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Wednesday, 27 September 1972
Page: 1984

Mr DUTHIE (Wilmot) - During my speech on the Budget, I referred to Tasmania's economic difficulties and suggested that one way out of those difficulties would be to make Tasmania a duty free State. I should like to say a little more on that point this morning. During question time today I directed a question to the Minister for Shipping and Transport (Mr Nixon) concerning the high freight rates charged by the Australian National Line for goods transported between Tasmania and the mainland. In one of the worst replies I have ever heard in this House, the Minister raved about unions and what they were doing to the ANL, as though they were the cause of all of Tasmania's troubles. The fact is that freight rates for most commodities have increased by 30 per cent in the last 2 years. I do not know how an island with an island economy, which is as isolated as Tasmania is and with a population of under 400,000, can continue meeting this type of freight rise.

If we cannot get justice in our freight systems, it ultimately will be the end of many of Tasmania's basic industries.

We have asked time and again for freight subsidies. This morning I asked the Government to repeal section 18 of the Australian Coastal Shipping Commission Act to relieve the requirement that the ANL be a profit-making concern. Why should the Government not repeal this section? When the Australian Labor Party becomes the government, it will be looking at Tasmania's freight problems very closely and I am hoping that one of the solutions we will provide to the whole situation is to repeal section 18. After all, the ANL has made a profit of S26m since 1957 when it first came into being. Had the Line not been required to make profits, we could have had freights at a reasonable and economic level. But because the ANL is forced to make profits it has to keep pushing up its freight rates to come within the framework of the Act under which it is operating and as this Government formulated it.

If the Government will do something about stabilising and subsidising freight rates, Tasmania will have to look for other ways of trying to strengthen its economy to make it viable. The suggestion that Tasmania should be a duty free State is made in that context. It is a suggestion born of desperation, for Tasmania is losing industries and other industries are not prepared to come to Tasmania because of the present cost of freighting goods across Bass Strait. If Tasmania were a duty free State, it would receive a tremendous boost in tourism. From the comments I read after making my speech on the Budget concerning this matter, the suggestion received a very favourable reaction. Of course, I do not have time to develop it again in detail this morning. Tasmania is sick and tired of being called a mendicant or a Cinderella State. We are one of the poor relations of the Commonwealth. Admittedly we get more back in grants than we pay in taxes, but the Commonwealth Constitution makes it incumbent on the Commonwealth Government to make Tasmania a viable State in spite of that fact.

Throughout the years we have laboured under problems and difficulties. The one that hit us the hardest was the increase in freight rates across Bass Strait. The Aus tralian National Line has been a wonderful boost to our island. Eighty-five per cent of our freight in and out is carried by ANL ships. But when so much is carried by one line it shows what a monopoly it has over the island. If we could reduce freights and peg them and if the Commonwealth Government would subsidise any losses this would have a tremendous impact on Tasmanian industry, Tasmanian employment and the encouragement of other industries to come to our island where hydro-electric power is the cheapest source of power in Australia.

At the moment the Constitution makes it impossible for Tasmania to become a duty free State without a referendum. Sections 51, 88, 92 and 99 all make it specific that trade, commerce and intercourse among the States shall be absolutely free. Section 51 (ii.) reads:

Taxation; but so as not to discriminate between States or parts of States.

Section 99 reads:

The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof.

But the Constitution does not say anything about the disadvantage of a State being recognised by the Commonwealth. I say quite clearly now that, although the Constitution specifically says that no State shall be advantaged over another State, the reverse is absolutely true also, that no State should be disadvantaged over any other State. I could spend half an hour this morning showing, point by point, how Tasmania is disadvantaged, because it is an island and because of its isolation. If that fact alone cannot convince the other States that we need some special assistance down there in the form of a duty free status, I do not know what can convince them.

I have been provided with some figures by the Legislative Research Service of the Parliamentary Library. They show that in terms of personal income per head of population Tasmania ranks lowest in Australia. In 1968-69 the figure was 85.3 per cent and in 1969-70 it was 85.8 per cent. The next lowest is Queensland. For 1969-70 Queensland's figure was 88.3 per cent. The fact that Tasmania has the lowest percentage of personal income per head of population is very important. This should be taken into consideration when the Commonwealth is trying to assist us. The Australian Grants Commission works within a very narrow charter. It grants us special money as a mendicant State but it also disadvantages us. It reduces the expenditure if we go beyond the level of the mainland States in items such as social services, forestry and transport. We are a disadvantaged State beyond any doubt.

When I spoke on the Budget I thought that if all the States agreed to give Tasmania a duty free status we would get it, but the researchers in the Library have pointed out to me that we cannot do it that way. We can do it by referendum, which is a cumbersome process, but we cannot do it by the States agreeing to it. So it boils down to a referendum, which one is loath to recommend. But if the Government cannot help this disadvantaged State in the matter of freights and in the matter of grants, maybe in the not too distant future we will have to go to a referendum to ask the people of Australia to give Tasmania this avantage. A duty free status would be an advantage but would be inconvenient in some respects but it would bring tourists to Tasmania in great numbers. I believe that all States would be advantaged by this because tourists would visit Tasmania on an Australian tour whereas otherwise they may not have come to Australia at all. So the suggestion is not as stupid as it might sound to some people. I make this plea to the Government: The Constitution provides that the Commonwealth can help any State that is in difficulties by direct grants. Perhaps the only feasible way, as the Constitution stands at the moment, is for this Government to lift its grants to our island to bring us up to the level of the mainland States. This is the Commonwealth's responsibility, as I see it, under the constitutional powers.

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