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Thursday, 31 May 1973
Page: 2964

Mr DONALD CAMERON (GRIFFITH, QUEENSLAND) - The honourable member for Blaxland (Mr Keating) has done much the same as I intend to do during this cognate debate, and that is to direct my attention to one aspect of one of the 3 Bills. Nevertheless I wish to make some reference to the main Bill, if we can describe any of them as the main Bill, which refers to excess distribution and loss companies. While members of the Opposition stand as one in their condemnation of those persons who exploit every conceivable means to avoid paying tax, I believe that the Parliamentary Counsel, the Government departments and the Parliament itself have a responsibility to ensure that when legislation is first introduced it is of such a standard that the holes which we have come to expect do not materialise. The Treasurer (Mr Crean) in his second reading speech uttered the words in this age of enthusiastic and ingenious tax avoidance'. If those days are upon us it behoves all those responsible for legislation to make the legislation so tight that people do not move out of the confines of the law, take advantage of the errors of this place and in the drafting of legislation, set themselves up in business and then suddenly become victims of the heavy hand moving in just over 9 months after the commencement of a financial year.

My colleagues and friends, the honourable member for Fisher (Mr Adermann) and the honourable member for Curtin (Mr Garland), made certain comments this morning and there is little point in repeating the views they expressed, especially with this session of the Parliament drawing to a close. However I would like to take up some of the views that the honourable member for Blaxland has put here today. He is a young man and one would have thought there would have been hope for him, but unfortunately he suffers from the same syndrome as a great percentage of the members on the Government side of the chamber: Anything that they see as representing success or anything that has a shadow of free enterprise could be evil and must be stopped.

The Minister for Minerals and Energy (Mr Connor), who is also with us today, is one who - I say this kindly because he cannot help the way he thinks - looks at the development of our mineral and oil resources as something which would have happened anyhow and believes, seeing that it has happened, that we should move in and grab the resources. He does not see that thousands upon thousands of Australians have risked and lost millions upon millions of dollars in outlaying the finance which has allowed the oilfields and the mineral fields in Australia to be found. It is a fact of life that the great majority of the finds in this nation have been by small prospectors.

I noticed one aspect of the Income Tax Assessment Bill (No. 2) and the Treasurer's speech on it, where reference was made to the withdrawal of the income tax benefits for visiting experts. In his speech the Minister said:

For ali of these reasons it was decided to withdraw these income tax concessions, and introduce in their place a system of direct grants to Australian enterprises employing visiting experts.

That is fair enough. The wording of the Treasurer's speech indicates that he realises that Australia cannot shut the door on experts. But what the Government is proposing in this Bill has no alternative. In relation to money invested within the provisions of clause 77c and clause 77d, the Government is slamming the door against hundreds of thousands of ordinary Australians who are risking some amount of capital on oil and mineral exploration. It is dismantling the rig of proven progress. It offers nothing in its place but a socialist dream of an island Texas of 3 million square miles with the Minister for Minerals and Energy on the Treasurer's payroll digging an occasional hole with the hoe of hope. That is about the extent of what will happen in Australia unless the Govern ment sets itself to finding an alternative proposal to encourage the private companies and individuals to go out and seek oil and the mineral wealth of Australia.

We know that the Australian Labor Party is based largely on Sydney and Melbourne and that without those 2 cities it would not be in Government today. If some members of the Labor Party get the opportunity to go beyond their freeways and highways, out to the prospecting camps where the geologists and the oil and mining exploration companies work, they will learn that one just does not walk along with a divining rod which suddenly points down to indicate oil or some mineral lode. It is not like that at all. The only reason we have been so successful in Australia in recent years is that we had a system whereby we encouraged individual Australians - every Australian - to play a part in financing the development of this country.

For the benefit of honourable members who think that these are just my words and that my view is not shared by others, I draw attention to an article in today's 'Australian'. The article, which may not be accurate, reports the President of the Australian Associated Stock Exchanges, Mr M. S. McAlister as saying:

If the tax concessions were being abused why not eliminate the abuse, rather than a system which has helped mobilise millions of dollars of countless private investors in Australia, so helping to create a more progressive market.

I wish that the Treasurer was here at the moment so that he could answer that question. Perhaps the Minister for Minerals and Energy might answer it. Why is the Government completely destroying what existed in the past without, at this stage, offering a viable alternative? I have been told, although I cannot vouch for the truth of this, that in recent weeks the stage has been reached where of 50 drilling rigs in Australia, 48 have been stilled and only 2 are presently being used. There has been such a loss of confidence by that sector of our society that many are giving it away. Perhaps the Minister for Minerals and Energy thinks gleefully that this is good and that the Government can now buy up those 48 rigs at a good price. That is perhaps the stance that he might adopt and the action that he might take. Realising the restrictions being placed on us in relation to time, I ask the Government to try to see beyond the syndrome which leads Government supporters to believe that anything that stands for capital is bad. The Government should try to recognise that we on this side of the House are prepared to join with it in eliminating bad practices, but there is no point in completely dismantling the proven formula.

In conclusion, I hope that if searching for these resources in Australia is to slow down or grind to a halt, the Government will soon devise a scheme whereby search might be encouraged again. We on this side of the House recognise that there has been some abuse of this system in the past and that the abuse must be eliminated. But let us not destroy the entire system, because it is one which has proved itself. It would have continued to prove successful if the rough edges had been removed and people throughout the nation had continued to receive enticement honestly to contribute money to finance the search for oil and minerals. The only endeavour that has been made is to remove what are considered by the Labor Party to be the evil aspects of the present system.

Mr FitzPATRICK(Darling) (2.43)- The honourable member for Griffith (Mr Donald Cameron) made reference to members of the Australian Labor Party belonging only to the cities.


Mr FitzPATRICK - 1 should like to inform him, although I think he has already recognised the fact, that I have spent more shifts underground and on the surface of mining leases probably than he has during his life time. I believe that the Government should be congratulated for plugging up the loopholes in tax concessions to shareholders for capital subscribed to mining and prospecting companies. Those tax concessions were said to be introduced in the interest of the nation. As has already been proven by my colleague the honourable member for Blaxland (Mr Keating), they have done little to attract finance for exploration and mining development in Australia. On the other hand, they have opened wide avenues for tax avoidance under the guise of developing our mineral resources. I think that the honourable member for Banks (Mr Martin) has produced concrets evidence to show that the present Opposition had been aware for some time of what had been going on in regard to tax avoidance. Previous governments did little to eliminate the methods of avoidance. It is a strange thing that when anyone who is remotely connected with the Labor Party happens to get a job of some type on a board we hear the cry from the Opposition that it is a case of 'jobs for the boys'. But it is surprising how our taxation laws have been left wide open and how the people who are normally considered to be the friends and supporters of the Opposition have been able to get in on the lurks and perks. The Labor Party is not opposed to any capable person holding down a job but we are opposed to financial manipulators who use the tax laws at the expense of the development of our mineral resources. I believe that the curtailment of taxation concessions, which in many cases only amount to subsidising investment by overseas companies, is long overdue. This also applies to the provisions in this legislation which give effect to the decision that income tax concessions available to visiting experts are to be withdrawn. Most of these so-called experts have little general mining knowledge. Often they are expert only in some special area. If they are experts or if they have some expert knowledge in a special area they very seldom pass it on to Australian mining engineers. As a matter of fact when their term of duty in Australia has expired they often are replaced by someone else from overseas.

These experts often are looked upon as tipoffs for a foreign company and their visits cause disruption in mining staffs. The Treasurer (Mr Crean) has already informed us that 90 per cent of the visiting experts are brought to this country by foreign owned enterprises. I know that there are many sincere people among them who have settled in Australia but in the majority of cases they are treated with suspicion. It is no longer necessary to bring these so-called experts into Australia because we have an ample supply of Australian mining engineers. In any case this Bill contains provisions to make a special concession available to Australian mining companies should it be necessary to bring these persons into Australia.

The fact that the Government has made an examination of the weaknesses in taxation law which allow financial manipulators to cash in on Government attempts to assist in the exploration and development of our mineral resources speaks well for the future. The fact that the Government is taking action to ensure that the assistance which is given to mining companies will be used for the real development of our mineral resources is very encouraging. The Government is aware of many large untapped mineral resources in which Government assistance could yield a rich and long term harvest. Some of these deposits are near rural towns. They could be the means of sustaining these towns while rural industries are recovering from the recent crisis. I would like to put forward some suggestions on how the development of these resources could be assisted but I have been asked not to take too much time in this debate so I will pass on.

The Government has already shown that it does not intend to forget mining centres which are already employing many thousands of people and which contribute millions of dollars yearly to the State and national welfare in royalties and taxes. One place which I have in mind is, of course, Broken Hill. The militant history of that town is well known. It is often distorted and publicised. As matter of fact the honourable member for Flinders (Mr Lynch) and the honourable member for Wentworth (Mr Bury) have done that very thing in this House. What is less well known is the heavy nature of the work of hard rock mining. In this field the effective life of a miner is said to expire at 62 years of age. These miners have to retire at 62 years of age. Some of them get part time jobs and others retire under a pension scheme the benefits of which are little better than unemployment benefits to which they contributed. Also little known are the other problems that hamper the operations of the mining industry. The contributions that the mining industry has made to the development of this country is surprising. Taking Broken Hill alone, the 4 companies in the year 1969 produced 2.7 million ounces of silver and concentrates containing two-thirds of the nation's zinc and two-thirds of the nation's lead production. One mine - New Broken Hill Consolidated - for the year ended 1968, before royalties and tax earned $11,675,000. The same mine in the year 1969, before royalties and tax, earned $15,570,000, or an increase of 33 per cent on the 1968 earnings. But after royalties and tax the increase on the previous year amounted to only $480,000, or 7.6 per cent. Tax provision amounted to $5,048,000 which was $1,688,000, or 50 per cent, more than was set aside in the previous year, 1968.

Royalties increased to an amount of $4,752,000, or an increase of 61 per cent on the previous year. This means that additional earnings of nearly $4m was reduced to $480,000 because of added tax and royalties.

I am not mentioning these things because 1 feel sorry for the companies because as a rule what they take out of one pocket they have a habit of putting back in the other pocket. But I am wise enough to know that sometimes the interests of the employees and of the companies coincide. Companies cannot be expected to give their ore away. The rate of company tax could mean that companies might curtail employment and of course if they did so the employees would suffer. I think that we should be aware that there are 2 major factors that determine the life of any mining field. One is the current price of metal on the world market and the other is the grade of the ore that is being mined. High grade ore at Broken Hill is reaching the end of its life but there is a large body of low grade ore. We believe that the Government should be conscious of the contribution that Broken Hill has made to the welfare of Australia and that some assistance should be given towards the exploration for and the mining of this body of low grade ore. I am aware that the responsible Minister is already conscious of this and is looking for ways to assist in the development of this large body of low grade ore at Broken Hill.

I congratulate the Government on the action it has taken under this legislation and particularly for the grants under the isolated children's education scheme. Recently I attended the annual conference of the Isolated Children's Parents Association at Bourke. One of the problems raised at that conference was whether recipients under that scheme would be taxed on the grants they receive. It is very nice to know so soon after that conference that the Government has come out and made a clear statement on the way in which the taxation will apply. I believe it is unfortunate that more time was not allocated to me in this debate. However, the Government should be congratulated for this amending legislation. The matters that I have had to leave out of my speech will be taken to the Treasurer and other Ministers in the hope that further development will be undertaken in the Broken Hill area.

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