator BUTTON:

– I do not know whether I would put it as high as that. There does seem to be a very marked lack of critical analysis of those proposals. I think there are certain warnings in that.

Senator Gietzelt:

– Do not you think that characterises all of the Opposition’s attitude?

Senator BUTTON:

-I am asked whether I think that characterises all of the Opposition’s attitude. I would say no, just occasionally; say one time in a hundred there is a critical analysis of an alternative policy.

I refer now to this question of the aspirin Budget. By the way, aspirin is a painkiller of some kind. I would hate anybody in the Senate to think that aspirin was the chairman of another committee or anything like that. The aspirin is the painkilling aspect of the Budget. In discussing whether that aspirin Budget may ease the business headache, the financial editor of the Sydney Morning Herald pointed to the situation with which various businesses were faced and said, responsibly I submit, that time will tell whether the proposals put forward in the Budget fulfil that promise. Time will tell- not the Opposition which has told us with rapidity and scant attention to the depth of the proposals which have been put forward- was the point which was made.

For those reasons I commend the 3 Bills to the Senate. In the contents of commending them I say that they are, in a sense, a part of the proposals which were put forward by the Treasurer in his Budget Speech of 19 August this year. In putting them forward he was offering a package deal, as it were, a part of which has been delayed by the Senate. In giving us lectures about the details of the Budget proposals, I hope Opposition senators will occasionally be mindful of a view which is very widespread in the community, and that is that one of the difficulties which the people of Australia face economically at this moment results from the stand taken by Opposition senators under instructions from their leader. I regret very much that the situation has come about in this way. I much regret that this House of review, as we hear it called, and this States’ House, as we hear it called, should have its privileges so disparaged as to accept instructions on this matter from a gentleman in another place.

Senator Wright:

– What a bantam idea you must have if you think our senators take instructions from him.

Senator BUTTON:

-I understand Senator Wright’s longstanding assertion of his independence but I have yet to see any evidence of it. That is the thing that distresses me in a senator who, in the first speech he made after my coming here, described himself as a bulwark of the Constitution. I agree he looks like a bulwark but he never behaves like one; that is the difficulty I have. It is a source of grave political regret that in this principled independent House of review when somebody in the other place says ‘Frog’, all the Opposition senators jump. That is a very sad situation for this country. Somebody interjects about Mr Whitlam. I might say I am coming around to Gough ‘s view myself as I look across the chamber. I commend the 3 taxation Bills to the Senate, Mr President.

Senator WEBSTER:
Victoria

-Three important taxation Bills are before the Senate which contain measures that are important to the citizens of this country. The Income Tax (International Agreements) Bill is one which perhaps does not concern us greatly. It alters the basis of calculation of the average rates of taxation for those receiving overseas income. The Income Tax Assessment Bill (No. 2) 1975- introduces the Budget decision for a new personal income tax system. That is particularly important and perhaps in the few minutes available to me tonight I might spend some moments on it. I think that, on listening to each of the speakers from the Government side, those people who may be listening on the air would be inclined to believe that this Government seeks to bring in a system which will save the taxpayer $205 m in a year and that the Government is being very plausible in what it is doing. The Treasurer (Mr Hayden) in bringing in his Budget indicated that there would be a saving of some $205m. Of course that is not the truth. I think that from now on one should look very carefully at all matters referred to by Ministers of this Government to see what the truth is.

I shall deal with that one point so that we may know, and those who are income earners in this community may realise that they are headed for a tax slug under this Government by these particular measures. Whilst the Treasurer says there will be a saving under this great new scheme of $205m, one only has to look at page 105 of the same Treasurer’s paper- the printed Budget Speech- to find that the estimated receipts for the current year will be some 43 per cent above those for the previous 1974-75 year. I quote these figures quickly; they can be found from the columns on page 105 of the Budget Speech. In 1973-74 the pay-as-you-earn income tax collected from wage earners was $4,238. 4m. The following year, 1974-75, under a Labor Government, that figure was $6,07 1.3m. The estimate for the 1975-76 year, declared by the present Treasurer, who said there will be a saving of $205m, is estimated to be $8,683m. If one looks only at that figure one realises- and the community should realise- that the socialist programs of a socialist government there is a rise in the pay-as-you-earn tax of more than 50 per cent in 2 years. Let the community not be fooled by this present Government. Let it not be fooled by a Treasurer who attempts to say that there is a reduction in income tax. In his Budget Speech he stated:

We have undertaken fundamental reform of the tax system with one overwhelmingly important objective- the achievement of a more equitable distribution of the tax burden.

If one is to believe that people earning less than $5,000 now will pay no taxation- that is what the Treasurer has said and he has indicated that those on the lower rates of income will pay little tax- there will be an enormous slug on those who pay tax under the pay-as-you-earn system. In fact there will be a 50 per cent increase in 2 years. I do not think that that is a fair proposition to put to the wage earners of this country.

Of course, the increase in taxation this year as compared to last year of $2,6 1 1 .7m in actual fact points up the abject untruth that the Treasurer has put to the people. I think the public should be made aware of these facts. Wage earners are being misled. They have been misled ever since this Government came into office. It promised at the beginning of its term of office that it would bring about major social reforms and it claimed that there would be no increase in taxation. One only has to see what has occurred since this Government has been in office to realise that it has not kept those promises. I believe that the general thrust of the figures that I have given is an exhibition of what this Government intends to do. It intends to inhibit ambition. It has had a part in encouraging the women of the community to go into the work force so that there are 2 wage earners in the family. Now the Government is proudly saying that when there are 2 income earners in the one family they are the ones who must pay.

The plans of the Australian Labor Party, since it has been in office- whether by design or by stupidity of administration- have resulted in this country now having the highest rate of inflation it has ever known. That has a great influence on the costs wage earners are incurring at present. We have the situation where not one member of the Labor Party will discuss the suggestion that we are likely to have 400 000 people unemployed. That is of no importance to this Government. It has been the plan of this Government since it has been in office, as I see it, to make the Australian community dependent on government. And this taxation legislation demonstrates that.

I believe that the ambitions of the average Australian will be inhibited by what the Government intends to do. We will become more dependent on government. In the newspapers these days one sees positions advertised with every type of government authority and commission at salaries of $15,000, $17,000 or $20,000 a year. One must doubt whether the private sector of the community, which is by far the biggest employing sector, can keep pace with the salaries offered by these great government instrumentalities. I believe that this Government has lowered the standards of living in the community. The Government encourages many loafers in the community by offering the unemployment benefit to some people who are not entitled to it. Perhaps in the last 6 months there has been some attempt to alleviate that situation by trying to identify those people. When the Government first introduced its policies it was obvious that this would come about. In his Budget proposals the Treasurer suggests that $205m less will be collected this year in taxation than in the previous year. The Treasurer has not brought to the notice of the Australian people the fact that $2,6 1 1 m more will be collected from the tax paying public in this current year.

Debate interrupted.

page 1805

ADJOURNMENT

Third Party Insurance Premiums in Tasmania

The PRESIDENT:

– Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question:

That the Senate do now adjourn.

Senator WRIGHT:
Tasmania

-I rise to call attention to a question and answer given in the Senate this morning which in my submission means that the Senate has been grossly misled. Senator Everett this morning asked a question of the Minister for Repatriation and Compensation (Senator Wheeldon). He asked:

Is the Minister aware of the announcement today that third party insurance premiums in Tasmania are to rise by over 70 per cent, that is, from $35 per annum to $60 per annum? Is this a further indication that the existing system is moving inexorably to extinction and must be replaced by a proper alternative?

Senator Wheeldon, who is not present, embraced that opportunity to promote his campaign against insurance companies. I told him that I proposed to raise this matter and if he is not here now that is his responsibility. He stated as a fact something of which he had no knowledge, that is, that the increase in premiums for compulsory third party insurance in Tasmania betokened the coming collapse and that there should be a radical change both in road insurance and workers compensation insurance. The’ Minister who, with his usual attitude, has just meandered into the chamber, should be informed that Senator Everett was probably misled by the garbled account of the Labor lap-dog, the Australian Broadcasting Commission, in its news broadcast this morning when it said:

The cost of thir d party insurance in Tasmania is going up by more than sixty per cent. The ABC’s Hobart office understands that from next month, the premium will be about $60- an increase of about $25. Compulsory third party insurance in Tasmania has risen by more than 400 per cent, from $14 a year ago, before the introduction of the no-fault system.

When one hears a news item like that over a national broadcast it is rime to revise the vote by which that Commission exists. It is a garbled account of muddled ignorance, biased towards party political propaganda, all for the purpose of adding to the antics that we see from Senator Wheeldon from time to time in answering questions generated by him to promote the cause of a government insurance office and unfairly to suppress private insurance. The fact is that in Tasmania the third party compulsory insurance premium was kept fixed at $12 per motor car from 1967 until 1974. We have only to recall price increases in that period to realise what that fixation of premiums meant from the point of view of economically meeting claims by insurance companies.

Then the angel of change came on the scene and Senator Everett as a Minister in the Tasmanian Government ushered in that radical change and gave to Tasmania the doubtful advantage of a no-fault insurance scheme. At the same time, it being a government beneficence so pretended and presented, a monopoly thereof was given to the Tasmanian Government Insurance Office. Of course, these Government socialist monopolies come laden with benefits for the people. The people only have to follow on and take their advantages as they please. In that year the $12 premium was increased to $35, which was nearly a cool 300 per cent increase. If we take the $35 premium and the $2 tax, we can call it, without unfairness, . a 300 per cent increase.

In relation to the announcement which was to be made today, I was told on ringing through that there is a certain amount of mystery about it. Because of some family affairs of the Premier, the papers got mixed up and the announcement was garbled or delayed. But the actual decision by the Government of Tasmania is to increase the premium from $35 to $56, which is an increase this year of 60 per cent on the base of last year, which was an increase of 300 per cent on the year before. Taking the efforts of the 2 years together, it is an increase of about 450 per cent on the premium which applied before. This is not the third party compulsory insurance policy. This is the premium required by the Motor Insurance Board for the insurance for which the Board has the monopoly. I hope that the Minister for Social Security and Senator Everett will take the first opportunity to correct the gross misstatement and to give some explanation for the reason for it.

The PRESIDENT:

– I call Senator Wheeldon.

Senator Webster:

- Senator Wheeldon is stuck for words.

Senator WHEELDON:
Western AustraliaMinister for Social Security · ALP

– I think that anybody would be stuck for words in knowing what precisely one was to make out of what Senator Wright has just told us.

Senator Baume:

– It was extremely clear.

Senator WHEELDON:

– It was very clear to the honourable senator, was it?

Senator Baume:

– Yes.

Senator WHEELDON:

-Perhaps we find out about that. There will be a test at 1 o’clock and I am not sure that the honourable senator will pass. One of the things which Senator Wright said was that the misapprehension under which Senator Everett and I had been labouring was as a result of the garbled report given by that Labor lap-dog, the Australian Broadcasting Commission. In fact, it was not. It was another Labor lap-dog which misinformed us, namely, the Hobart Mercury which is notoriously communist dominated and which has an editorial office in which, 1 understand, sharp disputes are forever raging between Maoists, Stalinists and, as Senator Mulvihill has told us, Trotskyites. I think Senator Wright believes that some Tito elements have snuck in lately. The reports on which I was basing my reply and about which I understand Senator Everett was asking his question had nothing to do with the ABC at all. Neither of us was able to hear the ABC in Tasmania because our receivers are not powerful enough.

Senator Wright:

– I heard it myself in Canberra this morning.

Senator WHEELDON:

– Well, Senator Wright heard it himself. All I can say is that Senator Wright has better hearing than we have. What we are relying on its an article by Wayne Crawford, whoever he may be, who writes in the Hobard Mercury. Mr Crawford stated:

No-fault rise $25?

I must say that he tends to qualify the statement by having a question mark after it. He continues:

No-fault fault motor accident insurance premiums are expected to increase by about $25 a year from December 1 .

This is the Hobart Mercury. I think that it should be a fit study for Senator Wright’s investigations.

The article continues:

The new rate for a private motor car is expected to be about $60 a year- compared with the present $35.

The regulations for the increase are listed in today’s Government Gazette.

Details of the new rates are not given, and the AttorneyGeneral. Mr Miller, would not authorise their release yesterday.

However, the Motor Accidents Insurance Board, which administers no-fault, made it clear in its report, tabled in Parliament last month, that a substantial increase was needed.

The report said the scheme had been hit by increases of 1 1 8 per cent in hospital charges, and 300 per cent in ambulance fees, since the current premium was decided on before no-fault started on December 1 last year.

The $2-a-year tax, which is paid on top of the no-fault premium, has not been altered.

Maybe the information is wrong but one likes to rely on the Press, particularly respected newspapers like the Hobart Mercury. I know that I referred to that newspaper in a rather ironic sense at an earlier stage, but we were not relying on the Australian Broadcasting Commission. Senator Everett and I have taken account of what Senator Wright has told us, and that is that Professor Downing and Mr Duckmanton are under-cover communists. For that reason we have been very suspicious ourselves of anything that appears on the ABC, so we tend to rely on journals like the Hobart Mercury from whence we obtained our information. I would suggest that Senator Wright might take up further with the Hobart Mercury whether the information is correct.

I do not want to prolong the agony at this time of the day by going along all the byways- I do not think there were too many highways- along which Senator Wright has led us. I would only say that throughout the country, in every State, the premiums charged for compulsory third party motor vehicle insurance, whether or not they are no-fault premiums, and the premiums which are charged for compulsory workers compensation insurance are steadily increasing. If Senator Wright would care to cast his mind back to the time when he was sitting on the Senate Standing Committee on Legal and Constitutional Affairs when it was inquiring into the National Compensation Bill, he might well remember some evidence which was given to the original inquiry into rehabilitation and compensation in Australia by Mr D. G. Pettigrew, the managing director of Sun Alliance Insurance Limited, which is a multinational and which is the oldest still existing insurance company in the world. Mr Pettigrew said quite clearly in evidence that it was necessary that there be some form of national compensation scheme because the burdens on private insurers of maintaining workers compensation insurance and third party motor vehicle insurance were becoming crippling and that they would have to be accepted as a responsibility for the State and could no longer be regarded as a responsibility for the private insurers. Evidence of that is seen every day in every State. It is seen in New South Wales, in Tasmania, in Victoria, in those States where the third party insurance is conducted by a State Government insurance office, in those States where it is conducted by private insurance offices- not very many of them do cover third party insurance at the present time- and in Western Australia where motor vehicle third party insurance is conducted by a trust which was established by legislation and in which there is participation by private insurers and the Western Australian State Government Insurance Office.

Nothing that Senator Wright has said this evening will alter those facts. Nothing that he can tell us about the communist plots by the ABC will alter that situation. The fact is that we do have a collapsing insurance system in Australia in regard to workers compensation and third party motor vehicle insurance. This Government intends to do something to correct that situation. I hope that the more enlightened members of the Opposition will not adopt the attitude shown by Senator Wright and will assist us to do something to correct a situation which is imposing a terrible burden not only on the insurance companies but also on all of the people of Australia.

Senator EVERETT:
Tasmania

Having listened to Senator Wright’s speech, I am completely uncertain as to what his actual complaint is. Is it a complaint against the accuracy of reporting by the Australian Broadcasting Commission? Is it a complaint against me for having asked a question? Is it a complaint against the Minister for Repatriation and Compensation (Senator Wheeldon) for having answered the question or for the content of his answer? Senator Wright’s speech was also remarkable for 2 factors. In the first place, his arithmetic is abysmally poor. For Senator Wright to represent or misrepresent an increase of $14 to $35 as being an increase of 300 per cent would hardly qualify him to be called a disciple of Einstein. In addition to that, he made 3 gross errors of fact which I shall list. He said in his speech that Senator Wheeldon had self generated the question.

Senator Wright:

– No.

Senator EVERETT:

-Ah, yes, sir.

Senator Wright:

– I said it followed the series which he had generated.

Senator EVERETT:

– Well, if the implication was that Senator Wheeldon initiated that question this morning, let me say that that is completely untrue.

Senator Wright:

– I never inferred that.

Senator EVERETT:

– Of course you did. Hansard will show it. The simple fact that I wish to put on the record is that I handwrote that question myself some 20 minutes after the commencement of question time, made a handwritten copy for myself, walked down to Senator Wheeldon, handed it to him, and said that I proposed to ask the question as soon as I could. From that moment onwards, I endeavoured to catch your eye, Sir, and eventually you gave me the call and I asked the question.

The second gross misstatement of fact of which Senator Wright was guilty was that he described me sarcastically as an angel of change. I have never considered myself as an angel in respect of anything. The third matter that I thought should have been omitted from Senator Wright’s speech was his slighting reference to the family affairs of the Premier causing some apparent error. The simple fact is that the mother of the Premier died early this week. I would have thought that Senator Wright would have had enough experience in this chamber not to attempt to humiliate through death the Premier of a State, even though he is his political opponent. I consider that it was a dastardly comment, of which he ought to be ashamed.

The simple fact is that the question was properly put following, it is true, my hearing on the ABC National News this morning in Canberra the reference that Senator Wright has read out. I cannot remember the precise words, but it alerted me to what was happening. Certain inquiries were made. As Senator Wheeldon has said, there is a report in the Mercury of this morning’s date. But I was more particularly concerned with a statement made by the Premier of Tasmania, I would say some 10 days to 14 days ago. It was a public statement in which he said that it was certain- I paraphrase his words- that within a short time third party insurance premiums would have to rise steeply. Those are words paraphrasing his statement; I have not the precise reference before me. On the basis of that information, with complete propriety and with complete accuracy, the question was asked of Senator Wheeldon this morning:

Is this a further indication that the existing system is moving inexorably towards extinction and must be replaced by a proper alternative?

That was a proper question. It was properly answered by Senator Wheeldon, with respect to him, and I am at a complete loss to understand the speech made by Senator Wright on the adjournment motion this evening, the precise basis of which I just cannot see. I repeat what I said at the beginning: It seemed to be a complaint against the Australian Broadcasting Commission. But where is the evidence that the report on the ABC this morning was inaccurate? I suggest there was none and that the whole speech by Senator Wright, especially in the reference to the Premier of Tasmania, was completely unworthy.

Question resolved in the affirmative.

Senate adjourned at 6.19 p.m.

page 1808

ANSWERS TO QUESTIONS

The following answers to questions were circulated:

Army Reserves: Use for Fire Fighting

Postal and Telephone Charges

POSTAL

Comparable statistics for postal services are not available but I am informed that postal earnings in country areas generally represent a lower percentage of expenditure incurred in country areas.

During 1 974-75 in rural areas less than 40 cents was earned for each $1.00 expenditure. This deficiency has to be made up from metropolitan users. The following statistics indicate the greater use of postal services in the non-rural areas.

Trade with South Africa

Senator Willesee:
ALP

– On 15 October Senator Laucke asked the Minister representing the Minister for Overseas Trade the following question without notice:

I refer to a statement made by the Minister for Overseas Trade, Mr Crean, on 3 September last, summarising developments in the overseas trade field in which that Minister said, inter aiia:

The Trade Commissioner post in Capetown South Africa was closed o.i operational grounds in May of this year.

In view of the highly favourable trade balance we have with South Africa and in view of the importance of South African trade to South Australian secondary industry in particular, will the Minister obtain information from his colleague as to what constituted operational grounds as the reason for closing the Trade Commissioner post in Capetown? Were the so-called operational grounds transient and is consideration now being given to re-establishing the post? If not, why not?

The Minister for Overseas Trade has provided the following information in answer to the honourable senator’s question.

Following consideration of Australia’s trade representation in South Africa, it was decided that the workload at the Trade Commissioner Post at Capetown was not sufficient to warrant the continued operation of the Post and that the provision of basic marketing information and assistance to Australian firms could be adequately undertaken by the Trade Commissioner Post at Johannesburg. Accordingly, the Trade Commissioner Post at Capetown was closed in May, 1975.

This situation remains unchanged and no consideration is being given to re-establishing the Capetown Post.

Persons Authorised to Open Mails (Question No. 846)

Senator Durack:

asked the PostmasterGeneral, upon notice:

  1. 1 ) How many persons are authorised to open mail in each State and at the head office of the Australian Postal Commission.
  2. How many offices have been established for the purpose.
  3. Are there any independent persons authorised to open mail and, if so, who are they.
  4. What is the status in the Commission of persons authorised to open mail.
  5. Are any directions given to authorised persons as to the procedure to be followed and, if so, what are they.
  6. Are reports required to be given in regard to the opening of mail and, if so, to whom are they given.
  7. What are the circumstances that require a postal article to be opened for inspection under Regulation 43.
  8. What is the criterion used to determine ‘a large quantity of similar postal articles’ referred to in Regulation 45.
  9. How many postal articles have been opened since I July 1975.
Senator Bishop:
ALP

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

  1. The following numbers of persons (151) are authorised to open mail:
  2. ) N.S. W. 4, Vic. 3, Qld 1 1 , S.A. 6, W.A. 1 1 , Tas. 4 (Total 39). There is one office in each State for articles in category (a) above. The remainder in each State are for Customs examination purposes.
  3. No, except in emergencies such as where articles are suspected of containing explosives, dangerous gases or liquids and expert assistance is required to make the article safe.
  4. Mature adults employed in positions of at least Mail Officer or equivalent classification.

  5. Yes. There are detailed working instructions. Broadly they provide that:

    1. all authorised persons are made aware of the conditions and penalties for disclosing information relating to the contents of an article ( Regulation 47);
    2. prescribed number of authorised persons must be present when the opening and examination takes place;
    3. the examination in each case must be confined strictly to the purpose for opening the article. For example, with undeliverable mail to the location of the name and address of the sender; and
    4. each article must be endorsed as prescribed that it has been opened (Regulation 48).
  6. Yes, to the State Manager where the postal articles or their contents are in contravention of postal legislation.
  7. Under this Regulation authorised officers are permitted to make a quick sight check to ascertain whether the article is entitled to be transmitted free or at an appropriate rate. This check is made only when there is some reason to suspect that the article is not so entitled.
  8. It has not been necessary to apply the provisions of that part of Regulation 45. If it became necessary to do so, a figure of 1000 articles is considered, at this stage, to be appropriate.

  9. 1 540 045 letters, packets and parcels. Of this number:

    1. 723 articles suspected to have been posted in contravention of postal legislation; and
    2. the balance were undeliverable articles of domestic origin which did not have the sender’s name and/or address on the outer cover and articles of overseas origin selected by Customs officers for examination.

Well over 60 per cent of ‘undeliverable’ enveloped and packaged mail is able to be returned to the sender after examination.

NOTE: The opening of undeliverable domestic articles has not always been done on a centralised basis, that is, at one office in each State. From early 1972 until recently, much of this work was decentralised to almost 700 selected post offices. The Australian Postal Commission decided at its meeting on 8 September 1975 that, because of the privacy issues involved, undeliverable domestic articles should no longer be opened at post offices, notwithstanding that no cases of privacy violation had come to notice during the period of decentralisation.

Ethnic Radio (Question No. 8S0)

Senator Baume:

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

  1. Has there been a recent change in the Department or bodies controlling Ethnic Radio in Australia.
  2. Has this involved change of control to bring Ethnic Radio under the control of the Minister for the Media.
  3. If there has been a change of control, why was this brought about.
Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

– The Minister for the Media has provided the following answer to the honourable senator’s question:

  1. Yes.
  2. and (3) Ethnic Radio was initiated under the Attorney-General’s Department through the office of the then Consultant for Community Relations, Mr A. Grassby, for an experimental twelve week period. Radio stations 2EA in Sydney and 3EA in Melbourne commenced operations on June 1 and June 15, 1975, respectively.

An experimental committee was established by agreement between the Minister for the Media and the PostmasterGeneral. It was chaired by Mr Jim Bayutti A.O. and included a representative of the Federal Opposition, Senator Gordon Davidson, as well as others involved in ethnic affairs. The licences for the stations were issued to Mr Bayutti.

The success of the experiment indicated that it should continue into a further experimental period. This required the application of resources and manpower not available in the Attorney-General’s Department. New committees were established to conduct the two stations, with an overall national committee, again with Mr Bayutti as chairman, to act as an appeals body from decisions of the Sydney and Melbourne committees and to plan for the further expansion of ethnic radio.

New experimental licences were issued to the chairmen of the respective station committees. The licences were issued by the Postmaster-General who supervises the operation of the stations. The Department of the Media established an Ethnic Radio Support Group to assist an increase in output from the two stations and to provide administrative support. The station committees have since appointed managers, answerable to them, and paid for out of Media Department funds. The funds for the operations of the stations, and the three committees, are incorporated under the Department of the Media appropriation in the Budget.

Local Government Grants (Question No. 927)

Senator Rae:
TASMANIA

asked the Minister representing the Treasurer, upon notice:

  1. 1 ) What amounts have been provided for by the Department of the Treasury in the 1 975-76 Budget for direct untied grants to the States for distribution as the States see fit to local government bodies.
  2. What amounts have been provided for by the Department of the Treasury in the 1975-76 Budget for tied grants to the States for distribution to local government bodies on terms set out by the Federal Government.
  3. In respect of each of the above cases, will the Treasurer specify whether the amount is more or less than in 1 974-75, and by how much.
Senator Wriedt:
ALP

– The Treasurer has provided the following answer to the honourable senator’s question:

  1. Nil.
  2. There are no tied grants to the States administered by Treasury specifically for distribution among local government authorities. While portion of amounts payable to the States from appropriations administered by the Treasury under the Special Employment Grants Scheme, the natural disaster assistance arrangements and Tasman Bridge disaster arrangements are allocated by the States to local government authorities, the amounts so allocated are not determined by the Australian Government. Details of Australian Government payments to the States specifically for allocation to local government authorities (including, importantly, the assistance of $56.3 million and $79.9 million provided and to be provided on recommendations of the Grants Commission in 1974-75 and 1975-76, respectively) arc included in Chapter 5 of Budget Paper No. 7 Payments to or for the States and Local Government Authorities 1975-76.
  3. Not applicable. See answers to ( 1 ) and (2).

New Radio Stations

Senator Bishop:
ALP

– On 4 September Senator Young asked me whether the issue of licences to 12 new stations would be made under the provisions of the Wireless Telegraphy Act and whether such an issue would be in contravention of that Act. He also asked whether I had sought a legal opinion from the Attorney-General’s Department.

I subsequently advised that my Department had sought such advice and that the views of the Attorney-General’s Department were being studied by the Heads of both my Department and the Department of the Media. The advice which my Department sought was whether special and experimental licences issued to certain stations, for example, Universities and Ethnic Stations, had been validly granted under the Wireless Telegraphy Act, and also whether the licences it was proposed to issue to selected educational institutions announced by the Minister for the Media, could be properly issued under the same Act.

The Attorney-General’s Department has indicated that a licence for a Broadcasting Station cannot be issued under the Wireless Telegraphy Act but that one has to look at Section 4(1) of the Broadcasting and Television Act which defines a Broadcasting Station to mean ‘a station for the transmission by means of wireless telegraphy of broadcasting programs, that is to say, matter intended for aural reception by the general public, and includes the studio, transmitting station and technical equipment used for the purposes of those programs.

The Attorney-General’s Department has observed that the question to be determined prior to the issue of a licence is whether a station is a Broadcasting Station within the meaning of the Broadcasting and Television Act.

Significant factors which must be considered are the nature of the matter which is to be broadcast, the audience intended to be reached by the broadcasts and the frequency, power and location of the stations.

After consideration of these factors, the Attorney-General’s Department has concluded that the licences already issued to the University of New South Wales, the Australian National University and University of New England have been validly issued under the provisions of the Wireless Telegraphy Act.

In the case of the Ethnic Stations, the case is not as clear cut as these were issued under the Wireless Telegraphy Act on the basis that they were experimental licences broadcasting material in a foreign language and directed specifically to ethnic groups. They were of a special character and could be considered as falling within the nature of a social/community experiment and not intended for general public hearing. I believe these licences were properly issued.

In response to your particular query about new licences, the Attorney-General’s Department has advised that the validity of granting licences under the Wireless Telegraphy Act to a number of educational institutions must be viewed against the nature of the material to be broadcast and the proposed audience. - Taking this advising into account, it is proposed to issue licences to selected institutions under the Wireless Telegraphy Act with special conditions relating to the nature of the material to be broadcast and the people intended to be reached so that there can be no doubt as to the legality of the licence.

These conditions would be along lines that the stations should transmit matter of an educational character intended for the aural reception of staff and students of the institution.

Departmental Consultants (Question No. 825)

Senator Withers:
WESTERN AUSTRALIA

asked the Minister representing the Treasurer, upon notice:

  1. 1 ) What persons or private companies outside the Public Service have been used by the Treasurer’s Department for research, public relations, advice, or any other purpose, since 1 July 1973.
  2. For what project or purpose were the services of each person or company utilized.
  3. 3 ) What was the cost of each of the consultations referred to above.
Senator Wriedt:
ALP

– The Treasurer has provided the following answer to the honourable senator’s question:

Tourism: Financial Assistance (Question No. 704)

Senator Rae:

asked the Minister representing the Minister for Tourism and Recreation, upon notice:

Following the Minister’s answer to Senator Rae’s Question No. 535 on grams, loans, tax inducements and other inducements regarding the tourism industry, would the Minister itemise each of the grants, loans and loan guarantees other than loan guarantees in respect of the Housing Loans Insurance Corporation, that have been made by the Government since December 1972.

Senator Douglas McClelland:
Special Minister of State · NEW SOUTH WALES · ALP

-The Minister for Tourism and Recreation has provided the following reply to the honourable senator’s question:

Details concerning tourism grants made by the Department of Tourism and Recreation in the period from December 1972 to June 1974 are to be found in the Department’s publication ‘Review of Activities’ tabled in Parliament on 24 September 1974. Details of further grants since that date included in the Department’s ‘Review of Activities for 1 974-75 ‘ which was tabled on 7 October 1975.

Loans for certain tourism purposes are made available through the Commonwealth Development Bank. Details of such loans are confidential between the Bank and its clients but to 30 September 1975 loans totalling $1,119,650 have been made by the Bank for accommodation, transport and other facilities to assist the development of tourism in areas away from the main population centres.

No loans have been guaranteed by my Department.

Cite as: Australia, Senate, Debates, 5 November 1975, viewed 22 October 2017, <http://historichansard.net/senate/1975/19751105_senate_29_s66/>.

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