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Wednesday, 31 May 1972
Page: 2355


Senator DRAKE-BROCKMAN - The amount payable to Kailis himself?


Senator WILKINSON - This is in respect of land thai we acquired from Gulf Fisheries, is it not?


Senator DRAKE-BROCKMAN - I understand from Mr Sutherland that the total amount payable to Kailis is $343,000.


Senator WILKINSON - And this amount of $68,000 is the last payment to be made?


Senator DRAKE-BROCKMAN - Yes, that $68,000 will enable us to pay the $343,000.

I now turn to what the Minister said in December 1971 during the Committee stage of consideration of Appropriation Bill (No. 1). The Hansard record reads as follows:


Senator Cant - When did you acquire the freehold?


Senator DRAKE-BROCKMAN - We have not acquired the freehold.


Senator Cant - You said that you acquired the freehold of the leased land.


Senator DRAKE-BROCKMAN - No, I did not. ] said it was decided that it would acquire the freehold interest in the land in 1969.

It is a peculiar thing that this so-called prawn factory was established at Exmouth Gulf in 1963 and Mr Kailis just squatted on the land. He had no control over the land. He had not obtained a lease on the land from the Western Australian Government or anyone else. Later the Minister advised me that the decision to upgrade the Learmonth airport was made in 1965. This was in response to a query from me as to whether the decision to acquire the land was made while Mr Gorton was the Minister for Defence, or when he was Prime Minister. The Minister replied that the decision was made in 1965. Despite that fact Kailis was allowed to rebuild his factory in 1965. However, this factory still amounted to only a few sheds and a freezer. His workers were living in caravans. I then got on to the question of the amount that would be paid to Kailis for this land. I asked about the reasons for the acquisition of the land in view of the fact that refuse from the prawn factory attracted bird life which would place aircraft and Air Force personnel in danger, a situation that we all want to avoid. This was the reason given for the acquisition. I do not quarrel with that. But in reply to my remarks the Minister stated:

It is all very well for the honourable senator who knows that if his Party were in office it would use every power to push this or that chap out of his business.

What an assumption for the Minister to make, that the Labor Party would do that, even in an Estimates debate. When I am pointing to incidents that may amount to graft on the part of someone the Minister wants to play politics.


Senator Douglas McClelland (NEW SOUTH WALES) - Which Minister said that?


Senator CANT - Senator DrakeBrockman. The Minister went on to say in his reply to me:

But this Government does not operate that way.

I wonder what the workers are saying about the statement 'But this Government does not operate this way' in view of the performance of the Government in this chamber over the past week. I wonder what the workers will say when they see the results of the work carried on in this Senate last week and this week. The Minister then went on to say:

The honourable senator is talking about the Government bypassing the Parliament. No such thing has been done. Parliament approves and allocates certain funds to a department. The expenditure of those funds on individual items is a matter within the prerogative of the Minister concerned. In this particular case $275,000 was allocated under a Supply Bill, the additional funds for the item coming from the Treasurer's Advance. This is normal practice which is carried on by departments . . .

I do not want to read any more of that. The 2 sources from which the Minister obtained the funds was $275,000 from funds made available through a Supply Bill and the balance from the Treasurer's Advance. A little later in the proceedings I said:

The Minister for Air (Senator DrakeBrockman) has attempted to make an explanation based on the Government's chaotic cost accounting system. First of all, he said that $27,500 of the money that was paid to Kailis-


Senator Drake-Brockman - I beg your pardon, senator, I made a mistake. It is $275,000.


Senator CANT - Very well. The Minister said that $275,000 came from the Department of Supply,


Senator Drake-Brockman - No, from the Supply Bill.


Senator CANT - The Minister said $27,500, as I noted it, came from the Supply Bill and the balance from the Advance to the Treasurer. But wherever it came from is neither here nor there. It does not matter because what the Government is doing is taking a sum out of one pocket and then asking this Parliament to appropriate that sum to put back in the pocket. The principle is the same. It does not alter just because the money is available and it is used. What will happen if the motion seeking rejection of Division 707 is carried? It will mean that the purpose for which the money sought under the Supply Bill is required will be $275,000 short. It will not be able to be supplemented. The balance to $335,000 which comes out of the Advance to the Treasurer will not be able to be supplemented. This is the simple way of dealing with it, instead of using the archaic accounting methods of this Government which have been criticised throughout the world and which no-one understands. The simple facts - the Minister cannot embellish them in any way - are that the Department has paid out $335,000 without the approval of this Parliament. No matter how the Minister tries to get around it, that is the simple fact. The Government will have paid the money out and will not be able to supplement it. If this is the way in which this Government and its departments want to operate, in future every cent covered by Supply, Bills, and every cent covered by the Advance to the Treasurer, will have to be documented so that we will know the expenditure proposed under the Supply Bills and the Advance to the Treasurer.

During the course of that debate I was assured by the Minister that at that stage - December of last year - Kailis had been paid $335,000, part of which came from the Supply Bill and part of which came from the Advance to the Treasurer. I want to impress upon honourable senators that the figure which had been paid to Kailis was $335,000. However, the Minister has advised Senator Wilkinson that the total amount payable to Kailis was $343,000. That is a difference of $8,000. Yet when we look at the appropriation made in these additional estimates we find that in relation to Learmonth, Western Australia, additional funds amounting to $68,000 are required to settle claims in respect of property acquired from M. G. Kailis Gulf Fisheries Pty Ltd. This is $60,000 more than the Minister told Senator Wilkinson was due to Kailis for his factory. I want to know just how these things are worked out. The amount of $335,000 was paid up to December 1971; $343,000 is the total payment for the acquisition from Kailis; and in May another $68,000 is required. That requires some explanation.


Senator Webster - Senator, could I interrupt you for a moment? Did not one of the committees bring out the fact that part of this expenditure was incurred because of the transfer of a telephone exchange or telephone connections of some sort?


Senator CANT - Last year I raised the matter of the movement of the factory a distance of 6 miles. The Minister said that it was 12 miles. In these vast open spaces it is easy to make mistakes. Kailis says that the factory was moved 6 miles, lt cost over $6,000 to move the telephone facilities. That is not a bad subsidy - $1,000 a mile. I think that was the additional money due to Kailis over and above the $335,000. The words of the Minister as they appear in Hansard are that Kailis has been paid $335,000 and that the total amount due to him is $343,000. I want to know: What is the purpose of the additional appropriation of $68,000 this year? It is not stated in the explanatory notes that this amount is being paid to any department or that it has been overdrawn. The notes state: 'Payment to M. G. Kailis - $68,000'. I think there is something for the Minister to answer in that respect.

I gain the impression, as a result of my raising this question, that it is suggested that we members of Parliament who represent the people of Australia should not raise these sorts of anomalies when they are brought before them; that we should remain dumb and allow people to use or abuse public funds or graft or do whatever they like with public funds, without us members of Parliament opening our mouths. Mr Kailis was interviewed by the Australian' newspaper. The article states:

Mr MichaelKailis, the Western Australian fisherman attacked by Senator Harry Cant in Parliament on Wednesday, is regarded as a millionaire . . .

So he ought to be a millionaire, if he can obtain money in this way. He has been paid the sum of $335,000 for a couple of tin sheds, a freezer and a couple of caravans. With the addition of this further appropriation of $68,000, the total sum paid will be more than $400,000.


Senator Webster - Have you seen these buildings?


Senator CANT - No, but I know what they are. Other people have seen them. If the honourable senator wants to defend Kailis he can do so at a later stage. The article continues:

The 42-year-old principal of Kailis Gulf Fisheries is a second-generation West Australian and a member of the State's leading fishing family. He pioneered the fishing of the big king and tiger prawns of the north.

Let me say something about the pioneering of the prawning industry in Western Australia. The industry in Western Australia is dealt with on somewhat the same basis as the cray fishing industry in that State. In the cray fishing industry a boat is allowed 2 pots for each foot of its length, fishing is allowed only during certain periods and an embargo is placed on fishing outside those periods. All sorts of restrictions are placed on the cray fishing industry in order to conserve it in the interests of the nation and of continuing to receive the amount of overseas currency that it can provide. When the prawning industry was established, the government of the day - it was a Liberal government, by the way - was not going to give the fishermen open slather to destroy the prawning grounds in the north. So it fixed the quotas of boats that could fish in the various designated areas in the north. Exmouth was one of them. There were 10 prawn fishing boats allowed to fish in the north. I happen to know some of the people who are engaged in this industry. I have a brother-in-law who was a pioneer in it and who started in it way back in the 1920s. He tried to obtain a prawning fishing licence at Exmouth and could not obtain one. Of the 10 licences that were issued, Kailis was able to obtain 5. This is an indication of the sorts of rackets that are carried on in this industry. Do not let people talk about Kailis being a pioneer and about how he came to be a millionaire. These are the sorts of things that happen. The article continues:

Some of Mr Kailis' sternest critics are among his own family. There was a falling-out somewhere back in their West Australian history, and he is accused of egotism for what appears to be a most generous gesture to some Indonesian islanders.

This has been played up. The generosity of this man has even been written about in newspapers in New South Wales. He is not generous. If he is not getting a quid out of it he is not there. He is not there for his dancing. The article continues:

On the Aru and Kai island groups, 700 miles north-east of Darwin, a consortium led by Michael Kailis is starting a totally integrated fishing industry to help the 30,000 islanders.

He took an ecological study group to the area - a geographer, an anthropologist, a geologist and a marine biologist - and they believe a fishing industry can be set up to work the local tuna and prawns.

Starting with a sawmill to get the islands' timber out (and this may later snowball economically) they will build trawlers to Kailis' specifications and then work the fishing grounds and process the catch.

For his $750,000 in risk capital (which includes the first stages of schools and hospitals, a radio station and airstrip) Mr Kailis hopes to take part in the processing and marketing.

This is the man Senator Cant this week accused of taking a $275,000 rake-off-

The amount of $335,000, not $275,000, was substantiated by the Minister - from the Federal Government because of his advance knowledge about plans for upgrading the Exmouth Gulf base.

According to the senator, Mr Kailis deliberately spent money on his prawn plant there knowing it would have to be moved at Federal Government expense.

To this, Mr Kailis replies: 'He can't even get my name right.' Senator Cant referred to him as George Kailis.

Let me say this to the Senate and to Mr Kailis: I called him George Kailis. His name is Michael George Kailis, so he tells me now. But I do not know the name of any other gangsters or racketeers in this country. I do not know the correct name of Legs Diamond, Al Capone or any other racketeer. I do not associate with these people, and I think they should be exposed at every opportunity. Mr Kailis says that I do not even know his name. I have known members of the Kailis family for many years. I do not distinguish them by name. I know that this man was known as George Kailis. He says that his name is Michael George Kailis. I do not doubt that. But I will not have him accuse me of not even knowing his name. I emphasise that I do not know the names of any other racketeers. They all go under pseudonyms. I will not proceed any further with that article. I wanted only to raise those points. I then received a letter from Mr Kailis of M. G. Kailis Gulf Fisheries Pty Ltd. He writes to me:

I refer to your statement in the Senate regarding the acquisition of Learmonth by the Commonwealth Government. It is quite evident that whoever fed this information to you must have had some malicious and mischievous thoughts in his mind . . .

No-one fed the information to me; I obtained it from the Estimates. I do not want information fed to me. He continued: . . because 1 cannot think of anybody giving such erroneous facts without having some ulterior objective in mind.

Due to your statement, my name has been slandered from one side of Australia to the other and has caused myself and my family a considerable amount of embarrassment.

I will not labour on the details, but I would like to point out that our Firm established the fishing industry in Learmonth-

I know how it was established - without any assistance whatsoever from the Governments, both State or Commonwealth.

That is doubtful. He continued:

In fact, since its inception it is remarkable what little interest both State and Commonwealth have given to these projects in the North, and to be humiliated and slandered by remarks made in the Senate for the work we have done up there 1 think is a very cruel fate.

Surely with your experience in the North you know what conditions were like back in the 1960s. This is before all the Iron Ore development, the Radio Base and the Air Force base were even conceived. Therefore, I think I am entitled to an apology both in the Senate and in writing.

I have given Mr Kailis my apology today and have said what I think of his propositions with regard to the acquisition of land. I want to emphasise this again: He got $335,000 last year, on the admission of the Minister; he got over $6,000 for the removal of his telephone; his total commitment, according to the Minister in charge of these estimates, is $343,000; and now there is an appropriation of another $68,000. I would like some answers to these questions.







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