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Wednesday, 28 October 1970

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) asked the Minister for Labour and National Service, upon notice:

What assistance does the Commonwealth give to the Productivity Promotion Council of Australia.

Mr Snedden - The answer to the honourable member's question is as follows:

The Productivity Promotion Council of Australia receives executive and administrative assistance from the Productivity Promotion Branch of my Department.

Mr Grassby - There has been no competition.

Mr DUTHIE - Of course there is no competition, and this has been the trend during recent years. There are fewer and fewer buyers attending the wool sales just as there are fewer and fewer butchers buying at the cattle and sheep sales today. This has emasculated the auction system and has heaped up the profits of private business at the expense of the producer. An article in the 'Sydney Morning Herald' of 23rd October 1970 had this to say:

Two wool buyers bad said before the current selling season that certain merchants planned to combine to force a substantial drop in prices, the general council of the New South Wales Graziers' Association was told yesterday.

Mr H.Gullett, the association's Canberra representative, said such a price fall had been 'precisely what had happened'.

Mr Gullettsaid the two buyers, men of repute and of conservative outlook, had asked to see him about 5 weeks ago.

They had said they were 'absolutely satisfied' a number of overseas buyers planned to combine to force prices down.

He had seen the buyers again yesterday, and they had said events had confirmed their fears.

Not only had European and British buyers been involved, but the Japanese during this selling season had been 'very ready learners indeed,' they had said.

Mr Gullettspoke after a councillor and member of the board of the Australian Wool Marketing Corporation, Mr D. J. Asimus, had moved that the association ask the Federal Government to establish, as a matter of extreme urgency, a reserve price to cover the whole Australian clip.

Mr Gullettsaid the 2 buyers had considered that if the downward trend in prices continued, as they expected, fine and superfine wools would suffer the same decline as other types.

This article shows that collusion had been taking place under our noses at the recent sales. How can this reserve price plan really stop this practice? The brokers are still able to play a complete and comprehensive part in wool selling and buying. There is no restriction on them at all. In fact, 1 believe that their position has been strengthened as a result of this Bill. Someone has said that this is really a brokers' Bill. This Bill will establish them securely in the framework of the wool industry. There will need to be a lot of constant checking and investigation week by week to see that this Bill will not be exploited by such people. The Bill is really a half measure at best; it is a nervous hesitant attempt at a solution. The Minister hopes for an increase of a few cents in wool prices through this voluntarily based reserve price plan which could be in some senses be a toothless tiger.

I would like to refer to another important piece of evidence from Professor Keith Campbell who told a recent conference of the industry:

No matter what wool marketing scheme this country ultimately gets, its benefit is going to be primarily in the direction of stabilising prices rather than raising them.

Professor Campbell, of course, is Dean of the Faculty of Agriculture at Sydney University. At this conference he was speaking on the subject 'The Economics of Wool'. Professor Campbell said that the effects of the cost price squeeze in the wool industry generally did not deter graziers from investing in their properties at least up to the 1966-67 financial year, but it appeared that farmers and graziers were now relying increasingly on bank credit. Another professor who spoke at the conference had the temerity to tell the stoney faced wool growers:

Having studied the production of natural materials in competition with synthetics and substitutes, 1 am certain that wool cannot survive the competition of synthetics.

So the poor old wool growers are getting it right left and centre from professors one of whom has had the nerve to say that wool has no hope of winning the battle with synthetics. The wool men and the wool industry contribute $800m to our export income. This is apart from the injection of spending power that wool makes possible in the country and the cities. But the 80,000 wool men are at the mercy of the bankers, wool buyers, overseas manufacturers and pastoral firms. The total rural indebtedness today is estimated at $2, 000m and a big chunk of this must be made up of the indebtedness of the wool industry. Those whose properties are heavily mortgaged are crippled by high interest rates, which are I suppose the highest in many generations. The small wool producer is hit the hardest.

The tremendous influence of the middle man in the industry is illustrated in my following remarks. The difference between the price received by the wool grower and the price paid by the consumer is scandalous. For instance, let us say that the wool grower receives 27c a lb for his product. The wool passes through the processors and the manufacturers and comes out at the other end in coloured knitting wool which is sold at the outrageous price of $5.75 a lb. This is completely scandalous and outrageous. The price paid by the housewife for knitting wool - not clothing or other made up material but ordinary coloured knitting wool - at $5.75 per lb represents an increase of 2,211 per cent over the return of 27c per lb to the grower, who must take all the risks. That situation is indicative of how the manufacturers and processors batten on the wool grower and keep him flattened out like a snake.

I have expressed my point of view on this Bill, and that of the Labor Party. We feel that it is at least a start on the road to a better scheme or a reserve price plan with more teeth in it, as ours would have. We would not be asking for a referendum on our scheme if we came into office. We believe that a government should act as a government. Believing that our price reserve plan with provision for total acquisition would be the right thing for the industry, we would have the courage to bring it down. That is our policy. It would give greater security and hope to the wool grower than the scheme encompassed by this measure. The weakness of the proposed scheme is that it allows for voluntary participation. Growers can use it or not, as they wish. So can brokers if they wish.

Finance to the extent of $115m is being provided for capital expenditure plus §19m for operating costs. The Government is doing its best financially to back the scheme and to guarantee to growers a reserve price, but it still has grave weaknesses which we wish to emphasise in this debate. We wish the scheme well. We hope that it will succeed beyond our expectations. So do the hard-pressed woolgrowers. We do not want to let the Bill pass without offering considered criticisms. Our committee has met frequently on this issue, and members of that committee have spoken in this debate. For members of the Country Party to try to make out that they are the only ones who know anything about the wool industry is a fantasy and an outrageous insult to honourable members on this side of the chamber.

Mr Robinson - Oh no.

Mr COLLARD - It is interesting to hear the honourable member for Cowper say Oh no'. It is also interesting to note that I am the second Labor Party speaker in succession in this debate. According to the list of speakers I will be followed by a third Labor Party member. It seems that the Labor Party has a great deal more interest in this Bill than honourable members opposite. Quite obviously this Bill has been thrown together hurriedly and haphazardly. It may be accepted by wool growers on the temporary basis of being better than nothing but it certainly will not be acceptable to them as the legislation they require to provide reasonable security in the future.

It can give them no comfort or cause for satisfaction because it will not necessarily bring about any upward movement in wool prices. This measure seems to me to be a last desperate throw by the Government to try to save itself at the forthcoming Senate elections. The best that can be said for it is that it may help to halt any further decline in wool prices. It may have a steadying influence, but even in that regard it is a case of hoping for the best but expecting the worst. I say that because there appears to be in the Bill absolutely nothing that is likely to pose an obstacle to buyers' continuing in collusion as they have for so long to force prices down and keep them down.

Until we produce a plan that will stop collusion wool growers will remain at the mercy of the buyers. The proposal for a reserve price plan is not new. Honourable members will recall that a reserve price scheme was in operation between 1945 and 1951. That scheme was the first worthwhile attempt to bring about a system of organised wool marketing. That scheme operated so well that a move was made by woolgrowers at that time to make it a permanent method of wool disposal. Unfortunately, when it went to the poll, it was rejected. But, of course, it was not rejected because of itself or what it contained, but it was rejected because the government of the day- a Liberal PartyCountry Party coalition, the same as we have at the present moment - which had taken office shortly before the expiration of the scheme imposed a 74 per cent levy to raise money to administer the scheme if the growers voted for it and also brought down a measure to deduct 20 per cent from the gross income of wool growers. These 2 impositions were sufficient to cause the wool growers to vote against the continuation of the scheme even though they realised its value in normal circumstances.

Since the expiration of that scheme almost 20 years ago, wool marketing in Australia has been allowed to be carried out in a completely haphazard method. Wool buyers have been permitted to have sole control of what the growers will receive for their product. It seems rather strange and indeed very disturbing that this Government, which has been in office for the whole of that time and which surely would have recognised the fact that our wool marketing system was not only unsatisfactory but also a danger to the future of our woolgrowing industry and which as a result of that long experience should not only have been aware of what was required but also have been prepared for what was required to protect wool growers against buyer collusion, should now bring down such a sloppy and imprecise proposal as we have before us this evening - or, should I say, this morning.

If the concern of the Government for the wool grower was as keen as it suggests, surely it would have had firm proposals all prepared and ready to introduce on short notice. But it seems from the proposals that we have before us now that its concern is mainly for the brokers because certainly there is a much greater measure of protection for those people in this Bill than there is for wool growers. The wool grower today has no more control and no more protection regarding the price that he will receive for his wool than he had in 1932 when the price dropped to slightly below 6d a lb. It was recognised then that buyer collusion was a prime cause of the decrease in price. It was significant that the price between 1929 and 1932 was higher. In 1932 the Commonwealth Wool Inquiry Committee was set up. It brought down its report in October of that year. I wish to quote from the report what one member of the Committee had to say in relation to collusion. The member was Mr E. Grayndler. Under the heading: 'Wool Buyers and the Wool Buyers Association', he had this to say:

In reviewing the evidence as shown in the transcript it is abundantly clear that the woolbuyers have a very close organisation and have such power among themselves to enable them to keep down prices. The existence of 'lot splitting' in my opinion is not as innocent and legitimate on all occasions as their advocates imply. The composition of a 'pie' seems to be readily accomplished at their will. Those in the 'pie' do not bid against each other. The 'pie' may be composed of any number of buyers who desire to secure any part or any lot of wool offered for sale. The evidence tendered by some witnesses indicated that the buyers can exercise a strong influence on the market prices. The constitution, rules and regulations of the Buyers' Association give power to a committee to refuse membership to any buyer, to call upon any member to resign, and to expel any member for any reason that the committee thinks fit, and the member has no redress or any right to take legal action in defence of his rights.

I am forced to the conclusion, after hearing the evidence on this matter, that the buyers could exercise, if they wished, a stranglehold on the wool market and stifle any successful competition.

Further, he went on to say:

Australia has the finest merino in the world and the world needs that high-class wool. Yet under the circumstances obtaining, it is possible for powerful buying groups to stifle competition and obtain our wool at prices below its cost and fair value.

I have considered it my duty to call attention to the above matters in the interest of the large number of growers who are unable to help themselves out of the difficulties and obstacles that confront them in the disposal of their wool clips.

So as long ago as 40 years wool growers were plagued with buyer control - not simply buyer resistance but collusion. In fact this has applied almost throughout the auction system.

In 1958 the New South Wales Government set up a judicial inquiry under Mr Justice Cook, if my memory serves me correctly, to investigate wool matters, including the allegation of the existence of pies. The report brought down in 1959 showed conclusively that Australian wool growers were at the mercy of operating pies in die buying area. In 1961 the Commonwealth Wool Marketing Committee of Inquiry was set up under Mr Justice Philp but it failed to make any recommendations towards improving the marketing situation. However, as a result of that report we saw the formation of the Australian Wool Board. It incorporated the Australian Wool Bureau and had authority to set up a committee of inquiry into wool marketing. It did this in 1963.

There has been no lack of inquiries and reports and there has been no lack of information showing that there are pies and buyer collusion which largely are the reasons for the depressed market. Despite years of experience of what has been happening we find on this occasion the Government bringing down a Bill which will do little, if anything, towards removing that collusion or the operation of those pies. A few years ago the Japanese admitted clearly that they worked in pies. Who can blame them? Noone can blame them. No doubt they operate under instructions from their Government that they have only a certain amount of cash with which to purchase wool. They have to spend that money as well as they possibly can. No doubt the same applies to other buyers. As I said earlier, no-one can blame them for doing this, but we certainly can blame this Austraiian Government for allowing the situation to continue for so long.

I realise that we cannot expect the reserve price plan to be the complete answer to buyer control. I suggest that any reserve plan introduced to operate in favour of the grower, or at least to bring him a reasonable and proper return, must include provisions whereby buyer collusion will be difficult to pursue. Unfortunately this Bill makes no such provision. I do not think we can achieve that desirable situation - it is desirable, in my view at any rate - while the seller, who incidentally need not be a grower but can be a broker, who can offer wool for sale by auction and accept a price below the reserve price, who can buy wool by private treaty at a sum well below the reserve price and who can go into the auction and sell below the reserve price and still make a profit. The Commission, as I read the Bill, will have no power to stop him doing it.

Another defect in this Bill is that it refers to a reserve price but fails to give an answer to this very important question being asked by the wool grower: 'What price can I expect to receive?'. This surely must be the main question being asked by wool growers. They want to know the minimum price they can expect to receive and whether it will give them some profit over their cost of production. In this respect I was rather interested in what the honourable member for Mallee (Mr Turnbull) said during an Appropriation debate in 1964. He said that the Country Party policy was one which favoured the auction system with a floor price that had been approved by the wool growers at a referendum. It would seem that the policy of the Country Party has changed. Whilst it now favours a reserve price scheme it does not suggest that such a scheme should be supported by a referendum of wool growers or that it should state what the minimum price should be. So in 1964 the growers, according to Country Party policy, were entitled to these things, but today they have been cast aside and receive no thought. As I said at the beginning, the best that can be expected from the proposals of the Government which is now before the House is that the decline in wool prices may become steady or perhaps may be even halted at the existing levels, but it gives no cause to expect any increase. Surely this is not sufficient. Practically all our primary industries have from time to time enjoyed protection of stability and established prices by either State or Federal legislation, or both. I do not think anyone would deny that those industries and the people associated with them have gained a considerable benefit from that legislation. Unfortunately some of those industries today are in some difficulties and, in fact, are facing very serious problems. But J would suggest that had the market protection not been available to them their difficulties would have come very much sooner and would have been much more serious at this time. 1 point out that it was a Labor Government which during the Second World War and the postwar years introduced 3 of those very important marketing schemes for the primary industries. In 1945 Labor introduced the Joint Organisation, which 1 referred to earlier as being the first worthwhile attempt to organise the marketing of wool in Australia. In 1947 Labor brought in the dairy industry stabilisation scheme, which gave a guaranteed price for 5 years. In 1948 Labor introduced wheat stabilisation, again with a guaranteed price. I do not think there is any need for me to go on and explain the benefit that the wheat industry and the people associated with it derived from that legislation. I have referred to those pieces of legislation which Labor brought down during its short term of office because they must make it clear that as far as the Labor Party is concerned the wool industry, which is one of our most important industries, should again have organised marketing facilities at its disposal of a kind which will give it the security it deserves.

Not only are the wool growers suffering from the lack of proper marketing methods, but all Australia is suffering from a loss of export revenue. I remember reading an article some 5 or 6 years ago which pointed out that the lack of marketing facilities with Commonwealth backing had cost Australia some £ 1,000m. So the cost to Australia now because we do not have proper marketing facilities is well over $2,000m. Certainly that sort of money cannot be given up by Australia, and is well worth chasing. I should not think there would be any argument about our capabilities to produce much more wool. Our sheep numbers and our wool production can and would increase considerably, particularly with the present wheat situation.

The Government has asked the wheat industry to diversify. What are the majority of wheat growers to diversify into if it is not into wool? But in the present situation we would simply finish up with much more wool but with less money. The increased production of wool would bring no benefit to either the farmers or Australia. What is the wheat grower expected to do? Is he expected to grow more sheep and produce more wool when he can see no surety or any possibility of receiving a minimum price? Can he go into wool unless he has some surety that he will at least get some reasonable return for his wool that will show him a reasonable profit? One would have thought that the Government would have been concerned about this situation and would have expressed some positive idea on what the situation would be in the future, and given the growers some assurances. The wool grower gambles not only on the price that he will receive but also on climatic conditions, drought, fire and floods. After he has been able to get through those, surely he should not also be called upon to take this further risk of having to place his produce on the market when he is likely to receive very little for it. I would like to think that the proposal that we have before us at present will give him that security. I would be very happy if I was able to stand here and be quite certain that the wool grower would receive from this Bill the security that we would like him to receive. But, unfortunately, there is nothing in the proposal to suggest that.

The fact is - this cannot be denied; it has been proved too often in the past and nothing has happened to alter it - that the wool grower is being denied, and in fact is being cheated out of, a fair go on the auction floor by the collusion amongst the wool buyers. Under this Bill the wool buyers will still determine what the price will be because there will be no reason for any competition. As I see the Bill anyway, the wool will be available and if they do not bid today they can be pretty sure that the reserve price will be lower tomorrow As a matter of fact, the way the Bill reads, it looks as though if they do not bid this morning the price will be brought down this afternoon. So, there does not seem to be any need for them to compete. As we know the method of collusion, the system is that they all partake in the lots that are bought and therefore they have no reason to compete with each other.

Even if the Commission is successful in holding the existing price, it still will be too low to allow a reasonable margin of profit over the cost of production. Of course, the cost of production will not decrease or even remain at the same level It will increase. In this regard also the Government has done absolutely nothing to try to rectify the situation. We hear honourable members on the Government side demanding that the Prime Minister (Mr Gorton) or the appropriate Minister take action to deny workers their just wage entitlements. We hear them calling for longer working hours. But we never hear them - not even the Country Party members - asking for any form of price control. The lack of any control of prices enables certain industries to increase their prices, whether or not an increase is warranted. This is crippling many rural industries in relation to production costs.

It is idle for honourable members opposite to suggest that the freezing of wages will control prices. If they cast their minds back about 17 years, they will recall that at that time wages were pegged for a period of about 12 months. What happened then? When it was decided that wages should be re-examined the arbitration court decided, in its wisdom, after an examination of the matter, that the basic wage should be increased by £1 a week to make up for the price increases that had occurred during the time of the wage freeze.

Mr DEPUTY SPEAKER (Mr Corbett)-Order! The honourable member's time has expired.

Mr DEPUTY SPEAKER (Mr Corbett ) - Order! The Minister's time has expired.

Mr ANTHONY -I think I have answered most of the questions.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

In Committee

Clauses 1 to 10 - by leave - taken together.

Mr Anthony - The clause states 'A member, other than the Chairman or the member representing the Commonwealth . . .

Dr PATTERSON - I am sorry. My argument applies to a member other than the Chairman or a member representing the Commonwealth. The Minister should have control over the appointment of a member, as he does under this Bill, and also over the appointment of a deputy who has all the rights of a member as provided for in the Bill.

Mr Anthony - Yes.

Clauses agreed to.

Clause 19. 01.) The flexible reserve price scheme operated by the Commission shall be a scheme under which -

(a)   from day to day, or as frequently us the the Commission thinks necessary, reserve prices for the various types of wool being offered for sale at auction are determined by or on behalf of the Commission, having regard to the bidding at recent auctions and to all other relevant information available to the Commission;

(b)   if, in respect of any wool submitted for sale at auction in accordance with arrangements referred to in paragraph (d) of sub-section (1.) of the last preceding section, a bid equal to or greater than the appropriate reserve price determined by the Commission is not made, the Commission is prepared to buy the wool at the appropriate reserve price so determined; and

(c)   the Commission, as and when it thinks expedient, re-offers for sale at auction, ' or otherwise disposes of, wool acquired by it under the scheme.

The CHAIRMAN (Mr Lucock (LYNE, NEW SOUTH WALES) )- Order! I suggest that as the honourable member has circulated 3 amendments to this clause he might ask for leave to move them together.

Dr PATTERSON - 1 ask for leave to move the 3 amendments together.

The CHAIRMAN - There being no objection, leave is granted.

Dr PATTERSON - I move:

1.   In sub-clause (1.), paragraph (a), omit 'from day to day, or'.

2.   After paragraph (b) of sub-clause (1.) insert the following paragraph: (ba) If the Commission buys the wool at the appropriate reserve price it will make arrangements so that the grower whose wool is bought is paid within fourteen days; and'

3.   At the end of paragraph (c) of sub-clause (1.) add 'at the best possible price'.

On the first of these amendments, I wish to refer the Minister to his second reading speech. This is an important point. There is no question that there is inconsistency here. The Minister says in bis second reading speech:

Under the - scheme reserve prices for the various types of wool offered at auction would be determined daily or at less frequent intervals.

That can only mean daily or more than daily. The point I raise is that the wording in the Bill is 'from day to day, or as frequently as the Commission thinks necessary'. That could mean by the minute or by the hour. There is no question that there is a definite inconsistency between the wording in the Bill and the wording in the Minister's second reading speech. According to the second reading speech, it is fairly clear that the reserve prices would be determined from day to day or at less frequent intervals. According to the Bill, the reserve prices would be 'determined from day to day, or as frequently as the Commission thinks necessary'. That is the main reason why the words 'from day to day' in the Bill are superfluous. If the reserve prices can be determined as frequently as the Commission thinks necessary, technically they can be determined every minute and there is no need for the words 'from day to day*. But if what is stated in the second reading speech is the correct interpretation, it is quite a different matter.

The second amendment concerns subclause (a) which relates to the Commission purchasing wool when it does not reach the reserve price. The clause contains the words: 'the Commission is prepared to buy the wool'. The Commission cannot say that it will purchase the wool because it does not have compulsory powers of purchase if the buyer does not want to sell the wool. As I see it, there is no provision to pay the broker or the buyer. I suppose it can be said that this is implicit, but this is the principal reason for the amendment to provide that when the Commission purchases wool it must pay somebody within some time limit. We believe such provision should be contained in the legislation so that the Commission can pay the broker, buyer or the grower under accepted commercial terms in the wool industry - that is, prompt payment within 14 days.

Mr Irwin - It is provided somewhere in the Bill.

Dr PATTERSON - No, it is not in the Bill. It is implied, but I think it is sufficiently important to have such provision in the legislation. After all, if a grower's wool is taken over by the Commission he wants to know when he will be paid. This is important. Ii he is selling a lot of wool and it does not reach the reserve price and is taken over, what is the position? What does the Commission do? Does it make its own rules? I think provision should be included in the Bill to meet this situation.

The third amendment is important because when the Commission purchases wool it has to re-offer that wool for sale, but there is no indication to the broker or to the taxpayer what the price will be. Obviously a specific price cannot be stated. We can assume that the Commission will try to get the best possible price but if it is a bit lax and has big stocks of wool on hand there is the temptation to get rid of it quickly and sell it at a low price perhaps at some private sale. This could materially affect the demand for wool traded at other sales at that time. This is the reasoning behind the amendments. There is inconsistency between what the Minister said in his second reading speech and what is contained in the Bill; there is the question of paying for the wool within a certain time and there is need for the Commission to indicate the price. Earlier I asked the Minister a question which he did not answer so I shall ask it again because it is fundamental. I do not know whether the Country Party can answer this, but I want to know the answer. Is this a secret reserve price or is it not? This is important.

Mr Buchanan (MCMILLAN, VICTORIA) - It must be.

Dr PATTERSON - It is no good saying h is because I have some doubts whether it is. If it is a secret reserve price, can it be kept secret? If anything is secret there should be some penalty for divulging it. Is this again in the realms of being secret one day and not secret the next? It was stated, after the Crawford report, that the reserve price would be a secret report and not a report posted up. It is important to know the answer to this question because if it is a secret reserve price I can see complications arising.

Dr Patterson - 'lt can do that, can it?

Mr ANTHONY - It will be able to go in and bid; it has this flexibility. The honourable member for Riverina (Mr Grassby) asked whether this flexible reserve price will apply evenly. It is intended to apply evenly in different selling centres on the same day. Clause 18 (4.) states:

The Commission shall not perform its functions so as to give preference to 1 State or any part thereof over another State or any part thereof or otherwise inconsistently with the Constitution.

So the Commission has to try and operate evenly throughout Australia.

Mr Grassby - Can the Commission buy it on the farm?

Mr ANTHONY - Under the measure it can buy it anywhere. As I have stated in my second reading speech, the intention is to do it so as to regulate the offerings of wool coming into the auction room. It is not the intention to act as a private buyer as such, although as the Act is written the Commission could do so.

Clauses agreed to.

Clause 22. (1.) The Commission may. with the approval of the Minister, given with the concurrence of the Treasurer, borrow money from an approved bank or from another lender for the purposes of working capital of the Commission and give security over any of its assets for the purposes of any such borrowing.

Mr Crean - Are we to continue? This is absurd. I say to the Leader of the House that surely this is a reasonable time to adjourn. We have to meet tomorrow and it is now 4 o'clock. We have committee meetings in the morning at 9 o'clock. When will we adjourn?

Mr SPEAKER-I call the honourable member for Swan.

Mr BENNETT - I rise to express the concern which is felt in Western Australia at the comparatively low grant which has been allocated to that State. Western Australia is our biggest State and has problems peculiar to itself. It has a comparatively low population in relation to its size. To find that ours is the lowest grant for the largest State and to be assured that the grant will further decrease in future is indeed alarming for Western Australia. Only South Australia and Tasmania are receiving less under the States Grants Bill 1970. However those States have the offsetting effects of the States Grants (Special Assistance) Bill 1970 which provides $5m extra to South Australia and $13,680,000 extra to Tasmania. It makes Western Australians wonder why discrimination is shown towards their State, which has suffered a drought and which is the only State that has not received drought assistance. So they have protested. They wonder whether Western Australia is again being treated as a Cinderella State.

Let us not be deceived by the volume of the amounts offered. We must realise that if local government services are to expand in Western Australia enormous capital will be required, which the State Government does not have available - nor has local government. We are in need of enormous amounts of capital to deal with the sewerage and drainage problems. There is land within 5 miles of the centre of Perth where building and development by the State Government and local government have been hopelessly delayed for want of capital for drainage and sewerage. Only the Commonwealth has the amounts available that are required to get the development under way. It is hopeless to expect the same taxpayer to pay twice for the facilities when he as a ratepayer has to meet the cost of the capital works, even if the loan moneys were available, which they are not. The State Electricity Commission has to use wide publicity campaigns to fill its loan issues in a competitive market. Even then it has difficulty in filling the loans. The money just is not there.

Unless the Commonwealth recognises its responsibility to participate by assisting local government, rates will continue to spiral just to meet loan repayments on capital works. It is hopeless to expect local government, which is being forced to accept more duties in the service of the community, to find the funds to do so. I instance the infant health clinics which local government bodies establish in fixed buildings or, in some cases, in mobile clinics. They provide kindergartens, the cost of the establishment of which is met from ratepayers' funds and is in no way taken into account by the State grants. The Federal Government has indicated that it is to enter into the preschool-child minding centre scheme on the taxpayers' money. It is not unreasonable to ask that this scheme be further widened to take into account grants to local governments to enable them to expand and maintain their infant health clincis and kindergartens. If this intrustion is not made on a direct basis, provision should be made for the State to give assistance from Commonwealth grants.

Assistance to local governments by all taxpayers is not a far fetched scheme, as some would have us believe. Let me quote from the Northern Territory report for 1969-70 at page 55. Referring to local government, it says:

Darwin is still the only Northern Territory centre with a City Council and municipal administration. Financial assistance from the Commonwealth in 1969-70 was $302,000 towards general operations, $168,000 on capital works and $269,000 on road construction commitments. In addition the Commonwealth carried out extensive reconstruction and improvements of main arterial roads and bridges.

Here is a prime example of direct assistance to a city by the Commonwealth for items which should receive a flow on from Federal funds through the State authorities to local government. Such flow on of capital could assist with educational services such as libraries which, at the moment, have to wait their turn in competition with the clinics, kindergartens and senior citizen services which the local government authorities are being expected to provide. The growth and public demand for these services are becoming more and more, year by year. As a result, local authorities do not know which way to turn to satisfy all of the demands which, in the opinion of many people, are being foisted on them, when these matters should be the responsibility of tax collecting governments.

The extra demand being made on local government is a reflection on the efficiency and the willingness of State and Federal governments to face up to their responsibility to the community. The situation in Western Australia is such that in many instances the local authority has no money left to deal with works in a proper manner. Footpaths and roads take secondary consideration because of a lack of funds. Funds have been expended on capital works and borrowings have been at such a high level that in some cases over 50 per cent of rate revenue goes in capital loan repayments yearly. This situation is not good enough. It is not good enough to say that urban services and planning are lacking, without attempting to ensure that our people receive a State grant sufficient to ensure that the difficulties mentioned are overcome. We cannot continue with this uneven and unequal development between States, between cities, between shires and between suburbs. It is imperative that genuine reorganisation take place at an early date.

We in Western Australia are not deluded into believing that we will be able to over? come our sewerage, drainage and general expansion problems caused by increased population growth without large capital sums being made available to us. Some people say that we are a booming State. We are booming in the north, in exports and private company developed towns, and even in private railways. The little money made available by the Commonwealth Government to the States as a grant for the flow-on of this development is a disgrace. No credit is due to the Commonwealth Government for this. The lack of help given to cope with or to encourage developments in Western Australia has created a parlous situation. When the Commonwealth looks at figures our growth rate, etc., in relation to the betterment factor it looks at inaccurate figures. It should take into consideration all the problems to be faced with distance and the costs and the unfortunate pressures associated with attempts to absorb a new and dramatically growing population.

People are attracted to the west by dreams of making a fortune which does not eventuate. So they compete with our established residents for housing and services which are hopelessly inadequate at this juncture. The crash housing development that is needed creates new areas with demands for clinics, kindergartens, libraries and all the associated services needed by a community. The cost of providing these services falls on local government. It cannot handle that cost. The Government has indicated that money is available for these services. It has announced its intention to enter the pre-school area. Therefore I call on the Government to make funds immediately available to local government, by special grant, to meet its immediate needs in sewerage and drainage and to facilitate housing development. I also call on the Commonwealth to make special grants for infant health clinics, kindergartens and other community services, the need for which is there now and is increasing.

By giving the money to the people who are experienced in this field and who know the needs of their community, a real solution will be offered to local government, which is a responsible part of the community and which voluntarily takes interest in and responsibility for the needs of tha community. It will be the best possible means of solving the problems of the community at that level. As 1 understand the situation, at least one shire has already expanded its services to include the provision of child minding centres. These problems will be solved if a genuine attempt is made to ensure that the States have sufficient money by way of grants from the Commonwealth. The Treasurer (Mr Bury) in his second reading speech, admitted that to keep up with community demands for improved services the States have at the same time had to increase the severity of their own taxes and charges. They are severe indeed.

I instance the road maintenance tax applied in Western Australia. Its application has led to the gaoling of several people and to threats of similar treatment to others who have been and are unable to meet the iniquitous tax that the State must impose because of an insufficient flow of grants from the Commonwealth. So, a desperate situation exists. Suggestions are being mooted to place an extra1c a gallon tax on fuel in an effort to raise the amount necessary for road maintenance. That is on top of the 3c tax already applied by this Government on fuel. If the extra tax on fuel imposed by the Budget were allowed to flow to the States, the problem of having a road maintenance tax would not exist. So, 36,000 commercial vehicle owners in Western Australia continue to suffer the double penalty of an increased fuel tax and an increased road maintenance tax, heavy permit fees for loads and heavy licensing fees for their vehicles.

This secondary system of taxation is an unjust imposition of which the Government is aware. This Government must co-operate with the States to ensure that the imposition of this tax is not continued. I say that because there is at least 1 truck owner incarcerated in Western Australia, on a Commonwealth warrant, for the offence of non-payment of New South Wales taxes. The fact that he is a bankrupt does not protect him. He will remain there until the debt is cut out at $7.99 a day up to 13th January 1971. This is adding a further cost to the State. We have to support his family at additional cost. Also, it must have cost the Commonwealth something to put the warrant into effect. So when the Minister said that the States were having to increase the severity of their own taxes, I only hope that he appreciated the effect of these taxes on individuals - the citizens of Australia - who suffer because insufficient Commonwealth grants are being made available to the States. This is their own money.It has been collected from the citizens of the States by way of direct and indirect taxation. It is not only a grant; it is a right.

It is unfortunate that the Government finds so many reasons to refuse to increase the return to the States of what is their own money. Unless some early solution is found to this impasse there will be a serious breakdown in State and local government finances. I call on the Commonwealth' to make grants to the States for the provision of community amenities in housing estates similar to those which the Commonwealth provides, by way of grants, in housing estates under its control. I have referred to the amenities which are provided in Darwin and whichI understand the Commonwealth is responsible for providing in Canberra itself. Let all be equal in opportunity and in the provision of amenities. Let the functions and finances of the Commonwealth Government, the State governments and local government authorities be balanced to ensure that resources are developed adequately and that adequate services are provided in the interests of the community.

Motion (by Dr Patterson) put:

That the debate be now adjourned.

The House divided (Mr Speaker - Hon. Sir William Aston)

Mr SPEAKER -Order! The question is that the Bill be now read a third time. The motion foreshadowed by the honourable member would be completely out of order in relation to the third reading of a Bill.

Mr SPEAKER -Order! The question before the Chair is that the Bill be now read a third time.

Dr Gun - I take a point of order. Does the Minister have to seek leave to move the third reading forthwith?

Mr SPEAKER - Yes. He sought it and it was granted.

Mr SPEAKER -Is it the wish of the House to proceed to the third reading forthwith? I call the Minister.

Mr SPEAKER -Order! I have called the Minister. He has to move for the third reading before the honourable member may speak.

Mr SPEAKER -Order! The honourable member should know the procedures of the House by now. This is the normal practice. It was followed by the member of the Opposition in charge of the Bill before the House. It was granted. The question now is that the Bill be now read a third time.

Question resolved in the affirmative.

Bill read a third time.

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