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Thursday, 25 October 1973
Page: 2715


Mr McLEAY (Boothby) - I have never served on the Public Works Committee.


Mr Peacock - We will put you on it.


Mr McLEAY - I am not so sure that I want to serve on it in the future. I wish to place on record my view that succeeding Public Works Committees, under succeeding chairmen, have done a very great service to this nation. I should like to express a few views to support that attitude and perhaps make some other suggestions. As I understand the provisions of the Bill the minimum cost of works undertaken by the Government which are referred to the Public Works Committee will be increased from $750,000 to $2m.

Anything which encourages public scrutiny of public works, in my view, is highly desirable. I put to the House a question that I have been trying to put to the Prime Minister (Mr Whitlam) for the last 2 weeks or 3 weeks. Because of the situation in the House at the moment, I have not received the call at question time. It seems to me that in our inflationary situation - I think we all agree that we are in such a situation - the increasing amount of money that is being spent in the public sector, if it is justified, should be thoroughly investigated because, in an inflationary situation, on my limited understanding of economics to increase the Public Service and to increase public works is like trying to put out a fire with kerosene. I would like to be convinced that whatever is done in this way represents money spent efficiently.

Let me refer to the sort of question which I have been trying to pose for answer. The Minister for Services and Property (Mr Daly), who is at the table, may care to give this question some thought. Having regard to the Government's Budget estimate of an increase in Public Service staff of 4.7 per cent - I believe that the increase actually will be more than 4.7 per cent - the increase in Public Service salaries of nearly 25 per cent, which is quite significant, the current rate of inflation which is running at 14 per cent and the fact that there has never been a thorough-going inquiry by an outside body into the Commonwealth Public Service, will the Government give consideration to appointing an independent economies commission, rather like an expanded Public Works Committee but independent and outside the Commonwealth Public Service, which would be responsible to the Parliament for a continuing, systematic and comprehensive check on the efficient working of all 37 Government departments? 1 listened to part of what the honourable member for Leichhardt (Mr Fulton), who preceded me in this debate, had to say. I think my question is along the lines of his suggestion. We should have some other body, independent of the Public Service, to report to the Parliament on the efficiency and other aspects of the ~ Public Service. If that is what he was saying, I hope that he will give consideration to supporting my proposal because it would be marvellous if both sides of the House could get together and encourage the implementation of such a suggestion. I have done a little research on this matter. It is very significant that the present Government wishes to make the Commonwealth Public Service the pacesetter by granting to it increased holiday pay, maternity leave of 12 weeks, paternity leave of one week or two weeks, a shorter working week, equal pay and heaven knows what. With the Government wishing to make the public sector the pacesetter, it will be quite impossible for the private sector to keep up with it.

For those reasons, I think it is appropriate to bring this matter up for debate when discussing the Public Works Committee because the Public Works Committee really is the body which most closely approximates what I advocate. As I said a moment ago, I have done a minor amount of research on this matter. In the history of our federation, there has never been the sort of investigation that I suggest. A thorough inquiry into the Commonwealth Public Service by an outside body has never been conducted. I believe - I am not being critical only of the present Government; I suppose that I am being equally critical of our own former Government, but perhaps this matter was too hot for it to handle - that the appointment of such an inquiry is something at which a government should look and about which it should take some action. I think that the present Government should be the Government to do this because, after all, it is the present Government that wishes the Commonwealth Public Service to be the pacesetter.

As briefly as possible, I wish to refer to the only 2 investigations on record as inquiries into parts of the Commonwealth Public Service. One such investigation took place just after World War I. To anyone who is interested to the slightest degree in this matter - I am sure that all members of the Public Works Committee are interested in it - I recommend the reading of a book entitled The Commonwealth Bureaucracy' by Gerald E. Caiden. This book was written in 1967. I wish to quote from this book his references to the 2 royal commissions which were set up after World War I. One was the McLachlan Royal Commission which was concerned with the administration of the Public Service of the Commonwealth and particularly 'the effect of such Acts upon the management and workings of the departments'. This Royal Commission petered out and finally died. Obviously, it was not a thorough-going economic investigation. The second inquiriy was known as the Economies Royal Commission and was under the. chairmanship of Mr R. Gibson who was called upon: to consider and report upon the public expenditure of the Commonwealth of Australia with a view to effecting economies.

That term of reference is the closest I can find to what I would like to see as the basis for an inquiry into our Commonwealth Public Service. In his book, Gerald Caiden states:

There has never been a thorough outside inquiry into the Commonwealth bureaucracy or the Commonwealth Service. The last thorough look at the Service personnel system took place at the end of World War I. Since that time there have been inquiries into parts, but not the whole, of the system and Commonwealth Governments have persistently refused to consider surveys on the scale of the British Royal Commissions, the Hoover and Glassco Commissions in North America and the McCarthy Commission in New Zealand. Behind the specious reasoning against such proposals is the very real fear of politicians and officials that a full inquiry might do more damage than good to individual reputations, Service morale and what appears to be a smooth-working system, particularly if mass media distort criticisms and exaggerate deficiencies.

In that passage, quoted from Mr Caiden's book which was written in 1967, the author refers to the only 2 investigations which have been made of the Commonwealth Public Service. I will quote only one further passage from his book. Were I brilliant enough, this is the sort of thing that I would write. I would like to be associated with his view. This quotation refers to the work of the first Commission.

The present Chairman of the Public Works Committee, the honourable member for Leichhardt (Mr Fulton), has returned to the chamber. I point out to him that I am in the process of quoting from a book entitled 'The Commonwealth Bureaucracy' written by Gerald Caiden which mentioned the 2 separate royal commissions which inquired into the Commonwealth Public Service. The first quotation that I made was written prior to the first inquiry - the McLachlan Royal Commission - which petered out in November 1920 after its second report in which it defended its previous report which had been attacked by critics. The inquiry died on the vine. I identify myself now with these views written after that report. I wish that they were my original thoughts. Gerald Caiden states:

This can only be secured if the duty of continuous criticism and the duty of seeing that fair value is received for money expended is placed in the hands of individuals 'who are not in any way to blame for the failures' -

And this is extremely important - and who will measure the efficiency and economy of all Departments and fearlessly bring to light all failures and with power to report direct to Parliament on the same principle as the Auditor-General is expected to fearlessly bring to light any lapses in honest and accurate accounting . . .

That really is the nitty-gritty of what I advocate to this Parliament as desirable action. I propose the appointment of some such economies commission - either an expanded Public Works Committee or a separate body altogether.

In the few moments that are left I would like to give the House an up-to-date reference to the inconsistencies of certain sections, not necessarily just of the Commonwealth Public Service but of spending in the public sector. I refer to the Australian Industry Development Corporation. As honourable members will know, the original Australian Industry Development Corporation Act requires the Corporation to submit annual reports to Parliament. However, these reports provide no detailed analysis of the nature and rationale for individual investments.


Mr Whittorn - They lost half a million dollars 2 weeks ago.


Mr McLEAY - As the honourable member for Balaclava pointed out, they lost half a million dollars 2 weeks ago. This is the way they go about losing it. In the past the identity of individual recipients of AIDC assistance has been revealed only in those cases where the recipients themselves - not Parliament or anybody else - have chosen to do so.


Dr F Cairns - It is a pity we cannot have two like you on the Board, is it not?


Mr McLEAY - I appreciate the Minister's interjection. I am not so sure that I would not accept that sort of appointment if that is what he is advocating. I go on to make the point that one illustration of the desirability of greater public disclosure by the AIDC is provided by the case of Information Electronics Ltd of the Australian Capital Territory. I think that the Minister for Overseas Trade (Dr J. F. Cairns) will know the company to which I am referring.


Dr F Cairns - It is very successful at the moment.


Mr McLEAY - The Minister says it was a very successful company.


Dr F Cairns - At the moment.


Mr McLEAY - At the moment. I am not sure that I can entirely agree. Information Electronics produces component equipment for data communication systems and has been assisted by loan funds from the AIDC. I am not in any way blaming the Minister for that because it happened before he became the Minister. This particular company initiated a tariff reference concerning cathode ray tube display terminals where manufacturers requested tariff protection for the production of these items. The Tariff Board report presented to Parliament on 7 March - the present Minister was the Minister at that time - recommended against protective duty and also noted the unsatisfactory performance of this company. A moment ago the Minister said that it was a highly efficient company. The Tariff Board, which at that time also came under his administration, said that it had an unsatisfactory performance. The Government has deferred a decision on the Board's recommendation pending a report by the Tariff Board on the electronics industry in general. It may be that this company has sound prospects for long term growth. Nevertheless, it seems desirable to know AIDCs justification for assisting a company- -


Mr Daly - I take a point of order, Mr Deputy Speaker. Can the honourable member advise us to which clause of this Bill he is speaking.


Mr McLEAY - Yes, I would be very pleased to do so. I am advocating an expanded Public Works Committee or, in lieu of that, a sort of economies commission. I have given other examples and other views.


Dr J F, Cairns - In place of the AIDC or the Tariff Board, or what?


Mr McLEAY - What I am saying is that public utilities, including the AIDC, should be subject to public scrutiny. On the one hand we have the Tariff Board saying that this particular company is inefficient and on the other hand we have the AIDC saying that it should be promoted and should be lent money. That really is the relevance. I appreciate the interjection by the Minister for Overseas Trade who wished to assist me in this matter.


Dr F Cairns - We do not see the relevance even yet.


Mr McLEAY - A lot of us can see things that we want to see, a lot of us can see things that we do not want to see, and some of us do not see anything at all. This is entirely relevant to the debate.


Mr Donald Cameron (GRIFFITH, QUEENSLAND) - It is a very deep and thoughtful speech.


Mr McLEAY - I thank my colleague very much. This question of the proposed assistance by the AIDC was raised at the Prime Minister's Press conference on 6 March. According to the transcript of the Press conference, the Prime Minister was asked:

As Minister who receives Tariff Board reports, you would be aware that the Board reported recently adversely on the prospects and performance of one of the AIDC projects, Information "Electronics Ltd. Will you have Sir John Crawford investigate the possibility of extending the protection commission's operations to cover the implicit subsidy in the AIDC operations?

The Prime Minister replied:

This will be open to him to consider and I hope he does.

I think that the reason the Minister for Overseas Trade is so sensitive about this is that he-


Dr J F Cairns - I am not in the least sensitive. I am just trying to work out how this has any relation to the Bill.

Mr DEPUTY SPEAKER (Mr Jarman)Order!I think that the honourable member is getting a little bit wide of the subject.


Mr McLEAY - I thank you for directing me in this way, Mr Deputy Speaker. Frankly, it seems to me that any thought, original or not, or anything that will create a situation where the public sector or any part of the public sector is made to feel that it is under the same sort of investigation as the private sector is useful and has a relation to public works. That is the relevance. I am finishing my remarks, anyway, by quoting what the Minister for Overseas Trade had to say about this same matter on 7 March. He denied that the AIDC would come under the continuing scrutiny of the proposed protection commission and did not consider that this statement was in conflict with the Prime Minister's statement on this matter. That is the reason why he is so sensitive now. I do not think that the question of economies and efficiency in the Public Service should be confined to any one of the 37 departments. It should be applied to all departments and in any area where public funds are spent. I conclude my remarks by saying once again that I think that the Public Works Committee has done a very good job over a number of years. At the same time it is impossible for it to do the job that is required of it because of the limitations of time, facilities and so on. I hope that at its next meeting the Public Works Committee will consider the possibility of expanding its own activities or recommending to the Government the present Chairman is a Labor Government supporter that an economies commission or something like that should be appointed.

Question resolved in the affirmative.

Bill read a second time.

In Committee

Clauses 1 and 2 - by leave - taken together, and agreed to.

Clause 3 (Definition).







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