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Wednesday, 10 November 1976


Mr HURFORD (Adelaide) -This Bill seeks to provide authority for the implementation of the forty-third Grants Commission report. The recommendations in the report were for special assistance grants to the States, but in fact the grants turned out to be only to Queensland. For the financial year 1976-77 Queensland is to be paid a grant. This circumstance has arisen because after negotiations earlier this year on financial assistance grants it was agreed that only that State would be eligible to make a claim to the Grants Commission. I will come shortly to the reasons why that is so. Special grants are paid by the Federal Government, on the recommendation of the Grants Commission, to claimant States which by reasonable efforts on their own part are unable to function at a standard similar to that of the average States. For this purpose the average States are deemed to be New South Wales and Victoria. Along with financial assistance grants, or tax sharing entitlements as I suppose we must now call them under the so-called new federalism, and along with the special revenue assistance grants, these special grants are part of the general revenue assistance to the States. This comprises the revenue the States receive to administer as they see fit. No strings are attached.

The original purpose of special grants was to overcome the fiscal disabilities suffered by the less populous States. These grants are termed horizontal equalisation grants and their aim is to provide each State with the capacity to provide its citizens with the same fiscal deal as is provided to the citizens of any other State. For this purpose a fiscal deal is regarded as the net effect on a citizen of the charges- for example, taxes- a State makes and the facilities it provides for the quality of life of its citizens. At present the 4 less populous States- Queensland, South Australia, Western Australia and Tasmania- are free to apply to the Grants Commission for special grants. However, Western Australia withdrew from the Grants Commission arrangements as from 1968-69. South Australia withdrew as a result of an agreement between the Australian Government and the South Australian Government for the transfer of that State's nonmetropolitan railways to the Federal Government. In June 1975 Tasmania, which had to withdraw from claimancy from the beginning of 1974-75 following arrangements under which its financial assistance grants were to be increased, made application for special grants for 1974-75 and 1975-76; but the applications were subsequently withdrawn.

It should be noted that, although individual claimant States have reached agreements with various Federal governments not to apply to the Grants Commission for the special grants, all four are legally entitled to do so. In recent years there has been a growing tendency for special grants to be subsumed into negotiated financial assistance grants. The 1975 report of the Centre for Research on Federal Financial Relations comments:

The special arrangements with South Australia and Tasmania in 1974 and 1975 are indicative of a tendency for the distribution of general revenue grants, and thus the process of equalisation or horizontal fiscal adjustment, to become increasingly dependent on bilateral bargaining and political decisions rather than on systematic evaluation by the Grants Commission.

Special arrangements in this area between Federal and State governments have not been limited to the years of Labor rule. I thought for a moment that the honourable member for Lilley (Mr Kevin Cairns), who is one of the few members in this House who understand these things, would be pointing out that I have drawn attention to political bargaining of which I do not approve in these matters. It is not only my Party that has fallen for this. For example, in 1959 and 1968 conservative Federal and State governments reached agreements for individual States not to apply to the Grants Commission in those years.

It could be argued that, with special grants accounting for less than 0.03 per cent of total Federal payments to the States and with only one effective claimant State, the need for the Grants Commission is diminishing. I have previously put the view in this House- in fact, just a week ago tonight when we were discussing the revenue sharing Bills, the so called new federalism Bills - that I consider that the Grants Commission should be retained and given a much larger role, especially in the disbursement of local government funds. Thankfully, the present Government has stated that even if its new federalism arrangements come to fruition- I must say that this looks increasingly doubtful as the degree of State disquiet intensifies- the less populous States will have access to the Commission.

I point out that the Grants Commission does much more than assess special grants. For example, in 1975-76 the subjects it investigated ranged from an investigation of the problems of measuring the revenue in relation to a number of taxes, land revenues and mining royalties to the measurement of diseconomies of scale and other special difficulties in relation to a wide range of cultural activities. Any body with such wide ranging fields of expertise should be exploited to the fullest. I repeat my call for the Grants Commission to be given at least an overseeing role in relation to these new State local government Grants Commissions. I presume that most honourable members would appreciate that there is a fair degree of irony in our discussing this Bill at this time. After all, the greater proportion of us are what the Queensland Premier would describe as southerners. Here we are discussing a Bill to give Queensland funds to overcome its fiscal disabilities when the Premier of that State has stated of his State, 'We could go it alone; we would be much better off'. There appears to be somewhat of a contradiction between the reality as the Premier sees it and as the Grants Commission sees it. In section 1.8 of the summary of the forty-third report of the Grants Commission it is stated that a special grant is given: to enable a claimant State to function at a standard not appreciably below that of other States without having to levy taxation and other charges of greater severity than in those other States. Its revenue needs to be supplemented because of: (a) its lower capacity to raise taxes and other revenue; and (b) its need to incur higher costs in order to provide comparable governmental services.

For these reasons this Bill provides for the payment of $2 7m to Queensland. An amount of $ 18m of this is an advance payment in respect of the current financial year 1976-77 and the other $9m is a completion payment for the year 1974-75. As the honourable member for Lilley would know, these completion payments are for a particular year and are made 2 years after the advance payments for that year, after the Grants Commission has examined in detail the actual financial positions of claimant and standard States in the appropriate year.

The futile, ill-informed and unnecessarily divisive talk that emanates from the Premier of Queensland on secession should be deplored from all sides of the House. We all know that secession is virtually a legal impossibility. The people of the separate States joined in a federation at the turn of the century to become one nation for a very large number of good reasons. The greater number of the major reasons for their decision at the turn of the century remain just as valid now as they did then. Some are even more valid now. The Queensland Premier talks rubbish about Queensland supporting the rest of Australia. Export figures are cited. No mention is made of who supplied the original investment which made such exports possible. No mention is made of the billions of dollars of taxpayers' money from other States over the years which have been used to help give Queensland the public facilities it possesses. This Bill is just one example of the money coming from the rest of Australia to that State. The Opposition is supporting it. I do not quibble with it. But I quibble with the nonsense that is talked on subjects like this by the present Premier of Queensland. I am sure that I have the support also of members of the Liberal Party in what I say. I repeat that Australia is one nation and must solve its problems as a single nation. The prattlings of the Queensland Premier should be consigned to the oblivion they deserve. I am sure that the great majority of Queenslanders find these utterances as embarrassing and invaluable as anyone else does.

While on the subject of the Premier's public statements, I refer to his newfound concern for the unemployed. His stand on Fraser Island on which he opposes the cessation of mining because of the effects on unemployment must rank high on the list of hypocricies voiced by conservatives in this country. One must be forgiven for thinking cynically that he is prepared to use men's jobs as a lever in his personality struggle with the Prime Minister (Mr Malcolm Fraser). Why not put forward a plan for saving both jobs and Fraser Island as the Labor Party did in the House today? I must make comment upon the statement by the Minister for Environment, Housing and Community Development (Mr Newman) on this subject. What a lot of hope it gave to the miners on Fraser Island. He merely offered them the services of the Commonwealth Employment Service to find other jobs or offered them merely the unemployment benefits which they will receive anyway. We have outlined already what we would do. This was stated in a speech in the House before the suspension of the sittings for dinner by the shadow Minister for Employment and Industrial Relations, the honourable - member for Port Adelaide (Mr Young). We would bring in such structural adjustment schemes as applied to industries hit by the 25 per cent tariff cut. We would be of real assistance in employing the men who are hurt by necessary, progressive decisions taken by the Government of honourable members opposite, decisions which we applaud for environmental reasons. But we do not applaud the way that the people who will be hurt by those decisions are being left on the scrapheap as this Government is leaving them.

I point out, Mr Deputy Speaker, that these remarks are pertinent to this Bill. As you would realise, they relate to money being made available to Queensland for its development. Surely it is time that the Government's ideological opposition to public spending was replaced with practical policies. A little bit of thought should be given to these things instead of the grandstanding and window dressing which we have heard and seen. Surely we could have this adjustment plan used as a pilot for other plans urgently needed in other parts of the country, just as this plan is needed now in relation to Fraser Island. They are the main points that should be made concerning this Bill, save one. The last point I want to make is to draw attention to how much better off Queenslanders would be now if their State Government had accepted the generous offer of the Australian Labor Government to take over its railways. The offer was accepted, of course, by South Australia and Tasmania. Thenbudgetary problems have been eased enormously. Their independence has not been hit one iota. Stupid, small-minded irrational conservative political attitudes such as those just displayed by the attempted interventions of some honourable members opposite are responsible for Queensland continuing to bear the burden of an enormous loss on its railways. The people of Queensland are the losers. In addition, their State Government is forced to continue to come cap in hand as a claimant State to receive the funds that are made available in this Bill which, I repeat, the Opposition does not oppose.







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