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Thursday, 18 October 1973
Page: 2369


Mr HAYDEN (Oxley) (Minister for Social Security) - I support the Bill, and I am heartened by the statement of the honourable member for Corangamite (Mr Street) that he, too, supports the Bill, although, mind you, it seems as though he may support it for slightly different reasons - at least superficially. I thought that his reason for supporting the Bill was a rather curious one in that he argued that there was a need for an appropriate public inquiry to protect primary industry. This seemed to be the essence of a substantial part of his argument. I hope that he is successful in persuading members of the Australian Country Party - who seem less than enthusiastic about this Bill, although the Liberal members of the Opposition have found some attraction in it - to see the particular point he puts forward. For myself, I am more concerned about the need to develop a system which protects the consumers and the taxpayers. For too long in this community of ours - for more than 2 decades in fact - the consumer has had to pay more than a reasonable price for too many commodities because there has been too much political jobbery going on in the community. Either too many votes have been bought at too high a price at the taxpayers' expense or the donations to political party funds have been bought, again at too high a price, at the taxpayers' expense.

The completely unjustifiable way in which subsidies and protection and other forms of support, many of them indirect, in which these payments have been thrown about at the taxpayers' expense-


Mr Enderby - They are listed in the Coombs report.


Mr HAYDEN - The Minister anticipates me too well. He is much cleverer than I. As I was saying, the payment of these forms of support which were made to keep a government in power long after it had run out of ideas and energy is something which will be a stain on the administration of this country for too long. That is why this proposal has been brought forward. I cannot say often enough that we do not spend our money in this Parliament; we spend the hard earned income of taxpayers. When we give a tax concession that concession is a cost to the community. Tax concessions forgone in one area are tax collections that must be made up in another area. If we give a tariff which has not been properly justified on the basis ot an objective and rigorous inquiry but has been granted because the particular recipient is a generous supporter of a political party, we impose a cost on the community. When we subsidise an industry, whether it is primary or secondary, when rational economic criteria would advise us otherwise, we are wasting economic resources in the community. We are not getting the return we ought to be getting, a return which can be ploughed back into the community in many ways such as investment, as better welfare provision and as better consumption standards for people in the community. We are denying the rest of the public, and for too long this denial has occurred as a payoff to the various powerful, albeit minority interests, in the community who have been able to prop up a tired lethargic government that had run out of inspiration at least a decade ago.

The Minister for Secondary Industry (Mr Enderby) reminded me by way of interjection that that is what the Coombs report was all about. The Coombs report extracted various forms of indirect hidden subsidies many of which most of us had either forgotten or never knew about, which had been introduced in some cases a decade or more ago and which had continued, again at the taxpayers' expense, to prop up industries. No assessment had ever been made to establish whether these payments should be provided, whether they should be continued or whether the taxpayer should be required to continue paying to surrender some of his living standards so that in some cases a particular powerful supporter could continue to get what can be fairly termed as a welfare payment at the expense of the rest of the community.

One instance that immediately springs to mind is the dairy industry and the butter subsidy which was mentioned by the honourable member for Corangamite. There was a program for free milk for school children. How many thousands of gallons of milk have been poured down the drain in the years that this scheme has been operating? How many people have taken home milk from schools when children did not want it? This program which was not necessary was introduced because of the power of a particular lobby in the community. These are the reasons why the Industries Assistance Commission Bill has been introduced. This Bill, which is designed to set up an Industries Assistance Commission, is one of the most significant elements in this Government's approach to the making of economic policy. By extending the role of the Tariff Board from the consideration of protection for, and assistance to, secondary industry to the whole spectrum of protective activity in Australia, we are taking a major step forward in the introduction of rationality into official policy towards the fostering of economic growth in Australia. The history of the free trade versus protection controversy in Australia is a long one, and a well known one. Originally the advocacy of protection was closely related to the view that national independence and the welfare of wage earners in this country would be promoted by the effect of tariffs in redistributing income from the owners of land to industrial labour and capital. The free-traders, on the other hand, informed by a fairly elementary and superficial grasp of nineteenth century English economics, felt that it would be to the long-term benefit of the community to specialise in those kinds of economic activity in which we from the point of view of international trade and a comparative advantage, namely land-intensive kinds of productive activity - that is, rural industry.

There was some rational core in the free trade arguments, in that they emphasised the benefits of concentrating on those kinds of productive activity which would contribute most to the increase of the national income; there was, however, an important flaw, in that no attention was given to the distribution of income or the desirability of economic diversification and innovation. The protectionists, in their manifestations, were concerned with the distribution of income. It was always the policy of the Australian Labor Party to use the tariff to promote the economic growth of Australia, to diversify Australian industry, to raise the incomes of wage earners, and to do this by transferring to secondary industry part of the wealth deriving from that asset which, despite any differences in title - leasehold or freehold - still remains primarily the property of the Australian people as a whole, namely, the land.

There were sensible cases to be made on both sides - protectionist and free trade. Unfortunately the controversy often became an argument between the interest groups representing rural industry and those representing secondary industry, with very little attention being paid to the interests of Australia as a whole. The free traders were able, with rationality temporarily prevailing, to have the Tariff Board charged with the duty of considering not just how to protect secondary industry but whether a particular industry should be protected. But the irrational free traders, which can be pretty directly identified with rich rural interests, were able to claim that the rural sector had some kind of claim for compensation for any measures of protection for secondary industry. Thus, over the years, we have had the absurd situation created where protection for secondary industry was introduced to compensate other sectors of the community for the monopoly of the nation's wealth by landowners, and then the landowners have claimed compensation for this compensation.

Such a Gilbertian result could only have derived from a set-up wherein assistance to industry was subject only to selective examination whereas a manufacturing industry was expected to justify any assistance it received. The crude doctrines of agricultural primacy could be. invoked to justify any kind of handout to a rural industry without examination. So there developed the notion that secondary industry assistance could not be granted without at least the semblance of inquiry and justification, but rural industry had claims which for some 'mystical reason were unexaminable. Of course there was no mystical reason; there were very hard cash-value reasons, reasons intimately connected with the long-term corruption practised by the Country Party, now fortunately no longer enjoying the Treasury benches or having access to the public funds pork barrel.

It is not surprising, therefore, that the Country Party is bitterly opposed to the establishment of the Industries Assistance Commission, for the primary purpose of this Bill is to abolish the special privilege which rural industry has enjoyed for so long - exemption from the proper processes of examination. Whenever public funds are to be spent on any sector of the community, whether by way of social security transfers, subsidy to industry or indirectly by way of tariff protection, the community has a right to demand that such a use of public funds should be justified in terms of the contribution to the community's objectives. We recognise that in many cases assistance to industry is justified, but feel that the process of investigation and justification which has for so long been demanded of secondary industry should also be demanded of primary industry. It will be the purpose of the Industries Assistance Commission to treat primary, secondary and tertiary industries - all these different kinds of productive activity - on an equal footing when it comes to any claims they may wish to make upon public funds.

It is possible to speculate upon why such an obviously sensible extension of the role of the Tariff Board was not undertaken in the past. And in indulging in such speculation, the history of Country Party attitudes to both the Tariff Board and protection to secondary industry, and to assistance to rural industry, cannot be ignored.

There has been a lot of attention given in this House today to the Government's proposals to legislate for disclosure of contributions to political party funds. The Leader of the Country Party (Mr Anthony) is obviously unhappy about the idea. But his dislike of the disclosure of contributions made by individuals and companies to Country Party funds pales into insignificance by comparison with his objection to the proposed functions of the Industries Assistance Commission because he knows very well that the major source of the Country Party's electoral strength has derived, not from shady dealings on a private basis with individuals and companies but from large-scale jobbing in public funds.

The Country Party has always been concerned with pilfering from the public purse upon a massive scale. It has, over the last generation during which the Liberal Party has, willy-nilly, been forced to accept what it knows to be dishonest in order to retain the perks, if not the realities, of power, diverted public funds to rural areas, without examination or justification. And at the same time it has perpetrated a monstrous confidence trick upon the people who vote for it. the large number of residents of non-metropolitan areas who think that because the Country Party calls itself by that name - it is, of course, quite prepared to sell its name as, long ago, it sold its virtue to the highest bidder - it is really concerned with the interests of country dwellers.

Of course any program of assistance to rural industries promoted by the Country Party has always been marked by two major characteristics - inequity and inefficiency. The major part of assistance to rural industries ends up in the pockets of the well-off. The poor and struggling farmers get a handout which is not worth much more than unemployment benefits. If you are a struggling wheat grower on $10,000 a year or more, you will do well out of Country Party programs; otherwise, you might as well forget about them. Nevertheless, the Country Party has misrepresented itself as the benefactor of the countryside, and it has grossly misappropriated public funds in order to do so. The million or so dollars which the Liberal Party has received under the lap from its multi-national friends looks petty beside the hundreds of million of dollars which the Country Party has stolen from the Australian taxpayers by way of its generous assistance schemes for rich rural interests and so-called decentralisation programs - hundreds of millions of dollars which have been spent on buying votes.

It is therefore not surprising that the Country Party should object to a Bill for an Industry Assistance Commission which will be examining the justification on grounds relevant to the guidelines pertaining to general economic policy laid down in clause 22 of the Bill. The Country Party will, of course, find it equally difficult to swallow clause 23 with its provision that any government must seek the advice of the Commission before implementing proposals for assistance to industry.

In the peculiar alliance of the Country Party with some sections of manufacturing industry which grew up in the latter years of the Liberal-Country Party government, it was commonplace for the Country Party Ministers to do their utmost to subvert the mandatory provisions of the Tariff Board Act. In their attempts to apply the same standards of dishonesty to assistance to certain sectors of secondary industry - usually those marked by monopoly, inefficiency, and foreign ownership - which they were accustomed to in the rural sector, the Country Party Ministers did their best, by way of loaded policy references and unofficial pressures placed upon the Public Service, to undermine the independence of the

Tariff Board, which, was based on the mandatory provisions. Not surprisingly, the Country Party is not happy about the existence of such mandatory provisions for a Commission which will have the powers, and the duty, to investigate the many forms of assistance for rural industries which have grown up, like weeds choking out the productive areas, in the last generation.

It should not be thought that the Government considers all the forms of assistance which have been given to rural industries and non-metropolitan areas as undesirable. On the contrary, we are concerned with subjecting all kinds of assistance to industry to thorough and independent examination in the confident expectation that such a procedure will show many forms of assistance to be justified and desirable. Such forms of assistance can be financed by reducing or abolishing the many wasteful handouts to the non-needy rich which the Country Party has instituted in the past. Nor should it be thought that it is even true that the Country Party, in its fondness for the behind the scenes deal, is in fact representative of rural interests generally. It is increasingly the case that rural industry groups, as well as secondary industry interests, have expressed their realisation of the fact that pork-barrel politicking of the Country Party variety does not serve their long term interests. Thus, in a letter to the Prime Minister (Mr Whitlam) dated 24 September, the Australian Farmers Federation expressed its strong support for the mandatory provisions of clause 23. The Australian Farmers Federation is of the opinion that mandatory provisions should apply equally to primary and secondary industry. The secretary of the Federation writes:

The President of the AFF, Mr W. N. Hogan. M.B.E., has asked me to convey to you his concern that exceptions might be made to the mandatory provisions of the proposed Industries Assistance Commission in the case of the mining and manufacuring industries, leaving the rural industries as the only sector fully bound by its operations.

My President wishes me to say that such a situation would not only be regarded as discriminatory and unfair in the countryside, and would be most objectionable on the grounds of appearing to favour selective interest groups in the generally well-to-do extractive and manufacturing sectors, while exposing other industries, seeking Government assistance, to the full rigours of the Commission.

My President firmly believes that if it is good enough for some areas of activity requiring public aid to be dealt with by the Commission, then it should be good enough for all other sectors also.

We realise that there is a good deal of support for the principles of this Bill on the other side of the House. The Government is prepared to accede to amendments which are put forward in good faith and which might contribute to the greater efficacy of the Industries Assistance Commission. However, we will not be swayed by partisan or sectional considerations, and we know that in the Opposition there are many members who agree with us on the necessity for the changes and innovations embodied in the Bill.

In conclusion, let us be clear about one fact. When misuse is made of economic resources - money is only the representation of those resources; it represents the power or the authority to command those resources and to direct them within the economy - there is waste. Investment is the key to economic growth in an industrial economy such as ours. If that investment is taking place in the wrong parts - that is, if unwise decisions are being made not according to rational economic criteria but according to the pay-off that can be achieved in the back room deals between the Country Party and the people, who are its backers, or it hopes will be its backers - we will not achieve the sort of growth we should achieve; we will not achieve the sort of progress and prosperity we should achieve; and we will not achieve the living standards that should be provided in the community and the welfare services that should be achieved.

This is represented in our long term growth, where we have not a particularly exciting record. I quote from the Organisation for Economic Co-operation and Development economic survey 'Australia', which was published in December 1972 and which stated:

On a per capita basis, Australia's performance-

That is, in economic growth- appears much less impressive . . . The high growth rate of total real GDP was thus more a reflection of relatively rapid growth of population rather than of output per head.

It stated further:

Throughout the period 1950-1970 Australia had one of the highest investment ratios of all OECD countries. In terms of growth of output per head of population, this high rate of capital formation appears to have yielded a low return . . .

The political deals were done, but the community suffered as a result. This Bill will end this political corruption and jobbery. It is overdue.







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