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Wednesday, 27 March 1968

Mr TURNER (Bradfield) - 1 must confess at the outset that flooding is not one of the major problems in my electorate. Nevertheless, it is a matter that does affect my constituents as taxpayers who provide a certain amount of the money that is used for national works financed by the Commonwealth Government. I want to say a few words on the principle involved in this kind of legislation. 1 am not particularly concerned with flood mitigation in New South Wales. I certainly do not oppose the Bill. I dare say, in accordance with the principles which have prevailed in the past, the Commonwealth is adequately safeguarded. Indeed it is. I noticed, looking at the principal Act, that the Commonwealth provides, in effect, a subsidy on a $1 for SI basis. For every $1 that the State spends on specified types of work, the Commonwealth provides $1 to supplement it. Also, there is adequate provision to ensure that this money is not wasted.

I am not in any way opposing the Bill or the purpose of the Bill. But it is worth looking at a very important principle involved in it. This principle is that the Commonwealth provides money for selected national works. Upon what principle does the Commonwealth provide money and how much money and for what work is it provided? This is what affects my constituents. The Commonwealth may provide aid either, as in this case, in supplementation of moneys that the States may spend or a particular State may spend on a specified type of work or the Commonwealth may provide the whole of the money necessary for some particular national work. I rather think the Ord River scheme would come into this category. This money may either be loan money that the Commonwealth has at its disposal or it may be revenue that the Commonwealth uses as in the case of the Snowy Mountains scheme. The works may not be only flood mitigation works; they may be water conservation works or works of other kinds.

At this point 1 want to quote from the Report of the Committee of Economic Inquiry, referred to as the 'Vernon Committee', on this matter. I do this because I think it is highly relevant to this kind of exercise. Chapter 17 paragraph 72 of the Report states:

Development of some of the resources in the north may come about naturally because of the possibility of profit in the normal commercial sense. The development of Mount lsa and the bauxite deposits of the Weipa area may be cited as examples of this. In many cases, however, as with the present plans for development of the Ord River area of northern Western Australia, development cannot start on any scale without government initiative and the provision of large amounts of public capital. If a concentrated attack on the development of the north is to be made, it will have to bc along these lines. Reduced to its essentials, therefore, the problem is one of deciding on the proper distribution of public investment between many competing objectives, of which northern development is one.

Following is the part I want to underline and which applies to other parts of Australia besides the north:

Above all, information on the nature and extent of resources and informed estimates of costs of development and market prospects are required. Cool judgment about the prospects of particular proposals is essential. We welcome the steps taken by the Commonwealth Government, including the establishment of a Division of Northern Development in the Department of National Development, to place itself in a better position to make such assessments in relation to northern development. The next paragraph covers national works other than merely northern development.

The Vernon Committee in paragraph 73 states:

While we would insist that adequate analysis of all proposals, including proposals for northern development-

These are not proposals exclusively for northern development - that involve the use of public money is essential . we do not say that any such proposal should be passed or failed on economic grounds alone. A further judgment is required whether the combined benefits, economic and social, are such as to justify the cost. Such judgment1! can, in the last analysis, be made only by governments themselves.

The rest of this paragraph is vitally important for anyone considering the throwing about of multi-millions around Australia for alleged national works which, in many cases, are merely political rackets. The statement continues:

We think, however, that there would be merit in the establishment of a Special Projects Commission, or some such body, with the power to investigate proposals for major developmental projects, wherever they are located, to advise governments on them, and to publish its findings. 1 emphasise the words 'and to publish its findings'. The statement goes on:

Such a body, if given sufficient powers and adequately stalled, could do much both to enlighten the public and to assist governments in arriving at the most informed decisions possible. lt is this proposal of the Vernon Committee that I. want to underline and emphasise. I underline and emphasise it in this kind of context: I believe, rightly or wrongly, that Australia's future is very much in jeopardy. I do not want to enlarge upon the situation in which Australia stands today, alone as a nation after having been a colony looked after by others, but I do believe that from this time onwards we cannot squander money on alleged public works that are merely political rackets. We cannot afford this any more. We are no longer a colony which is in a position to construct roads, bridges, dams and all manner of such things merely to win a few votes in this electorate or that. We can no longer afford to waste and squander our money because of the position in which we find ourselves today, alone in the south west Pacific.

What kind of commission is proposed? It is called by the Vernon Committee - and there is no magic in the name - a Special Projects Commission. What are the characteristics of it? First, it has to be properly staffed and equipped, lt may well be that some of the staff of the Snowy Mountains Hydro-electric Authority who are no longer required to develop the Snowy Mountains area would be available for such a commission. 1 refer particularly to those who would be concerned with the engineering aspects of proposals. But of course engineering aspects are not the only aspects of developmental proposals. For example, if we consider the Ord scheme we find that the question there is nor merely whether we can construct a dam, or how the dam should be constructed, or how much water it may impound; it is rather a question of whether it will be possible to irrigate a sufficient area to produce those crops that can be sold profitably. The project involves, therefore, not only engineers but also economists and the Bureau of Agricultural Economics - people who can give some kind of estimate of market possibilities. What is needed is a cost benefit study. If we are going to spend many millions of dollars of the taxpayers' money we have to be sure that what we invest is invested in a sound proposition which will pay for itself in due course. So I say that this cost benefit study is essential and what is needed is a body equipped to carry out this kind of study. This body could be the Snowy Mountains Authority plus something more. Constituted in this way it would be an appropriate body, commission, or authority - call it what you like.

The first characteristic, then, is that it be properly staffed and equipped - properly, that is, for its purpose, and I hope J have outlined its purpose adequately. Then the second characteristic, and a tremendously important one, is that it have a degree of independence. It must not be simply a group of individuals in the Department of National Development from whose reports you select those that happen to suit your purpose and say: 'There you are, it is recommended. The Minister recommends it. We have reports of this kind and that kind to prove to us that this is a viable proposition.' Such reports can be selected at will. So the independence of the body is just as important as its being specially equipped. In this sense it should be a body similar to the Tariff Board. It would bear comparison with the Tariff Board because the Government has established the Tariff Board as a kind of barrier between it and the pressure groups who want to increase tariffs, and this commission should be a barrier between the Government and the pressure groups who want a dam here, an irrigation system there, and flood mitigation works somewhere else, lt should be that kind of barrier and have a degree of independence in the same way as the Tariff Board has.

The third characteristic, which is related to the second, is, as stated in the Vernon Committee report, that the reports of the body receive publicity. It should publish its findings, to use the words of the Vernon Committee. This means that once the reports are laid on the table in this House, and so are made public, all the world will be able to examine the cost benefit analyses. If a particular amount of money is being spent on some political racket it will he quite clear that the project is not the kind of proposition in which any prudent person would invest his money, and therefore is not the kind of proposition in which the people'* money, contributed by way of subscriptions to loans, should be invested on their behalf.

The Vernon Committee says that, of course, there are other considerations. There are economic ones, there may be social ones. In short there are various considerations. But the point is that everything should be above board. A government may come along and say: 'We are going to put money into such-and-such a proposition although the return is dubious and although, indeed, we anticipate a loss for years. We are doing this because there are social or national considerations that overbear the economic considerations'. But if a government wants to do something along these lines then let the Government prove its point. Let it be forced to prove its point. Let all the world see that from an economic point of view the proposal will not stand up.

I suggest that the time has come when governments should erect this barrier between themselves and pressure groups just as they have erected a barrier in the form of the Tariff Board between themselves and pressure groups. So I put this view, not in the belief that politicians will ever forsake politics, not in the belief that public money will not continue to be spent in political rackets-

Mr Robinson - I raise a point of order, Mr Deputy Speaker. I direct your attention to the fact that the honourable member has used the phrase 'political rackets' several times in his speech. This matter concerns my electorate, the phrase is offensive to me and I ask that the honourable member be directed to withdraw it and apologise.

Mr DEPUTY SPEAKER (Mr Cope)Order!There is nothing personal in the honourable member's use of the phrase.

Mr TURNER - If the honourable gentleman is offended I would apologise very quickly. 1 was not dealing with his flood mitigation works. I said right at the outset that 1 was not opposing the Bill. 1 was talking in principle about government moneys being provided for so-called national works. 1 was not talking about the honourable member's flood mitigation works. God bless him. Let him have them. I was talking about a principle that I believe should be introduced into our system of subsidising national works through this Parliament. I was talking about it not, as I said, in the belief that anything will be done about it. There are too many people who prefer political rackets to the kind of investigatory authority that I have been talking about - and in this context I except the honourable member who has just told us he is offended. What I have suggested is, I believe, what ought to be done, and somebody in this place ought to say what ought to be done.

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