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Thursday, 8 March 1973
Page: 423

Mr KERIN (Macarthur) - I am privileged to represent the people of the ruralurban seat of Macarthur. Macarthur is an electorate of 4 distinct parts, each with its own problems and prospects. All parts have a potential to make a greater contribution to our nation, given an aware, efficient and tolerant government. It is an electorate of incredible beauty, where the grass is green, the soil is rich and the cows are contented. There is a positive correlation between basalt soils and conservative voting. Fortunately, the larger number of astute voters live in the sandstone and shale areas.

Macarthur was named after one of the betterdescribed rogues in Australia's history and was represented for the 23 years since its creation by one of Parliament's greatest characters. The former honourable member was a man who passed through this place often but spoke little. He was a man who loved the land and was happiest with farming people. The history of the United Australia Party and the Liberal Party on the south coast of New South Wales is a history of the Bate family. Father and son served their parties well, and Jeff Bate represented parts of the present-day Macarthur in the New South Wales State seat of Wollondilly since 1937 - before I was born. It was a heartless action by the young Turks in his party to depasture him prior to the recent elections. His attainment of more than 11,000 votes, standing as an Independent, gives credence to the claim that those who scrapped him, including the present New South Wales Minister for Lands, had not lived long enough in the electorate to understand the importance of his service or the fidelity of his supporters.

Mr Bate,along with his colleagues in the Liberal Party, believed in subsidised, protected and privileged free enterprise, but was consistent enough to oppose the socialist legislation of the Poultry Industry Levy Collection Act when it was introduced in 1965. I have inherited the former honourable member's office. It still has a faint tang of Tilba cheese about it, but I do not like using the word tang' in this House. Unlike my friend and colleague, the honourable member for Eden Monaro (Mr Whan). I cannot claim to have received the advantage of advice and encouragement from my predecessor. This is not to say that he did not help. However I should like to pay my respects to Mr Alan Fraser who represented parts of the present-day Macarthur in earlier years. Alan's wisdom, his independence and his constant consistent concern for the rights of the individual will be remembered by all. He will be missed in this Parliament.

Each Federal electorate generates problems of a national character. With the change of Government on 2nd December a mandate was given for reform and for the national Parliament to act in the interests of all Australians, quite apart from the parochial demands of each electorate, each State, each particular industry, each Government department and each pressure group. I do not wish to infer that politics is not about the articulation of demands many of which are parochial, nor that politics is about the resolution of conflicting interests, but I do infer that we must identify the national interest in so many areas of so many needs and act to create institutions flexible enough to survive and adapt to change. A 10c subsidy for Meals on Wheels is no answer to poverty. A little more state aid is no answer to educational need. An increase in the Commonwealth Aid Roads appropriation does not exactly solve our transport problems.

We must be aware of overall social and economic climates. An increasing proportion of the population is aged under 35. The selfish individualism of the post-war years has been replaced by a more confident individualism based on mutual concern for others. The younger people demand that they make up their own minds on matters affecting them personally. They do not see that it is holier to consume than it is to think for themselves. They reject hypocrisy and are concerned with wider issues, such as the quality of life, and they are more aware of the sciences, technology and sociology.

The major economic problem facing Australia is an excessive rate of inflation. Few policies can be implemented without taking it into consideration. One of the current myths of .politics is that the Government has inherited an economy without the massive problems that dogged previous Federal Labor governments. The simple truth is that we face a plethora of crises instead of one readily identifiable crisis, such as the World Wars or the depression, that faced past Labor governments. The fact that our balance of payments can be described by some as healthy - though it could be said that our reserves are so high that they invite retaliation - or that unemployment is starting to drop is insufficient to guarantee continued prosperity and only reflects limited thinking. Inflation is the worst distributor of income. The second rate certainties of the 1950s are no answer to urban Australia's problems.

We live in a capitalist, semi-planned economy. For such an economy to perform best, there is a need for market forces to operate in many sectors. In other sectors there is a need for governments to act for social reasons. Above all there is a need for government to be more actively engaged in planning. Just as wages are incidental to the problem of the control of inflation, so ownership is incidental to the working of the economic system we have or create. To attribute socialism to the ownership of some utilities or r industries is to engage in sterile debate and confuse the real strength of our overall political and economic system. Sweden has a large and sensible range of nationalised industries yet 90 per cent of the gross national product of that country is derived from free enterprise.

The core paragraph of the GovernorGeneral's Speech to which I address myself is where he so rightly points to the clear failure of existing social and economic structures to meet the needs of modern society, particularly in relation to education, social security, health, industrial relations and urban and regional development. The rapidly growing areas of Macarthur - Campbelltown, Dapto and Nowra - face every problem in this regard. These have been expounded eloquently by my colleague, the honourable member for Casey {Mr Mathews), who represents a similar electorate. But the same failure of economic structure and decision-making machinery is evident in most other areas of our crisis-ridden economy. I wish to relate this failure and my earlier remarks to 3 areas of national importance which have a direct bearing on my electorate. They are primary production, coal, and defence.

I assure honourable members opposite that I was bom and bred on a farm but instead of inheriting grass I inherited bush. However my credentials are impeccable because I actually cleared my land and gained great moral fibre in the process. I planted 17 acres of orchard when I was 18 years old. My form of farming was prosperous so long as I worked 80 to 90 hours a week, but unfortunately chook farmers and small orchardists do not have many votes. I raise these points because after 23 years of government, when there was a specialist party looking after country interests, we now find members of the same Party opposite crying for immediate action in almost every rural field. This surely is the greatest indictment of the Country Party and its lackadaisical approach - the compromises, the confusions of the late coalition and the failure ever to act in other than a short-term, short-sighted manner.

It has been said that the Government is acting slowly with respect to rural reconstruction. The previous Government gave an undertaking that $18m would be available for rural reconstruction in 1973-74 to finance approvals during the latter part of 1972-73. The Labor Government is not going back on this undertaking. The Government is now engaged in a review of rural debt and rural reconstruction which was initiated by the previous Government. As honourable members know full well, a meeting will be held this month to announce the conditions and the financing of the furtherance of the scheme. The immediate need, of course, is for carry on finance, but the Commonwealth Government has never been equipped to allocate funds on an individual basis. One State government - New South Wales - did not adhere to assurances given to the previous Government on rural reconstruction so it is a little hypocritical for people to criticise the new Government for laxity when it has a problem that the current Opposition clearly could not handle when in office.

It has been said that there is deception on the question of revaluation compensation. In December 1971 Australia appreciated 6.32 per cent against the United States dollar. In a wide movement of currencies Australia effected an overall depreciation in relation to the parities of our trading partners of approximately 1.75 per cent. In a Press statement of 22nd December 1971 the then Prime Minister, the right honourable member for Lowe (Mr McMahon), said:

The changes in international exchange rates will adversely affect some of the rural industries already experiencing difficult times. The Government is therefore prepared to examine and consider the position of those rural industries which are seriously affected.

Note the change of policy. There was no mention of compensation but merely a promise to examine and consider cases of industries already in trouble. The Leader of the Country Party (Mr Anthony), who attacked the new Government for not providing compensation for currency alterations, has conveniently forgotten the 1971 decision of the government of which he was a member. Indeed, he was a leading member - the tail that wagged the dog so to speak. A number of rural industries indicated to the Department of Primary Industry that they had been harmed by the appreciation of the Australian dollar, but the Budget figures last August showed that nothing had been paid to those industries. During 1972 the Treasury made it clear that the Prime Minister's statement stood and that assistance to industries in difficulties had replaced loss compensation as the policy of the McMahon Government.

We are presently faced with far more wideranging movements in world currency valuations. After the December 1972 revaluation of .the Australian dollar the Labor Government established an interdepartmental committee to examine the impact on rural industries. Provisions were laid down on which to base adjustment assistance. In brief, they were, firstly, where difficulties and problems of adjustment were already being faced at the time of adjustment, and, secondly, where the industry would experience difficulty in bearing the consequences of appreciation. As a consequence a welfare grant of up to $1,500 is available to growers producing export apples and pears and canning fruits. In addition a supplementary grant is available for growers eligible for clear fall assistance under the fruit growing reconstruction scheme. The submissions of other industries will be examined by the committee. In addition, following the February 1973 devaluation of the United States dollar, it was announced that the interdepartmental committee would examine submissions on the same conditions as applied to the revaluation decision of December. Not only did the Labor Government act quickly on currency changes but also it adopted a position not altogether dissimilar from that of the previous Government. Unlike its predecessor. Labor has actually made funds available for rural industries.

The compensation issue can only be approached on an examination of each industry. This Government recognises the very important aspect of the principle of identifying the welfare need. But even in these early days of government some attempt must be made to formulate a national approach to rural policy and the approach must be in depth and apart from the ad hocery of the past. I have a profound sympathy for the problems of the rural sector and do not go along with some of the ideas of city journalists. However, the traditional Country Party approach that only those who produce a commodity should decide how to market it might have been a popular catchery in the country, but it clearly has not worked. As an exfarmer I would be the first to agree with it if it had. I might add that if the ALP adopted the same approach to its relationship with the trade unions you would be able to hear the Country Party bellowing in Outer Mongolia. The recent Organisation for Economic Cooperation and Development report shows that Commonwealth financial assistance has risen from 12.3 per cent of gross farm product in 1969 to 18.4 per cent in 1972. Yet the problems have become no easier in the long term.

The current high prices for many of our rural commodities lead me to believe that there are no problems for the future of our trade. Although arguments for and against devaluation can be sustained, there does seem to be evidence that both revaluation and devaluation do little to change a country's relative trading position. While trade balances may not respond predictably to exchange rate changes, they do appear to be quite closely related to differential growth rates. If a government acts only at the behest of rural organisations, a person can find himself in a position where he is, for example, for the acquisition of the wool clip one year and against it the next, or he is using organisations such as the Australian Wool Industry Conference to forestall decisions.

The reference in the Governor-General's Speech to a protection commission provides the basis for a more considered rational approach. It is roughly in accord with that suggested by a committee of the Liberal Party chaired by the honourable member for

Corangamite (Mr Street), The goodsproducing sectors of our economy need special consideration. However, 1 trust that confusion between economic and social problems will cease. It seems to me to be far more sensible to subsidise farm income by means such as a negative income tax than it does to subsidise farm inputs. In social terms the need for retraining and education in the rural sector is just as essential as in secondary industry.

The ALP accepts responsibility for its decisions, but we are not going to act along the lines of more of the same when clearly the approach has not worked. The GovernorGeneral's Speech made reference to the fact that for the first time this country will have a Minister for Minerals and Energy. This move is long overdue as we have previously possessed a Ministry for National Development which had no charter to identify our national interest in this growing and vital area. The work of the honourable member for Cunningham (Mr Connor), who is the Minister for Minerals and Energy, has been immediate in areas requiring action and has been long overdue. He has been accused of acting parochially with respect to Customs (Prohibited Exports) Regulations due to the fact that his is an industrial electorate concerned with mining. This is nonsense as it is in my electorate and the electorates of the honourable member for Hunter (Mr James) and the honourable member for Shortland (Mr Morris) that the crunch is now on. Unions and employers have been fighting to preserve the employment of some 600 men in the electorate of Macarthur who, for a 2-month period, have worked on virtually a week to week basis. One hundred and fifty men have lost their jobs and uncertainty hangs over the jobs of the 1,300 miners and the 700 or so other workers and contractors in the Burragorang Valley. There was a possibility that the last Government was prepared to sacrifice all these jobs.

Let us look at this question from a national point of view without the emotional response of 'destroying Queensland to gain Queensland's markets for the high priced mines of the south'. Those are despicable words. The

Joint Coal Board's annual report for 1971-72 shows that 465 men had lost their jobs in New South Wales. Many more have lost them since. It also shows that over S50m was invested in mines last year in New South Wales. Due to the fact that coal in the Bowen Basin is more easily extracted, does it make sense nationally to wipe out this investment overnight? Does it make sense to throw away a 3-foot seam of coal in Queensland because it is not up to standard? Does it make sense to forsake revenue by selling coal too cheaply overseas? The Minister has made it perfectly clear that he is not acting to help Clutha v. Utah - they are, after all, both overseas companies. But let us consider this from a nationalistic point of view. Do honourable members honestly consider that if Australian companies were mining California for the Japanese market, the United States Government would allow our firms to cut each others throats and give the United States a pittance in royalties? It is not the fault of United States companies in Australia that absurdities abound, lt is ours, as Australians, and that of the previous Government. The principal culprit is the federal system.

I am not particularly concerned about the diatribes of an individual State Premier or about an individual Premier. That Premiers have been placed in a position of giving our resources away is more a reflection on problems of Commonwealth and State financial relations than anything else. However, it must be pointed out that there is evidence that the Queensland Government refused increased royalties, preferring increased rail freights so that they could bargain harder with the Commonwealth at the Australian Loan Council. We need to look closely at the whole royalty question. Little economics has so far been applied. I seek leave to include a table which is part of an unpublished master's thesis by Mr Alan Henderson of Monash University which shows that the royalty revenue per head of population in Queensland was 37c in 1968- 69. I doubt that the proportion has increased since.

Mr SPEAKER -Is leave granted? There being no objection, leave is granted.


Mr KERIN - There are at least 6 areas on which a national minerals and energy policy should centre. They include: Foreign ownership and control; legislative needs, taxation, royalties, subsidies and incentives; export control; decentralisation and infrastructural assistance; and further processing.. I could go on with these matters but I hope to have a chance to speak on this at a later occasion. I could point out that it has recently been calculated that the benefits to Australia of the mineral sector are not quite of the magnitude expounded by some. The change in capital per man in Australia has raised national income by one-fiftieth of one per cent; consumer surplus accruing through price reductions has been outweighed by adverse changes in terms of trade; taxation gain has been onequarter of one per cent of national income; indirect gains via linkage effects have been negligible; and rapid capital inflow has been a major cause of inflation. It may be that in the long run our mineral sector will reduce national income. I cannot expound on these claims but I am very glad that our Minister is acting quickly in the area of natural gas. He does not believe in the virtues of a 2-pipeline policy and neither do I.

One of the most significant changes the Government will effect will be the combination of the 5 former defence departments into one for administrative purposes. It is essential to do this so that unnecessary duplication will not take place and so that one-service optimisation in procurement programs will be avoided. Whether or not we have 10 years of low threat, as stated by the former Prime Minister, the right honourable member for Higgins (Mr Gorton), may be debatable but it is certain that we have a chance to integrate our equipment and manpower programs. Given the nature of defence heirarchies and the implications of Nixon's Guam Doctrine, it seems to me that we should also review our procedure for the collection and assessment of intelligence so that it assumes a more relevant aspect. Defence is too important to be left entirely to defence personnel and decision makers, who by the very nature of defence planning must be less informed than they should. At the same time it is beyond the ability of mere politicians to make detailed decisions about procurement programs. But we should be able to define goals, ask relevant questions and be able to define the constraints. Given these factors planners should then be able to put up a range of alternatives.

The defence Budget is the resources constraint. But the defence Budget is really the way in which a multitude of economic political and social factors manifest themselves in the defence planning process. Many of these other political and social factors have to be identified. This is where politicians can help or at least throw up some flak. I have profound doubts as to the construction of the 3 DDL destroyers for $355m at 1972 prices. This well may limit options for re-equipment of the Fleet Air Arm or for other naval equipment. As there is a naval air power study under way I believe that no decision should be made on the DDLs until that time. Even more importantly, given our resource limitations, we need to examine total naval requirements. If we are concerned with the defence of Australia - and I doubt that such a study has ever been done in modern times - it may well prove that our Navy needs to go increasingly under water or that we need more small ships and attack through deck cruisers with vertical take-off and landing aircraft. Having the Fleet Air Arm in my electorate has given me some bias in this direction. Robert Macnamara once said:

You cannot make decisions simply by asking yourself whether something might be nice to have, you have to make a judgment on how much is enough.

Mr SPEAKER -Order! The honourable member's time has expired.

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