Wednesday, 25 May 1983 Mr SPEAKER (Hon. Harry Jenkins) took the chair at 10 a.m., and read prayers. The Clerk-Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: Discrimination against Women To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that whereas the Government of Australia has signed the United Nations Covenant on Civil and Political Rights which in Article 23 (1) states that ''The family is the natural and fundamental group unit of society and is entitled to the protection by society and the State''. And whereas the terms of the United Nations Convention on the Elimination of All Forms of Discrimination Against Women would violate the above Article 23 (1). We humbly pray the Government to refrain from ratifying the Convention on the Elimination of All Forms of Discrimination Against Women. Believing that its implementation would result in: (1) Undue cost to the nation at this time. (2) ''The elimination of any stereotyped concept of roles of men and women at all levels'' as described in Part 3 Article 10 (c), being a disruption of traditional parental roles, is likely to result in emotional disturbances of childhood. (3) The strong encouragements to mothers to join the workforce, with the provision of networks of creches and child care centres as outlined in Article 11 of the convention is likely to result in maternal deprivation and psychological disturbances among children with an increase in childhood psychiatric illnesses. (4) The sexual role changing as recommended in Part 3 Article 10 (c) is likely to contribute to further marriage insecurity and breakdown. And we pray you may be conscious of God's sovereign purpose for our nation. And your petitioners as in duty bound will ever pray. by Mr Adermann,Mr Cadman,Mr Ian Cameron,Mr Cowan,Mr Katter and Mr McGauran. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth the need for the immediate introduction of an Attendant Care Allowance for Disabled people who need assistance with aspects of daily living. This allowance will enable disabled people to live in the community. It should be in the form of a benefit paid directly to the disabled person enabling him/her to employ and train the attendant of his/her own choice. And your petitioners as in duty bound will ever pray. by Mr Brumby. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: 1. That an airport in the north-western region (commonly called Scheyville) imposes disastrous economic, environmental and social costs on our community. 2. An airport would destroy 2,000 households and impose upheaval, noise and pollution on one million people presently unaffected. 3. The cost of an airport in the north-western region is greater than the alternatives, whilst fog and close proximity to RAAF Base Richmond would make operations impractical. 4. It would destroy the historic village of Pitt Town, environmentally important wetlands, and their unique adherent wildlife. 5. Your petitioners reject these proposals and call for endorsement of the MANS Committee findings. And your petitioners as in duty bound will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of the Commonwealth submits: That offshore oil exploration within the Great Barrier Reef Region constitutes a serious threat to the richest and most varied living system on earth. Your Petitioners request that your Honourable House will. 1. Prohibit oil exploration within the Great Barrier Reef Region, 2. Declare the entire Great Barrier Reef Region a Marine Park under the Federal Government's Great Barrier Reef Marine Park Act 1975, 3. Provide the Great Barrier Reef Marine Park Authority with the staff and resources for effective management of the Region. And your petitioners as in duty bound will ever pray. by Mr Dobie. To the Honourable the Speaker and Members of the House of Representatives of the Commonwealth of Australia in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we request that the Government take steps to ensure: (1) The construction programme of Radford College, Bruce proceeds immediately. (2) Parents freedom of choice in education is fostered by continuing to provide a basic grant for all Australian children. And your petitioners as in duty bound will ever pray. by Mr Fry. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That because television and radio: (a) affect our social and moral environment, (b) are family media watched and heard by many children at all times, and (c) present too much explicit violence and sex, they therefore need stronger control than other media and the existing standards need stricter enforcement in both national A.B.C., and commercial sectors. Your petitioners therefore humbly pray: That the Australian Government will amend the Broadcasting and Television Act, in relation to both national and commercial broadcasters, to legislate (a) for adequate and comprehensive programs in the best interests of the general public, (b) for a ''Dual System of Regulation'' enforced by the Australian Broadcasting Tribunal by internal regulation and external control. (c) for an independent consumer body to represent the best interests of the general public, and (d) for immediate and effective penalties to be imposed for breaches of program and advertising standards. And your petitioners as in duty bound will ever pray. by Mr Maher. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That the railway crossing situated approximately 5 kilometres east of Port Augusta on Highway One (the main highway between Adelaide and all northern and western centres of South Australia and continuing through to Western Australia) has once again been the sight of an horrendous accident. This accident has caused two, possibly three, fatalities. Previous requests have been made by the city council of Port Augusta for the construction of an overpass, so that this section of the highway no longer presents a danger to the motoring public and those involved in driving trains over this crossing. Permission for construction of this overpass has previously been refused and the situation has now become critical. Your petitioners therefore humbly pray that the Federal Government will reconsider their previous decision and approve construction of an overpass at this fatally dangerous railway crossing to avoid further loss of life. And your petitioners as in duty bound will ever pray. by Mr O'Neil. To the Honourable the Speaker and Members of the House of Representatives of the Commonwealth of Australia in Parliament assembled. The humble petition of the undersigned citizens of Mackay respectfully showeth: That the intention of Telecom Australia to close the Mackay Directory Assistance Centre will: downgrade telephone services to Mackay and district. deprive customers of a personalised reliable telephone service. reduce job opportunities in the area. increase the likelihood of the eventual closure of the exchange. We the undersigned believe that Telecom Australia has a social responsibility to provide a sound, reliable, personalised telephone system. Your petitioners therefore humbly pray that your Honourable House will call on the Government to intervene to stop Telecom's proposed closure of the Mackay Directory Assistance Centre. And your petitioners as in duty bound will ever pray. by Mr Beddall,Dr Everingham and Mr Gayler. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The humble petition of the citizens of Western Australia respectfully shows: Last year, over 3,300 people died on Australian roads; Alcohol is a factor in 50 per cent of road deaths; Alcohol advertisements do not show the perils of driving after drinking alcohol ; Alcohol advertisements are glamorous and increase their effect on teenagers, indicating drinking alcohol as the social pastime; Your petitioners therefore humbly pray that the Parliament will legislate to ban the advertising of alcohol from commercial television and radio. And your petitioners as in duty bound will ever pray. by Mr Beazley. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The petition of certain citizens of the Northern Territory of Australia shows: 1. That the Commonwealth of Australia and the State of South Australia entered into an agreement on 7th December, 1907 requiring the Commonwealth of Australia to construct the transcontinental (North-South) railway from Darwin to South Australia; 2. That the transcontinental (North-South) railway has not yet been constructed ; 3. That the construction of the transcontinental (North-South) railway is the linchpin for the further development of the Northern Territory of Australia; 4. That the transcontinental (North-South) railway will provide employment through construction work, steel production and manufacturing and it will assist in ensuring the defence and security of Northern Australia. Your petitioners therefore pray that the Commonwealth of Australia commence and complete construction of the transcontinental (North-South) railway at an early date. And your petitioners as in duty bound will ever pray. by Mr Reeves. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We the Citizens of the City of Woodville and supported by the citizens of South Australia, being deeply concerned over the threat of closure of the Woodville Plant of General Motors-Holdens, respectfully show: 1. That the management of General Motors-Holden's has failed over a period of more than two (2) years to give any assurances that the Woodville Plant would continue in operation. 2. That a recent statement attributed to the GMH Managing Director, quote: ''The overall objective of our South Australian rationalisation plan has been to eliminate all productive activities on the Woodville site'' end of quote. This statement has not been refuted. 3. That the elimination of the Woodville Plant will cause enormous social dislocation, hardship and misery to the citizens of Woodville and South Australia. Your petitioners therefore pray that the Parliament of Australia will condemn this callous disregard for the citizens of Woodville and South Australia, and do all in its power to force General Motors-Holdens to retain its operation at the Woodville Plant. And your petitioners as in duty bound will ever pray. by Mr Scott. Petitions received. Mr HODGMAN(Denison) —I give notice that, on the next day of sitting, I shall move: That this House- (1) joins with the Australian Polish community and Australians generally in mourning the death of the 19-year-old Polish student Grzegorz Przemyk who died two days after being detained by Warsaw police, and (2) calls upon the Australian Government to lodge with the Polish Government the strongest possible protest against yet another brutal violation of human rights. Mr HUMPHREYS(Griffith) —I give notice that, on the next day of sitting, I shall move: That this House, noting the Government's commitment to co-ordination and co- operation in the setting up of both Federal and State public works programs, deplores the unco-operative attitude of the Queensland Government in this important task. Mr CADMAN(Mitchell) —I give notice that, on the next day of sitting, I shall move: That this House- (1) condemns the Government for the manner in which it has used taxing powers in regard to superannuation; (2) declares that lack of appreciation of the personal circumstances of widows, mobile or itinerant workers, small business people, such as shop keepers, employees of all types, including defence service personnel, will cause massive disruption in continuity of employment and much hardship, and (3) urges the Government to immediately withdraw its proposals for further consideration and in future statements avoid the duplicity that has been previously the basis of many statements. Mr BURR(Wilmot) —I give notice that, on the next day of sitting, I shall move: That this House urges the Government to honour its election promises to Tasmania by proceeding as soon as possible with the construction of the Warners Creek Dam, the Craigbourne Dam and irrigation project and the urgently needed upgrading of the St Helens fishing port. Mr BRAITHWAITE(Dawson) —I give notice that, on the next day of sitting, I shall move: That this House notes the critical financial situation of the Australian sugar industry brought about by the drought and low export prices, and calls on the Government to- (1) meet its commitment to an underwriting scheme or to grant loans to the industry and relate such assistance to 1982 season's crop; (2) make further funds available for rural reconstruction to help out individual cases of poverty in the growing sector; (3) meet the long-standing commitment of the Commonwealth to the building of the Burdekin Dam as the only sure means of alleviating the effects of future droughts on cane crops; and (4) treat these matters as ones of great urgency. Mr WELLS(Petrie) —I give notice that, on the next day of sitting, I shall move: That this House deplores the Queensland Government's continued disregard for the health situation of Queensland Aborigines on reserves in that State. Mr ANTHONY(Richmond-Leader of the National Party) —Mr Speaker, I wish to make a personal explanation. Mr SPEAKER —Does the right honourable member claim to have been misrepresented? Mr ANTHONY —Yes. Mr SPEAKER —He may proceed. Mr ANTHONY —There have been a number of media reports of the testimony given to the Stewart Royal Commission of Inquiry into Drug Trafficking yesterday by a Mr Trevor Volkman. One of the claims made by Mr Volkman is that I influenced investigations into the operations of the Nugan Hand Bank. These allegations have been made before. They were denied by me in this House some time ago. I repeat today: Any allegations that I have in any way influenced or attempted to influence any investigations into this matter are utterly without foundation. The allegations made by Mr Volkman were reported last night on the 7 p.m. television news bulletin of the Australian Broadcasting Commission. I fully understand the duty of the ABC to report those allegations. I regret, however- without wanting to be seen to be giving any bipartisan support to the Deputy Prime Minister (Mr Lionel Bowen) or the Minister for Industry and Commerce ( Senator Button)-that the ABC did not report my previous denials of these allegations or ask me to respond to the claims repeated yesterday by Mr Volkman. Perhaps I may draw your attention, Mr Speaker, to Hansard of 27 October 1982, page 2600, where it is reported that I said that I had contacted the former member for Riverina, Mr Sullivan, whom Mr Volkman named, and that Mr Sullivan had stated that he had never at any time raised anything of this nature with me. I also said that I was certain that Mr Sullivan had never raised such matters with me, and that I had never made such suggestions to the honourable member for Farrer (Mr Fife). At that time I also reminded the House that Mr Brian Bates had denied that he had been directed by any Minister of the Crown to suppress investigations by the Federal Bureau of Narcotics into the activities of the Nugan Hand banking corporation. Mr FIFE(Farrer) —Mr Speaker, I also claim to have been misrepresented and wish to make a personal explanation. Mr SPEAKER —The honourable member may proceed. Mr FIFE —The misrepresentations to which I refer also relate to the testimony to the Stewart Royal Commission of Inquiry into Drug Trafficking given by Mr Trevor Volkman and reported in the media yesterday and again today. Mr Volkman was reported to have claimed that I may have taken some kind of action, when Minister for Business and Consumer Affairs, to inhibit in some way the investigation into the affairs of Nugan Hand Ltd which at the time was being carried out by the then Narcotics Bureau, a unit of the Department of Business and Consumer Affairs. These allegations have been made previously and have been categorically denied by me previously. In fact, I denied these allegations in this House on 27 October 1982. During the time that I was Minister for Business and Consumer Affairs, I repeatedly sought and obtained assurances that the Department was actively pursuing investigations into the operations of the Nugan Hand Bank. I also sought and obtained assurances that other law enforcement agencies were investigating the activities of Nugan Hand. The allegations concerning me that have been made by Mr Volkman are completely without foundation. Discussion of Matter of Public Importance Mr SPEAKER —I have received a letter from the Leader of the Opposition (Mr Peacock) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The Government's duplicitous handling of the Ivanov/ Combe affair. I call upon those members who approve of the proposed discussion to rise in their places. More than the number of members required by the Standing Orders having risen in their places- Mr PEACOCK(Kooyong-Leader of the Opposition)(10.11) —Yesterday in this House the Leader of the National Party of Australia (Mr Anthony) asked the Prime Minister (Mr Hawke) a question regarding the Combe affair. The Prime Minister in his answer hid behind the Royal Commission on Security and Intelligence Agencies . The Prime Minister established this Royal Commission and on that basis he refuses to answer questions in this Parliament. Yet he is prepared to talk his head off outside the Parliament. I have a small sample of the interviews that have been granted to newspapers around the country in the last few days, including an interview published in the Melbourne Herald on Saturday, one on radio on Sunday and one on the Mike Walsh Show on television on Monday. But, interestingly enough, one newspaper report has sought answers to questions which the Prime Minister will not answer. Let me read some excerpts from an article in the Melbourne Age of yesterday, headed: I could not have told Combe, says Hawke. In that report Michelle Grattan, the chief political correspondent, said: The Prime Minister, Mr Hawke, has claimed that he would have broken the law if he had confronted Mr David Combe with ASIO allegations that his activities were a security risk. Yesterday Mr Hawke said on the 'Mike Walsh Show' on Channel 9 that he was ' nothing less than amazed at the gratuitous and insane observations' that he should have called Mr Combe in and 'tipped him off'. Asked last night what law Mr Hawke would have broken by confronting Mr Combe before the Government cut off official contact with him, his office said it was the Crimes Act. The Crimes Act, of course, has provisions against the unauthorised disclosure of confidential information. The Melbourne Age went on to state: However, what is not clear is: Why a Prime Minister, or a Cabinet, would not legally authorise such a disclosure of information. How Mr Combe could later be given a full briefing of the ASIO evidence against him without this being a breach of the law, when Mr Hawke says to have confronted him before would have broken the law. . . . . Senator Evans's office last night referred questions to Mr Hawke's office. I understand that no answers have been provided from the Prime Minister to those questions. The Melbourne Herald editorialised last night under a heading: 'The indignant Mr Hawke'. It concluded: No doubt the coming Royal Commission will canvass all these issues-- That is, the issues that the editorial discussed- and perhaps nothing more should be said until the findings are in. But it is Mr Hawke himself who keeps the affair in public debate. We think he doth protest too much. The fact is that this Prime Minister will answer questions other than those posed to him by the Age but will not answer questions in this Parliament. As recently as Monday, on a television program, he discussed the matter and referred to laws that he says he would have been breaking-that is, the provisions of the Crimes Act, providing, as the Age reported, against unauthorised disclosure of confidential or classified information. The reality is, of course, that to try to stonewall in here and yet talk out there is one thing. He cannot get away from the law itself. It is always open to a Cabinet to authorise legally such a disclosure of information as referred to in the terms of the Crimes Act. But, of course, Cabinet did not do this, so we understand, because it had not been told the full details, in contrast to a certain Mr Farmer and a certain Mr Butler. But the question also arises how Mr Combe could later be given a briefing of the Australian Security Intelligence Organisation's evidence against him without it being a breach of the law. Is it not classic Hawkespeak-say one thing, do another; this time in the arena of national security. The Prime Minister said: I couldn't have advised Mr Combe because I'd break the law. Yet, after his gaffs blew the matter publicly, Mr Combe was then advised. Was the Crimes Act changed? No. Did Cabinet authorise the briefing? We do not know. Was the law broken? Who knows. The Prime Minister knows; the Special Minister of State (Mr Young) certainly knows. As I indicated, the media sought answers. One example, the Melbourne Age, points out that the Attorney-General (Senator Gareth Evans) simply will not answer the questions. So the reality is that in the handling of this affair, as the Opposition has put down today, the Government has been duplicitous. Frankly, that is putting it mildly. Quite apart from the lies that have been told about this matter, the Prime Minister has crushed civil liberties. He has tried to have it both ways. He said he would have broken the law, yet, before the statement which was made in Parliament some two weeks ago, allegedly to 'put the matter to rest', he had had Mr Combe briefed. He cannot have it both ways. He cannot say that Mr Combe could not be briefed because that would be breaking the law and also say that he arranged for Mr Combe to have a briefing. But even in that briefing the Prime Minister denied Mr Combe his legal counsel. Honourable members will remember, however, that the Prime Minister tried to establish at a Press conference and in this Parliament that Mr Combe's solicitor was present during that briefing. It was not until that misrepresentation was exploded by the Press that we learnt the truth of the matter. Mr Combe may be guilty but such presumptions can never be made under our standards of justice and equity in the law without a fair hearing let alone without the charge being made. Furthermore, what of the other unanswered questions in this matter? We know that Mr Farmer and Mr Butler were tipped off. We know that for a fact. Mr Holding —How do you know that? Mr PEACOCK —Mr Farmer has admitted that he was told. Mr Combe indicated publicly that it was Mr Farmer, his prospective partner, who warned him of the matter. We must assume that it came from someone in government. After all, all these people were part of this incestuous Labor scene. I have to raise one matter which has been touched upon in questions but not developed. I simply touch upon it. Honourable members should remember that the prospective partners, namely, Farmer, Butler and Combe, were to go into a lobbying business. At the time of discussions about the formation of that business, one Mr Butler had a role in assessing who would serve in ministerial offices. He was overseeing for the Labor Government the placement of staff in ministerial offices. To describe this matter as a conflict of interest is putting it at its lowest. We should think of the consequences of that situation. Was there a declaration of the conflict of interest? If there was, at the time of such a disclosure of a prospective conflict of interest, was Mr Butler informed of what the Government believed of Mr Combe's role in this matter? Who is to know of all the leaking? We know that the Special Minister of State leaked to at least one person. Did he talk to others? Did the recipient of the leak make contact with others? Did the recipient of the leak make contact with Mr Combe? If so, where, when and how? Yet another aspect is that the statement by the Prime Minister to the House on 11 May, the statement that was to put the matter to rest, was also prima facie misleading. A cursory reading of that document seemed to indicate that Mr Combe had accepted and understood all that had happened. In fact, as he has confirmed, he was accepting only the decision of lack of contact with Ministers, not the Government's handling of the whole matter. The tangled web that was woven by dint of half truths and subterfuge to the Cabinet did not succeed. It was all blown asunder by the Prime Minister's gaff in even discussing the matter in the Caucus and the Parliament. The Royal Commission has been and is welcomed by the Opposition. The fact that the Prime Minister could have cleared the air considerably by expanding on his media statements in this Parliament is what we are on about also. At this stage any further information given to the House would be an advance. At the moment, to use the words of another, this is a riddle, wrapped in a mystery, inside in enigma. It could be answered by the truth. It could be answered by the facts. It would be answered by an honest Prime Minister. It is not being answered by this Prime Minister, certainly not in this House. The Prime Minister derives his authority, firstly, from the people and through that from this House. Yet he denies this House the truth while talking day after day to sections of the media. I ask honourable members to remember that Ivanov's expulsion was and is fully supported by the Opposition. That has never been in question. What is in question is the apparent denial of civil liberties and the endeavours to mislead this House. On this serious matter let there be no doubt that there is a stench about this Government-a stench of dishonesty, a stench of duplicity, a stench of downright deceit-and honourable members opposite know it. Furthermore, some know the truth while some not knowing the truth suspect it and sit uneasily with those involved in the subterfuge and the cover up. I say to the Prime Minister: If he can talk on television of his alleged innocence, if he can talk to newspapers and indeed berate them of his subjective propriety, why can he not talk to this House? I repeat: The Opposition supports the Royal Commission but it should never have been necessary. At root, the plain fact is that if truth, propriety and proper standards of conduct had been observed there would never have been a need for a royal commission. The Prime Minister and his mysterious mafia caused the royal commission. They now skirt the truth; they hide the truth; they camouflage the truth, especially from this House. A competent, open and proper Prime Minister would have conducted himself differently. A competent, open and proper Prime Minister would not have sought refuge in subterfuge. But a competent, open and proper Prime Minister is not what we have. He and his Government stand condemned for their duplicity and thereby their misconduct. As a consequence a man was accused, perhaps in due course justly, and during that period he was denied his basic rights. He is left twisting slowly in the wind, but so too is the Government's veracity. The reality is that on this matter it is the Government that is twisting and turning tortuously, albeit slowly, in the wind, and so it should. The Prime Minister cannot continue a cacophony of accounts outside the House, yet remain silent in the sanctum of the House. Yet that is what the Prime Minister has chosen to do. The choice was his and he and his cronies are now cornered by their cowardice. A responsible Prime Minister would come clean. A responsible Prime Minister would confess. A responsible Prime Minister, in all these circumstances, would recant. No fair-minded Australian can accept the double standards applied to the Cabinet, the Ministry, the Parliament, the nation or Mr Combe. Consequently, this Government stands condemned for both its duplicity and double talk and consequently this Prime Minister stands condemned for his deceitfulness, his double dealing and his downright duplicity. Mr BEAZLEY(Swan-Minister for Aviation)(10.25) —Members of the Opposition have been making extraordinarily heavy weather of this issue for the last two weeks. Their propositions on this matter fell as a damp squib during the last week of the Parliament, to their very considerable embarrassment. One of the reasons that they are making very heavy weather of this is that they do not really know what they want from it. They do not really know what they want discussed and they are not welcoming the Royal Commission on Security and Intelligence Agencies as they say they are. They are most reluctant that the matters that the Royal Commission will hear be aired in public because they will go to the very heart of the handling of national security matters by the now Opposition leaders when they were directly responsible for national security. On the one hand, the Leader of the Opposition (Mr Peacock) comes in here demanding frankness and full disclosure of matters which the Prime Minister (Mr Hawke) has repeatedly said will be properly before the Royal Commission, when those matters will be thoroughly considered by it. On the other hand, he comes into this place, buttons up his coat, leans on the dispatch box and says: 'A Prime Minister who revealed these matters would be an injudicious Prime Minister. A Prime Minister who revealed these matters would be a Prime Minister who would not be properly mindful of the national security interests of this country. A Prime Minister who discussed these matters would be a Prime Minister not fit to hold office'. He cannot have it both ways. He cannot come into this place and demand a degree of frankness on matters that are to be referred to a royal commission and then in another guise come in and say that these matters ought not to be discussed. He is not serious when he says that he supports the terms of reference of the Royal Commission. He does not want that Royal Commission to look into the matters surrounding both this affair and the other matters that will be discussed by it. I refer honourable members to that portion of the terms of reference of the Royal Commission that deal with this. There may be some suspicion, after the constant raising of this matter by questions in the House from the Opposition, that there may not be an opportunity for all matters that ought properly to be considered by the Commission to be considered by it. That would be a reasonable supposition on the part of the general public, having listened to these debates in which the Opposition is constantly raising this matter. To put that to rest, I will refer to the terms of reference of the Royal Commission that deal precisely with the matters that he has raised. Of course, a number of other matters will be considered and I will get on to them a little later. The terms of reference in part (c) state: further to the inquiry in relation to paragraphs (a) and (b) above, all the circumstances, including the actions of the Government, surrounding the expulsion from Australia of Mr Valeriy Nicholayevich Ivanov, First Secretary, Embassy of the Union of Soviet Socialist Republics, and the involvement of Mr Harvey David Mathew Combe in those circumstances; The Opposition, as well as the Government, will be in the box in this Royal Commission. The Government welcomes the opportunity to be in the box on this matter. Opposition members will be able to go there and explain some of their absurd conduct on this matter over the last few weeks. As the saying goes, they will be able to 'explain it all down at city hall' in front of Judge Hope. That is the time when it will be appropriately raised and properly dealt with. It is a pity for the proper conduct of the national security of this country that we have on our hands the Bruce by-election because if we put in front of the Liberal and National parties the smell of an election or a by-election they cannot help themselves on national security matters. They cannot leave these matters for appropriate bipartisan discussions and appropriate briefings. They must attempt to wrap themselves in the flag in such a way as to throw discredit on their opponents and to attempt to claim for themselves a monopoly of patriotism in this country, a monopoly of virtue on national security matters and a monopoly of competence in handling national security matters. This has produced down the years a series of the most appalling misuses of the Australian defence and security forces. They have been involved in Australian politics in a way in which in no other democratic country they would be involved . Most of the leaders of the Opposition were Ministers at the time of those worst abuses. The security forces have been sooled on to decent, responsible Australian citizens whose only disagreement has been with the policies of the governments of the 1960s and the beginning of the 1970s. That has been their only crime. In the process, the effectiveness of those bodies in protecting our national interests on a range of matters, in protecting the interests of Australians against the activities of terrorist organisations in this country not associated with the ideological Left but associated with the ideological Right, and the entitlement of Australian citizens to be protected from the depredations of those groups, went unconsidered or ill-considered as a result of the misuse of security forces by those governments. The Royal Commission will provide opportunities for those matters as well to be considered a little further. The Royal Commission will provide opportunities for the security forces of this country to be structured and operated in such a manner that all Australian citizens can have full confidence that their national interest will be protected. We will not tolerate the situation that has existed for a number of years in which the security forces, the defence forces or whatever become an aspect of the political arm of a government of a conservative persuasion. They will become genuinely independent and genuinely protective of the national interest. I will return a little later to have a closer look at this question of duplicity in connection with more recent events and the duplicity of honourable members on the other side of the House on national security matters in years past. Ever since this Parliament first met we have raised constantly the duplicity involved in the $9.6 billion deficit. I will not go into how flexible forward estimates are. I will not go into the general propositions but, since the Leader of the Opposition is here presenting himself as an honourable man, as an honest man, and is criticising the Prime Minister for alleged breaches and duplicity, certain aspects of this problem should be raised. One thing that can be said for the Deputy Leader of the Opposition, the honourable member for Bennelong (Mr Howard), is that irrespective of whether he agrees that the $9.6 billion was what he said it was, he accepts full responsibility for the fact that that forward estimate was not disclosed during the election campaign. He has taken on himself the full burden of the responsibility of that act of duplicity in relation to the Australian electorate. He ought not to bear that burden alone, though he has been obliged to bear it alone. I find it absolutely inconceivable that any Ministers who had senior responsibility for the management of the economy or industry during the period of the Fraser Government, and particularly during the election campaign, were not themselves apprised of the facts as well. Obviously the Leader of the Opposition knew that. If he did not know, he was an incompetent Minister; if he did know he has permitted his colleague to bear the full political burden of that act of duplicity. That is an act of impropriety in relation to one's colleagues that ought not to be tolerated by the electorate but which has been tolerated by the Liberal Party. Let us get a little closer to this matter from that particular question of concern though, as I said, if the Opposition is going to fling around terms like duplicity in matters of public importance in this House the flack will fall where it may. I am going instead to go to the way in which the Opposition has dealt with this matter in the House. As I started off by saying, on the one hand there has been this demand for frankness; on the other hand there has been the view that these matters really ought not to be discussed here, that they ought to be left for bipartisan, secret consideration. The Opposition now claims it has a desire to see them properly dealt with by the Royal Commission. As honourable members opposite are so protective of civil liberties, let us take a look at the way in which David Combe's name was raised in this House. I go back to 10 May when three questions, culminating in one from the Deputy Leader of the National Party, the right honourable member for New England (Mr Sinclair) actually naming David Combe, were placed before this Parliament. There can be absolutely no doubt when the content of those questions is read that they were placed before this Parliament in a co-ordinated fashion designed to tease forth that name. There can be no doubt in the mind of anyone who has a rudimentary understanding of the procedures of this House and the politics of this nation that those questions were brought down in such a way as to reveal that name. It is absolute balderdash for honourable members opposite, having been actively engaged in that process, to come into this place and claim somehow innocence of any breach of a person's civil liberties. That balderdash is being inflicted on the people of Australia by the Opposition. The question arises, of course, as to the way in which the information was garnered by which those questions could be placed before this House. There has been only one explanation from the Deputy Leader of the National Party, that is that he got the information from an Australian Associated Press report and that that information was not in any way relayed to him and confirmed or otherwise by the man who had received the secret briefing and had expressed himself pleased with that briefing. It did not come from him; oh, no, it came from an AAP report . I have those AAP reports. At no point in those reports on 10 May, before the question was raised in this House, was the name David Combe mentioned. A senior Australian Labor Party official was referred to. Around this country there are hundreds of senior ALP officials and ex-senior ALP officials. To be able to isolate a particular name from the vast numbers of ex-ALP officials around the country is not merely a matter of coincidence; it is a matter of having received a briefing from either the Leader of the Opposition or somebody else as to the name of the person involved. It has been claimed that the briefing has been properly respected. However, there is at least a prima facie case to suggest that it was not. If the briefing has been properly respected the Leader of the Opposition will be able to explain that to Mr Justice Hope at the Royal Commission on Security and Intelligence Agencies and no doubt he will be prepared to give Mr Justice Hope a very full, free and frank briefing of the way in which he has handled the material that has been given to him. I will be followed in this debate by the Leader of the National Country Party ( Mr Anthony) who has always been pretty free over the years with his accusations of treason. I will be interested to hear from him an explanation of a few factors that have come out in this whole national security issue and which have yet to be properly aired in this House. These relate to what purport to be highly classified documents which were stolen, leaked and published in the National Times on 6 May. It is a security scandal of the Fraser Government which the present Government is now obliged to manage in the national interest. We have the Deputy Leader of the National Party describing the Special Minister of State (Mr Young) as having committed the gravest breach of national security in Australia's history. That charge has been somewhat diminished since then. If we look at those documents-I am not a briefed Minister so I cannot verify their accuracy-we find that they have a serious ring of authenticity about them. If those documents are accurate, they have compromised every single major intelligence agency in this country and they have com- promised our relationships with allies and important neighbours. These people have the hide to walk into this place wrapped in the flag, wrapped in national security and criticise the Special Minister of State for the terrible way in which he handles national security matters when they have handed us this blue duck, this massive compromise of our security, a direct result of their incompetence, with which we must now deal. The Leader of the National Party, the Deputy Leader of the National Party and the former Minister for Foreign Affairs were all on the intelligence committee of the Cabinet at the time when these documents were leaked. That is another matter that they will have an opportunity to explain to the Royal Commission. The Opposition speaks of duplicity. What a hide the Opposition has to introduce questions of duplicity into this debate. This is a shonky matter of public importance raised by an Opposition that is running out of steam and desperate to introduce this element again. As such it ought to be absolutely rejected. Mr DEPUTY SPEAKER(Hon. Les Johnson) —Order! The honourable member's time has expired. Mr ANTHONY(Richmond-Leader of the National Party of Australia)(10.41) —The duplicitous handling of the Ivanov-Combe affair is raising a lot of questions. The more the Government speaks on the matter the more curious the nation becomes as to the depth of the intrigue and the full extent of the plot behind this whole affair. Why is it that today a matter of such importance to this Parliament and to the nation is being answered and defended by two Ministers, the Minister for Aviation (Mr Beazley) and the Minister for Aboriginal Affairs ( Mr Holding), who were not members of the National and International Security Sub -committee of Cabinet that spoke about this matter, that knew all the details? These are two Ministers who were not informed as to the details until 2 May. Indeed, they were not even given the details. All they were told was that there was not to be any involvement with Mr Combe; that it would be embarrassing to the Government to have people who were closely related to it acting as lobbyists . Yet today both gentlemen come into the House and try to defend their Government. That only raises more questions as to why the Government should put up such insignificant Ministers, who know nothing about the details, to try to fend off problems that the Prime Minister (Mr Hawke) is making for himself. This is an issue on which the Government has tried to prevent debate taking place; on which it has tried to prevent a parliamentary examination taking place . Instead, it has hidden behind the curtain of national security and of a pending royal commission. Of course, the Prime Minister has not abided by that restriction himself. He has pulled the curtain aside whenever it has been convenient to do so and, as the Leader of the Opposition (Mr Peacock) has said, during the course of the weekend he gave numerous interviews to people when it suited him to do so. In a good many of those interviews, when questions were raised, all they got was a vitriolic reply. In the end, in one interview he said that it would be a crime to talk about it; that it would be a breach of the Crimes Act; that he could not possibly go on talking about it any further. That opens up a lot of questions. Did the Special Minister of State (Mr Young) commit a crime when he erred and said that the Government was about to kick out a Russian? Was that a crime? Is the Prime Minister going to take any action about it? Was it a crime when the Government informed the Chief Minister of the Northern Territory that he must have no further dealings with Mr Combe? Was it a crime that Mr Farmer somehow or other found out, through sources very close to the Government that Mr Combe was involved with Mr Ivanov and, that that was one of the principal reasons for Mr Ivanov being expelled? Was the Prime Minister's statement to this House itself a crime? He started delivering certain innuendoes as to the activities of Mr Combe, a person who, he said, without any explanation, was compromised, who was a national risk- allegations that have already been denied by Mr Combe. Was that a crime? These are all very curious affairs. First, the Prime Minister hides behind national security. Secondly, he hides behind a pending royal commission. Thirdly, he now says that it would be a breach of the Crimes Act. Obviously the Government is trying to cover up. It is not good enough. This is an important matter and the Opposition demands that it be given more attention, and be made the subject of more honest replies, than is the case at the moment. There have been leaks from the very highest levels of government. In fact, the way that this matter has been handled goes to the very credibility and integrity of the Government and the Prime Minister. We expressed our concerns that the terms of reference of the inquiry were not satisfactory and evidence is now showing that they are not satisfactory. Of course, the manner in which this inquiry came forth is a laughable affair. It was not until it was brought up in this chamber that Mr Combe was not being given natural justice, was not being given a chance to defend himself, whether he was right or wrong, that the Prime Minister hastily then-to the embarrassment of the Minister for Industry and Commerce (Senator Button) and the Deputy Prime Minister (Mr Lionel Bowen) who only just a few hours prior to that had said that that would be the last thing one would want to do if one wanted to help Mr Combe -announced a royal commission. He announced the terms of reference to the stunned silence of all his front bench with whom he had not consulted. Cabinet knew nothing of it. This whole affair has been one mystery after another. Many facts are emerging that require very close examination. We know that the sub- committee of Cabinet met on 21 April. It decided to expel Mr Ivanov and was told of the relationship between Mr Ivanov and Mr Combe. It decided on a cover story. It needed a cover story, obviously, to protect a former Labor Party figure. Mr Ivanov was expelled on 22 April. But before announcing that decision, we know the story of what the special Minister for long lunches did. He blurted it out. He could not keep the secret. By the time Mr Cameron left that lunch and after speaking with Mr Combe-he says the Special Minister of State said no more and we will just have to accept that-Mr Combe, back at the National Press Club, fully understood that he was somehow involved with the expulsion of Mr Ivanov. Cabinet met on 23 and 24 April and honourable members then moved to Adelaide to attend the Constitutional Convention. It was during that Convention that the Chief Minister of the Northern Territory was informed. I have no quibble with that briefing. He had been closely involved with Mr Combe in his lobbying business. What does concern me, however, is the statement on 12 May on the Australian Broadcasting Commission radio program PM by Mr Richard Hall, formerly a staff member of the Whitlam Labor Government. Mr Hall said, on 12 May, that a State non-Labor politician had had a briefing on the matter. We know now that Mr Hall was right, and that the Chief Minister was that person. But this event was another closely guarded secret, according to the Prime Minister. He did not announce, until 20 May-there are some aspects of that announcement-- Mr MacKellar —How did Hall know? Mr ANTHONY —Mr Hall, of course, was very close to the Government. Yesterday I asked the Prime Minister a very important question. I asked the Prime Minister whether Mr Bill Butler had approached the Prime Minister to ask whether he and his business partner, Mr Richard Farmer, a person who had been very closely involved with the 1983 Labor election campaign, and who was planning to enter a lobbying business with Mr Combe, would be in difficulties if that occurred. Mr Farmer said later that he knew, of course, that Mr Combe had been involved with Mr Ivanov. My question was fended off with the answer that it was a matter of security. The first thing I asked the Prime Minister was: . . . whether he or anyone instructed, authorised, or employed by him briefed any other person in relation to this matter; and secondly, whether following an approach by Mr Farmer's business partner, Mr Bill Butler, a member of the Government's ministerial staff advisory panel, about a possible conflict of interest if Mr Farmer and Mr Butler entered into a business arrangement with Mr Combe, the Prime Minister personally briefed Mr Farmer about Mr Combe's relationship with Ivanov, on or about the weekend of 23 and 24 April. All these questions have to be answered. But yesterday the Prime Minister took the opportunity of again saying that he could not answer them because of the pending Royal Commission. But when he goes out into the public arena and is interviewed by people, he has no qualms at all about opening up and expressing points of view on this matter. But he will not tell this Parliament. The fact that two junior Ministers have come into the Parliament today to defend the decision raises greater questions. Mr DEPUTY SPEAKER(Hon. Les Johnson) —Order! The honourable member's time has expired. Mr HOLDING(Melbourne Ports-Minister for Aboriginal Affairs)(10.51) —It is an odd experience to be lectured, as we were, by the Leader of the National Party ( Mr Anthony) on civil liberties and the rights of citizens to be protected from allegations as the Opposition launched yet again a series of names and floated them across this Parliament without regard to the truth or accuracy of the allegations. There is one simple answer to the allegations made by the Leader of the Opposition (Mr Peacock) and the Leader of the National Party. It is that the Government has appointed a Royal Commission on Security and Intelligence Agencies. No member of this House could seriously entertain any doubts about the integrity or the honour of the man chosen to lead that Royal Commission. The Prime Minister (Mr Hawke) has indicated to this House that if any member or citizen has any allegation that he wants to put about the propriety of the actions of the Prime Minister, the Government or any honourable member, the Royal Commission is there and is open to them. I say to the Leader of the Opposition that there is not one single allegation that he made in this House today that, if he had the political courage and a greater vocabulary, he could not have put to the Royal Commission. But he chooses to launch what can be described only as this Bruce by-election stunt, dredged up by an ailing and failing Opposition and a Leader of the Opposition whose only contribution to this debate seemed to me to be restoring the credibility of the former Treasurer . He was the only member of the Opposition who looked at all happy with the performance of the Leader of the Opposition. Let us consider that performance. In the last three minutes of the speech of the Leader of the Opposition I made a note of the terminology he used. He used words such as 'subterfuge, duplicity, misconduct, cowardice, incompetence, secretiveness, double talk, deceitfulness, double dealing' and, again, ' duplicity'. He threw all those words out. What is the basis of the allegations made by the Opposition? It is that the Prime Minister answered some questions asked by some journalist. According to the Leader of the Opposition, he should not do that; that is sinful. He says this despite the fact that he knows as we all do that the Prime Minister has reserved the rights of the Royal Commission ultimately to make decisions on this matter. I say to the Leader of the Opposition that the Prime Minister is not the only person in Australia who has recently been talking to the Press about this matter. Lots of people-- Mr Peacock —But he won't talk to the Parliament. Mr HOLDING —When he talks to the Parliament, he makes a damn sight better sense than the Leader of the Opposition. The Prime Minister is not the only one who feels the need to answer certain questions in respect of this matter. I refer the Leader of the National Party and the Leader of the Opposition to the statement made on a public broadcast on Monday, 23 May, by their own political colleague, Mr Everingham, who was asked what he knew about the matter. I do not have time to deal with all of his allegations, but he was defending himself, as he was entitled to defend himself, against the allegation that he might have been the source of the leak. I defend his right to do that. Let me quote, in order to defend Mr Everingham-- Mr Reeves —Don't do that. Mr HOLDING —Oh no, he is entitled to have his case put. He went on to say: I say categorically that I have had no dealings with the Opposition on this matter- Listen to this; I repeat it: I have had no dealing with the Opposition on this matter whatsoever, and any approches from them have been rebuffed by me, and there has only been one approach anyway. I repeat: 'There has only been one approach anyway'. Perhaps the Leader of the Opposition would like to tell us whether it was the Leader of the National Party , or which member of the Opposition chose to approach the Leader of the Government in the Northern Territory in order to get him to disclose personal briefings that he had had in respect of this matter, because that is a statement from one of the Opposition's political colleagues. These are the men who come in and talk about security matters. Let us look at the history of the Ivanov affair and get it into its historical context. The last people in this Parliament to lecture the Australian people about security, the appropriate use of the Australian Security Intelligence Organisation and a proper relationship in respect of ASIO are the members opposite, because when they were in government and members of past conservative governments, ASIO was subject to continual leaking and involvement in the internal domestic political affairs of this country. How can this be for this highly principled Leader of the Opposition or the Leader of the National Party? It has been a matter of public knowledge. I cannot quote it all; I do not have the time. However, I refer them to page 183 of the only authoritative book written on the history of ASIO, which says that not only were those items leaked and ASIO used for internal political processes; but also they were used to help to decide the internal leadership of this party, when Opposition members were members of a political party that allowed a former Prime Minister in his candidacy to lead this Opposition, as it now is, this rump Opposition-- Opposition members interjecting- Mr HOLDING —Security-it is not a matter of concern; oh, no. The allegation was that a former Prime Minister, a member of this Parliament, a member of the Opposition party, a former leader, could have had his house burgled. The serious allegation is that while the Opposition was in office and assuring the people of Australia that they were safe and secure and assuring members of this House that they had nothing to fear, as part of the internal clawing and backstabbing which had featured in their political organisation, ASIO was used to burgle the house of a former leader and former Prime Minister. Were these men who now talk about duplicity moved by that? Did they regard that as a serious allegation? Did the Leader of the Opposition come in here and raise the matter? Mr Lusher —You are not a member of the security committee. You are not even in the Cabinet. Why don't you tone it down? Mr HOLDING —Why does the honourable member not stop acting like the cheap larrikin that he has always been? Mr Lusher —You have not even been-- Mr HOLDING —One of the flowers of the back benches. The honourable member's own dog would not even use him. Mr DEPUTY SPEAKER(Hon. Les Johnson) —Order! The Minister will resume his seat. I ask the House to come to order. The honourable member for Hume has been interrupting, and I ask him to conform with the requirements of the House. Mr HOLDING —The record of the gentlemen who raised this matter in terms of their responsibilities when they were in government and were responsible for the proper and effective administration of security services is a national disgrace. If they were fair dinkum in their allegations in this Parliament today, if they were the two men of integrity-- Mr Lusher —You would not even know. Mr HOLDING —If they were the men of integrity that they claim to be, the allegations could be made to the Hope Royal Commission. One does not have to be a prophet to say there will be none of these allegations. They will not go to the Royal Commission. They will find a dozen reasons not to do so while they continue to waste the time of this Parliament. The real issue before this Parliament is the mess that the former Government made of the economy. It is the responsibility of this Government to clean it up. The Opposition should not waste the time of this Parliament on these kinds of puerile and nonsensical matters. I condemn the matter and I condemn the shallow and baseless allegations made by the Leader of the Opposition and his henchman, the Leader of the National Party. Mr DEPUTY SPEAKER(Hon. Les Johnson) —The discussion is concluded. Mr YOUNG(Port Adelaide-Leader of the House)(11.1) —I move: That this House authorises Mr Speaker to have installed closed circuit television facilities which will enable the proceedings in the House of Representatives Chamber to be monitored in the offices of the Whips and at certain other locations within Parliament House as approved by Mr Speaker. Mr Hodgman —ASIO headquarters. Mr YOUNG —The terms of the motion are self-explanatory, although I would not think we would want to see the honourable member for Denison too often on television. As some honourable members will be aware, on 27 November 1981 the Senate agreed to the installation of closed circuit television cameras in the Senate chamber and associated monitors in the offices of the party Whips. I understand that the installation was suggested by the Whips and has proved to be of assistance to them in carrying out their duties. The installation of similar facilities in the House of Representatives was raised by the then Government Whip in this House during the debate on the 1982-83 appropriations for the Parliament. Mr Speaker's predecessor indicated that he saw considerable merit in the proposal. I understand that following Mr Speaker's election he asked the Whips to take up the matter with members of their parties. He has now received advice that all parties have agreed to the proposal. This motion seeks the authority of the House for the Speaker to proceed with the installation. It is intended that monitors be provided in the offices of each of the three Whips. However, if agreed to, the motion will permit the Speaker to approve the installation of monitors in other offices in Parliament House if the Speaker is satisfied that there is a need to do so. The estimated cost of installing the system of six cameras and three monitoring positions is $23,000. Additional monitoring positions would cost approximately $3,000 each. I commend the motion to the House. Mr SINCLAIR(New England)(11.2) —The Opposition does not object to the closed circuit television system that this motion seeks to establish. It is intended to facilitate the functioning of the Parliament. For that reason we believe it is well worth while. The one matter of concern to honourable members in this place is that if we move to the next stage of having our proceedings televised, the lights that would necessarily be included as part of that system will be very disruptive to normal debating processes in the chamber. I understand the closed circuit television system does not require any additional lighting and, therefore, it in no way will intrude on the debating function of this place. But is is important that honourable members within this chamber are able to pursue their roles without any undue intrusion as, unfortunately, tends to be the result of the very hot and fairly brilliant light that television arc lights normally impose. Having seen some chambers in which proceedings are televised, that is the one real reservation I have on the proposal to televise proceedings in this place. The Opposition does not object to the motion of the Leader of the House (Mr Young) and supports it. Mr ADERMANN(Fisher)(11.4) —A few minutes ago I spoke to the Leader of the House (Mr Young) on this very aspect. Therefore, I ask whether he will reply to what I have to say. We have had full televising of the events in the Parliament only during the Joint Sitting of Parliament and on other brief occasions. The television lights were very dazzling and harmful to the eyes and it was extremely hot. I understand that the Senate has closed circuit television. I have not been in there recently but I understand that the brilliant lights may not be needed for closed circuit television monitors. I think this chamber is not appropriate for full televising. I have no problem with the motion apart from the question of lights. I think it is a good idea and it will facilitate the functioning of Parliament. Can the Minister in his reply elaborate a little on the lighting because that is the real worry I have on the matter? Mr YOUNG(Port Adelaide-Leader of the House)(11.5) —in reply-I assure the honourable member for Fisher (Mr Adermann) that it is my understanding that no lights are required for the monitoring cameras that would be put in for the purposes of the Whips being able to follow the proceedings of the House. I must say that it might not be a bad idea to put a monitor into the office of the Leader of the House, too, seeing I have a vested interest in this place. I understand fully the honourable member's concern and the concern of the right honourable member for New England (Mr Sinclair) about the lights. We experienced those lights during the Joint Sitting. We also had that experience recently when the proceedings of the National Economic Summit Conference were televised for a full week in this chamber. I sat through those proceedings under those lights. Some people outside this place thought that on occasions I was asleep but I was really closing my eyes to the lights because they were so glary. I know that it would be absolutely impossible to operate in this chamber with those lights on all the time. I think the role of the Joint Committee on the Broadcasting of Parliamentary Proceedings was to consider whether there were some aspects of parliamentary proceedings that ought to be televised, such as Question Time or a particular debate. I do not think that that Committee has ever seriously looked at the complete televising of all parliamentary proceedings. That would present other difficulties as well. It did receive a reference during the last Parliament. It is the intention of the Government on this occasion for the Committee to complete that reference. Mr SINCLAIR(New England)(11.6) —Mr Deputy Speaker, I seek your indulgence to pick up one point made by the Leader of the House. Mr DEPUTY SPEAKER —Indulgence is granted. Mr SINCLAIR —As the Leader of the House (Mr Young) is considering the placement of closed circuit television monitors in his office, as Leader of the House, I suggest that it might be appropriate that his counterpart on the Opposition benches might also enjoy that facility. I think we have an equal interest in knowing what goes on in the House at any time. Perhaps an extension of this facility could be reciprocated. Mr Young —I think we should have one on each other, too. Question resolved in the affirmative. Approval of Work: Public Works Committee Act Mr HURFORD(Adelaide-Minister for Housing and Construction)(11.7) —I move: That, in accordance with the provisions of the Public Works Committee Act 1969 and by reason of the urgent nature of the work, it is expedient that the following proposed work be carried out without having been referred to the Parliamentary Standing Committee on Public Works: Royal Australian Air Force Base Williamtown, N.S.W.-F/A18 Hornet facilities development tactical fighter- time critical facilities. The Parliament deserves an explanation as to why I have moved this motion. The proposal is for the provision of time-critical facilities at the Royal Australian Air Force Base Williamtown to ensure that the first three FA18 fighter aircraft and a FA18 flight simulator can be maintained and kept operational during the first phase of the FA18s introduction into Australia. The new facilities comprise only those that are critical for the effective continuation of pilot training and commencement of operations following the initial FA18 delivery to Williamtown in April 1985. Early commencement is also required to avoid serious aircraft noise exposure of workers employed on subsequent construction activities. The proposal comprises the following elements: Simulator building for pilot training; avionics facilities to be fitted out with complex test equipment essential for aircraft support; relocation of engine run up essential to avoid excessive noise to construction site; extension of central store; relocation of dog complex to clear site for other works; and ancillary services including security, electrical, roads and stormwater. I have had a look at the plans and models relating to this matter in the Sydney offices of my Department. The estimated cost of the work is $15m out of a total of $105.75m to be spent on facilities proposed at Williamtown. There will still be plenty of work for the Public Works Committee in examining this project. The time critical works are those for which contracts have to be arranged during the period to August 1983. Failure to provide the proposed facilities in time for the scheduled introduction of the fighter aircraft would cause irrevocable delays in pilot training and other phases of introduction. Other effects would be to reduce the planned 1983-84 expenditure on the Williamtown project and delay the engagement of about 100 of those who would be employed on the project. In view of the tight construction timetable it is not feasible for the ugent works to be referred to the Public Works Committee for consideration and report. I regret this. I value very much the work of the Public Works Committee. I understand the usual courtesies have been carried out, namely, that the Public Works Committee has been informed. The Chairman of the Committee has agreed to the move that I am making. I am very pleased that the Opposition shadow Minister, the honourable member for Farrer (Mr Fife), who I gather is the Deputy Chairman of the Committee, is in the House. I hope that the Opposition has thus been informed through the communications with the Public Works Committee. If the House agrees to support this motion, and I trust it will, detailed planning and construction can proceed. Mr COWAN(Lyne)(11.11) —As a member of the Public Works Committee may I say that the Opposition agrees entirely with the proposal placed before the House today by the Minister for Housing and Construction (Mr Hurford). We appreciate the fact that this work has a time limit for actual completion and that it is necessary to call for tenders as early as practicable. I concur with the Minister when he said that the Public Works Committee had been consulted. We are very much aware of the nature of the work to be undertaken. As the Minister said , some $15m worth of work is involved. We think it is essential for this work to proceed. I think the Minister may have omitted to mention that the delay was caused primarily by the Federal election. This caused the Public Works Committee to be re-formed. We are now sitting as a committee. From our discussions the other day with the departments, it is our understanding that we will have an opportunity of probing some of the works that will be undertaken within this first contract. At the moment it is anticipated that further works be placed before the Committee. A hearing will be held at the base inside the next two or three months. The Williamtown Royal Australian Air Force Base is certainly a very important part of my electorate of Lyne. It is a very important part of the Port Stephens shire area. In fact, it is an important part of the Newcastle district. The work to be undertaken, as outlined by the Minister, will create employment for many people in an area in which there is a lot of unemployment at present. We welcome the opportunity that work will be available to many of these people. Naturally, there has been some concern from the local community as to the noise factor that is involved, not only with the Mirage aircraft but also with the introduction of the FA18s. I thank the Minister and the Minister for Defence (Mr Scholes) for doing everything I believe they can to acquaint the local people, who are concerned about the noise and pollution problems surrounding the base, of the situation. The Minister for Defence has agreed that there should be a public meeting in the area. I think it is to be held on Wednesday night, 1 June. Anybody who has not been informed of the situation will certainly be informed. The Opposition has no qualms with this proposal. We welcome the fact that the work is proceeding and wish to co-operate. Question resolved in the affirmative. Approval of Work: Public Works Committee Act Mr HURFORD(Adelaide-Minister for Housing and Construction)(11.14) —I move: That, in accordance with the provisions of the Public Works Committee Act 1969 and by reason of the urgent nature of the work, it is expedient that the following proposed work be carried out without having been referred to the Parliament Standing Committee on Public Works: Avalon, Victoria-Construction of new works and upgrading of existing facilities for the new tactical fighter project-stage 2. I think the House deserves an explanation. I do not enjoy moving these motions because I value very much the work done by the Public Works Committee, on behalf of the Parliament, in its scrutiny of these proposals. This proposal is for a package of 14 new works and upgrading projects at the Government Aircraft Factories, Avalon airfield to enable final assembly and flight test of the FA18 new tactical fighter aircraft. Under arrangements entered into between the Commonwealth, the United States Government and the McDonnell Douglas Corporation , the Government Aircraft Factories will be the subcontractor to McDonnell Douglas for final assembly and flight test of the aircraft. The Government Aircraft Factories is contractually committed to a final assembly and test program at Avalon commencing with the receipt of major aircraft assemblies in May 1984. Test flying of the first completed aircraft is due to commence in November 1984. To meet its contractual obligations the Government Aircraft Factories requires the progressive completion of the 14 new works and upgrading projects within a tight time scale which requires first tenders to be called in June 1983 and contractual commitments to be entered into in July 1983. I will tell the House of the proposal. It comprises a project office and data processing accommodation; an extension to the flight test centre; a flammable materials store; modifications to the explosives store; a liquid oxygen facility ; an ejection seat build-up and storage area; a flight test preparation shelter; the upgrading of floors; special power reticulation; services for aircraft arrestor system; taxiway upgrading; an engine run-up bay; upgrading of fire protection facilities and security upgrading. The estimated cost of the work is $9.6m. Failure to implement the proposed works in time to meet the scheduled commencement of production operations at Avalon would result in late delivery of the first aircraft to the Royal Australian Air Force base at Williamtown. There would also be the implication of the Commonwealth's inability to honour its commitments to the United States to provide the necessary production infrastructure. In view of the tight construction timetable and aircraft production schedule, it is not feasible, regrettably, for the project to be referred to the Public Works Committee for consideration and report. I am grateful for the words of the honourable member for Lyne (Mr Cowan) on behalf of the Opposition in relation to the other project. Once again, I trust that the usual courtesies have been carried out and that the Opposition, as well as the Public Works Committee, has been informed. I have had word that the Chairman of the Public Works Committee agrees with this move I am making today. If the House agrees to support this motion, tendering action and construction can proceed in accordance with the critical timetable. Mr FIFE(Farrer)(11.18) —The Opposition supports the motion. Of course, the work contained in that motion flows from decisions taken by the former Government. We are fully informed on what is proposed and it has our very warm support. As Vice -Chairman of the Public Works Committee I need to say that the Committee has been provided with details of this proposed work by officers of the Department of Defence Support and the Department of Housing and Construction and the Committee understands the reasons why the Government has sought exemption from scrutiny on the grounds of urgency. However, it has been brought to my attention that the former Chairman of the Public Works Committee, Mr Mel Bungey, has commented in the past that exemptions on the grounds of urgency have been rare. In fact, there were no works at all exempt on the grounds of urgency between 1974 and 1980. There has been a number of such exemptions since 1980 and I understand that the Committee can expect several more in the near future. Whilst the Committee recognises that there are special circumstances pertaining to certain projects, it is concerned that an increasing number of projects are going ahead without the very important review process inherent in examination of a work by the Public Works Committee. With reference to the project at hand, this is the third exemption of works in the overall program to provide facilities for the new tactical fighter project. In between these exemptions one further work in the program was examined by the Committee in August 1982. The Committee's report on this work was very critical of certain aspects of the project and this highlights the value of scrutiny by the Public Works Committee. The Committee is aware of the very tight schedule and that the non-existence of a Committee between February and May this year was a contributing factor. Therefore, in this case the Committee does not object to the exemption now proposed. Mr HURFORD(Adelaide-Minister for Housing and Construction)(11.20) —in reply-In closing the debate I assure the honourable member for Farrer (Mr Fife)-I ask him , as Deputy Chairman, to pass on this message to the Standing Committee on Public Works-that it is only in the most urgent circumstances that I will be seeking exemptions of this sort. I have already stated how much I appreciate the scrutiny carried out by the Public Works Committee. Certainly it is of valuable assistance to any Minister who is unable to undertake the scrutiny in the same detail. I have been impressed, too, by the fact that officers of my Department are also very supportive of the work of the Public Works Committee. Mr Fife —They are very co-operative with the Committee. Mr HURFORD —I am glad to hear that. I am not surprised because they too value that extra scrutiny that the Committee can give to the work. Honourable members will understand that these exemptions are due mainly to the fact that we had a premature election. We had a delay between the old Committee ceasing its work and the new Committee commencing its work. I regret that this will necessitate a couple more urgent exemptions being brought before the Parliament tomorrow, but I hope that from there onwards we will be able to take most if not all of the great construction works of this country to the Public Works Committee for its scrutiny. Question resolved in the affirmative. Mr UREN(Reid-Minister for Territories and Local Government)(11.22) —I move: (1) That the resolution of appointment of the Joint Standing Committee on the New Parliament House be amended by inserting after paragraph 3 the following new paragraph: '(3A) That the committee consider and report on the use of the provisional Parliament House after it is vacated by Parliament.'. (2) That a message be sent to the Senate acquainting it of this resolution and requesting its concurrence. The purpose of this motion is to amend the terms of reference for the Joint Standing Committee on the New Parliament House to require that the Committee consider and report on the use of the provisional Parliament House after the building is vacated by Parliament. It is clear that a decision on the future use of the provisional House is an essential step not only in developing an overall plan for the parliamentary zone but also in determining which items of historical or artistic merit should be incorporated in the new Parliament House. In June 1982 the National Capital Development Commission published its Parliamentary Zone Development Plan. The Commission made the following point: In the absence of any decisions about the use of the provisional Parliament House after it is vacated in 1988, it has been assumed that it will remain in its present form. Obviously a clear decision about the building is required. It should also be recognised that detailed planning for the interior of the new Parliament House will be affected by any decisions to incorporate material from the provisional House and that, sensibly, such decisions should not be taken until the future use of the provisional House has been determined. Perhaps the major reason for uncertainty about the provisional House is the fact that no obvious procedure exists for determining the matter. Under the Parliament Act 1974, all buildings and works within the parliamentary zone must be approved by Parliament. This motion proposes that Parliament take the initiative and establish arrangements now which will provide for a proper consideration of the future use of the provisional House and lead to an early decision being taken. As honourable members will know, between 1972 and 1975 the Whitlam Labor Government set up an inquiry into the National Estate and later introduced the Australian Heritage Commission. It is my personal view that the building which we now occupy, particularly the part built in 1927, forms a very important part of the National Estate. I commend the motion to the House. I believe that it is a part of our national heritage. I hope-I am expressing a personal view-that in due time this building will return to its original state in 1927 and will become a proud part of our national heritage and of our National Estate. I commend the motion to the House. Mr RUDDOCK(Dundas)(11.25) —I signify to the Parliament the Opposition's concurrence with the motion. I understand that the Joint Standing Committee on the New Parliament House is aware of the intention to amend its resolution of appointment in this way. Obviously some flexibility has been shown by the Minister for Territories and Local Government (Mr Uren) and the Government in respect of the Committee's terms of reference. I think flexibility is important because it has been envisaged that the Committee will principally be involved in the development of the new building on the Capital Hill site. Obviously, there are some important areas-the present building is one-which are not on the Capital Hill site but the very nature of the Capital Hill development will be affected by decisions taken in respect of the wider area of the Parliamentary Triangle to which the Minister has referred. I think that the original plans that were produced for the new Parliament House were widely supported because they envisaged the retention of the present building. It was thought that the new building would provide a very attractive backdrop with the present building being retained. Whilst that is not necessarily a determined view, I think it would find wide support in this place. I think the Minister has indicated his support for such a proposition by his references to the importance of the National Estate and the Heritage Commission in the previous inquiries in which he has been involved. We must have been thinking alike in a sense because when the Minister mentioned the importance of the National Estate my mind went to South Australia where the old parliament building has been maintained and developed as an important constitutional museum in which a great deal of material relevant to the development of that State and Australia has been maintained. It has been designed to provide the means by which people might become very much aware of our Constitution, our constitutional structure and, in my view, the importance of the Federation. I welcome the flexibility in relation to extending the resolution of appointment of the Committee because inquiry into other matters by the Committee may well need to be widened. One matter that was mentioned at a meeting recently in which I was involved was the possibility of parking requirements for the new Parliament House having to be examined in a wider context than that of the actual site itself. Obviously, there are other areas of the environs of Capital Hill that might well have to be taken into account in planning for the effective use of the new Parliament House itself. I hope that the Minister will show the same flexibility in relation to any requests for a further extension of the resolution of appointment if other matters need to be looked at. I note that the Minister is on the Joint Standing Committee on the New Parliament House and no doubt he will be able to give force to his views on the way in which this matter might be examined. I certainly indicate that, for my own part as an individual, I will be very much behind him in his efforts to ensure that this building still has a proper place. Question resolved in the affirmative. Bill presented by Mr Lionel Bowen, and read a first time. Mr LIONEL BOWEN(Kingsford-Smith-Minister for Trade)(11.30) —I move: That the Bill be now read a second time. The purpose of this Bill is to amend the Racial Discrimination Act 1975 to remedy a situation which has arisen as a result of a High Court decision which was handed down last week, on 19 May. The case arose from a complaint made under the racial discrimination provisions of the New South Wales Anti-Discrimination Act. The issue for decision by the Court was whether the racial discrimination provisions of the New South Wales Anti-Discrimination Act 1977, which is known as the State Act, were inconsistent with those of the Commonwealth Racial Discrimination Act 1975, which is known as the Commonwealth Act, and were accordingly invalid by reason of section 109 of the Constitution. In a joint judgment all five justices hearing the case unanimously held the State Act to be inconsistent with the Commonwealth Act. The Court noted that the Commonwealth Act, in dealing with the subject of racial discrimination, was doing so for the purpose of giving effect to the International Convention on the Elimination of All Forms of Racial Discrimination which required the parties to the Convention to undertake to prohibit and to eliminate racial discrimination in all its forms . The Court took the view that the Commonwealth's Racial Discrimination Act was intended to cover the whole area of racial discrimination prohibition in Australia, and therefore it was not possible for the State legislation to operate in the same field. The Court adopted the dicta of Mr Justice Dixon in the case of the State of Victoria and others v. the Commonwealth and others, which is reported in 1937, 58 Commonwealth Law Reports 618. Specific reference to his views is made at page 630 thereof. The Government takes the view that constructive developments have taken place in some States in the field of anti-discrimination law and that Federal measures should not impinge upon those developments. The High Court decision has meant that the constructive New South Wales racial discrimination provisions are no longer effective. The New South Wales Government has asked that urgent action be taken to overcome the effect of the court decision, and the Government agrees that it is desirable to do so. This Bill makes it clear that State and Territory legislation which furthers the objects of the Racial Discrimination Convention can stand alongside the Commonwealth legislation. The States of course will need to ensure that their legislation does further those objects and is in a form in which it is able to operate concurrently with the Commonwealth Act. In New South Wales there were a large number of complaints in various stages of investigation when the Court decision was announced. The Bill has been drafted in such a way as to allow those cases to continue under the State legislation. As it will be possible in many cases for a person to pursue a remedy under either Commonwealth or State law, provisions have been included to prevent a person from taking action under both laws in respect of the same matter and also to prevent the difficulty presented by double penalties. I commend this Bill to the House and express the hope that it will have an urgent passage. Mr RUDDOCK(Dundas)(11.34) —I am sure that the Opposition will examine the request of the Minister sympathetically but I move: That the debate be now adjourned. Question resolved in the affirmative. Message from the Governor-General recommending appropriation announced. Bill returned from the Senate with an amendment. Ordered that the amendment be taken into consideration in Committee of the Whole House forthwith. Consideration of Senate's amendment. Senate's amendment- Page 5, clause 3, paragraph (2) (a), line 4, after 'the ingot', insert 'for a purpose other than the removal of impurities from the ingot by the process known as electro-slag refining'. Mr JOHN BROWN —(Parramatta-Minister for Sport, Recreation and Tourism, Minister for Administrative Services and Minister Assisting the Minister for Industry and Commerce) (11.36)-I move: That the amendment be agreed to. The purpose of the amendment is to clarify the scope of paragraph (a) of sub- clause 3 (2) so that bounty is payable on products produced from prescribed ingots which have been melted and re-cast for removal of impurities from the ingot by the process known as electro-slag refining. The purpose of paragraph (a ) of sub-clause 3 (2) is to exclude from bounty, products that have been produced from the melting or re-casting of a prescribed ingot. Temporary assistance on such products was not requested by the industry. However, it is intended that assistance should apply to products, mainly tool-steel bars, produced from a prescribed ingot after impurities have been removed by melting and solidifying by an electro-slag refining process. As there is a possibilty that the refining process might be considered to be a form of re-casting, and thus excluded from bounty, it has been decided to clarify the position by amending clause 3 of the Bill. I commend the amendment to the House. Mr MOORE(Ryan)(11.39) —While I have not studied the proposal in any detail, on the face of it I would say that the Opposition would support the proposed amendment. Question resolved in the affirmative. Resolution reported; report adopted. Debate resumed from 24 May, on motion by Mr Kerin: That the Bill be now read a second time. Mr McVEIGH(Darling Downs)(11.40) — We on this side of the House are not opposed in principle to the Wheat Marketing Amendment Bill 1983. But I believe that in this important debate on the wheat industry it is appropriate to talk about matters of general interest and concern to that industry, particularly as it was affected by the mini-Budget on Thursday night. It is not very well known, particularly on the Government side of the House, that the Australian wheat farmer is a very efficient producer. He labours under enormous difficulties such as strike activity and the inability of the servicing sector of the industry to contain its costs. I want to let Australia know how productive the average wheat farmer is. His output is enough to look after the requirements of 70 people, whereas the average American farmer feeds only about 50, the European farmer feeds 13 and the average world farmer feeds 5.5 to 6 people. Quite obviously, by any test whatsoever, the Australian farmer is very efficient and cognisance needs to be taken of that efficiency. It is a matter of very great regret indeed that the cost of wheat from the farm gate to the consumer in another part of the world and on an average basis in Australia is of the same order as it costs the farmer to produce his wheat. A similar set of circumstances applies in the meat industry. I was a guest at the annual meeting of the Cattle Council of Australia. Its incoming president indicated to all and sundry that a beast that is worth $240 to the farmer costs a similar amount to get from the farm gate to the consumer's plate. Quite obviously, the farmer has to operate in enormously difficult areas. Similarly, we find that the farmer is grossly disadvantaged by strike activity. I will give the House an instance of what happens in the wheat industry when strike action is taken. Taking the latest figures, those available in late 1982, we find that the cost of maintaining a ship of 24,000 tonnes was $8,000 a day. If, as we have had in many instances, there is strike activity which causes ships to lie idle in a harbour, the extra cost works out at $7 a tonne. In addition, as the payment for the wheat in such an instance was delayed by three weeks, the interest forgone was $1.75 a tonne. Quite obviously, these costs are not borne by the waterside labourer. A report given to the annual meeting of the Cattle Council last week said that the waterside worker was subsidised by the Australian consumer by $70,000 a year . So the loss did not come from his pocket; it came from the farmer's pocket. Strikes alone last year deducted an average of $2 to $3 a tonne from the price received by the grower at the farm gate. Quite obviously, when we are talking about such an important piece of legislation as the Wheat Marketing Amendment Bill, we cannot dismiss it or sweep it under the carpet by saying that it is a simple piece of legislation, because matters of finance are of paramount importance. Farmers, like everyone else, do not live by bread alone. I was disappointed, therefore, to find that a rather cavalier attitude was adopted by the Minister for Primary Industry (Mr Kerin) in his introduction of this legislation. I do not want to be critical of him; I just want to indicate the ad hoc approach that your Government, Mr Deputy Speaker, advances to primary industry. We were asked on Thursday night last whether we would co-operate this week in getting various pieces of legislation through the Parliament. Members of the Government are not good business managers; they are not practical people and do not understand. Quite rightly, we agreed that we would co-operate on an important piece of legislation. It was promised that I would have the Bill in my office on Monday morning. We are reasonably affable, easy-going people. Perhaps the Government is unable to understand even the time, because I got that Bill at 10.25 a.m. on Tuesday. I find that that indicates that the Government is not concerned, and nor is it interested in what happens in the wheat industry. I acknowledge that this piece of legislation is supported by the industry. The Australian Wheat Growers Federation and the Australian Wheat Board itself are of the view that the ability to borrow off-shore will enhance the industry's competitive capability in the international market-place. Additionally, the previous Minister was supportive of the general concept of enabling the Wheat Board to borrow overseas. The concept is very much in line with Liberal Party and National Party philosophy of giving greater commercial freedom to organisations such as the Wheat Board provided that their accountability to the Parliament is maintained and that it is in the interests of the industry that they represent. We have some reservations, however, which should be noted and, I hope, taken on board by the Government. Although this is essentially a straightforward piece of amending legislation, its ramifications could be quite far-reaching. For example , the scene could now be set for similar overseas borrowing powers to be given to the Australian Wool Corporation and other marketing authorities to enable those authorities to finance the various stockpiles held in Australia. Presumably, in the case of the Australian Wool Corporation such a facility would amount to a useful cost saving to the wool industry. But of more direct and immediate concern is the paucity of supportive information provided by the Government and the looseness of the drafting of the Bill. We have been told that the new arrangements will mean a saving to the Commonwealth of $19.8m in 1983-84 and about $30m in subsequent years. Presumably those estimates are based on past borrowings and projected crop yields. But we are talking about fairly large sums of money, and the Government should provide more precise details as to just how those estimates have been arrived at. I hope that the Minister at the table, the Minister for Primary Industry, will answer the following query and give an explanation to the ordinary Australian farmer. The interest subsidy is to cease from 1 July. However, the Board will not be entering into any new borrowing arrangements until towards the end of the year. This means, therefore, that for some five months or so the Board will have to pay the full interest on any borrowings that it currently has. In my view-it is a practical and honest view-the Government should have at least expressed some concern about the fact that we are just coming out of a drought, that farmers have enormous debts to pay and that their plant has become run down, with buildings, fences et cetera badly in need of repair. Surely the Government could have shown a little sensitivity and could have timed the phasing out of the interest subsidy in such a way that it worked in more realistically with the Board's financial arrangements, rather than dropping it for the sake of bureaucratic tidiness at the start of the new financial year. It has been fairly difficult for us to obtain adequate figures as to the sum involved in this forgoing of interest subsidy for a period of four or five months, until the Wheat Board is in a position to borrow overseas. The most reliable figures to which we have obtained access indicate that the Australian wheat growers will be forgoing a subsidy of about $10m. That is a very important point. I hope that the Minister will give us a clear and explicit explanation as to the reason why the subsidy arrangements will cease from 30 June this year, as stated in his amendment to section 46 of the Wheat Marketing Act. We want an explanation. We want him to come clean and let us know why his Government, very early in its life, is discriminating against farmers. The Treasurer (Mr Keating) has told us that with the Board being able to borrow overseas there is no further need for the interest subsidy. I wonder whether the Treasurer has really thought this matter through. I can understand that he has not had the advantage of discussing it with the Minister for Primary Industry. I have had great difficulty in tracking the Minister down. He seems to be a phantom Minister. He was away for such a long time. He did not seem to do much good with his 'gentle, gentle, catchum monkey' approach in Geneva towards the sugar industry. The Treasurer may not have had advice on this 'gentle, gentle, catchum monkey' approach from the Minister. We know that at the present time the Australian Wheat Board is able to borrow within Australia through syndicated borrowings and through the issue of its own commercial Australian Wheat Board bills at a rate of interest which is below that prevailing under the Rural Credits Department of the Reserve Bank of Australia. I am concerned about whether the Treasurer and presumably the Minister, if he was here in time, really understood that the prevailing situation might not be the same in a few months time. In other words, what the Treasurer said last Thursday night-he has not contradicted it-and what he is continuing to say is that from now on, ad infinitum, the Australian Wheat Board will be able to secure finance at interest rates that are at least equivalent to or below those being charged by the Rural Credits Department of the Reserve Bank. However, the Government has given no guarantee-I think it should do so here and now-that if at any time in the future commercial interest rates in Australia and overseas are above those being charged by the RCD, the Wheat Board will have guaranteed access to those RCD funds. On behalf of the wheatgrowers I seek the assurance of the Government that that will be so. It is absolutely essential to us that such an assurance be cemented into the legislation. It will be my intention to move an amendment in the Committee stage to ensure that what has been the right of the wheatgrowers of Australia from time immemorial will be cemented into the legislation so that there is absolutely no doubt that if, due to the inability of those who occupy the Treasury benches at present to control inflation and interest rates, interest rates rise here and overseas-we will not blame the Government for what happens overseas-the wheatgrowers of Australia will not lose that very great help that they have had. In our view the amendment is relatively simple. It appears to us that the Bill has been far too loosely drafted, even in the very few lines that it has taken the Government so many days to present to us. I understand that the reason I am speaking early in this debate today is that the Government has been unable to get its Bills printed and delivered in time, indicating that it is a government that is in tatters and does not really know how to operate the system. The Bill, as we said, does not adequately protect the interests of the industry. In due course I will move an amendment in the Committee stage. The Government seems to be unable to grasp the simple proposition that wheat growers are part and parcel of the general Australian farming community. There was absolutely no indication about the drought and post -drought aid in the statement last Thursday night. It is true that the Government moved quickly on drought aid. It included pumpkins and certain citrus products. Mr Goodluck —Not apples. Mr McVEIGH —I do not know about apples but certainly pumpkins were included as eligible in respect of the fodder subsidy. The Government did not indicate whether that subsidy would be increased to cover such animals as goats. It did not indicate how long the drought assistance programs would continue. I would like to let the Government know that, notwithstanding the information it might be getting from television and radio, several areas continue to be drought affected. In case it does not realise and does not understand, the fact that it has rained does not indicate when farmers will receive incomes. It may be six months or it may be 12 months before they receive incomes. Irrespective of the amount of income they receive, they will have an enormous number of bills to pay . We hoped-surely we could have expected-that in a statement called a mini- Budget some announcement would be made about drought assistance. During the election campaign the Australian Labor Party made firm promises to maintain existing drought arrangements, to ensure that all farmers received equitable treatment, to extend aid after drought-breaking rain, to utilise a gauge of tax rebates to encourage farmers to protect themselves against drought and to introduce additional drought aid measures. We have heard nothing more about these promises. Farmers are, quite naturally, becoming increasingly concerned as to precisely what future assistance they can expect, especially in the post-drought period. I think that this is an area where the Government should have moved- Mr Kerin —I raise a point of order, Mr Speaker. I do not mind the honourable gentleman talking about the ALP drought policy but we are talking about wheat. Mr SPEAKER —Order! The honourable member rose on a point of order. He should raise a point of order, not make a comment. Mr McVEIGH —Mr Speaker, I am glad that you ruled my way because, obviously, the Minister does not understand that this piece of legislation is part and parcel of the mini-Budget which was announced last Thursday night. Mr SPEAKER —I suggest that the honourable member not provoke the Minister and continue with his speech. Mr McVEIGH —I was making the point that I agreed with the immaculate logic of your ruling, Mr Speaker. We have heard nothing at all about the promises of the ALP. Farmers are, quite naturally, becoming increasingly concerned as to precisely what future assistance they can expect, especially in the post-drought period. The Minister for Primary Industry does not absolve himself from his inability to be effective-honourable members know that he is not included in the Cabinet-by saying that only one of the decisions in the mini-Budget affected rural industry. We have some difficulty in understanding how such things as the abolition of the income tax concession for petroleum storage do not affect farmers. We have great difficulty understanding that these matters do not affect the creation of jobs, or keep small business active, or affect those investing in plant on the understanding that it would be fully depreciated over three years and finding that the term has been increased to five years. This might be an appropriate time for debate to be adjourned. Debate interrupted. Mr SPEAKER —Order! It being 12 noon, the debate is interrupted in accordance with Sessional Order 101 (a). Debate may be resumed at a later hour. The honourable member for Darling Downs can continue his speech when the debate resumes. Mr PEACOCK —Did the Prime Minister, as the news media widely reported on 16 April and as was confirmed by Mr Barry Unsworth last night, assure the Australian Council of Trade Unions that there would be no increase in taxation on lump sum superannuation payments? If so, why has the Prime Minister broken that specific promise to the trade union movement and presumably the Australian people? Mr HAWKE —The answer is no, and I have not. Mr BLANCHARD —I ask the Prime Minister: Will the Hawke Government be following the practice of its predecessor and having Australia's views put to participants in the Williamsburg Summit? What is the relevance of the Summit to Australia? Mr HAWKE —I thank the honourable member for Moore for his question. When these summits arose I believe the previous Government, sensibly, took the opportunity of briefing participants as to the view of the Australian Government in terms of trying to see that the interests of this country were protected. That practice was sensible. We applaud it and indeed this Government has followed it. Yesterday I had the opportunity of having a useful discussion with the Japanese Ambassador. As the Leader of the Opposition will recall, in the past the Japanese Government has been very useful to the Australian Government in this respect. I followed the practice of the previous Government on this matter and conveyed to His Excellency the considerations which, in our judgment, are of paramount importance in terms of protecting the interests of this country. In brief, the interests of this country which I conveyed to His Excellency and asked that he ensure were in the minds of the participants were these: I said that the fundamental concern of the Australian Government is that action should be taken to see that there is a sustained global economic recovery without rekindling inflation, particularly in the United States of America and in other major countries. I pointed out to His Excellency that such a recovery holds the key not only to improved employment prospects but also to virtually all the other issues that would be discussed at the Summit. As far as this country is concerned the fundamental issue is the question of a sustained global economic recovery. I went with His Excellency to the point that the continued high level of real interest rates around the world and the related question of persistent large fiscal deficits is a matter for serious concern, certainly to this Government. Those factors have the potential to choke off any recovery that might take place . They have certainly increased the debt burdens of developing countries. They have increased also protectionist tendencies within developed countries. These matters are fundamental to the economic and social welfare of this country. I hope that honourable members opposite understand that, as I am sure the Leader of the Opposition does. I said to His Excellency quite directly-I do not think there is any room in these matters for beating around the bush-that we have a concern that at such meetings of the major economic industrialised countries there be no cosy bilateral deals done which, while perceivably in the interests of the countries concerned, can operate against the interests of Australia. I put that consideration quite directly to him. We pointed out our concern with the interests of the developing countries. The major interest of the developing countries is that there should be a sustained global economic recovery, which would give those developing countries access to the markets of the developed countries. In that same context we put that there should be at least a sustenance in real terms of the level of developmental assistance to these countries. Finally, having conveyed those matters of fundamental concern to the interests of Australia, on my overseas visit in the near future I look forward to the opportunity of following up those issues with relevant leaders. Mr NEWMAN —My question is to the Prime Minister. He will remember that in Opposition the then Leader of the Opposition, Mr Hayden, the then Leader of the Opposition in the Senate, Senator Button, and a number of other senior Australian Labor Party spokesmen asserted that when Labor came to office it would abolish the Government Information Unit and the State information directors, which they said were a scandalous waste of money. I ask the Prime Minister: Is it a fact that the Government is setting up a new media unit? Is it a fact that the administrative staff of the old Government Information Unit in Canberra and in the States will provide the support for this new unit? Is it a fact that journalists will be appointed to the unit in the States? Is it a fact that the Australian Broadcasting Commission journalist, Mr Gary Scully, has been appointed to take over this unit? Finally, what is the difference between this new media unit and the Government Information Unit? Mr HAWKE —This matter is being handled by the Special Minister of State. Mr YOUNG —I thank the honourable member for Bass for his questions. He asked a number of questions and I will try to answer them all. The difference between the new National Media Liaison Service and the former Government Information Unit is that the new unit will work for the Government, not for the Australian Labor Party as the former one worked for the Liberal Party of Australia. There will be a very big difference. Mr Newman —I raise a point of order, Mr Speaker. Will the Minister please explain whether Miss Linda Hornsey is working for the Labor Party-- Mr SPEAKER —Order! There is no point of order. Mr YOUNG —All governments take very seriously the issue of providing information to the Australian community. The way in which the Government Information Unit was manipulated for political purposes under the former Government did great disgrace to the way in which governments ought to utilise these facilities. We said in Opposition that we were unhappy with the way in which these things were manipulated. Immediately on taking office, we said to those people who had been employed as ministerial appointees that their services were no longer required. We then proceeded to look at the best way to recreate what ought to be a proper unit to provide information to the Australian people. We have been very fortunate in obtaining the services of a very reputable journalist, Gary Scully, who is being employed as the director of the unit and to whom I have given the power to seek out other people who may be available to work in the States to provide the information that the people throughout Australia should have. He will not be employing political apparatchiks as the former Government did. It is not the purpose of this Government to spend money in that way. I also tell honourable members that, when the farmer from Nareen was running the Government of this country, during the election campaign-I am doing a little exercise on this-many hundreds of thousands of dollars was spent through the Government Information Unit, using a 40,000-name mailing list at Government expense to send out Liberal Party propaganda. Who do honourable members think paid for all that? It was the taxpayers of Australia. The then Government was not able to increase the unemployment benefit but it could spend millions at the behest of the headquarters of the Liberal Party. I will tell honourable members who was running the Government Information Unit under the former Government: It was not the Government, but Tony Eggleton. He was the person in charge. Many documents we went looking for after the election had gone missing in toing and froing between the director of the Liberal Party and the Government Information Unit. The honourable member for Bass has asked a question about the unit and I invite him to follow the procedure that will be adopted by the unit in future because it will all be above board. We will answer any of the questions about it asked by the Opposition. It will be set up for the purposes for which it ought to have operated under the former Government, and will provide proper information, from professional people properly employed, to the people of Australia. People will be appointed in each of the-- Mr Newman —Mr Speaker, I raise a point of order. Under the Standing Orders Ministers are supposed to be at least almost relevant. I know that Government members might enjoy this diatribe but we would like the Minister to answer the question. Mr SPEAKER —The honourable member has been here long enough to know the problem in regard to relevance. Perhaps the Special Minister of State is winding up. Mr YOUNG —No, Mr Speaker; the honourable member's question encompassed many matters. Honourable members will recall that while we were in opposition we raised a matter which was never denied-that members of the GIU were attending campaign meetings of the Liberal Party. They were all being paid. The Unit was using more than a couple of million dollars of taxpayers' money at the behest of the Liberal Party, not of the Government of the day to do the job that ought to have been done. I can tell honourable members two things: Firstly, we will not follow the mistakes the Opposition made in wasting taxpayers' money; secondly, the Opposition will know that its Unit was a failure-ours will not be. Mr BALDWIN —Does the Minister for Health see any inconsistency between the claim of the private health insurance funds that the Government's decision to give the Health Insurance Commission primary responsibility for Medicare will result in net job loss in the overall health insurance field and their claim that they would be able to run Medicare at a lower cost than could the Health Insurance Commission? Dr BLEWETT —I thank the honourable member for Sydney for pointing out quite clearly the discrepancy in the argument of the health insurance funds concerning the number of their employees and their ability to produce this service much more cheaply than could the public fund. Indeed, the honourable member for Mackellar, in light of the days when he claimed to be a man of some managerial expertise, should also see the discrepancy, but he seems to be blinded now by notions of socialist monsters. I say quite clearly that it is possible that in the short run the private funds could produce a costing somewhat lower than that of the public fund because they could rely on their reserves. That is possible in the very first instance. But following the running down of those reserves clearly the more cost efficient public fund would produce distinct cost advantages. I have not the slightest doubt that in the long run the public fund will produce those advantages. We had to make decisions not just for the short term but also for the long run because we are producing a health scheme which, unlike the Liberal health schemes, is designed to last. Therefore the judgments we made in the last fortnight or three weeks were related to the long term benefits to the Australian people. Let me take the issue of employment. The figure of 5,000 jobs lost has been regularly cited. On all the statistics we have, that is an exaggerated figure. But let us say 5,000 jobs are potentially threatened. When one considers, firstly, that a further 3,000 jobs will be provided in the Medicare organisation itself and we have requested the Health Insurance Commission to give preference to employees of private funds in filling these 3,000 jobs and, secondly, that there is a staff turnover rate of nearly 20 per cent a year in the private funds , one understands that there is a natural run-down in those funds. Thirdly, one should notice that the Minister for Health in New South Wales has already offered to work with us in also providing preferential employment in similar clerical occupations. We have put together a quite effective employment scheme in relation to this problem. Given the statements of some of the representatives of the private funds since the decision was taken, it seems that the funds are quite likely to be prepared to co-operate with us. Unlike the honourable member for Mackellar, they have made reasoned and constructive statements on what was for the Government a difficult and tough decision. Mr CADMAN —My question is addressed to the Treasurer. Will widows, on the death of their husbands, be forced to pay the lump sum tax on superannuation payments? Will only registered redundancy payments not be taxed? Will forced retirees through serious accident-for example, a person who becomes a paraplegic-be forced to pay the lump sum tax? Will workers who by dint of their vocation are itinerant or mobile be forced to pay the tax? Can the Treasurer indicate how the Government's decision will operate in these cases, or is it a fact, as Mr Crean has said, that the whole decision is still negotiable? Mr KEATING —First of all, let me correct the last point by saying that Mr Crean never at any stage said or tried to indicate that the decision is still negotiable. What the Government did last week, which the former Government, of course, failed to do for seven years, was deal with the major distortion in the tax system in respect of the tax on 5 per cent of lump sum superannuation payments so that over time we will get back to the original intent and purpose of the Commowealth's subsidy in respect of retirement income which will amount to roughly $2,000m this year. We took that in principle decision which was announced last Thursday and we indicated that there would be no retrospective element of the decision. The Government, of course, could have finalised all details by last Thursday but that would have been very unfair to all of the people concerned, including the categories of persons nominated by the honourable member for Mitchell and particularly the life assurance and superannuation industries. A meeting on some of these matters was held yesterday between officers of my Department, the Department of Finance and the Australian Taxation Office and representatives of the superannuation and life assurance industries. A number of matters, including some of those referred to today by the honourable member for Mitchell, were discussed. The meeting discussed such things as the formula for determining how much the pre-announcement entitlements would be, how to make annuities more attractive and questions relating to portability. The Government will be considering the results of that meeting later in the week, the matter will be put before Cabinet probably next Monday and a comprehensive statement will be made thereafter. I also intend to release the report of the task force on superannuation commissioned by the former Government, which was presented to it in January. That report, which will be released for public consumption later this day or tomorrow, indicates the views which were put by the task force established by the former Government and upon which it, of course, failed to act . I also make the point that Mr Crean this morning on the radio program AM referred to some questions which the Australian Council of Trade Unions had about the scheme. He referred principally to the question of portability. I indicated last Thursday night that there will be a portability factor, that people who shift from one area of employment to another within a short space of time will have portability maintained though the general question of portability for a more extended period is, again, subject to discussion at the moment. Last Friday the ACTU indicated that it would like to have a meeting with the Government on these matters. We have indicated that we will have such a meeting. We will probably have it later this week or early next week. I make a point of saying, in respect of some other comments that were passed by the Secretary of the Labor Council of New South Wales, that they will be taken into account also. I might just indicate that the Government has no intention of being pilloried by any section of the community, including the Labor Council of New South Wales, on this issue. We made a decision to see the ACTU before Mr Unsworth made any comments about superannuation and we will be seeing the ACTU. Unlike the former Government, when a statement on a final package is determined by all interest groups it will stand as an important, substantial and comprehensive change to the tax laws of Australia. Mrs DARLING —I draw the attention of the Minister for Health to a report that over the last 20 years approximately 200,000 tons of potentially radioactive sand has been distributed to householders and builders in South East Queensland and ask: Is he aware that the Queensland Health Department has now notified over 100 Brisbane householders that they have filled their yards with sand which has a level of radioactivity which exceeds National Health and Medical Research Council safety levels? Is he further aware that these and many other householders are suffering stress as a result of (a) the Queensland Government's direction that they pay for removal of the sand; and (b) long delays in having their sand tested for radioactivity? Also, will he draw the attention of his State counterpart to the need for the Queensland Government to meet its responsibilities to Queenslanders who are exposed to this health hazard? Dr BLEWETT —I thank the honourable member for Lilley for her question. The Government is concerned about what appears to be an abrogation of public health responsibilities by the Queensland Government. People who have found that their yards are filled with radioactive sand are being charged between $8,000 and $22, 000 to have that sand removed. For many this is a burden that they cannot bear. It does seem to be a very clear area of State responsibility. One could argue, quite clearly, that the Queensland Government should have been monitoring these sands, or tailings, from Moreton Island and the Gold Coast. Such monitoring has taken place in other States since the 1960s, so there seems to have been a failure on the part of the Queensland Government in that respect. Moreover, now that it is known that people have unknowingly used this sand to fill their backyards, there seems to be a clear responsibility on the part of the Queensland Government to make up for this neglect in monitoring and identifying the problem in previous years. Public health is very much a State matter and I would urge the Queensland Minister for Health to have the matter fully investigated and to take action to help those who have unwittingly become victims of this problem. In relation to one other point made by the honourable member, I say that I am disturbed by the long delays that are occurring in responding to applications for testing of the backyards of the people concerned. I know of at least one case in which application was made on 27 October last and the tests have still not taken place. Therefore, despite some of the assertions that have been made by the Queensland Minister for Health, there do seem to be very long delays in having these tests carried out, which suggests that a very large number of people are very much concerned. Mr COWAN —I ask the Minister for Defence whether he recalls saying to Mr William Pinwell of the Australian newspaper, on or about 4 March 1983, that the Australian Labor Party has no proposals to change the Defence Force Retirement and Death Benefits Scheme 'to the disadvantage of service personnel'? Will the announcement by his colleague the Treasurer last Thursday mean that lump sum payments made under the DFRDB Scheme for service after 19 May will be subject to taxation at the standard tax rate of 30 per cent? For example, will this mean that a chief petty officer of the Royal Australian Navy, or his equivalent in the Australian Army or the Royal Australian Air Force, who would now be entitled to receive approximately $36,000 after 20 years service, will retain only $24, 000 of such an entitlement for service which takes place after 19 May? In what way does he reconcile this consequence with his undertaking of 4 March? Mr SCHOLES —I am surprised that the honourable member does not know the difference between the conditions of a superannuation retirement scheme and taxation provisions which apply to the general community. There has been no alteration in the DFRDB Scheme. Ms MAYER —I ask the Minister for Housing and Construction whether he can inform the House of the response to the Government's new housing assistance program? Mr HURFORD —I am very pleased to inform the honourable member for Chisholm and the House that the response to the Hawke Labor Government's housing package has been magnificent. The only exception has been the mean, contradictory and inadequate response of the Opposition. Opposition members interjecting- Mr SPEAKER —Order! The House will come to order. Mr HURFORD —It so happens, perchance, that I have with me a copy of some of the Press releases that have been issued. I will quote from the Press releases of the Housing Industry Association; the Australian Association of Permanent Building Societies; National Shelter, that wonderful organisation that looks after the housing consumers; the Real Estate Institute of Australia; and Jennings Industries Ltd. All of these Press releases are indicative of the universal support that the Government has received for its housing package. I know that the House will want me to quote from some of these Press releases. I start with the Press release from the Housing Industry Association. It states: . . . the Government has set the scene for sustainable recovery in the housing industry and the creation of many thousands of new jobs. Moreover, the substantial increase in the allocation of funds for public housing programs will give real hope to many disadvantaged families in our community who are in urgent need of housing assistance. In taking what must be seen as a series of difficult decisions, the Government has substantially improved prospects for lower interest rates, which is good news for both the industry and home seekers. Government members-More. Mr HURFORD —I thank honourable members. I note that they want more. I will oblige. I quote from the Press release of the Australian Association of Permanent Building Societies. It states: In essence the decisions mean that many thousands of young homeseekers will not have to defer their decision to buy their own home. The scheme is flexible and well targeted. The introduction of means testing for all on-going housing assistance schemes is a responsible solution to a difficult problem. Mr Tony Dalton of National Shelter says: . . . the Labor Government had, within the context of a general redistribution, moved towards a more equitable housing policy. I welcome in particular . . . to the increase in the chances to those on lower incomes to move into public housing where they experience a real level of security. I will not-well, I will. Mr SPEAKER —Order! I suggest to the Minister that he not change his mind midstream. I invite him to wind up his answer. Mr HURFORD —I do that only in deference to you, Mr Speaker. I think I will be disappointing many people; nevertheless I will point out that in order to ensure that the public could be fully informed about the new proposals, I instructed my Department to operate a number of hotlines in each of the major cities across the country. I am indebted to honourable members, at least on my side of the House, for referring many housing inquiries to those hotlines. I want to say to the House that the response has been-- Mr Cadman —Mr Speaker, I raise a point of order. I think we have had enough of this answer. Mr HURFORD —That interjection is just one more example of the Opposition not being interested in the housing of this nation. Mr Dobie —Mr Speaker, I raise a point of order. I am wondering whether the Minister could advise the interested members of this House of the phone numbers of the hot lines. Mr HURFORD —Yes, I could, but I will not do so now. Mr SPEAKER —I do not know whether the honourable member for Cook wants that counted as a question. I invite the Minister to wind up his reply. Mr HURFORD —I will wind up by saying that the response to 11 o'clock this morning was that 6,835 inquiries had been put to those hotlines. That is an indication of how magnificent the Government's housing package is. Mr HOWARD —My question is directed to the Treasurer. Are recent Press reports correct in saying that the Treasury has increased its early March forecast of gross domestic product growth next financial year from 0.5 per cent to more than 4 per cent and for non-farm GDP from 1.5 per cent to more than 3 per cent? If so , why did the Treasurer conceal these figures from the nation in his economic statement? Finally, if that is not the case, what are the latest growth forecasts available to the Government? Mr KEATING —The former Treasurer well knows and understands that there is no obligation on me, as there was not on him, to give a monthly forecast of the state of the economy in the ensuing year. I indicated in the Summit scenarios, and particularly in the illustrative scenario which I took in respect of the speech I gave to the Summit, that the projection was an average of 2.1 per cent in 1983-84, based upon that particular scenario. Mr Howard —That is the forecast, is it? Mr KEATING —No, that was in respect of that scenario, given certain wage and deficit assumptions. In respect of more general ongoing assessments and forecasts which the Treasury does from time to time, they are being done at the moment and will be in my hands at some time, understandably before the next Budget. Therefore, I just do not see the point of the honourable gentleman's question. I noticed in his speech yesterday that the former Treasurer was trying to make a fairly weak case for the $9.6 billion blowout of the Budget deficit. Mr Speaker, you may remember that last week in a speech I gave in relation to the Summit, I asked the Opposition to indicate what it would do in respect of the fiscal position we face. I tell the House, for the benefit of those who did not listen yesterday, that neither the Leader of the Opposition nor the former Treasurer attempted to indicate or quantify in any way precisely what he would do with the fiscal position. There was no comment made about the specific measures undertaken by the Government, except condemnatory ones. I just observe that the former Treasurer indicated that as far as he was concerned-this was the only inkling I got from his speech- he would give effect to his statement after the election that the Opposition would not tolerate, if it had won the election, a $9.6 billion deficit, and that he would remove the tax cut which his Government gave. In other words, he virtually confirmed yesterday that we were to have a re-run of 1977 all over again. People could ring up to find out how much the tax cut was and then find it was taken away the following May. I indicate also that, in respect of the cost cutting exercise to which references were made yesterday, the former Government took six months to come to a long term saving of $560m as compared with the longer term savings of the proposals by the Government last Thursday of $2,000m. I also indicate that outlays as a proportion of gross domestic product by the former Government-given the fact that that was the Government that was going to rein in Labor's extravagances, pull back the size of the public sector and do all these things- were 30.1 per cent in 1975, when that Government came to power, and they remain at 30.2 per cent. So much for the vigour of the former Government in dealing with the fiscal position. I conclude on this issue: I do not mind being asked questions which seek information, on the basis that honourable members are entitled to be given it at a certain point in time, but the former Treasurer well understands and knows that there was never any requirement on him or attempt by him to provide monthly forecasts on the economy, and I do not intend to start doing that now. Mr SCOTT —Will the Special Minister of State advise whether the electoral offices had sufficient funds to carry out all their duties leading up to and during the last Federal elections? Mr YOUNG —I thank the honourable member for Hindmarsh. As the Opposition and people throughout Australia would know, we place great significance on the electoral laws and their operation in this country, and that means the proper operation of the Australian Electoral Office itself. As honourable members are more than aware at present, because of the operations of the Commonwealth Electoral Act and its sections affecting a redistribution, if the population trends continue this year as they were given in the latest statistics in the next redistribution Victoria will lose one division and Queensland will gain one . Under another section of the Act, wherever there is a State in which more than a quarter of the seats are outside the 10 per cent tolerance that also requires a redistribution; so Western Australia, New South Wales and Queensland, under that section of the Act, are also required to have a redistribution. So if there is to be a total redistribution of the electorates of this country, the necessity for the Electoral Office to carry out a thoroughgoing and complete habitation review is in the interests of everyone in this country. What happened under the previous Government, which aroused so much suspicion, was that it gave the Electoral Office only sufficient funds to do about a 50 per cent habitation review. One has the thought that perhaps it was directed at what may be the more beneficial aspects of the review that would have assisted the Liberal Party and the National Party rather than the democratic processes of Australia. If a habitation review is to be done before a complete electoral redistribution, it must be done everywhere for everyone. It cannot be done in sections of the country so that it arouses suspicion that it was done to the advantage of one group against another. The other significant feature about the last election was the disgraceful way in which it was called, which gave only 24 hours for people to get their names on the roll. In those 24 hours, 55,000 people throughout this country enrolled. In 1980, when a longer period of about a week was available for people to get their names on the roll after the election was announced, 260,000 people enrolled. So there can be no doubt that the former Prime Minister deliberately closed the rolls early so that, as he thought, between 250,000 and 300,000 people would be denied the right to vote on 5 March. There is also no doubt that the former Prime Minister and perhaps his Ministers-we do not know to what extent his Ministers were involved in this decision making process-must have reached the conclusion that many of those people, who were young, unemployed, had just left school, and so forth, would not have been terribly sympathetic to the fortunes of the Liberal Party and the National Party at that election on 5 March. So the action was taken deliberately to see that the rolls were closed quickly so that these people would be denied the right to vote. None of those practices will be tolerated in future. Everyone will have plenty of advice. Opposition members interjecting- Mr YOUNG —The boundaries are another thing, and they are subject to the electoral commissioners. No Minister of this Government will interfere with the electoral commissioners, unlike a Minister of the previous Government. Opposition members interjecting- Mr YOUNG —If the electoral commissioners in Victoria decide that the division of Kooyong is to go, it is to go. Mr SPEAKER —Order! I invite the Special Minister of State to reply to the question and not to supplementary questions he is receiving. Mr YOUNG —It is the desire of this Government to see that all the practices of the Electoral Office, and the laws affecting its operations, are carried out on behalf of all Australians and not individual political parties. I hope that, when the Parliament agrees to the change, the people will get no less than seven days notice of the closing of the rolls. There will be a complete habitation review and the Government will make the resources available to the Electoral Office to see that this is done. Extra teams will be made available to see that Aboriginal enrolment is properly carried out throughout this country, not like under the former Government when insufficient resources were made available for these things. The Electoral Office, which is so important to the proper operations of this Parliament, will return to its traditional role of seeing that all Australians have a say in the proper running of their country. Mr ADERMANN —Can the Minister for Science and Technology advise the House of the latest developments in that exciting breakthrough for the deaf, colloquially known as the bionic ear? Is surgery now being undertaken on Australian patients and, if so, where is that surgery taking place? Mr BARRY JONES —I thank the honourable member for Fisher for his question without notice. By a strange coincidence I happen to have a bionic ear with me, although it would not do much to improve the audibility of some of the honourable members opposite. It is a remarkable Australian breakthrough from a very interesting co- operative venture between an innovative Australian firm, Nucleus Ltd in Sydney, and the research team at Melbourne University under Professor Graeme Clark. Part of the mastoid bone is excised and in the hollow underneath the bionic ear is inserted. It uses the very latest technology. It is estimated that the worldwide market value of this will be of the order of $500m per annum. It is the greatest technique for dealing with the problems of the profoundly deaf anywhere in the world and it is a great Australian breakthrough. I pay tribute to what has been done under the Australian Industrial Research and Development Incentives Scheme. I must pay tribute to the contribution of the former Minister, but we have upgraded the project. We are now in phase four. Six operations have already been carried out in Melbourne. We hope that, as the project is upgraded and we are able to obtain world markets, the unit cost will fall considerably. The bionic ear will present an entirely new life to people who have suffered from profound nerve deafness. I think we, as a parliament, ought to be extremely proud of this leading edge technology that has been developed by first class research people and a first class industrial enterprise in Australia. Mr O'NEIL —My question is also directed to the Minister for Science and Technology. Is it a fact that a contract has been signed between a research team at the Howard Florey Institute and the Australian National University and the American firm Genentech for the production of the human birth hormone, relaxin? If that is so, why was a contract not signed with an Australian biotechnology firm? Mr BARRY JONES —The point raised by the honourable member for Grey is absolutely correct. It illustrates the bad side of what was done in the field of science and technology by the previous Government. The previous Government did contribute to certain areas. It deserves some recognition for the work it promoted on the bionic ear. But, in many ways, the research capacity of much of Australian industry was wound down. The fact is that our universities had to look elsewhere for funding because they had to work under unacceptable staff ceilings, because they were deprived of funds. The good news that the honourable member's question draws attention to is that it is a remarkable world breakthrough. Dr Hugh Niall's team at the Howard Florey Institute and John Shine 's team at the Australian National University won, in a sense, a great international race to be the first to produce the human birth hormone, relaxin. Relaxin enables an expansion of the birth canal so that children can be born without the use of instruments and so on. It is potentially of enormous significance throughout the world. It is a fact that no Australian firms were technologically capable of taking up the development and production of relaxin in a commercial way. There are six elements-- Mr Carlton —Will you mention the $400,000 grant? Mr BARRY JONES —Of course there was, but the honourable member will have his opportunity to reply later. His Government has been judged already by the people of Australia for what it failed to do. At this stage in Australia we do not have the scientific base which would enable us to have this drug developed economically and put on the market. Six elements are needed to do this: Gene synthesis, cloning, computer-controlled fermentation, isolation techniques, micro-sequencing and biological testing. We have several of those elements in some firms but not all six. We have had to obtain funds from overseas for a whole number of first rate projects. Agrigenetics Research Associated Ltd of the United States has invested $2m in developing nitrogen-fixing plants in Australia . We could not find the money in this country. We could not find the money from the previous Government. It is good that the project is going out to the world. It is a tragedy that, at this stage of development, the project had to go to American firms to be developed. I hope this is a precedent that in the future is honoured in the breach and not in the observance. Mr WILLIS(Gellibrand-Minister for Employment and Industrial Relations) —For the information of honourable members I present the Official Establishments Trust 1981-82 annual report. Mr WEST(Cunningham-Minister for Immigration and Ethnic Affairs) —For the information of honourable members I present a review of Australia's demographic trends for 1983. Mr WEST(Cunningham-Minister for Immigration and Ethnic Affairs) —For the information of honourable members I present a report on national consultations on multiculturalism and citizenship. Mr WEST(Cunningham-Minister for Immigration and Ethnic Affairs) —For the information of honourable members I present a report on multiculturalism for all Australians-'Our Developing Nationhood'. Mr KERIN(Werriwa-Minister for Primary Industry) —Pursuant to section 29 of the Dairy Produce Act 1924 I present the Australian Dairy Corporation 1981-82 annual report. Mr UREN(Reid-Minister for Territories and Local Government) —Pursuant to section 5 of the Parliament Act 1974 I present the proposals for the construction of concrete barriers around the base of the piers supporting the Commonwealth Avenue overpass above Flynn Place. The views of the Joint Committee on the New Parliament House are being sought. When these views are available I shall be in a position to take further action under the Parliament Act to seek approval by the House of the work. Mr UREN(Reid-Minister for Territories and Local Government) —For the information of honourable members I present the Australian Capital Territory Milk Authority 1981-82 annual report. Mr UREN(Reid-Minister for Territories and Local Government) —For the information of honourable members I present the National Exhibition Centre Trust 1981-82 annual report. Mr NEWMAN(Bass) —Mr Speaker, I wish to make a personal explanation. Mr SPEAKER —Does the honourable member claim to have been misrepresented? Mr NEWMAN —Yes, I do. Mr SPEAKER —The honourable member may proceed. Mr NEWMAN —Today in answering two questions the Special Minister of State (Mr Young) made extremely serious allegations which reflected on my administration of two areas: Firstly, the Government Information Unit and, secondly, the Australian Electoral Office. In the first case the Special Minister of State alleged two serious things: Firstly, he said that Tony Eggleton, the Federal Director of the Liberal Party, ran the Government Information Unit. If I heard him correctly he said that there was documentation to prove that case. That is a disgraceful allegation which is completely untrue. I challenge the Minister to bring in the documentation to show us. Secondly, the Minister said that members of the Government Information Unit were involved in Liberal Party campaigns. Such an allegation was made but was refuted completely. Since the election I have had correspondence with the Minister for Industry and Commerce, Senator Button, pointing out that allegations which were made in the Senate at that time were wrong. I went to great lengths to show that a member of the Government Information Unit, a very reputable journalist, was being maligned. I am quite happy to table the correspondence I had with Senator Button. On those two issues I have geen grievously maligned. The Minister has used disgraceful tactics in this place and, in fact, has misrepresented the case completely. There is another and probably even more important matter. The Minister, in the answer regarding the Australian Electoral Office, made allegations of quite serious dimensions. He will have to prove the case or apologise. He said that habitation reviews had been jacked, that the former Government had gone to the Australian Electoral Office and had used the habitation reviews in a selective way. It was implicit in that that we had directed the Australian Electoral Office to go to certain divisions to somehow conduct reviews which would favour us. Mr Hand —That would be right. Mr NEWMAN —If that is correct I ask the Minister to prove the point; otherwise he should apologise. It is a very serious charge. As the Minister who was in charge of the Electoral Office I deny it completely. As I have said: Let the Minister either prove the case or come into this place and apologise. There is a further point. The Minister said that the former Prime Minister had arranged things so that 18-year-olds and others on the electoral lists would be excluded from voting. That is also totally false. I ask him to produce the proof that would show that that had happened. The reality is that a time was fixed for an election which meant that the Electoral Office, working backwards, had to close the roll to make the election happen. Mr YOUNG(Port Adelaide-Special Minister of State) —Mr Speaker, I wish to make a personal explanation. Mr SPEAKER —Does the Minister claim to have been misrepresented? Mr YOUNG —Yes. Mr SPEAKER —He may proceed. Mr YOUNG —I do not think the honourable member for Bass (Mr Newman) was listening to what I said. I will try to go through my remarks again. I did not cast aspersion on his administration. I cast aspersion on his Government's policy of handling these matters. If the Australian Electoral Office is denied funds to carry out a complete habitation review, it is the policy of the Government under which the honourable member served which is to blame. It would have been the honourable member's desire, I would have hoped, to see that the Electoral Office had the resources that it required. It did not have them. I did not say that the honourable member went to the Electoral Office and said: 'Do a selective habitation review'. What I said was that because it was less than a full habitation review it aroused suspicions about why it was less than a full habitation review. The honourable member raised another matter concerning documents. I did not say that there were documents to prove the allegation of the involvement of the Liberal Party, but what I do say is this: Stories came to us in the then Opposition that documents were available in the Government Information Unit which showed a direct link between the Federal Director of the Liberal Party and the Government Information Unit. We do not seem to be able to find any such documentation. That is what I said. Nevertheless, the accusations which were made by the Minister for Industry and Commerce, Senator Button-as honourable members are well aware-about GIU people attending Liberal Party campaign committees were made some months prior to the election. Mr NEWMAN(Bass) —Mr Speaker, I wish to make a personal explanation. It is on a further misrepresentation by the Special Minister of State. Mr SPEAKER —I will allow the honourable member to proceed but I remind honourable members that personal explanations must be to correct any misrepresentation. Mr NEWMAN —This is in relation to a direct misrepresentation, Mr Speaker. Mr SPEAKER —The honourable member may proceed. Mr NEWMAN —In the explanation which the Minister just gave he said that during my administration I did not provide enough money for proper habitation reviews. I am speaking from memory and this may need correction but I am almost certain that what I am about to say is 100 per cent correct. In fact, last year the Australian Electoral Office was given sufficient funds for a comprehensive habitation review. The reason why it was not completed was simply that there was an election called on 5 March before it was completed. Report and Ministerial Statement Mr BEAZLEY(Swan-Minister for Aviation) —I present the report of the Chairman of the Board of Accident Inquiry on an accident of a Beech Super King Air 200 aircraft VH-AAV at Mascot, New South Wales, on 21 February 1980. Motion (by Mr Beazley)-by leave-agreed to: That this House, in accordance with the provisions of the Parliamentary Papers Act 1908, authorises the publication of the Report of the Chairman of the Board of Accident Inquiry on an Accident to Beech Super King Air 200 Aircraft VH-AAV at Mascot, New South Wales, on 21 February 1980. Sitting suspended from 12.57 to 2.15 p.m. Mr BEAZLEY —by leave-As honourable members may recall, on the evening of 21 February 1980 the Beech Super King Air 200 aircraft registered VH-AAV, operated by Advance Airlines of Australia, crashed soon after take-off from Sydney Airport on a commuter flight to Temora and the 13 people on board were killed. The Air Safety Investigation Branch of the then Department of Transport carried out an investigation into the circumstances of the accident. On 22 September 1981, the then Minister for Transport tabled in the Parliament the investigator's report relating to the accident. My colleague the Minister for Transport (Mr Peter Morris), who was of course at that time the Opposition spokesman on transport, called for a royal commission to investigate all the circumstances of the accident. On 24 September 1981 the then Minister for Transport accounced that, in the public interest, a Board of Accident Inquiry would be convened to inquire into the causes of the crash. Consequently, a three -man Board of Accident inquiry was appointed on 14 October 1981 with Sir Sydney Frost, Q.C., as Chairman. The Board presented its report to my predecessor in office on 25 February 1983. I am aware that the then Minister for Aviation expressed to the Chairman of the Board and to the assessors his Government's appreciation of the painstaking manner in which they carried out their examination of the circumstances of this tragic accident. Honourable members will find, after reading the report of the Board of Accident Inquiry, that the Board's conclusions are consistent with those reached in the Air Safety Investigation Branch report and the Board has stated that it was greatly assisted by the investigator's report and that it is satisfied that all relevant aspects of the accident were considered. The Board, in this report, finds that there were a number of factors which, in combination, and on the balance of probabilities, contributed to the accident to VH-AAV. Those factors included the use of reduced take-off power, the failure of the left engine due to fuel contamination, high pilot work load and the fact that the auto propeller feathering and auto engine ignition systems were not armed. The Board also indicated that there were errors on the part of the pilot but, in the Board's opinion, the errors were not culpable because of the combination of adverse circumstances which the pilot faced during the emergency, which required a standard of skill beyond that of the average pilot. The Board has observed, too, that the operator of the aircraft, Advance Airlines, had included in its operations manual the use of a technique involving reduced power for take-off. The Board also observed that the departmental examiner of airmen responsible for the surveillance of the company's operations was aware of this practice and had committed an error of judgement in not reporting the matter to his superior officers because in his opinion there could be no objection to it. Although the Board has commented that it was most unfortunate that the Department did not act earlier on the matter of reduced take-off power, a practice which appeared to have been introduced by some operators without departmental approval, I must say that when the circumstances of this accident became known it is clear that the Department took swift action to ensure that the reduced power take-off technique was restricted only to those types of aircraft for which the appropriate procedure had been approved. The Board has also drawn attention to what it considered to be a surprising design feature of the Beech Super King Air nacelle tank fuel strainer, and I can assure the House that my Department is pursuing this matter with the manufacturer of the aircraft. Investigation to date does not indicate the need for any modification of the strainer. The Board has, however, emphasised the need for meticulous attention to regular fuel drains of the sump of the nacelle tank of this type of aircraft and my Department is again reminding operators that regular fuel drains from all drain points in aircraft fuel systems are a requirement essential to flight safety. The Board has made a number of recommendations relating to the crew complement of commuter aircraft, the auto ignition and auto feathering systems, asymmetric flight training and flight recorders. As to the crew complement of commuter aircraft, the Board has recommended that a minimum crew of two pilots be required on aircraft which are pressurised or have normal cruise speeds in excess of 250 knots true airspeed and operate into primary airports. Honourable members may be aware that supplementary airline licences have recently been introduced for commuter operations following a review of domestic air transport policy. This supplementary airline licence requires compliance with operating standards which were upgraded after a detailed study of commuter operations commenced in 1979. This study examined the circumstances of significant accidents and incidents which had occurred in those operations. The revised standards embrace a number of amendments suggested by the industry in consultations which commenced in 1980. Arising from this study one of the measures taken by the Secretary to my Department earlier this year was to issue an air navigation order requiring all aircraft licensed to carry 10 passengers or more in supplementary airline services to be crewed by two pilots as from 1 July 1983. The Board's proposal, however, suggests different criteria which I do not believe would achieve the safety objective implicit in the criteria adopted by my Department. Commuter operations now carry almost one million passengers a year and many routes previously served by the major airlines are now served by commuter operators. While it is extremely important that air services to these communities be maintained, there is also a need to ensure that passengers are afforded a safety level as close to airline standards as it is possible to achieve with this class of aircraft. I am mindful that the introduction of two-pilot crews to supplementary airline operations from 1 July 1983 will impose a cost penalty on those operators directly affected by it. A number of those operators, however, will receive benefit by the easing of the requirement for the carriage of cabin attendants from a complement of 16 passengers to a complement of 19 passengers where the additional pilot is carried. Additionally, my Department has agreed to reduce fuel reserve requirements in some circumstances and it is expected that this assistance will be available before 1 July. Again, the matter of the availability of lower take-off minima where aircraft are equipped with an auto feather system is being examined on an individual operator basis and this may be approved in some circumstances. Another matter of concern to operators is that the United States of America in recent years introduced a new class of aircraft certification entitled Special Federal Aviation Regulation-SFAR-41 which permits an increase in the operating weights of some commuter aircraft. As a result of submissions by the industry, my Department is currently reviewing this complex technical matter. An officer is about to go overseas to obtain first hand knowledge from other regulatory authorities as to the reasons for their acceptance or rejection of this aircraft certification role adopted by the USA. The outcome of this review will be made known to industry as soon as possible. Having made these points and being very conscious of the commuter industry's present economic situation, I am nevertheless of the opinion that the Department's requirement for two pilot crews on aircraft licensed to carry 10 passengers or more is necessary and this is to be introduced from 1 July 1983. Turning to other recommendations of the Board, my Department is studying the implications of the Board's recommendations that an auto feather system be required to be fitted where it is available at the time of purchase of the aircraft and it has already acted on the recommendation that King Air 200 operators include in the 'on take-off role' section of their cockpit check lists a check that the auto ignition system is armed and operating. The Board, in its recommendations, also draws attention to the training and checking of pilots in asymmetric procedures following an engine failure immediately after take-off. The handling of the aircraft immediately following take-off was, the Board considers, a factor of major importance in this accident. While my Department already has training requirements and an educational program to ensure asymmetric flying proficiency, the matter is being looked at again in the light of the Board's recommendation. The Board has recommended that asymmetric training in light twin engine aircraft should be carried out at a simulated take -off weight rather than in an empty aircraft. For the information of honourable members, to simulate flight at maximum take- off weight power on the live, or operating engine, is reduced. I am informed that, while this practice can be satisfactory for asymmetric training in transport category aircraft, my Department is of the view that it should be approached with great caution in respect of the aircraft being used in commuter operations. My Department would be most reluctant to introduce such a requirement as it could, in some circumstances, introduce a real hazard into the training operation in the types of aircraft used in commuter operations. The Board has also commented on the need for commuter aircraft to carry flight recorders-both cockpit voice recorders and flight data recorders-and has recommended that the search for lightweight, inexpensive recording equipment, suitable for light aircraft use should continue so that it may be required to be installed in commuter aircraft when feasible. As the Board points out, there was no means of ascertaining precisely the sequence of events on VH-AAV's fatal flight. No doubt the length of this inquiry could have been shortened significantly if there had been available some flight recording of the sequence of events. As the Board notes, flight recorders have long been recognised by aviation authorities throughout the world as valuable aids to accident investigation and my Department will continue its quest for suitable recording equipment for light aircraft. When such equipment is developed, and available, consultations will be held with the aviation industry before implementing requirements for its carriage in commuter and other general aviation aircraft. Turning to the Board's remarks on airworthiness surveillance, the report recommends a system of surprise checks of maintenance organisations which have attracted criticism in routine surveillance reports by airworthiness surveyors. While my Department accepts the need for follow-up checks to ensure that deficiencies have been corrected, it does not believe that unannounced inspections are necessarily the best means of achieving the Board's aim. My Department, however, is considering the introduction of a system of formal acquittal of reported deficiencies. I am taking steps to ensure that necessary manpower resources are available to my Department to provide an adequate surveillance of the aviation industry. Whilst this tragic accident, which claimed 13 lives, has blemished our high safety record, it must be remembered that commuter operations are the fastest growing element of this nation's aviation industry and, as I have already mentioned, they now carry almost one million passengers a year. I am sure that honourable members will agree, after reading the Board's report, that the Board has not only thoroughly discharged its terms of reference but also has focused attention on a number of matters of significance to aviation safety. I present the following paper: Aircraft Accident-Report and Ministerial Statement, 25 May 1983. Motion (by Mr West) proposed: That the House take note of the papers. Debate (on motion by Mr Fife) adjourned. Bill received from the Senate, and read a first time. Mr PETER MORRIS(Shortland-Minister for Transport)(2.30) —I move: That the Bill be now read a second time. I am pleased to introduce into the House this package of two Bills concerning the protection of Australia's marine environment against pollution. The purpose of the Bills is to give effect to the 1973 International Convention for the Prevention of Pollution from Ships as modified by the 1978 protocol. The Convention is widely referred to as the MARPOL 1973-78 Convention. The Bills currently before the House are essentially the same as those introduced by the previous Government on 21 October 1982. As the House is aware, the Government views very seriously the need for Australia to accede to and honour international conventions, not only in the transport field, which is my responsibility, but also in other affected areas such as the environment. Our national transport policy states explicitly that we will promote the conclusion, ratification and application of transport conventions under the auspices of the United Nations and its specialised agencies. The particular subject of attention by this Bill is, of course, basically environmental in its origins and effects, and I believe it is important to note the way in which concern for the marine environment has been incorporated so effectively. Australia has an extensive coastline and spread of territorial waters. It is fundamentally important that we be able to demonstrate to ourselves and the international community that we take our responsibility for this national and global resource seriously, and that we are committed to its protection. The MARPOL Convention is a departure from previous pollution conventions in that it addresses all the various forms of ship-sourced pollution in one treaty. The Convention contains five annexes which deal respectively with pollution by oil, noxious liquid substances carried in bulk form, noxious substances carried in packaged form, sewage and garbage. Initially, Australia will implement only the compulsory annexes I and II of MARPOL 1973-78-that is, those dealing with oil and bulk noxious liquids. In addition we will defer the operation of Annex II for the three years permitted by Article II of the 1978 protocol to ensure that adequate reception facilities for the discharge of tank washings and sludge are provided at Australian ports. The Commonwealth, States and Northern Territory are examining, in the forum of the Marine and Ports Council of Australia, the provisions of annexes III, IV and VB in order to arrive at a recommendation concerning their acceptance by Australia. The findings of this examination may well make it necessary to amend, in due course, the legislation currently before the House. The construction of the Commonwealth Bills is based on the jurisdictional arrangement recommended by the Marine and Ports Council of Australia which requires that complementary Commonwealth, State and Northern Territory legislation be enacted before Australia can ratify MARPOL 1973-78. The proposal is therefore in accordance with current arrangements between the Commonwealth, States and Northern Territory. The MARPOL Convention will be applied legislatively in Australia by two Commonwealth Acts and by State and Territory legislation. Implementation by two Commonwealth Acts continues the traditional way of giving effect to pollution control legislation. The Protection of the Sea (Prevention of Pollution from Ships) Bill 1983 will, upon proclamation, repeal and replace the Protection of the Sea (Discharge of Oil from Ships) Act 1981 which applies the provisions of the 1954 International Convention for the Prevention of Pollution of the Sea by Oil known as OILPOL. The Bill also contains provisions imposing discharge prohibitions, the obligation to carry and maintain oil and cargo record books on ships and to report any discharges. Matters pertaining to the construction, survey and certificate requirements of ships will be given effect in the Navigation Act. This method of giving effect to MARPOL 1973-78 has been adopted for simplicity of administration and understanding by the industry. This Bill introduces new and improved provisions for oil pollution prevention and control including special arrangements for protection of the Great Barrier Reef. This particular issue was included in the 1981 Protection of the Sea (Discharge of Oil from Ships) Act which provides Australia with the enabling legislation to implement provisions of the 1954 OILPOL Convention which are not yet in force internationally. Following notification late in 1982 that MARPOL will enter into force on 2 October 1983, the MARPOL 1973-78 Great Barrier Reef protection measures will now enter into force earlier than the OILPOL provisions. The Bill also introduces new controls on the operation of ships carrying noxious liquid substances in bulk. Specifically, provision is made concerning prohibition of discharges of noxious liquid substances into the sea, cargo record book requirements and cleaning of cargo tanks following discharge of cargoes. The protection of the Great Barrier Reef will be maintained in relation to noxious liquid substances by imposing outright prohibition or special discharge rules when ships are within particular distances from the outer edge of the reef. Differing rules are applied depending on the categorisation of the substance and its strength in the mixture being discharged. In many cases discharge into the sea is prohibited entirely. The implementation of the MARPOL Convention in Australia will introduce stricter control of ship-sourced oil pollution combined with compulsory ship construction and operational requirements which are designed to reduce the incidence of pollution at sea and in port. The Convention requires that ports themselves provide adequate shore reception facilities to receive ship-generated wastes. The Convention and the legislation to implement it is a marked improvement of existing arrangements and will place Australia in the international forefront in the field of marine pollution convention implementation. I commend the Bill to the House. Debate (on motion by Mr Carlton) adjourned. Bill received from the Senate, and read a first time. Mr PETER MORRIS(Shortland-Minister for Transport)(2.36) —I move: That the Bill be now read a second time. This Bill is the second of two important steps in applying the provisions of the MARPOL 1973-78 Convention. In this Bill, Division 12, inserted by the Navigation (Protection of the Sea) Amendment Act 1981, is repealed. The existing Division 12 has not yet come into force because it was included in the legislation to enable Australia to implement the 1971 ship construction provisions of the 1954 International Convention for the Prevention of Pollution from Ships. Those provisions have not yet attracted sufficient signatures for them to have come into force internationally. The MARPOL 1973-78 Convention supersedes the 1954 Convention and therefore new requirements will be incorporated in the Navigation Act 1912. This Bill inserts a new Division 12, relating to ships carrying or using oil, and a new Division 12A making provision concerning ships carrying noxious liquid substances in bulk. These Divisions will incorporate in the Navigation Act 1912 provisions relating to ship construction, equipment, survey and certification for ships covered by the respective Divisions. I mentioned in my second reading speech for the Protection of the Sea (Prevention of Pollution from Ships) Bill that all matters relating to construction, safety and survey of ships are incorporated in the Navigation Act. For simplicity of administration and understanding by the industry, MARPOL Convention requirements will be included in the Act now being amended by this Bill, in accordance with usual practice. I commend this Bill to the House. Debate (on motion by Mr Carlton) adjourned. Bill received from the Senate, and read a first time. Mr LIONEL BOWEN(Kingsford-Smith-Minister for Trade)(2.40) —I move: That the Bill be now read a second time. This Bill continues the practice developed during the last Parliament of introducing an omnibus Bill into each sitting of the Parliament to make a large number of what are called non-contentious amendments to a number of measures that are already on the statute book. Whilst in Opposition we supported such legislation but were always concerned that too often substantive amendments of major policy importance could be ' tucked away' in these Bills and that the details of such amendments were not readily available to the legal profession and the public. On the former point the Attorney-General (Senator Gareth Evans) has approved procedures in relation to such Bills. The principal feature of those procedures is the criteria of the nature of matters which might be included in the Bill. I now inform the House of those criteria: Firstly, only matters which genuinely deal with tidying up, correction and updating, routine administrative changes or are of minor policy significance, may be included; secondly, no matter that is contentious, or is closely related to a contentious matter, may be included; thirdly, matters that involve lengthy and complex drafting, particularly of a kind that may hold up the Bill, should generally not be included; fourthly, matters that involve substantial policy issues-including legal policy issues- should generally not be included; fifthly, no matter that would constitute a change to the National Companies and Securities legislation may be included; sixthly, no matter that imposes, abolishes or varies a tax or varies the incidence of a tax may be included; and seventhly, no matter involving an appropriation may be included-except the repeal of a 'spent' appropriation power . Where, upon examination of the details of the proposed amendment the Attorney- General's Department or the Office of Parliamentary Counsel considers that a proposal does not satisfy those criteria, they will draw the matter to the attention of the Attorney-General for the consideration of the Legislation Committee. The Attorney-General's Department is considering what further steps can be taken with the reprinting of Commonwealth Acts program to have amendments made by these Bills incorporated in the parent Acts as quickly as possible. To assist the dissemination of the contents of this Bill, the Attorney-General's Department has now forwarded copies of the Bill and explanatory material to the Law Council of Australia so that that body can inform the profession through its member State bodies. I should mention that this Bill differs in format in a substantial way from its predecessors. Previously each amendment was a separate clause of the Bill. Under the new format most of the substantive amendments are contained in the Schedule to the Bill with no separate clauses for each amendment. The changed format allows for easier drafting and will overcome the inevitable errors that seem to have occurred in past Bills because of the late rearrangement of the material resulting from the inclusion or deletion of provisions with the many consequential changes to clause numbering, cross-references, et cetera. The proposed amendment in this Bill of section 182 of the Statute Law (Miscellaneous Amendments) Act (No. 1) 1982 falls into the latter category. On 18 May, in the Senate, the Attorney-General incorporated in Hansard a supplementary statement explaining in detail the changes to the various Acts that are to be made by this Bill. A revised supplementary statement has now been circulated for the attention of honourable members of this House and accordingly I need not read it. The statement does not include reference to minor amendments of a drafting nature. In some cases a number of amendments of a similar nature are made to a number of different Acts. In those cases the amendments are described in detail in relation to only the first relevant Act which appears in the Schedule. The change from the supplementary statement that was incorporated in Hansard relates to the omission by the Senate of the proposed amendment to the Honey Industry Act 1962 because that amendment went much wider than was necessary for the particular purpose for which it was required. I now give notice that at the Committee stage I will move a narrower amendment of the Honey Industry Act that will comply with the Senate's objections. I might say that that Act will relate to the fact that the Australian Honey Board has power to make advances to owners of honey on the security of the honey. The advances are made from a loan by the Reserve Bank which is guaranteed by the Government. If the owner of the honey gets into financial difficulties, the Government may not have adequate security vis-a-vis other creditors, and so public funds are not fully protected. To obtain effective security over the honey, quite impractical arrangements have had to be adopted. The proposed amendment would enable the Board to make advances to owners of honey on different forms of security and thus ensure that the Commonwealth is a secured creditor in relation to the advance. The amendment which will be discussed in Committee tomorrow in respect of paragraph 18 (1) (c) of the Honey Industry Act states: Omit 'on the security of the honey', substitute 'on such security as the Board considers adequate'. In addition to the Honey Industry Act there will also be an amendment to the World Heritage Properties Conservation Act. That again would need to be dealt with in the Committee stage of the legislation which we hope to have discussed tomorrow. The amendment to the World Heritage Properties Conservation Act relates to this: The World Heritage Properties Conservation Act 1983 establishes a procedure for ascertaining the amount of compensation payable in respect of any acquisition of property as a result of the operation of the Act. There is a provision for the appointment of a commission of inquiry to inquire into this matter and if the property is within a State, the Premier of the State is entitled to nominate one of the three members of the Commission. The purpose of the amendment now to be put forward in the Committee stage is to put the Northern Territory in a similar position in this respect; that is, the Chief Minister of the Northern Territory will be entitled to nominate one member of the Commission where the property acquired is within the Northern Territory. In respect of the World Heritage Properties Conservation Act 1983 I now give notice of intention to move tomorrow the following amendments to Schedule 1: Paragraph 17 (9) (a)-After 'State', insert 'or in the Northern Territory'. Paragraph 17 (9) (b)-After 'State', insert 'or the Chief Minister of the Northern Territory, as the case may be'. I expressly draw the attention of the House to proposals contained in this Bill regarding the furnishing and tabling of annual reports of departments and authorities. This is a matter with which the Parliament has been concerned for some time. In particular, the Senate Standing Committee on Finance and Government Operations has made detailed recommendations for an annual reports Act containing detailed reporting criteria. More recently the Senate Standing Committee on Constitutional and Legal Affairs has commented adversely on the contents of annual reports. Following interdepartmental committee considerations of the recommendations of the Senate Standing Committee on Finance and Government Operations an amendment to the Acts Interpretation Act 1901 has been drafted which would require all bodies which do not have a specific period within which to furnish a report to the Minister to do so within six months of the close of the reporting period. The Minister would then have 15 sitting days within which to table the report in the Parliament. Where the report is not furnished to the Minister within the six month period a written explanation is required and an extension may be granted. Both the letter of explanation and the reasons for the grant of extension are to be tabled in the Parliament. Those provisions, although not implementing the recommendations of the Senate Standing Committee, are a marked improvement on the present situation. Accordingly, the Government has decided to go ahead with the proposed amendments as an interim measure. Consistent with its election commitment, as part of a wider review of its overall approach to statutory authorities the Senate Standing Committee recommendations will be further considered by Government as a matter of priority. The proposed provisions of this Bill, as it relates to the furnishing of annual reports, specifically exclude the need for compliance with them by the Australian Security Intelligence Organisation and the Office of National Assessments. The question of the tabling of annual reports by these bodies will be considered in the context of the larger question of the public accountability of the intelligence organisations. I commend the Bill to the House. Debate (on motion by Mr McVeigh) adjourned. Debate resumed. Mr McVEIGH(Darling Downs)(2.49) —Prior to the debate being interrupted for Question Time, I was indicating to the House that the Minister for Primary Industry (Mr Kerin) cannot absolve himself from blame in relation to the Government's policies in imposing impossible burdens on primary industry by indicating that there was only one set of decisions, namely, the wheat marketing decisions, which were under his direct control. I was in the process of indicating that it is wrong for him to adopt a mere academic approach because other matters, even though they are outside his portfolio responsibility as such , do impinge on the position of primary producers. I intimated some of those matters, such as the removal of the petroleum storage installation taxation deduction, and the matter of increased fuel prices for avgas, with particular reference to an impost on aerial spraying, which is very applicable at the present time following the record flood rains we have had and the prolific weed growth because of which farmers are using aerial sprayers to a marked extent. I referred to the savage impost, the increased depreciation life and consequent reduced amounts which may be written off each year, the increased telephone charges and so on, and indicated that these were part and parcel of rural life. The Minister just cannot issue Press releases indicating that there were no matters under his control in Cabinet in which a decision was taken which was inimical to the interests of farmers. That is just not true. As any practical person knows, all those other matters do affect primary industry life, and if the Minister were in Cabinet he could have been present at all of those discussions and he could have had an input. If he was present in Cabinet, quite obviously it was an ineffective presence. Mr Kerin —Mr Deputy Speaker, I raise a point of order. The issue we are debating here consists of the removal of two lines from the Wheat Marketing Act. If the honourable member for Darling Downs wants a debate on all the rural matters in the economic statement, so be it. But we are talking about the Wheat Marketing Act. Mr DEPUTY SPEAKER(Hon. Les Johnson) —I will ask the honourable member for Darling Downs to come back closer to the central theme of the Bill. Mr McVEIGH —I accept your ruling, Mr Deputy Speaker, which quite obviously is far different from that of previous occupants of the Chair who, on so many occasions when honourable members from your side of the Parliament where challenged by honourable members from our side of the Parliament, indicated that the second reading speech is a wide ranging debate. That is an established rule of Speakers here. Mr DEPUTY SPEAKER —Order! The honourable member is not taking a point of order and I ask him not to question the ruling of the Chair in that way. Mr McVEIGH —I was just making the point, and I accept that it was wrong of me to question your wisdom, that certain precedents have been established here and I believe that you have transgressed those precedents. Mr DEPUTY SPEAKER —Order! I ask the honourable gentleman not to proceed along those lines. He has no prerogative to challenge the ruling of the Chair. I ask him to resume the debate. Mr McVEIGH —I will resume the debate. We are talking about the interest rate arrangements that have been made by the Government. I want to make this point, that it needs to be clearly understood that there is an implicit message that the Government is putting in this measure. By, in effect, scrapping the interest subsidy, the Government is basically saying it will be cheaper forever for the Board to borrow overseas than in Australia. I think that is quite pertinent to the matter under consideration. In other words, what the Government means, but it does not have the intestinal fortitide to say directly, is that interest rates in Australia are to remain higher than those interest rates overseas because, quite obviously, if interest rates in Australia were below interest rates overseas, there would be no reason to borrow overseas and obviously there would be no reason for an interest subsidy. So by scrapping the interest subsidy, by giving the Australian Wheat Board power to borrow overseas, in effect what the Minister should be saying honestly to the Australian people is this: As far as we can see down the track, interest rates in Australia will be very high. They will be higher than the Rural Credits Department interest rates-even though they are lower at the present time-but they will be much higher than overseas interest rates. The difficulty I have, bearing in mind that I am talking about interest rates and subsidies, which are the very core of the measures proposed in this Bill, is that, in effect, in the Government's decision in introducing legislation, they will remain very high. I hope, Mr Deputy Speaker, that you do not pull me up on the point I am about to make, because it is very pertinent. During the Bruce by-election campaign the Minister for Housing and Construction (Mr Hurford) spread the word around that interest rates will come down. How can he, for his part as a Cabinet Minister, say that interest rates will come down, when the Minister for Primary Industry basically at the same time says with regard to this Bill, in effect- Mr Cunningham —How do you come to that logic? Mr McVEIGH —I ask for a withdrawal of that. That is a disastrous statement to make. That is repugnant to me. Mr DEPUTY SPEAKER(Hon. Les Johnson) —The interjection has not registered with the Chair. Mr Cunningham —I asked how did he come to that logic. Mr McVEIGH —He said 'lies'. I think he did. Mr DEPUTY SPEAKER —There is no requirement to withdraw that comment. The honourable member will resume the debate. Mr McVEIGH —I am making the point that on the one hand we have had an admission that interest rates will go up, and on the other hand the Minister for Housing and Construction ran around the countryside saying that they will go down. Finally, I foreshadow an amendment in the Committee stage. I hope that the Minister in his reply will answer the specific queries I have raised and that he will also indicate that the Labor Party will honor its very many election commitments, including the one to maintain tax averaging. There was no reference at all in its pre-election statements to any reconsideration of taxation averaging and income equalisation deposits. Yet what do we see? Tax averaging is now to be changed to such an extent that the National Farmers Federation believes there will be a penalty to farmers of some $20m. Mr SIMMONS(Calare)(2.57) —The measures outlined in the statement of the Treasurer (Mr Keating) to this House last Thursday night are designed to restore balance and growth to the Australian economy. The package represents a reorientation of Government spending priorities and a shift in the composition of tax liabilities within Australia. The package also indicates the Government's firm intention of attacking the structural component of the Budget deficit; in other words, that part of the Budget deficit that will not automatically disappear when the Government manages to return the economy to its normal growth path. The structural component of the estimated Budget deficit of $9.6 billion is projected to be about 55 per cent, or over $5 billion. Many of the measures announced by the Treasurer will yield savings which will become substantial over time. Total savings on current program expenditures are expected to increase from $985m in 1983-84 to $2,036m in 1984-85 and $2,190m in 1985-86. In my speech to the House today I want to discuss the impact on Australia's primary producers of the measures announced by the Treasurer. A number of the measures will have a direct impact on primary producers. But by far the major impact will come through the contribution of all the individual measures working together to restore balance and growth to an economy ravaged by over seven years of mismanagement by a government soundly rejected by Australians on 5 March. One of the most enthusiastically greeted components of the May statement is the Government's decision to grant the Australian Wheat Board the facility to borrow overseas. With Loan Council approval, the Australian Wheat Board can source 50 per cent of its net borrowing requirements from overseas. For borrowings exceeding 50 per cent of net requirements, the approval of the Minister for Primary Industry and the Treasurer will be required. Within the established borrowing limit, the Australian Wheat Board is free to choose the timing, size, currencies and terms of individual raisings. The Australian Wheat Board and the Australian Wheatgrowers Federation have been pushing for this facility for some time. Just 10 weeks after the election of a Labor Government, the Wheat Board has been given a flexibility in its borrowing activities that has the potential to save the wheat industry hundreds of millions of dollars each year. These savings will be passed back to wheat growers. The May statement also contained details of a new scheme, the income stabilisation scheme, designed to encourage producers to take the necessary steps to help stabilise their incomes. This is the first time that Australian primary producers have had access to a scheme specifically designed to stabilise incomes. The existing income equalisation deposit scheme is characterised by the remarkable feature that, in conjuction with unlimited in-out averaging, it actually encourages primary producers to destabilise their incomes in order to maximise the benefits of participation. The income stabilisation scheme will operate from 1 September 1983. It will pay a rate of interest on deposits that is two percentage points higher than the ruling two-year Commonwealth bond rate. The scheme has been designed in such a way that all depositors will receive the same return on deposits and the nominal interest rate will also be the effective interest rate. Unlike the income equalisation deposit scheme, it is anticipated that the income stabilisation scheme will prove to be an attractive investment and hence also an attractive income stabilisation device for all primary producers. The income equalisation deposit scheme has been used by only a small proportion of primary producers, with the level of funds currently invested totalling $161m. Producers with funds invested in the income equalisation deposit scheme will continue to receive an interest rate of 9.5 per cent. Mr McVeigh —Mr Deputy Speaker, I raise a point of order. I know that you are a great man for precedents- Mr DEPUTY SPEAKER —Order! The honourable member will state his point of order. Mr McVeigh —Mr Deputy Speaker, you suggested when I was talking about income equalisation deposits that they have no applicability to this Bill. I suggest you apply the same ruling to the present speaker as you did to me. Mr Kerin —I think the honourable member for Darling Downs has set the precedent in terms of this debate now, having spoken so widely and departed from the Bill. Mr DEPUTY SPEAKER —I take it that the honourable member for Calare is proposing to return to the central theme of the Bill, as I had previously requested the honourable member for Darling Downs to do. The honourable member may proceed. Mr SIMMONS —Mr Deputy Speaker, I was taking the opportunity, as the honourable member for Darling Downs had been rather wide-ranging in his comments, to make some points in response to some of his comments. But, Mr Deputy Speaker, I will certainly respect your ruling. The major impact of the May statement on primary producers will come through the contribution that the measures announced by the Treasurer will make to restoring balance and growth to the Australian economy. The measures that relate to borrowing by the Australian Wheat Board in particular are certainly central to that point. The erosion of primary producers ' competitiveness as Australia's rate of inflation has exceeded that of our trading partners has been an influential factor reducing the prosperity of primary industries. Restoration of balance and growth to the economy should be of prime concern to all primary producers. The measures announced in the May statement will contribute towards a more favourable economic climate over the longer term by reducing the structural deficit, the rate of monetary growth, inflation and inflationary expectations, and, most importantly, interest rates. Primary producers are net beneficiaries from the May statement. Granting the Australian Wheat Board the facility to borrow overseas has the potential to save the wheat industry hundreds of millions of dollars. Under the income stabilisation scheme and other measures announced by the Government in the May economic statement, primary producers are given the opportunity to stabilise their income through investment yielding a return of two percentage points above equivalent investments open to other members of the community. In concluding, we believe that strengthening the domestic economy is to the advantage of all primary producers. It will help them in regaining competitiveness and restoring profitability as Australia, hopefully , comes out of the worst drought in 100 years. Mr TUCKEY(O'Connor)(3.5) —The Opposition welcomes the principles behind the Wheat Marketing Amendment Bill. The proposal originated in submissions to the Fraser Government. Our Government had no opposition to the proposal and was proceeding to the legislation that appears before us today. The history of the Australian Wheat Board's borrowing to fund the guaranteed minimum price and, more particularly, the first advance guaranteed under the original legislation was originally that all funding was provided through the Rural Credits Department of the Reserve Bank of Australia, commonly referred to as the RCD. The interest rates charged by the RCD were generally below the commercial rates available in Australia at any time. The procedure was a form of printing money. The annual first advance injected a large amount of new money into the Australian economy. To further support its monetary policy, the Fraser Government announced in 1978 that the Wheat Board must raise a percentage of its requirements on the domestic money markets. To further establish that the principle was one of monetary control and not one of adding a further financial burden to the rural sector, the Government offered a subsidy on the differential between the RCD interest rate and the prevailing commercial rate. Since this scheme has operated, the following amounts have been raised annually from the local market and from the RCD. In 1978-79 the RCD provided $1,400m, of which some $484m was subsequently refinanced through commercial borrowings. In 1979-80, the RCD provided $700m and the commercial sector provided $800m, for a total of $1,500m. In 1980-81, the RCD raised $200m and the commercial sector provided $1,100m, for a total of $1,300m. In 1981-82, all of the funds required, some $2,000m, were raised on the commercial markets. In 1982-83, some $1,200m, all that was required, was also raised on the commercial markets. The approximate cost to the Government of the subsidy related to the interest rate differential has been: In 1979-80 $7.7m, in 1980-81 $23.2m, and in 1981-82 $22. 2m. The figures relating to the current year are not really known, but my advice is that the $19.8m suggested in the mini-Budget would be fairly close to the mark. The new proposal before us today recognises two factors: First, that interest rates are now cheaper on the international commercial markets; and, secondly, that the Wheat Board conducts nearly all its business off-shore, and consequently that such borrowings, if raised in currencies similar to those used for the making of sales, are automatically hedged by the wheat stocks to be sold during the year and used to repay those loans. A great problem could arise in some other areas of off-shore financing where the funds are made available for capital assets-and this has been experienced in the wheat marketing arena in my own State-when currency fluctuation that goes in the wrong direction can add substantially to the interest burden and make such borrowings extremely expensive. However, it would not appear to me that this particular arrangement will create that problem. But should the matter be expanded in other directions, which on the present interest rates would be of great assistance, the Board could in future years find itself paying substantial amounts because of currency fluctuation. This, plus the Fraser Government decision to allow the Wheat Board to operate an international wheat futures market, will give the Board the degree of flexibility that it has long needed to best represent the wheat growers, for whom it is the virtual agent. The Australian Wheat Growers Federation consequently saw this great improvement as so worthwhile as to happily accept a trade-off and forgo the Government subsidy on excessive interest charges, and this Bill removes that from the present legislation, as an amendment. Whilst commending the Government on proceeding with the previous Government's initiatives, I must express my regret that it has seen necessary-presumably to boost the apparent savings of its mini-Budget-to remove the right of the interest rate subsidy. Naturally, if the Wheat Board exercises its new right to borrow overseas and takes advantage of the rates now applying, there would be no need to pay a subsidy on interest and no cost would accrue to the Government. Overseas rates are now much lower than those of the RCD. I am advised that because of the excellent borrowing status of the Wheat Board, rates as low as 9.5 per cent could be obtained on borrowings by the Board in the United States. This compares with the current RCD rate of 14.5 per cent, and, of course, as we know, some money market rates higher than that. So quite considerable borrowings-some hundreds of millions of dollars, in fact-could be available to the Board by obtaining this provision. When requirement for commercial borrowing by the Board was introduced, it is my recollection that interest rates applying overseas were higher than the rates within Australia, and at that time the Australian Government felt constrained to pay a subsidy. There can be no doubt that such circumstances could occur again. This Bill removes the right of Australian farmers, through their Wheat Board, to seek this level of support in times of high interest rate regimes. The Opposition amendment foreshadowed by the honourable member for Darling Downs (Mr McVeigh) is in my opinion, therefore, the minimum that wheat growers can expect. However, this amendment does not address itself to the situation that previously existed; that is, when, for economic reasons, the Government of the day may not wish to increase money supply by means of obtaining funds from the RCD. In other words, it could then send the Wheat Board back on to the Australian commercial market, which would be cheaper than the overseas market but substantially more expensive than what one would expect from the RCD. The question might be asked as to why wheat growers should be offered some insulation from high interest rates. The rural communities are locked into an economic scenario that requires that they sell their products on fluctuating international markets, yet they must conduct their business within an atmosphere of strictly structural levels of remuneration and prices in all other industry sectors. This cost structure has been set most particularly by the wage setting procedures within Australia, which take no cognisance of the financial return to sellers on overseas markets. An example of the burden that the wage and condition setting procedures impose upon the rural sector is an extract from the Primary Industry Newsletter of 23 May 1983 under the headline: 'Massive Farmer Subsidies to ANL and its Employees, says Report by NFF'. The two items of interest to me state: . . . but the general theme will be especially important in the next few months as the Government negotiates with the Australian National Line and maritime unions on the 'revitalisation' of the coastal shipping business recommended by the Crawford Committee last year. It goes on to say: Mr Lane said that ANL seamen were being subsidised by Australian farmers to the tune of $73,000 a year each. Further on Mr Lane is reported to have said: The freight differential between ANL and competitive tonnage-- He is referring here to the carting of rock phosphate, the basis of every grain of wheat that is grown in Australia-- is around $17 a tonne. That is, by the way, a rate which exceeds the government subsidy that is paid on superphosphate. An even more classic example exists within the wheat handling system within Western Australia, where the Waterside Workers Federation, in a blatant attempt to increase its own revenues, has stolen some members of the dominant union in the Western Australian grain handling industry and must now deliver the benefits that it promised to convince those people to turn on the union that had maintained an excellent standard of representation for them. In the future the resultant leapfrogging will become another burden that the wheatgrowers of Western Australia in particular must carry. It will cause an increase in handling costs of up to $4 a tonne just to accommodate the avarice of a certain union leadership. In all, there seems to be no redress for wheatgrowers other than direct support from government, particularly this Government, which is prepared to concede further wage increases in the tertiary and secondary sector which, by their very names, are the constant passengers of the primary sector. It is therefore inequitable to remove another area of support from that sector of industry which is crippled by the burdens of support that government gives by one means or another to those other sectors I have just mentioned, namely, the secondary and tertiary industries. All this is said understanding that at present the borrowing requirements of the Board will not place a burden on government. However, the protection that this arrangement has provided should remain. At least this must be shown by the retention of access to the Rural Credits Department. The explanatory memorandum that was delivered with this Bill refers to certain specific conditions by which these funds may be borrowed overseas. The proposed amendments and the other documents do not exactly tell us what the specific conditions are. Government members are obviously better informed on that than the Opposition. So is the Primary Industry Newsletter. In regard to overseas borrowing by the Wheat Board the Newsletter states: It will be free to borrow 50 percent of its prospective net borrowing requirements overseas, and more with the agreement of the Treasurer and Minister for Primary Industry. The previous speaker made some reference to that too. I am not sure whether that is a commitment of government or whether that is the situation today. When one refers to certain specific conditions one wonders what the wheatgrowers of Australia have in fact achieved. It is not unusual to have those sorts of conditions. Obviously, the Government would want to know something about what people were doing. It becomes very clear that the conditions relate to the amount of money that may be borrowed overseas. I wonder to what extent these specific conditions will be used to interfere in the commercial judgments of the Wheat Board, particularly to accommodate future government monetary policy. There is no difficulty to the Government at present. It is desperate to attract the maximum of overseas capital inflow. However, how will it view these levels of borrowing in the future when its inflationary wages policy has recreated levels of M3 that will create massive levels of general inflation in Australia. Will the wheat farmer again be called on to become the monetary instrument but this time without the protection of an Act of parliament that guarantees him an interest rate at the bottom of the scale, which was the position that our Government took on that issue? This Government should have the courage to back its rhetoric regarding economic recovery and a stable currency and it should state that it will leave the interest subsidy in place, secure in the knowledge that it will not be needed. I do not think there is much difficulty with that argument. It is quite clear that with a good and sound economy, under these new arrangements high interest rates will not occur in a manner that will damage the Wheat Board. The Government need not concern itself. Its mini-Budget promise that it will save nearly $20m, can stay in place. It is up to the Government. But if it takes out the subsidy, it shows to me that the Government lacks the courage of the fine words its Ministers say at the despatch box as to how their Government will create this wonderful economy. I hope that when the honourable member for Darling Downs presents his amendment, the Government can accept it, secure in the knowledge that it will not mean anything to it. It is just a guarantee to the farming community that it will not be used as an instrument of monetary policy without compensation in the future. There are other great problems confronting farmers concerning borrowing. Drought has been common to the Australian rural industry in recent years. The financial burdens of the types I mentioned earlier which have inflated farmers' costs by annual rates approximately double the rise in the consumer price index, leave no margin for drought. Farmers can no longer save for a rainy day. Of course, it is not the rainy day they need to save for, it is the dry day, the dry season and, as in recent times, the dry years. Nor, in my opinion, will farmers be able to survive in continuous bumper years unless some financial burdens are removed. Again, I am able to congratulate the Government for removing one financial burden if only, as we know it, in the short term. It is obvious that this Government will not reduce the inflationary burden. It has shown very clearly, by accepting the proposition-- Mr Brumby —Rubbish! Mr TUCKEY —The honourable member has not been here even long enough to know, so I do not think he should be interjecting. Mr Brumby —We will see who is right. Mr TUCKEY —The honourable member is just encouraging me to use up the whole 20 minutes allotted to me. In recent years my office has been host to a steady stream of farmers seeking assistance to survive on their land. Just two years ago all of these people had extremely low gearing. Their debt asset ratios were good. Nevertheless the lending institutions were already expressing concern that the cash flow of these farmers could not support further borrowing. After I had argued their cases with their lenders most received funding. Last year most experienced a reasonable season in my electorate. However, as the lenders predicted, the farmers have completed the year owing more money than they did at the beginning. One gentleman who, with his father before him, had farmed a property for 30 years, has seen his debt gearing grow from practically nil to 70 per cent of the deemed value of his property over the last four years. Of course , when circumstances like that apply, the deemed value is very notional indeed. Were he to be forced to sell his property as result of another drought he would not get anything like the value which would be put on it in better times. The Primary Industry Association of Western Australia Inc. recently issued a paper entitled: 'Assistance for Post Drought Recovery'. I recommend it to the Minister and others for reading. I think the interesting things are the recommendations, and I refer them to the Minister in closing my contribution to this debate. The paper recommended: That funds be provided for debt reconstruction to assist producers in post- drought recovery where such reconstruction will improve the long-term prospects of financial viability for the individual producer. That the PIBA provide $10 million as debt reconstruction finance to Western Australia; comprising $5 million provided by the Commonwealth Government and $5 million raised by PIBA through market operations. That one per cent of funds held in Statutory Reserve Deposits should be conditionally released to the trading banks. The release to be conditional upon the trading banks directing those funds to assisting primary producers recover from the effect of drought- And most importantly-- That debt-reconstruction loans should be for periods of not less than 30 years. That the interest subsidy scheme recently announced by the Commonwealth Government-- of course, that is the Fraser Government-- be extended for a post-drought period of equal duration to the period of drought . Mr KERIN(Werriwa-Minister for Primary Industry)(3.24) —in reply-I thank the honourable members who participated in this debate, particularly the honourable member for Calare (Mr Simmons) and the honourable member for O'Connor (Mr Tuckey ), who seems to have a far greater grasp of the issues than the shadow Minister. He set out very sensibly the reasons for the interest rate subsidy that had applied and the reasons for the past Government moving that way in 1978. As he has pointed out, this is a progression from that course. I will respond very directly to some of the points and the wild and woolly charges raised by the honourable member for Darling Downs (Mr McVeigh). First of all, I am sorry that he did not get this very simple Bill, the Wheat Marketing Amendment Bill-it consists of only two lines-at the time I promised him he would . There was some problem in getting it out of my office. I did not want it to go to him before it went to the members of the Caucus. Somehow, in that arrangement , he failed to get it on time. I assure him that I will treat him exactly as his predecessor treated me. I had one briefing with the Department. I requested one other and it was refused. The speech by the Treasurer (Mr Keating) set out exactly what we are doing in this regard. Only two lines in the Act are being changed. I understand that the shadow Minister for Primary Industry, the honourable member for Darling Downs, wanted a full briefing on it. He has acted in a confused way. On the Thursday night, in the House, he charged that it would 'cost Australian wheatgrowers $20m in 1983-84 by removing the subsidy payable to the Australian Wheat Board'. It was pretty obvious by Sunday night that somebody obviously had had a word in his ear about the fact that the industry welcomed the move because he then put out another release acknowledging the removal of the subsidy with the corollary of the freedom to go off-shore for financing the Guaranteed Minimum Price. So, he changed his mind. As a man who describes himself as a leading wheat grower, it seems that he is strangely out of touch with the long standing request of the industry. The Australian Wheat Growers Federation, the Australian Wheat Board and, of course, the National Farmers Federation, the umbrella organisation of the farmers, have welcomed this move. As the honourable member for O'Connor said, in 1978 the Federal Government required the Wheat Board to go on to the commercial market rather than fund up to $2 billion worth of wheat through the Rural Credits Department of the Reserve Bank of Australia. It paid a differential in the interest rates. The past Government in its infamous razor gang decision, cut that interest rate subsidy by one per cent. This was regarded as a betrayal by the wheat growers because there is no offset. We are now giving the Wheat Board massive commercial flexibility. The most important value of this is that it is giving it the freedom to hedge on the exchange markets. It stands to make a packet if its members use their heads in the right way. There are hundreds of millions of dollars to be saved by this measure. This can be proved. The Wheat Board has been given one of the greatest bonanzas of all time. It is a great reform. The honourable member for Darling Downs wanted me to give some calculations. I must say that it is absolutely impossible to give exact calculations on this matter. The amount that the Government will save next year will be something in the order of about $19.6m or $20m. But there is the offset of allowing the Board to go on to the international market. The calculations depend on the interest rates here and abroad, on how big the wheat crop will be and on a range of matters. One cannot calculate into the future. All one can do is a cold precise calculation, which is the sort of thing that the Department of Finance has to do and about which it has no choice in terms of extrapolating figures ahead. So it depends very much on the situation of the commercial market. Going back to the razor gang decisions, we tried to work out what the subsidy calculations would cost the industry. Again it was near impossible to work it out because it is not a calculation based on the cost for a full year. The Rural Credits Department rate is one level and the commercial rate is another. Of course, it would depend on when the Wheat Board actually goes on to the commercial market to make the loan and it is doing it then in terms of a basket of currencies. That basket at the time was compared with the RCD rate. There is then a calculation at the end of the year. So no calculation for a year ahead is possible. If we look at the RCD rate and the gap between a full year-again I say it is not a very precise calculation-in 1981 the gap between the Rural Credits Department interest rate and the commercial interest rate was about 2.4 per cent . Now it is between half of one per cent and one per cent. In other words, the value of the subsidy was rapidly tapering away but it need not have. It depends on the interest rates on the commercial market and the variation with the RCD. Of course, the amount being financed in a drought year is smaller than usual. If we go through the figures at present, I think the Wheat Board could currently borrow in the United States of America at a rate something of the order of 9.5 per cent as against a current domestic commercial rate of 13.5 per cent. Let us calculate what the tonnage could be in the year ahead. If there are 17 million tonnes of wheat-that is quite feasible-at $150 a tonne GNP, there would be approximately $2.5 billion of borrowings. If that 4 per cent is applied there is a saving of $40m and if 5 per cent is applied there is a saving of something like $50m. In other words there is the potential to save hundreds of millions of dollars. The Australian Wheat Board can now automatically borrow up to $1,250m, on this calculation, overseas at an interest rate differential. So it is very hard to calculate but the potential is there for massive savings and massive gains for the Australian wheat growers. The honourable member for O'Connor set out exactly the same figures as I have set out in terms of the value of the subsidy in the past. But he was good enough and sensible enough to point out why we are doing that we are doing. It is because there is no longer the need for the interest subsidy because we are going a further step and allowing the Wheat Board to have full commercial flexibility. In terms of the Australian Labor Party's policy on statutory marketing authorities, that is the way we want to move. We want these big marketing organisations to be controlled by the farmers in terms of policy, but for the marketing arm of those bodies to have full commercial flexibility and stand in the market place and get on with the job of selling the crop or the wool or whatever. I think our big marketing organisations are moving that way. The Wheat Board and the Australian Wool Corporation in particular are moving that way. In some other elements of his speech, the honourable member for Darling Downs carried on with his critical sniggering and sneering because I went to Geneva. I want to know what he has got against the sugar industry. No Minister has gone to a meeting as important as the International Sugar Agreement Meeting in Geneva and stayed for six days. I was there with the Queensland Minister for Primary Industry, Mr Ahern. We worked together. We worked with the Sugar Board, the Australian Sugar Producers Association, the Australian Canegrowers Council and the Proprietory Mill Owners Association, CSR Ltd, Queensland departmental officials, and Commonwealth Department of Trade officials. We worked as one in the interests of the sugar industry. Nothing is more important to the sugar industry than getting the European Economic Community into the next international sugar agreement. The honourable member can sneer all he likes but I was there six days and I was proud of it. No Minister has been there that long. It was essential. While I was there I took up the questions of the common agricultural policy relating to beef , cheese, dairy products, apples, deciduous canning fruits, dried vine fruits, wheat and wine and the possibility of a trade war between the EEC and the United States. I stressed Australia's anger, alarm and dismay at the way the EEC is continuing with its common agricultural policy. Of course, the honourable member is not sniggering and sneering because I was over there fighting for Australia's primary industries; he said that I was not head kicking enough. I make it quite plain that we made our anger known to the EEC about what it is doing, but we will not indulge in public abuse. Great Britain is a member of the EEC. We used to trade with Great Britain. Honourable members opposite carry on about royalty and the monarchy but want this Government to go over there and head kick the British people who are basically responsible for our institutions. It is not sensible to conduct trade by abuse. The former Minister or Primary Industry accused the EEC of being like Ned Kelly at an international forum. Ned Kelly was hanged. That is marvellous. There are cheers back home and the farmers love it but what runs did the Opposition get on the board with the EEC by engaging in abuse and head kicking? It got nowhere. Today we deal in trade negotiations by diplomacy, not by abuse. There are no gains from indulging in abuse. The honourable member for Darling Downs brought up the nonsense he is running around the bush with, that because the Primary Industry portfolio is not included in Cabinet there are problems. I will put that straight once and for all. I know that the honourable member will say this forever and a day, regardless of the number of times I explain to people. We are not comparing this Ministry with an inner and outer Cabinet as occurs under conservative governments. The Australian Labor Party has a caucus system. Members and senators are not kept in the dark. We do not have a Ministry that carries on- Mr McVeigh —I raise a point of order, Mr Deputy Speaker. I think you would have just a little difficulty in- Mr DEPUTY SPEAKER —Order! I ask the honourable member to state his point of order. Mr McVeigh —In relating the operations of the Australian Labor Party Caucus- Mr DEPUTY SPEAKER —Order! I ask the honourable member to state his point of order immediately. Mr McVeigh —My point of order is that in a summation of a second reading debate on the Wheat Marketing Amendment Bill the Minister is talking about the procedural operations of the Labor Caucus. I do not think that has anything to do with it. Mr DEPUTY SPEAKER —Order! There is no point of order. Mr KERIN —I am responding directly to the wild and woolly charges made by the honourable member for Darling Downs. I was talking about the continuous sneering and smearing that the Primary Industry portfolio is not in the inner Cabinet. I was explaining that the ALP has a caucus system. We do not keep our members and senators in the dark. We do not have a kitchen Cabinet. We do not have big Mal making all the decisions and everyone else having to go along with them. We do consult. The Ministry has six functional committees. Mr McVeigh —I raise a point of order, Mr Deputy Speaker. I do not mind your giving the Minister a wide range- Mr DEPUTY SPEAKER(Hon. Les Johnson) —Order! The honourable member will state his point of order. Mr McVeigh —My point of order is this: It is wrong for the Minister to make an incorrect statement when the world knows that Bob Hawke appointed a royal commission without reference to Caucus. Mr DEPUTY SPEAKER —Order! There is no point of order. Mr KERIN —Mr Deputy Speaker, as you well know, the Ministry has six functional committees. Primary industry is on the industry and economic committees which are duplicated in the Caucus. Therefore, matters come through on the industry and economic committees. Primary industry is represented on both of those committees. The functional committees within the Ministry are the deliberative ones. If there are no disagreements matters go forward straight to the Cabinet. The Department of Primary Industry, through me, attends Cabinet meetings whenever primary industry matters are discussed. It attends Cabinet meetings whenever any matter vaguely impinges upon primary industries. I can attend any ministerial committee meeting I choose. There are regular Cabinet meetings of all the Ministry and I can go to any meeting of the Cabinet as I so choose. Let us have no more nonsense about this. People have not raised the fact that my colleague the Minister for Finance (Mr Dawkins) is not a member of the Cabinet. Of course, there can be no criticism because he attends nearly every Cabinet meeting, as I do. It is a very open and flexible arrangement. It is very sensible and efficient and it means nothing about whether primary industry gets a matter through. In this Ministry we are all in the same boat. The system works extremely well and efficiently. The honourable member for Darling Downs said also that I was not prepared to take the blame or responsibility, whatever it was, for some of the other measures that were announced in the economic statement and that were not technically part of the Department of Primary Industry. I take the view that I accept the credit or the blame for the lot. I believe in Cabinet government, as do all members of the Hawke Ministry. If the honourable member wants me to direct my attention to the other three or four matters that could be seen to be affecting primary producers, I will go through them. We are talking about one of those matters. Let us look at tax averaging. The system of tax averaging is to remain, but we have wiped out something to which the Balderstone Committee pointed. By people using the automatic in-out provisions of the primary producer tax averaging system and also the income equalisation deposit scheme, whereby people on a very high marginal tax with high incomes can transform a 9.5 per cent flat rate into a 23.5 per cent gain, the system is being rorted and is able to be used only by a handful of high income producing farmers. We are trying to retain tax averaging so that people can make their own decisions as to whether they will be in it or out of it. Most of them will be in it. We are providing a system of income equalisation deposits and paying a decent interest rate which is 2 per cent above the long term two-year bond rate. That scheme will be fine tuned so that it does meet the purposes for which the last Government set it up. I think that is a far more sensible approach than the nonsense we had before where a handful of people could rort the system. We are after a system whereby small and medium income earning farmers can have something to put away for a dry day. As the honourable member for O'Connor rightly pointed out, we are not worried about rainy days, except when they cause floods. I now deal with the depreciation allowance. The former Treasurer, the honourable member for Bennelong (Mr Howard), on behalf of the Government, introduced this in July 1982. We followed on with that proposal. It was a substantial move down for primary industry from 20 per cent to 33 1/3 per cent. We implemented that legislation. We are keeping it on for one year to get primary industry on the same level as all other aspects of secondary industry depreciation rates. If one takes into account that the investment allowance is 18 per cent and there is now a 20 per cent depreciation allowance-38 per cent in the first year if one is sensible enough to buy in about June-one will see that the situation is not too bad. All we are trying to do here is get back to some sort of equality with the rest of the industry. The other matter one can mention is the Petroleum Products Freight Subsidy Scheme. Honourable members on the other side of the House should be the last people to criticise us. The former Government put up the cost of distillate used for off-road purposes, brought in this iniquitous rebate system and wiped out the certification system. I understand there were rorts in that system. I know that problems existed, but members of the Opposition cannot criticise us for what we did. The former Government put up the cost of fuel. The cost of fuel trebled in the seven years of office of the Fraser Government from something like 14c a litre to 42c a litre. Members of the Opposition then have the gall to come in here and criticise us because we have moved the freight equalisation component up by one-tenth of one cent. Those were the people who increased the price of fuel three times in seven years. The honourable member for Darling Downs talked a lot of nonsense about the drought. There is one extra point I wish to raise on the economic statement. The economic statement, as a macroeconomic policy document, has more potential for gain in the primary inustry sector than the three or four single nitpicking issues. We intend to do something about the structural deficit-the rate of monetary growth-and to try to bring down inflation and interest rates. In other words, all Budgets should be regarded primarily as macroeconomic documents. The National Farmers Federation and the big farm organisations know that it is in the macroeconomic area that the fortune or failure of farmers will be decided, not in nitpicking little commodity issues. This statement is very important. We should all hope that it will work and that it will get Australia back on the track. Finally, there has been a bit of nonsense about the drought and how the relief scheme has not been extended. I think that some people do not understand the scheme. The fodder subsidy will continue; it is on. The trouble is that the States will pull off the declaration in some areas because it has rained. This is not under our control. I cannot force people to buy fodder. The scheme continues. I have expanded it in certain areas. Leasing is now in. I have examined the problem for share farmers, but we found that the administrative arrangements were too difficult. A couple of items regarding fodder increases were included. A few extensions have been made at the request of the States. The scheme continues and it is administered by the States. Mr Deputy Speaker, I thank you for your indulgence. I have wandered a bit far from the mark. The honourable member for Darling Downs sees this as an opportunity to score points against the Government because he is stuck with a basic fact that what we are giving the wheat industry is the potential to save hundreds of millions of dollars. This is something which the former Government did not have the sense to do. I commend the Bill to honourable members. Question resolved in the affirmative. Bill read a second time. The Bill. Mr McVEIGH(Darling Downs)(3.43) —I formally move an amendment to clause 3 of the Wheat Marketing Amendment Bill. I move: Clause 3, page 1, omit proposed sub-section (5A), substitute the following sub- section: '' '(5A) The powers of the Board under sub-sections (3) and (5) may be exercised both within and outside Australia, and in a case where interest rates within and outside Australia are higher than the current rates of the Rural Credits Department of the Reserve Bank, the Board is guaranteed access to the Rural Credits Department for such amounts as approved by the Treasurer and the Minister for Primary Industry.'.''. The Opposition proposes this amendment for the simple and fundamental reason that we believe that our wheat industry needs to be offered some guarantee of absolute security. The Minister for Primary Industry (Mr Kerin) in his summation , which he readily admitted was a bit of a Cook's tour, and a wide and rambling one, talked a lot about potential. I do not know whether anyone has ever been able to exist on potential before except in the Minister's mind. Whilst it is all right to talk about these arrangements which give the Australian Wheat Board a great deal of potential to make-I think he started off by saying 'tens of millions' and ended up saying 'hundreds of millions'-a deal of money, I think those of us who have had some experience in the practical side of life know of many instances in which potential has never been realised. I am most grateful to the Minister for publicly admitting in his speech that these initiatives give the Wheat Board wonderful potential. I suggest that the Minister give consideration to recalling in his mind how many wonderfully potential things he has seen that have failed. It is with added assurance, after that rambling speech of the Minister wherein he seemed to talk about potential, that we move this amendment because this amendment has nothing to do with potential; it has to do with the practical appreciation of security. We believe it is in the national interest that this be the case. As other speakers have said, and I guess from practical experience we all know, the Australian Wheat Board has done a great job on behalf of the Australian wheat industry and, of course, the persons to whom it is ultimately responsible, the Australian wheat growers. It appears to us that the Board and the industry are entitled to that knowledge of security, no matter what happens in the future . The Minister talked about potential. He even admitted in his rambling speech that he could not accurately give figures. He admitted that he could not accurately project whether the figure would be $19.6m or $30m. The Treasurer (Mr Keating) cited those figures. But on the one hand we have the Minister believing in this wonderful potential and in the same speech, on the other hand, indicating that he cannot accurately define what will happen. Consistent with the logic that he adopted in his speech on this issue, I hope he follows that logic through and accepts this amendment for the simple reasons that one cannot rely on potential and one does not know accurately what interest rates might be in three months or six months time. I am indebted to the Minister for his practical exposition in those two matters -that potential in effect can amount to nought and we cannot accurately reflect what interest rates will or will not be. The aim of the amendment is simple. We seek assurance from the Minister that, if the worst possible situation occurs- namely, internal and overseas interest rates higher than the current rates of the Rural Credits Department of the Reserve Bank of Australia-and given the Minister's argument, his logic, his doubt about the future, the Board will be guaranteed access to the RCD finance. It is all very well for the Minister to get up and say that what we are asking for is implicit in the legislation; that it is understood. Madam Deputy Chairman, you will know from your vast experience that occasionally-maybe far too often-things which are implicitly understood are not always the things which are legally binding on the participating parties. It is for that reason that the Opposition seeks to amend clause 3 of the Wheat Marketing Amendment Bill. We submit that instead of the Government's amendment to the Act the amendment to sub-section 5 (A) as circulated in my name should be the one included. Mr KERIN(Werriwa-Minister for Primary Industry)(3.49) —The Government rejects the Opposition's suggested amendment to clause 3 of the Wheat Marketing Amendment Bill. The honourable member for Darling Downs (Mr McVeigh) talked a lot about potential in some semantic sense. I point out that the word survives on its own without much definition. People know what the word means. The only reason I am not able to define whether the wheat growers will save tens of millions or hundreds of millions of dollars is one of simple arithmetic and depends on whether one multiplies by one year, two years or three years. If the honourable member can calculate what interest rates overseas will be in the future, as a basket of currencies, or how much wheat will be traded on the world market, or how much wheat will be grown in Australia, he is a better man than I am. That is why I am simply saying that the calculations in the speech of the Treasurer (Mr Keating) relate to the usual method, the only method available to the Department of Finance and the Department of the Treasury; they must simply extrapolate figures forward. I am sure all honourable members realise that we cannot make estimates of what interest rates, cropping rates or production will be in the years ahead. But they can clearly understand that this Bill offers the potential for the wheat industry to save tens of millions of dollars-in the short term-or hundreds of millions of dollars. The honourable member's amendment tries to have a little bit both ways. I point out that there is absolutely nothing to stop the wheat industry or the Australian Wheat Board coming back to the Government with a request to go to the Rural Credits Department if a situation is so bad. Again, I think the honourable member does not really understand the potential, the real benefit of this, to the Wheat Board. It will be able to get into currency hedging. Quite simply, the amendment to the principal Act proposed by the Government allows the Wheat Board to choose where it will borrow. It can borrow overseas if that is the most profitable course or it can borrow domestically if that is the most profitable course. Due to the mess that we inherited, and the record high interest rates, in the short term it is quite obvious that it will be much more profitable to borrow overseas. As I pointed out in my second reading speech, there is a 4 per cent to 5 per cent gain available right now. We are talking about the ability of the Wheat Board to get into these markets, to currency hedge in terms of the countries to which we sell the wheat. This increases absolutely its commercial flexibility and profitability. It is this ability to get into currency hedging and to go forward, seeing it is now into futures contracts for wheat, that gives the Wheat Board and the wheat industry new massive capacity. I commend the Bill as originally printed and reject the amendment as moved by the honourable member for Darling Downs. Amendment negatived. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Mr Kerin)-by leave-read a third time. Debate resumed from 18 May, on motion by Mr Dawkins: That the Bill be now read a second time. Mr DAWKINS(Fremantle-Minister for Finance)(3.53) —Mr Speaker, may I have your indulgence to suggest that the House have a general debate covering this Bill and the Taxation (Unpaid Income Tax-Dividends) Bill 1983, the Income Tax Assessment Amendment Bill 1983, the Income Tax Assessment Amendment Bill (No. 2) 1983, the Income Tax (Rates) Amendment Bill 1983, the Income Tax (Individuals) Amendment Bill 1983, the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Bill 1983 and the Income Tax (Payments for Work) (Consequential Amendments) Bill 1983 as they are associated measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. Mr DEPUTY SPEAKER(Hon. Les Johnson) —Is it the wish of the House to have a general debate covering these eight measures? There being no objection, I will allow that course to be followed. Mr HOWARD(Bennelong)(3.54) —This batch of Bills falls naturally into two categories. There are those dealing with the extension of the recoupment legislation passed last year by the former Government and those dealing with the introduction of a deduction system for cash payments affecting certain industries. I shall address both groups of Bills in my remarks. The first group of Bills-those dealing with a purported extension of the recoupment legislation passed last year by this Parliament at the instigation of the former Government- is by any measure a very important group of Bills. The Bills are important not only in their own right but also because they represent the first offering of the new Hawke Labor Government in the area of anti-tax avoidance legislation. For that reason they deserve not only the attention of this House but also the very careful scrutiny of not just the Opposition but the wider community as well . It is through this legislation and what this legislation attempts to do that we in the Opposition and others in the community can try to answer a number of questions. It is first of all a demonstration of how genuine were the criticisms of the anti-tax avoidance record of the former Government by the then Labor Opposition because it is now in government and has the opportunity to demonstrate that the things it said about us, the things that it said we were leaving undone in the anti-tax avoidance area, can be put right. In preparing my remarks for this afternoon I had a look at the records of some of the debates in this Parliament of September and October last year. We will all remember the figures that were thrown around. The former Leader of the Opposition, the Prime Minister (Mr Hawke) said that $15,000m was there for the plucking, to be recouped from the tax avoidance industry, if only the Fraser Government would act. An amount equivalent to $35 a week from every taxpayer in Australia could be recouped and returned to those long-suffering pay-as-you-earn taxpayers if only the Fraser Government would act, he said. Of course the Minister for Finance (Mr Dawkins) was not backward in coming forward on the subject of taking stern action against tax avoiders so naturally everybody, including the Opposition and those long-suffering PAYE taxpayers, have waited with breathless anticipation for this first offering from the Hawke Labor Government in the anti-tax avoidance area. We have looked forward to seeing legislation to recoup that $7,000m, to seeing that $35 a week recouped. When it was not in the mini-Budget last Thursday night I thought: 'Oh, I know, Dawkins is holding it up for the taxation legislation debate and he will unveil in that debate precisely what the Hawke Labor Government is going to do in this area'. But what do we find? We find a miserable $500m to $600m. To recoup that, what has the Hawke Labor Government done? It has broken yet another of the promises it made during the election campaign-the promise not to introduce a capital gains tax. Although the Minister for Finance did not tell us, this batch of Bills contains the introduction, retrospectively, of a capital gains tax. I invite the Minister for Finance to disprove that charge during this debate. We will all remember that during the election campaign the then Leader of the Opposition, the present Prime Minister, went to the Australian people and said: 'There's one thing that you people have to be absolutely clear about-in no way would a Labor government introduce a capital gains tax'. I express my absolute astonishment at the fact that, given the opportunity to recoup that $7,000m a year that we were allowing to slip through our fingers when we were in government, we now have the Government offering a miserable $500m or $600m a year and in order to do that it has to introduce a retrospective capital gains tax. The most important thing that that demonstrates, above everything else, is that the charges of dereliction of duty, of being soft about the tax avoidance industry and of being friends of the tax avoidance industry made against the former Liberal-National Country Party Government were absolutely groundless. The inability of the new Labor Government, with the great majority that it has in this place, to bring forward legislation to recoup that $7,000m it said we were not collecting demonstrates that above everything else. The second thing I want to say about this group of Bills is that they have as much in common with the original recoupment legislation passed last year as do Barry Unsworth's views on superannuation with the views of the Treasurer (Mr Keating). This legislation goes far beyond the recoupment concept contained in last year's legislation and it will not be supported by the Opposition parties in this place or elsewhere. The legislation is not a mere toughening up of the recoupment legislation that passed through the Parliament last year. It not only retrospectively imposes a capital gains tax but also seeks to collect a new tax which has never been the subject of an illegal evasion, which was the single distinguishing point about the legislation introduced by the former Government and supported by the then Labor Opposition last year. In expressing the Opposition's attitude, let me say at the outset that we are not in any way being inconsistent with the stance that we took last year. I know that already some people, both here and in another place, have tried to say that in opposing these Bills the Liberal and National Parties are behaving differently from the way in which they behaved last year. I make it very plain to the House that every single item in these Bills either reverses amendments that were specifically inserted by the former Government into the legislation passed last year or, alternatively, proposes changes that were specifically raised by the Labor Opposition last year but were rejected for the reasons then given by the Government. So in no way is our stance today and the stance that we will adopt later in another place at odds or inconsistent with the stance that we took when the legislation was debated last year. I make that clear right from the outset and put at rest any suggestion, any lie, that may be around that we have changed our stance and that in some way we are behaving inconsistently and differently from the way in which we behaved last year. The next point I make-it is fundamental to an understanding of this debate-is that these are not Budget Bills. Unless the Government has decided to fund its deficit through confiscation, they are not normal revenue-raising items. Therefore any claim by the Government that the Opposition, in opposing this legislation, is in some way frustrating the Budget-cutting desires of the new Government, the economic rationalist zeal of the new Government, is totally in error. In no sense are these Bills revenue-raising measures. They go far beyond the concept of anything previously before this Parliament. The Bills are retrospective, with a capital R, in their intent, in the novelty of the tax imposed and in the reach and breadth of the provisions contained in them. They seek retrospectively to create a liability for tax which has never previously existed. In fact, had the companies concerned gone on trading it would never conceivably, for all practical purposes, have arisen. As I mentioned earlier, the Bills do not recoup the proceeds of a fraudulent evasion of tax. In the long debate that went on last year the one central proposition that was important to the case that the Government then argued-sometimes against opposition from different quarters of the community-was that all we were seeking by that legislation was to recoup to the Commonwealth Treasury tax that was then due and payable, which had been rendered incapable of collection because of an illegal act and therefore ought to be recouped to the Treasury. We were not seeking to create a new tax liability; rather, we were seeking to redeem an existing tax liability by looking to those who had benefited in a financial way from the profits of illegal evasion in order to collect that tax. That is a far narrower and more central proposition than that which underlies this legislation . The tax imposed by this legislation is in every sense of the word a new tax. The legislation will not recoup tax which has been the subject of an illegal evasion. As I understand it, it will tax both the accumulated profits and the capital reserves of a company. Therefore, the accumulated profits will previously have borne company tax at the rate of 46c in the dollar, undistributed profits tax at the rate specified by the Act and now, on top of that, under this Bill there will be a further tax of 60c in the dollar. So effectively we will be looking at a tax rate of 78 per cent to 85 per cent. Extraordinarily enough, deceitfully enough because it was not made clear in the legislation, this legislation contains for the first time, as I understand it, in Australia's taxation history the imposition retrospectively of a capital gains tax. That is in defiance, if I may say so, of the promise given a number of times by the Prime Minister and others during the last election campaign that the Labor Party would not introduce a capital gains tax. So this legislation has those quite unique features. It imposes a capital gains tax, it imposes it retrospectively and it is utterly unlike and goes far beyond the legislation that was brought in last year. These Bills specifically overturn a decision of the High Court of Australia in respect of a whole group of companies and specifically render totally illegal with penal taxation consequences acts done many years ago. Profits earned and on which tax in the normal sense of the word was paid will now years after be rendered liable for tax. In that sense it is quite unlike the recoupment legislation last year because there we were talking about the collection of taxation that was due and payable at the time the transactions took place. There was never any doubt in the case of the companies we were dealing with last year that a liability for company tax would have existed at the end of the financial year in question. What we were seeking to do in those cases was to say to people who gained from illegal evasion: 'You got the benefit of it; if you had not got the benefit of it the tax would have been paid and the Commonwealth Treasury would not have been robbed.' But that is not the case in this situation. Under this legislation we will be able to say to a company which has operated in the normal fashion, paid company tax and Division 7 tax on its profits and put those profits into some kind of revenue reserve: 'On top of that we will add 60 per cent in respect of antecedent transactions.' Yet the Minister for Finance will come into this House and say: 'Oh, this is just some toughening of the orginal bottom-of-the-harbour legislation.' It has nothing to do with bottom-of-the- harbour legislation. It is a totally new excursion into completely unchartered waters so far as taxation legislation is concerned. It shows the bankruptcy of the claims made against the former Government of dereliction in this area because the best the Government can do to recoup all this tax that we were letting slip through our fingers is to bring forward this kind of shonky, irrational and economically destabilising proposition. This Government over the last few days has been preening itself because of some newspaper editorials about its economic rationality, about how responsible it is and about how it can take all of these tough decisions. I put it to the House that these Bills represent not tough decisions; they represent totally illiterate decisions by the Government in the area of taxation. The legislation seeks to impose taxation liabilities of the kind I have described on companies and give them only 30 days in which to meet those liabilities. They will not have 30 days to pay up something that should have been paid years ago. That might in a commercial sense be a little unrealistic. But perhaps in a moral sense the Government might say it is justified, that these companies should have paid many years ago, they did not, they knew they were getting a benefit by not paying and it is therefore fair enough that they be asked to cough up, and cough up quickly. But we are not talking about that set of circumstances here. We are talking about a set of circumstances where people and companies have in fact borne tax according to the law that existed at the time. The Government comes along to them years later and says: 'We are going to put this tax on you and you are going to pay it within 30 days'. It then runs outside and says: 'All we are doing is toughening up the legislation that the former Liberal Government introduced.' To say, 'We are a group of economic rationalists, we are all thoroughly reasonable people and the business community should feel totally safe and secure with us, is really to stretch logic a long way. I believe that the proposal to remove the 12-month period is nothing other than a stupid act of spite by the new Government. The 12 months' amnesty or grace period that was introduced by the former Government was implemented for a very practical reason. Whatever the merits may have been of these transactions, it was considered that the game being up and people having received assessments to pay their recoupment tax in respect of the proceeds of an illegal evasion, those people should be told: 'Well, if you can organise to pay within a period of 12 months we will allow you to do so'. I know for a fact that in many cases companies have gone to the Commissioner of Taxation and said: 'Right, we accept we have to pay this money, it should have been paid in the first instance but in the interests of not dislocating our business, in the interests of our not having to sack or retrench people, at a time of recession, will you give us a period in which to pay off the tax?' Anybody would surely accept that in today's economic circumstances, and against the whole background of this legislation, that this is a reasonable proposition. But no, that is not good enough for the Hawke Labor Government. That is not turning the screws tightly enough; that is not putting enough squeeze on the profitability of the companies concerned. The Government says: 'We will take that 12 months away from them. We will not only take it away from them in respect of the unpaid company tax that was the subject of the Fraser Government's legislation but also we will deny it to them in respect of the retrospective capital gains tax that we are imposing by this legislation.' If I may say so, that is not a bad effort for the first anti-tax avoidance offering, or should I say the first tax confiscation offering, of the new Labor Government. In case the Minister or anybody else in this House thinks that what I have been saying is mere rhetoric and bears absolutely no relationship to the facts, I will describe an example that has been brought to my attention and probably to the attention of many members of this House because it is absolutely fundamental . The example is a 100 per cent Australian owned manufacturing company employing 400 people with sales of over $20m a year, exports of $1m and an import replacement of $10m. I understand from the managing director of the company and its accountants that if this legislation goes through the company will quite simply be forced into liquidation and that the new tax in that event will not be able to be fully recovered. In June 1980 a sale of the operating company's structure brought a benefit only in respect of current year profits. Of course, the law passed last year collects the tax in respect of those current year profits. That sale, which will also be affected by this new legislation, brought no cash benefit whatsoever. The company's book reserves totalled $6.9m of which $2.2m were tax free capital reserves which would never have been taxable even if distributed by way of a capital issue to shareholders and $4.7m were revenue reserves which would have been taxable only in the event of a wind-up. These reserves are being fully used to finance-sin of all sins-the continued operation of the business and therefore the continued employment of 400 people. Those reserves, which are being used to keep the business going during difficult economic times and which are keeping those 400 people employed, will bear the jackboot of this legislation. The Government now plans to tax the non-existent alleged benefit of the book sales of those reserves of $6.9m at the penal rate of 60 per cent. The Government is not mucking around. The rate is not 10 per cent, 15 per cent or 20 per cent, but 60 per cent. The Government is creating a tax liability of $4m which will totally wipe out the present net worth of the business. That is an example of how this legislation will affect one 100 per cent Australian owned company. I invite the Minister for Finance to demonstrate in his reply where that example is wrong. Surely we are not here talking about blatant, artificial and contrived tax avoidance. What can be blatant, artificial or contrived about the circumstances that I have described? What is so wrong with what that company has done that it should have visited upon it the effects of this legislation in all its savage operation? I speak as one who brought before this Parliament on two occasions when I was Treasurer, over a period of five years, legislation which had retrospective operation. But the circumstances of those two measures differed entirely from those of this legislation. On both occasions, particularly in respect of the legislation passed last year, we were speaking not of creating a new taxation liability but rather of collecting taxation that always had been due and payable. It was due and payable at the time the legislation was brought before the Parliament but, because an illegal act had been perpetrated by some, the company against which the tax assessment was outstanding was unable to meet its liability and we quite reasonably looked to the people who had benefited from the evasion to collect the tax owing. I put it to honourable members that the legislation that is before us goes far beyond the scope of that provision. Every item in this legislation-the abolition of the 12-month period, the removal of the tight definition, the trigger of fraud described by many people in the Government at the time; indeed all the other provisions of the legislation-was carefully examined by the former Government. The amendments to the original Act, which it is now proposed should be struck out, were proposed by the former Government because we believed that they were necessary properly to limit the scope of the legislation. Similarly, we rejected the amendments then sponsored by the then Opposition because in our view they went much too far . Surely even those Government supporters whose views will differ from the arguments that I have put forward, surely even the most rabid supporters of wholesale retrospective legislation in regard to anything that has a remote connection with tax avoidance, would concede that some kind of burden should be borne by those who argue that this Parliament should legislate retrospectively. I put it to then that the circumstances of the company I have just described are hardly so blameworthy, nefarious, delinquent or immoral as to warrant visiting upon it the consequences I have outlined, not only for its own operating structure, commercial viability and existence but also for the future well-being , employment and existence of its 400 employees when we have 10 1/2 per cent unemployment in the Australian community. Surely that company has not behaved so badly, immorally and nefariously that that kind of treatment should be meted out to it. Therefore, the Opposition will vote against this legislation. It does not believe that the Government has any kind of a mandate to introduce it. So far from having a mandate, the introduction of the legislation breaks a clear promise given by the Prime Minister that no capital gains tax would be introduced by a Hawke Labor Government, let alone a retrospective capital gains tax. If this legislation is passed the Parliament will not only be sending many companies and businesses into liquidation, it will also be disemploying many thousands of Australians. In passing this legislation the Parliament would, in my view, and I believe in the view of the great majority of the Australian community, and I think also in the view of many government supporters in their more rational moments, be entering very dangerous, uncharted waters. It is one thing to recoup retrospectively unpaid company tax that should have been paid in the first place. It is entirely another to impose retrospectively a capital gains tax, particularly in respect of accumulations of capital that could go back as far as 50 to 100 years, as would be the situation with some of the companies that would be affected by the legislation. Finally, the Opposition will be behaving consistently with the stance and attitude that it took last year. Our attitude on each of these issues was then explained in virtually the same terms. In the moments remaining to me I would like briefly to state the Opposition's position in regard to the cash payments legislation. Some features of the legislation disturb us and will be the subject of more detailed comment by the honourable member for Mitchell (Mr Cadman) and others. I refer particularly to the absence of assurances that subcontractors and the subcontracting system, which provides a fine example of independent small business operation in Australia, will be protected. In the absence of such assurances, we are concerned. We would also like some explanation concerning why the Minister for Finance has gone soft and has raised the threshold from $3,000 to $10,000. He is the great anti-tax avoidance crusader, but when it comes to a little cash, he buckles at the knees on the first test. The Minister said that $7,000m was sloshing around out there; that all that was needed was to apply the great sponge that would be provided by a Labor Government and soak it all up. What is his first offering? It is a pretty miserable compromise, having in mind the original announcement by the former Government. I know a little about this legislation. I had a little bit of dicussion concerning it when I was the Treasurer with not only officers of the Government but also the business community. I would like to know why the Minister for Finance has lifted the threshold from $3,000 to $10,000. Why is he going so soft in this area? Why has this great crusader suddenly gone soft on this issue? The Opposition will move a second reading amendment which will relate to contractors . We will follow the course of the legislation very carefully. The Minister knows as well as I do that many people in the building and construction industries are concerned about this proposal. Let me say in fairness-I wish to state the position truthfully-that the Opposition supports the principle of the legislation. It was embraced in the last Budget. I know that it is unpopular with such bodies as the Housing Industry Association, which has genuinely held concerns. I did not fully accept them when I was the Treasurer, indicating that the legislation would go ahead and that we did not support a reporting system. To that extent I am on common ground with the Government and will not pretend to oppose the substance of this legislation. Indeed, I support it. However, if we in this Parliament are to become really serious about the cash economy certain action must be taken. I believe that it costs the revenue literally thousands of millions of dollars more now than do sophisticated tax avoidance arrangements which, as most experts realise, are completely and utterly dead. The best evidence of that is that we have seen no legislation designed to kill it off come forward from the new Government. If we are to become really serious about the cash economy in Australia we will have to consider changing our taxation base and place a much greater reliance on indirect taxation. Mr Robert Brown —No, that is no solution. Mr HOWARD —Government supporters want to have it both ways. My views on the subject are well known to the Parliament and to the Australian community. I believe in indirect taxation and believe that there should be a greater reliance on it. Overall, that is the kind of change that we must move towards if we are to become really serious about the problem. The Opposition will monitor very carefully this legislation and its operation. At a later stage I will move that the motion for the second reading of the Income Tax Assessment Bill be amended in these terms: That all words after 'That' be omitted with a view to substituting the following words: whilst not declining to give the Bill a second reading, the House is of the opinion that it contains inadequate provision to protect the independence and continued survival of sub-contractors. Madam DEPUTY SPEAKER(Mrs Child) —Before calling the honourable member for Bendigo, could I suggest to honourable members who have difficulty in knowing how to address a woman in the chair that Mr Speaker suggests that 'Madam Deputy Speaker' would be quite acceptable. Mr BRUMBY(Bendigo)(4.25) —I rise to join this debate and speak in support of the wide range of new and amending taxation legislation which is now before the House. The Taxation (Unpaid Company Tax) Assessment Amendment Bill and the Taxation (Unpaid Income Tax-Dividends) Bill give effect to the Government's election undertaking to recover personal tax avoidance by former owners of companies which were the subject of bottom-of-the-harbour schemes. The legislation provides that persons who benefited from the sale of shares in companies that were stripped of pre-tax profits should not be limited only to the tax that should have been paid by the company concerned but should also pay the tax that, as shareholders or other former owners, they escaped through receipt in a non-taxable capital form of accumulated after tax profits that, if the companies had continued to operate as going concerns, would have been taxable as dividends in their hands. The revenue implications of these two Bills is significant and I shall comment on that matter and others related to this Bill in a short time. The Income Tax Assessment Amendment Bill 1983 gives effect to a range of taxation measures which were announced by the previous Government but which had not been implemented by the time of the election. Four Bills, the Income Tax ( Rates) Amendment Bill, the Income Tax (Individuals) Amendment Bill, the Income Tax (Companies) Corporate Unit Trusts and Superannuation Funds) Amendment Bill and the Income Tax (Payments for Work) (Consequential Amendments) Bill 1983 provide either consequential amendments or complementary legislation supporting the major Bill. The major features of the substantive Bill provide for the introduction of a system of deductions at source from payments for works and services, for a new system of accelerated depreciation allowances for new and second hand plant and for a modification of the scheme of tax incentives for investment in the production of qualifying Australian films. The remaining Bill before the House, the Income Tax Assessment Amendment Bill (No. 2) gives effect to a number of the taxation proposals arising from last Thursday's economic statement delivered by the Treasurer (Mr Keating). In the limited time available , I propose to concentrate my remarks on the two substantive aspects of the legislation before the House, that is the witholding tax provisions of the Income Tax Assessment Amendment Bill and the Taxation (Unpaid Company Tax) Assessment Amendment Bill. The need for a system of deductions of tax at source for payments for works and services is clear and has been well documented over many years. The Asprey Taxation Review Committee considered this matter in some detail in its report dated 31 January 1975. The Committee recognised that the tax instalment deduction system applied to payments of income made in circumstances where a relationship of employer and employee existed. However, in the absence of such a relationship, the Committee recommended that all payments substantially for the labour of one person or a small group of persons should be subject to a flat rate tax at source. The system envisaged by the Committee was similar to those which have been in operation in the United Kingdom and in New Zealand for several years. They advocated that an exemption, wholly or partially, from the flat rate deductions at source should be made available in certain circumstances . In its report the Committee suggested: The areas of activity to be covered by extending tax deductions at source might include the building and construction industry; primary production, including forest operations and fishing; the entertainment industry, including professional sport; and freelance writing. Following that report in 1975, the previous Federal Government, in its Budget of 15 August 1978, foreshadowed a number of measures designed to curtail avoidance of tax liabilities by persons paid in cash without deductions of tax for various forms of labour and services. The then Treasurer, in foreshadowing these measures, said that the amendments had become necessary because persons who had traditionally stood in the relationship of employer and employee were, to an increasing extent, entering into arrangements under which former employees assumed the role of independent contractors, thereby being entitled to payment in cash without deduction of tax at the source. Despite those announcements in 1978, it was not until the 1982-83 Budget that the former Government announced its decision to introduce a system of deducting at source an amount on account of tax in respect of certain payments for labour and services. The necessary legislation had not been introduced by the time of the recent Federal election and the Bill proposing these deductions at source is now before the House. The proposals in that Bill have important revenue implications. A number of overseas studies on the cash economy estimate that cash transactions constitute somewhere between four per cent and 30 per cent of the size of the total income economy. Australian estimates calculated this year indicate that as much as 36 per cent of all transactions might occur in the cash economy. Indeed, as one Australian study has suggested, between $2,000m and $2,700m of income tax is not paid because of the cash economy which represents slightly more than 10 per cent of total income tax receipts for the previous financial year. It should also be emphasised that this proposal to deduct tax at source and thereby minimise evaded tax liabilities is entirely consistent with the spirit of discussions at the recent National Economic Summit Conference. Clause 29 of the joint communique, released after the Summit, stated: All parties believe that there is a special obligation in the current environment to ensure that artificial tax avoidance and evasion is removed, including in the cash economy, and for the further development of the general understanding to this effect. This income tax amendment Bill also honours an important election commitment made by the Australian Labor Party in respect of the Australian film industry. I comment briefly on that. In the policy speech of 16 February this year, the now Prime Minister (Mr Hawke) in respect of the Australian film industry stated: Our main priorities in government will be to closely monitor, and adjust where necessary, film industry tax incentives to ensure the stability and expansion of quality Australian film production. Under existing legislation, film organisers have been obliged to produce scripts , raise funds, complete production and exhibit, all within an effective 12-month period. This has led to a definite bunching of films into an effective six- months production timetable. In the circumstances, production costs have been forced upward and the quality of films has been forced downward. The proposed amendments overcome this situation by allowing an effective maximum of up to three years and, through other measures, provide for overall increased support of the Australian film industry. I turn now to examine details of the recoupment provisions detailed in the Taxation (Unpaid Company Tax) Assessment Amendment Bill and the Taxation (Unpaid Income Tax-Dividends) Bill. The (Unpaid Company Tax) Bill and (Unpaid Income Tax -Dividends) Bill, as I have said, honour election commitments to recover personal tax avoided by former owners of companies which were the subject of bottom-of-the-harbour taxation schemes. These Bills also have important revenue implications for the Australan people and this Government. Under the existing recoupment legislation, it is anticipated that some $590m of previously avoided tax liabilities will be collected by the end of the 1984-85 financial year. The adoption by the House of this Bill, which incorporates additional measures to recover personal tax liabilities, will result in the collection of an additional $350m in the 1983-84 financial year and an estimated $220m in the 1984-85 financial year. It should be pointed out very clearly that the combined total of existing and proposed recoupment measures will therefore facilitate the collection of almost $1,200m of taxation revenue over the next three to four years. Such a sum, of course, represents almost $200 per head for each Australian taxpayer. Liberal and National Party opposition to the provisions proposed in this Bill will effectively cost $100 a head for each of Australia's six million taxpayers and will also ensure that future expenditure programs which might be undertaken by this Government will necessarily have to be raised from taxpayers who have already contributed their fair share of the tax revenue while those who have avoided their tax liability over a period of years would remain untaxed. Arguments advanced in opposition to this Bill are specious, and I intend to examine several of the supposedly contentious aspects of the Bill raised by the honourable member for Bennelong (Mr Howard). Our opponents have argued that there has been no avoidance of personal tax in relation to the capital profits component of accumulated profits on the grounds that, if the vendors had liquidated the stripped company, that part of the liquidators' distribution would represent capital profits which would not be subject to personal tax. The reality is that the profits were stripped while the target companies were, in a practical sense, going concerns, and the existing legislation requires that both revenue and capital profits distributed by an ongoing company should be taxed in full. This approach is consistent with the operation of Part IVA which treats both capital and revenue profits as part of the tax benefit which a vendor-shareholder receives from the dividend stripping scheme to which that Part applies. Another matter of apparent contention relates to the rate of tax payable on deemed dividends. It is argued that if shareholders are to be taxed on deemed dividends at their marginal rate of personal tax for the year of income in which the shares were sold, certain high rate taxpayers will pay a higher marginal rate than the normal 50 per cent rate which applies to the undistributed profits of private companies. The Government believes it is appropriate that former owners be taxed according to their marginal rate of personal tax, because this rate is the correct measure of the tax they avoided by receiving the profits of the stripped company as a capital sum rather than as a dividend. It should be noted that the rate of Division 7 undistributed profits tax does not represent the full tax payable on undistributed profits. If undistributed profits tax is paid, the balance of the profits after payment of that tax will be subject to tax when ultimately distributed to shareholders. Upon sale of the shares the vendor-shareholders have, in fact, received the balance of profits in the form of the sale price of the shares. The final matter relates to the whole question of avoided tax on accumulated profits. It was argued previously by the honourable member for Bennelong that there has been no avoidance of personal income tax in relation to accumulated profits on the grounds that, if the shares in the stripped company had not been sold, the accumulated profits would have been retained in the company indefinitely; that is, until its eventual liquidation. The fact of the matter is that the vendor-shareholders received all the accumulated profits of the stripped company in the form of the sale price of their shares, with some reduction for promoters fees, and the existing income tax law applies. So distributions of profits to shareholders by a company that is a going concern are, indeed, taxed as dividends. It is my firm view that the Government has been generous in the provisions of this recoupment legislation. In my mind, there is no question that tax has been avoided. There is equally no question that that tax so avoided should rightfully be collected. It is absurd to suggest that this Bill represents a retrospective capital gains tax. If it did, the expected revenue gain over the next four years would be considerably greater than the $570m or $590m which has been estimated. Much of the tax avoided occured between 1975 and 1978. Many people would argue strongly that the Government ought to demand not just the amount avoided at that time but also an additional amount representing the opportunity cost of the interest on those tax liabilities between that time and the present. Clearly, any individual who avoided $1m in 1975 has not only avoided payment of that tax at that time, but also has received the benefit of interest free finance to the value of $1m over some eight years. Even if that liability to the Government is discharged next financial year, the loss in real terms to Government revenues is in the order of $600,000 and the effective gain in money terms to the tax avoider over that period is equally $ 600,000. As I indicated, I believe the Government has been generous in that respect. Had this Bill provided for the payment of additional interest or penalties, the total revenue yield would increase by some $270m to $280m. In conclusion, I commend all taxation Bills before the House to honourable members. I reject the proposition that the recoupment tax is, in effect, a retrospective capital gains tax. I particularly commend the latter Bills, the recoupment Bills , on which I have spoken at some length. Mr ROCHER(Curtin)(4.42) —I want to speak on two of the taxation Bills now before the House. Firstly, I will address some remarks to the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983. Hitherto, the Act which it is proposed to amend by these measures raised a retrospective tax that required assessment of the tax liability equivalent to that which would have applied in the normal course of events-normal, that is, if companies and their current year profits had not been dealt with fraudulently by purchasers, sub-purchasers and/ or their associates. The Act, as it stands, imposes no tax obligations on vendor-shareholders where they, the purchasers and the subject companies, all acted at all times entirely within the law and pursuant to written law and decisions of the High Court of Australia. The amendments proposed to change all that in an unprecedented way. If these mindlessly vengeful, vindictive changes are passed by the Parliament, the consequences for the wealth-creating private sector and employment within it will be very serious indeed. The amendments envisage, among other things, removal of the trigger of fraud as a necessary pre-condition for recoupment taxes; the raising of taxes and penalty taxes on lawfully accumulated, undistributed profits on which company, possibly Division 7, taxes have already been paid; and raising of taxes and penalty taxes on capital reserves, capital gains and even goodwill. I point out that some of those capital reserves are non-cash items, as is the case with goodwill. Profits accumulated over many years, after distribution of mandatory dividends and payment of undistributed profits tax, become taxable under these proposals. It should be acknowledged that if those accumulated profits had been distributed by way of dividend or on liquidation if the winding up process had left a surplus in shareholder's funds, shareholders would have been taxed for funds distributed , but at marginal rates ranging from about 30c to 60c in the dollar. However, I want to assure the House that that did not happen in many cases which are the subject of these measures. Many companies were sold in a manner which the High Court of Australia ruled completely legal. Despite the legality of transactions and the once legal tax benefits that accrued, a liability to pay a new tax is now to be created. The given reasons for this legislation are faulty in that certain sets of circumstances are likely to have happened which make them faulty. I will now read an account from a constituent of those likely circumstances. I do so even though it is a long passage because I think it expresses the view adequately. It reads: Many of the companies in which the shares were sold had been carrying on a business. The purchasers were not interested in carrying on the business of the company and the shareholders still wished to carry on the business of the company. Accordingly, the business of the company was sold to another company in which those vendor shareholders also held shares, perhaps a new company formed to take over the transferred business. The new company did not have sufficient funds with which to purchase the business from the company whose shares were being sold by the vendor shareholders. What happened is that the vendor shareholders, from their proceeds of sale, loaned those funds to the new company, so as to enable it to pay the old company for the business. In this type of case, the consideration received by the vendor shareholders for their shares was not able to be retained in the pockets of the vendors but was immediately re-injected into the business, which was now owned by the new company. In fact, it was also necessary for the new company to obtain further funds to enable it to purchase the business, as funds were needed to replace that part of the assets of the old company which went to the promotors by way of fee on the transaction. Thus the situation was that, on the one hand, the new company had assets in its business represented by trading stock, debtors and cash, whereas on the other side it had a loan owing to its shareholders of the amount injected into the company. Although the tax on the current year profit may have been able to be met from the company's liquid assets, that was not so with accumulated profits which had been converted into non-cash assets. The Bill now seeks to tax amounts which have been re-injected into the company and are still tied up in the form of working capital within the business. Payment of the dividend recoupment tax could only be made by liquidating the company's assets and, in a great number of cases, this will mean the closing down of the business with consequential unemployment of literally hundreds of employees. I heard the Deputy Leader of the Opposition, Mr Howard, make that point starkly. This amending legislation requires vendor shareholders to be treated as if they had received a dividend from the company, and that is plainly not the case. It may be all right if the shareholders had received the proceeds in cash and were free to spend them, but in cases in which proceeds from sales were used to ensure that businesses were able to continue uninterrupted, gross inequities arise. It is patently unreasonable for those vendors who were not free to spend the proceeds of a sale to have to find funds to pay tax on accumulated profits which, for all intents and purposes, are still locked up in a continuing business. The Minister for Finance (Mr Dawkins), in his second reading speech, said that vendors: . . . escaped through receipt in a non-capital form of accumulated after-tax profits, that, if the companies had continued to operate as going concerns, would have been taxable as dividends in their hands. The plain truth is that if the company had continued in business as a going concern, those accumulated after tax profits would not have been distributed. In the cases I have outlined, the vendors have continued the previous businesses as new companies without interruption and with all the funds of the old fully utilised in the new. Remembering that the transactions I have outlined were legal and at the time had the imprimatur of the High Court of Australia, these new taxes should not be imposed in the cases described. The Australian Labor Party in its 1983 policy speech professed an appreciation of the importance of profits and the ability of companies to retain them. On 16 February 1983 the Prime Minister (Mr Hawke) said: We shall legislate to allow up to 100 per cent retention of profits by small businesses where these funds are to be used for genuine business operations. If that remains one of the few promises to be kept, this legislation should reflect that commitment. These amendments should not attack, by new retrospective taxes, accumulated profits which were immediately reinvested in a business taking over the business of a former entity. The only exception to that general proposition may, perhaps, be vendor shareholders whose reinvested funds were subsequently distributed to shareholders by the new company. This Bill proposes, among other things, to repeal sub-section 3 (12) of the present Act. This sub-section provides exemption from the provisions of the principal Act to vendor shareholders of companies which were not part of a stripping arrangement, and for other specified reasons. The Minister for Finance has claimed that the provision 'defies logic'. The logic offered by the previous Government for including sub-section 3 (12) in the principal Act may defy only the Minister's logic, which seems to be clouded by his lust for vengeance. Mr Dawkins —I got you your pre-selection, Allan. What are you talking about? Were it not for me, you would not be here. Madam DEPUTY SPEAKER(Mrs Child) —The honourable member will ignore the interjection and continue. Mr ROCHER —I am sure that the Minister is numbered among that whole number of back bench left wing crows that comprises a large part of the back bench and a great deal of the Government, but he may yet have the perverse satisfaction of cawing over and picking over the bones of the Australian economy if he does not come to his senses. Examined unemotionally, the previous Government's logic called for vendor shareholders who benefited financially from the subsequent and fraudulent activities of purchasers or their associates to recompense the Revenue. Vendor shareholders were deemed to be innocent of any prior knowledge of the fraudulent intent of the purchasers, and rightly so. Indeed, where fraud did not occur subsequently, the previous Government's rationale for its legislation was not present. It is as simple as that. I might add that that should be perfectly clear and logical, even to the Minister for Finance. His amendments, including the repeal of sub-section 3 (12), adopt the simple if preposterous concept of retrospectively taxing what were at the time they took place perfectly legal transactions, not distinguishable by the presence of fraud . There are other reasons that I should like to advance for my opposition to the Bill, but I estimate that time will not permit that. I simply observe that the title of one of the Acts becomes a little inappropriate because it is no longer dealing solely with unpaid company tax. I turn now to another of the Bills being cognately debated, which is to provide for what is rather quaintly called collection of tax at source. It is a new system of collection restricted in its application to certain industries and occupations. In effect, the reputable in certain areas of endeavour are to become tax collectors and policemen in the unpaid service of the Australian Taxation Office and this Government. The paperwork and bureaucratic procedures to be imposed on business are not only onerous in terms of legal obligations; they will also be enormously costly to those charged with the responsibility of reporting, deducting and remitting payments which are of a certain kind. What that kind is has yet to be prescribed but we are told that it will be prescribed in future regulation; I repeat-in future regulation. So incompetent is this Government that Parliament is being asked to debate the merits of legislation without knowing the essential ingredient-that is, what kind of payments are to be considered source payments. Are deductions to be made or reported only by the payer who is the first in a chain of transactions, for instance? Is a payment by a building contractor to a sub-contractor the beginning and the end, or are subsequent payments by the sub-contractor to his sub-contractor also to be caught in the net? What about payments by the sub-sub- contractor to his sub-contractor? Those chains of events occur. Because it is extensive and sophisticated beyond the capabilities of this Government apparently to understand, the contracting system which is integral to the building industry could well be among the first casualties of this legislation. By the time that the first dollar paid by the prime contractor finds its way to the end of the line, it could be worth much less than 50c. That would be so in very many cases. This legislation has the earmarks of an attempt to meet calls to come to grips with tax evasion possibly in what is loosely called-often very loosely called- the cash economy. However, limited as it is to the building industry and associated industries-road transport, vehicle repairs and cleaning-I believe that it will not even scratch the surface. By dint of sheer weight and volume, the big money in the cash economy is to be found in areas such as cash payments made by householders to pensioner and other cleaning ladies, to lawnmowing contractors, to odd job men, and to gardeners and the like. Are Ministers of the Government, in their anxiety to come to grips with tax evasion in the cash economy reporting payments they make to their cleaning ladies for household help to the Taxation Office or the Department of Social Security? I bet they are not, but for spurious and ill-considered reasons they are prepared to single out part of industry for attention. I suspect they are content to inflict in industry and commerce obligations to report payments, to deduct and remit tax deductions which they cannot discipline themselves to do in their private lives. This latest example of double standards will be at great cost and inconvenience to those affected. In the building industry it will become necessary for the smallest company to report payments to the largest corporations in the land, even though the latter, the large corporations, will be exempt from deduction requirements. What possible justification can there be for a small contractor or even a householder to have to fill in a form each month to report to the Taxation Office payments that he, she or they make in the ordinary course of business to a subsidiary of the Broken Hill Proprietary Co Ltd or even to Monier Ltd? What possible justification can there be for that? That is what is required by this legislation. It is bureaucracy gone mad. Even putting that aside, and we should not, the Government gives us no idea of the level of increased collections as distinct from advanced collections it expects to get from this measure. If it is based on some unsupported notion that tax evasion is rife in the target industries and businesses, we should also have some idea of the cost benefits. The additional costs to be inflicted on the private sector should be justifiable on a cost benefit basis. The benefits to revenue should not be largely or unreasonably offset by the cost of collection-the cost, I might add, to the private sector. We have no way of judging the efficacy of this measure because of an absence of basic fact and information. As far as exemptions for those who will be entitled to continue to receive deduction free payments are concerned, it seems that another unnecessary imposition to require most to apply for that exemption is to be made. Qualification for exemption could surely be simple. For instance, any employer business which satisfies criteria already in place for qualifying for group employer status in relation to pay-as-you-earn deductions must surely be a business of substance. Why cannot group employer status automatically confer exemption? The same group employer number could be quotable by future payers in their monthly reports on advice from the payees. These measures have not been thought through. There are implications for affected industries, in the nature of paper work, which cannot be gauged because of the paucity of information from the Government. I am afraid that the insensibility of this Government and its pre-occupation with tax raising measures indicates more to come, perhaps in the next Budget. I caution industry to watch events over the next few months. I sincerely suggest to members of industry that they get on their bikes and lobby this Government hard because we do not want further deterioration of business in this country with all that that means for the wealth creation process which only the private sector can create and be responsible for. Mr ROBERT BROWN(Hunter)(5.0) —The legislation which the House is considering at this time represents a very significant list of Bills, all of which are important in connection with the general structure of the taxation system in Australia. The particular Bills out of that set to which I will restrict my comments are the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 and the Taxation (Unpaid Income Tax-Dividends) Bill 1983. Most of the contribution towards the debate that I have heard so far appears to have been concentrated in that area. The passage of this legislation will take the Hawke Government further down the track to meeting its major commitments to the Australian people. In particular I refer to this Government's commitment to questions of equity and justice. I refer to its commitment to ensure that the taxation system as a whole operates fairly with equity and justice to all people in the Australian community, and its commitment to the ordinary wage and salary earners who for too long have been carrying the burden for the tax sharks in the Australian community. It was made perfectly clear during the period that the present Government was in opposition that, given the opportunity to put into place equitable and just taxation measures, as the Government of Australia, the Australian Labor Party would be certain to do those things. I congratulate the Minister for Finance (Mr Dawkins) for the rapidity with which these measures have been brought forward. The present Government's intentions in relation to this legislation have been made clear on at least two occasions, so it does not make very much sense for the former Treasurer, the honourable member for Bennelong, (Mr Howard) and other people in the community at large who have canvassed this matter to suggest that in some way aspects of this legislation have been sprung on the community. The nonsense references to a capital gains tax being applied retrospectively I would put into that category. As I said, notice was served by the present Government on at least two occasions to indicate the direction it would take in relation to the original legislation which was passed last year. The first occasion on which notice was served was when the original Bill, was being considered by the Parliament last year; and secondly, our intentions were also indicated during the election campaign. There is no doubt that this Government has sought and has been granted a very clear mandate to proceed along the lines along which it is proceeding at present. The recoupment legislation of last year will be substantially strengthened by this legislation. In effect it picks up all of those deficiencies, which we identified during the debate last year in order to make that legislation much more effective-with one exception. We might well call this the present Government's own hardship clause. That one exception relates to our earlier proposal to index the recouped tax to a current value, equal in real terms to the tax which was not paid at the time it was avoided. In other words, if the tax we are about to pick up, as a result of this legislation, was avoided in 1974, the tax that would be applied to those people who avoided it in 1974 would be, in real terms, equal to the amount in that year. In other words it would have been indexed from 1974 until 1983. We have indicated that we will not proceed with that proposition. I emphasise the generosity with which the Government has approached those tax avoiders as a result of that decision. The Minister in his second reading speech said: The measures contained in this Bill are estimated to yield $570m in total, and $350m in 1983-84. He continued: If the Government had required payment not only of tax owing but also of an additional amount for the period of delay in payment, the total revenue yield would have been $840m. So it appears that something like $300m in real terms, as a result of this legislation, will not be picked up from those people who initially avoided those amounts of tax. The honourable member for Bendigo, Mr Brumby, who spoke a short time ago, indicated that, in effect, what this means is that those people who engaged knowingly in tax avoidance practices have had the use of Commonwealth funds interest free from the time they engaged in those practices. Now, I think that is a remarkably generous concession for this Government to make towards tax avoiders. Let it not be said that this Government is unsympathetic to the types of situations in which these sharks, these crooks and these shysters might find themselves. We are extremely generous. This provision makes that perfectly clear . There is one matter to which I want to give special mention. The question has been canvassed both here in the Parliament, and particularly by the former Treasurer, the present Opposition spokesman on Treasury matters, the honourable member for Bennelong, and more widely in the community, as to whether or not these provisions represent or include in some way a tax on capital gains. The honourable member for Bennelong, in an earlier contribution in this debate, went so far as to say that we were introducing a retrospective capital gains tax. Mr Lusher —Quite so. Mr ROBERT BROWN —The honourable member for Hume, who is sitting at the table, interjected. He said: 'Quite so'. I am glad he said that. Obviously he has some responsibility for the Opposition in this debate, just as the honourable member for Bennelong has some responsibility. I want to nail this matter and nail it once and for all. I hope those who are not listening to the debate at the present time at least take the opportunity to read what I have to say and that they will not repeat that claim again. It has been argued that there has been no avoidance of personal tax in relation to the capital profits component of accumulated profits on the grounds that if the vendor has liquidated the stripped company, that part of the liquidator's distribution which represented capital profits would not be subject to personal tax. That has been the claim by those people who have suggested that this legislation represents, in some way, a tax on capital gains. Mr Lusher —That is not all. Mr ROBERT BROWN —That is the essence of the point that has been made. Let me nail it. The question of whether or not personal tax was escaped in relation to the accumulated capital profits of a stripped company depends on what, in substance, actually happened as a result of the scheme carried out to strip the company rather than on what might have happened had the vendors not sold their shares but instead retained control of the company. Mr Lusher —You are barking up the wrong tree. Mr ROBERT BROWN —I will not be sidetracked from the point I want to make. I understand the embarrassment which has been caused to the honourable member for Hume (Mr Lusher). I understand the embarrassment that will be experienced by the honourable member for Bennelong as soon as he takes advantage of the opportunity to read what I have to say. I will not be sidetracked again in relation to the explanation I want to make. Two features of the bottom-of-the-harbour schemes are significant. First, the vendors, in fact, received the profits, both capital and revenue, of the target company at a time when the company was not in the course of liquidation. Indeed, even today, many of the target companies are still in existence even though many years have passed since the profits were liberated to the vendor shareholders. Secondly, the schemes did not involve the discontinuation of the business of the target company. On the contrary the business was almost invariably transferred to another entity, either a company or a trust, controlled by the former owners of the target company. These two features of the scheme led the Government to conclude that the former owners should be taxed as though they received the profits of the target company while it was a going concern. The existing income tax legislation requires that both revenue and capital profits distributed by an ongoing company not in liquidation should be taxed in full. Accordingly, personal tax has been escaped in relation to both revenue and capital profits of the target company. This approach is consistent-I emphasise that-with the operation of Part 4A which treats both capital and revenue profits stripped from a company as the tax benefit which vendor shareholders receive from a dividend stripping scheme to which that Part applies. That is particularly significant because the honourable member for Bennelong, who was making the claim that this represented in some way a new type of retrospective tax on capital gains, was the person who introduced that legislation. Now apparent to me is the honourable member for Bennelong's deficiency in understanding just exactly what the new Part 4A meant. He introduced it into this Parliament, when Treasurer, but he did not understand the significance of it, to a very large extent. The honourable member for Bennelong said that there was nothing new in this legislation which had not been canvassed during the debate last year. That is true. There is nothing new in this legislation which was not canvassed during the debate last year. One of the points made at that time was that there was a possibility-we had considered it-that in order to achieve the objectives of this legislation all we needed to do was to extend back the provisions of the former Treasurer's Part 4A to 1972. We could have done it that way. We choose not to. In fact, we have chosen to introduce amending legislation to achieve the same objectives. But there was a possibility that we could have done it that way. Why was it possible that we could have done it that way? Because the provisions in this legislation are provisions of essentially the same kind which are contained in Part 4A for which the legislation was introduced by the honourable member for Bennelong. I think we need to be reasonable. I think the honourable member for Bennelong needs to be reasonable. He cannot have it both ways. He introduced Part 4A. If that Part 4A contains exactly the same sort of provisions that are contained in the legislation he cannot, on the one hand, support his own legislation and, on the other hand, condemn this legislation. As a result of that very serious inconsistency into which the honourable member for Bennelong has fallen, that is the position in which he finds himself. The original legislation was introduced into this Parliament by the former Treasurer on 23 September last year. It was then reintroduced in a changed form on 21 October 1982 after what was referred to at that time as 10 days of protracted negotiations with the back bench. Why were these protracted negotiations with the back bench required? They were required because members of the back bench at that time were responding to the pressures being exerted on them by powerful financial and crook interest in the Australian community. They were then, in turn, applying pressure on the Treasurer and, indirectly then, through the Treasurer-- Mr Howard —I take a point of order, Mr Deputy Speaker. The use of the expression 'crook' in the context of this debate and in the context in which the honourable member for Hunter, for whom I have a very healthy respect as a lusty debater, uses it goes beyond all the bounds of reason and truth. Mr DEPUTY SPEAKER —Order! The honourable gentleman has made his point of order. The point of order is not upheld. The honourable member for Hunter was talking about crook influences being exerted. I think that was the term he used. It is not a reflection on the honourable member. There is no point of order. Mr Howard —I am not suggesting it was. It is a reflection on him. Mr ROBERT BROWN —I am not the crook. We know who the crooks are. We know the Denis Horgans, Brian Mahers and all of those people who have been given some protection. Mr DEPUTY SPEAKER —Order! The honourable member will be out of order if he proceeds along those lines. Mr ROBERT BROWN —With respect to you, Mr Deputy Speaker-- Mr Howard —Mr Deputy Speaker, I raise a point of order. The reference to Mr Horgan is most unfair, particularly as the Attorney-General in the Labor Government certified to this Parliament that there was nothing out of order in relation to that gentleman. The honourable member ought to have the decency to withdraw his comments. Mr ROBERT BROWN —I will not withdraw any statement I have made. I will not call Denis Horgan a crook again; that is already in the Hansard. As all honourable members know, Denis Horgan was up to his eyes in the dry Slutzkin schemes. I will not be intimidated by these people who suggest that in some way I have to restrain the references that I use in connection with people such as that. As I have said, the legislation was reintroduced into the Parliament on 21 October. It came back after 10 days of protracted negotiations with the back bench. We all understand the factors, forces and pressures that lie behind that. The Opposition shadow Treasurer at that time, the honourable member for Gellibrand ( Mr Willis) who is now the Minister for Employment and Industrial Relations, responded at the second reading stage of the debate. In the limited time available to me I want to have his comments recorded in Hansard because I think they sum up more than adequately our general concern about this legislation and about the lack of genuineness on the part of the previous Government in connection with its appraoch to questions of this kind. The honourable member said: The Taxation (Unpaid Company Tax) Assessment Bill (No. 2) and associated Bills now before the House, far from being the triumph over tax dodgers which the Prime Minister (Mr Malcolm Fraser) has so proudly proclaimed, represent only the latest chapter in the greatest tax scandal which this nation has ever known, a chapter which again demonstrates the Government's weakness in dealing with tax dodgers. It is a scandal which has encompassed negligence and culpability on the part of senior Ministers, inexcusable government delay, bureaucratic bungling and incompetence, protection of tax dodgers in the Liberal Party's own ranks, irreparable government splits and prime ministerial hypocrisy and inconsistency. The smell of this scandal has tainted not only the entire government but also has reached far into some of the previously most exclusive sections of the Australian establishment. Most of all, however, this scandal has encompassed a massive rip-off of the vast majority of honest Australian taxpayers. How dare honourable members on the opposite side of the House suggest that there may have been some offence in terms that I use within this Parliament? The obscene offence has been committed by people outside this building-people in the financial establishment, in the commercial world and within the legal fraternity . It has been committed by the accountants and all the people who promoted, devised, implemented, encouraged and enticed shareholders in private companies and other companies to do what they could to avoid their tax responsibility so that, as we know, the total area of tax avoidance and tax evasion in Australia represented something in excess of $30 every week for taxpaying families. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mr LUSHER(Hume)(5.19) —There is a certain deja vu about this debate. Earlier this afternoon I looked at Hansard from October 1982 when I made a contribution to the debate on the principal Act. The Taxation (Unpaid Company Tax) Assessment Bill was being debated at that time and it is the subject of amendment today. I noticed that in the debate I preceded the honourable member for Hunter (Mr Robert Brown). He was still in the chamber and was interjecting on me during that debate. Here we are again. We might have changed the side of the House on which we sit, but probably little else has changed. A package of Bills is before the House. The Taxation (Unpaid Company Tax) Assessment Amendment Bill and the Taxation (Unpaid Income Tax-Dividends) Bill undeniably are the most important aspects of the package before us. I think the payments for work section of the Income Tax Assessment Amendment Bill is fairly significant also, particularly as it is Labor's first attempt, maybe its only attempt, to come to grips with the problems of the cash economy in our society. The Opposition intends to oppose the retrospective legislation that is before us. That attitude, as my colleague the Deputy Leader of the Opposition (Mr Howard) pointed out, is consistent with the attitude that we took last year when we were in Government. The provisions of the Bills which we will oppose are the reverse of the legislation that we passed or, alternatively, are proposing change that was considered by the Government and rejected in October last year when the legislation was before the House. Principally, my opposition to this legislation is that it creates a new liability and creates that liability in a retrospective fashion. The Taxation (Unpaid Company Tax) Assessment Amendment Bill opens up the whole sorry debate about retrospectivity and recoupment that led to so much bitterness and genuine concern last year. Let us be clear about a few things right from the start. Last year's legislation was recoupment legislation. This legislation is retrospective legislation. Last year's legislation recovered a benefit which was in the hands of beneficiary vendor-shareholders. The Bill creates new liabilities that did not exist before, and imposes a penalty rate of tax on that new liability. Last year's legislation dealt with outstanding assessments, uncollected but assessed company tax. This Bill will require new assessments to be issued in most cases, I suspect, going back to before 1980 when the schemes were effectively stopped after Part IV of the Crimes Act was introduced by the former Treasurer. There is no precedent for legislation of this nature. I believe it will make thinking Australians sick to the stomach. It goes against all principles of fairness and equity and all because of the Australian Labor Party's ideological hatred of free enterprise and the ability of the private sector to order its financial affairs according to the law of the land. I believe it is essential that this legislation at least be delayed. There must be further debate on the matters that have been put before the House by the Minister for Finance (Mr Dawkins). There must be further consideration not only in this Parliament but also outside of the matters raised in this legislation. I think there has been indecent haste about the proposals that we are being asked to consider. This legislation was introduced into the Parliament on 18 May, a week ago. It is being debated today. As I understand it, the Government expects that it will go through the House today. It is being debated, as far as the outside world is concerned-I think that is important in matters of high taxation policy, as this undoubtedly is-in an atmosphere of ignorance. I do not think anybody yet understands what is in this legislation and what the Government is seeking to do . Those of us who were here at the time will recall the extent of discussion and debate, the extent to which people were able to put views-and ultimately the consideration given by the then Treasurer to that debate and those views-and the amendments that were made in last year's recoupment legislation. This legislation is far more significant than last year's legislation ever was and I believe it deserves at least a similar amount of time for consideration by the community. I am concerned that the Minister for Finance in his second reading speech creates a series of hypothetical situations and then seeks to apply tax to those situations. His second reading speech is riddled with phrases such as 'if', 'on the basis that', 'imputed dividend', 'deemed to have been paid' and a range of others which are, if nothing else, totally lacking in certainty. Phrases in the Bill include 'if the companies had continued to operate as going concerns', 'on the basis that the company had paid a dividend to the former owner', 'this imputed dividend', et cetera, and 'the dividend will be deemed to have been paid '. They are totally hypothetical situations. This is not satisfactory. Mr Howard —It is Dawkinsspeak. Mr LUSHER —It is Dawkinsspeak as opposed to Hawkespeak. Mr DEPUTY SPEAKER —Order! I take the opportunity to mention that there has been a tendency of late for honourable members to refer to other honourable members by their names rather than by the names of their electorates. I think it is far better that we arrest that trend as early as possible. Mr LUSHER —This legislation is of vital concern because people will be faced with taxation assessments which would not previously have been issued. They cannot be issued until this legislation is passed. It needs to be made clear that the Government has no mandate for this legislation. The Commonwealth has never been entitled to collect tax on company reserves at a penalty rate of 60 per cent. I do not believe that the Government put that to the electorate at any stage and it absolutely improper to claim a mandate for that provision. Two things need to be understood: There is no suggestion of revenue lost to the Commonwealth under anything that the Government is seeking to change by this legislation; and distributions for capital reserves never have been taxable on liquidation. As anybody who knows anything about business would know, which eliminates most people on the Government side of the House by definition-I defer to the honourable member for Robertson (Mr Cohen) who obviously knows a great deal about business-nobody would distribute reserves if a company was to be of an ongoing nature. The Bill, if enacted, will impose a dividend recoupment tax. It will assume that a dividend may have been paid and that that dividend would have been taxable in the hands of the recipient. It will then proceed to collect that tax. In legitimate non-bottom-of-the-harbour situations the income that will in reality be taxed was a capital payment on the sale of shares. Because of that, the Bill will impose tax on capital gains retrospectively. I listened to what the honourable member for Hunter (Mr Robert Brown) had to say when he preceded me on this matter, especially the remarks that he made toward the end of his speech. He was not dealing with the real issue. I pointed out to him that he was barking up the wrong tree. What the Opposition and I are concerned about, as far as the retrospective capital taxing aspects of this legislation are concerned, is simply that what the Government seeks to do is to redefine capital as income and then tax that income retrospectively. That has the effect of taxing retrospectively, capital gains. There goes just another of the Hawke Labor Government's election promises. The Government is effectively legislating to overturn the High Court's decision in the Slutzkin case and is seeking to make that legislation retrospective. The existing Act, the former Treasurer's Act, fully provides for recoupment of taxes which were not collected . This Bill proposes penalty taxes that were never lost to revenue. There was no assessable income to be taxed and there still is not. This Bill has to create that revenue before it can tax it. This Bill retrospectively creates assessable income and then turns around and taxes it at 60 per cent. That is pretty insidious legislation. The Slutzkin case established the principle that the purchase price received on the sale of shares in a company with accumulated profits was not taxable. If in fact a company is to be wound up for whatever reason the distribution of capital profits and reserves is not taxable although, to the extent that the distribution is from revenue, profits would be taxable. What would people who had to dispose of companies do? Obviously they would take the advice of their accountants-for all sorts of honourable reasons; there is no suggestion of scheming-and, having the requirement to dispose of companies because of the change in the nature of business, they would take the Slutzkin track and sell the shares in the company to people who were prepared to pay for them rather than wind up the company, distribute the proceeds and run the risk of having to pay tax unnecessarily under the legal framework at that time on that part of the distribution that may have been from revenue profit. That is perfectly proper. There is nothing illegal or wrong about that. But this Government wants to redefine that and say: 'Well, that is all income; that is not capital and we are going to change it retrospectively and impose a penalty rate of tax of 60 per cent on it'. There was nothing wrong with Slutzkin. What was wrong was that purchasers or promoters, who in some cases were rogues, paid a premium for companies that were subsequently rendered incapable of paying the company tax that had been assessed on the profits that the companies had made. The existing Act introduced by the then Treasurer, now Deputy Leader of the Opposition, recovers that unpaid tax from the beneficiary vendor. This Bill not only reverses the Slutzkin decision but also extends the tax liability to capital profits and exempt income that were never liable to tax. I regard that as iniquitous. This Bill removes the earlier requirement that there must have been an arrangement as a result of which the company was rendered unable to pay its company tax. That was provided in clause 5 (1) (h) of the Taxation (Unpaid Company Tax) Assessment Bill 1982. This Bill seeks to have application in any case where the shares have been sold and company tax has not been paid. There is no requirement that there be an arrangement, no requirement that there be some scheme, some fraud or something improper. There is no protection whatsoever for honest, legitimate and decent people who for all sorts of reasons, as part of the restructuring and structuring of their affairs, have to take decisions of that nature. The net of taxation is unfairly widened to include all manner of transactions that may have had proper and justifiable motivation. But this Bill strikes further at an individual's rights and protection. It removes section 3 (12), the so-called innocents section, that was designed to protect vendor shareholders where the purchaser, who may have been a promoter, and the company acted legally at all times. These were not bottom-of-the-harbour situations and deserved some protection. They were given some protection in the 1982 legislation. This Bill seeks to withdraw that protection. It exposes people who acted legally and who had no taxation liability to a retrospectively created liability which is to be calculated at a penalty rate. If that is not iniquitous , I do not know what is. I want in the few minutes remaining to make a few comments on other aspects of the package of Bills before the House. Provisions have been put before the Parliament in relation to the cash economy and aspects of payment to contractors for work. As far as I am concerned the Government and the Minister for Finance have squibbed it. They have walked away from any real attempt to deal with the cash economy that operates right through our society and have raised from $3,000 to $10,000 the threshold on the amout that will be considered. Anybody who knows anything about the reality of our society and the cash economy knows it is way below that level that revenue is being lost. It is being lost in hundreds of dollars here and there of taxation that is not being paid. What is happening is that the Government is imposing further on business. It is asking the business community to collect its taxation for it. There is far too much impost on business. It collects our sales tax and all sorts of other taxes for us but this Government wants it also to collect this withholding tax. In addition to that, it will create a totally bureaucratic situation; it will add significantly to the bureaucracy in this country. As I understand it, the Government will be monitoring all local government approvals for work over $10, 000, for all the 700 or 900 local councils across Australia, so that it can have taxation collected on those amounts. Before I close I want to draw attention to the further series of slugs on the rural sector. It is absolutely unbelievable that in one week we have seen Bills introduced which, amongst other things, provide for depreciation to be extended from 20 per cent to 30 per cent and then, within days of that, the Treasurer in his mini-Budget reversed that decision before it had even gone through Parliament. The bush is in a bad enough position without having to take slugs of that nature, let alone cope with measures like that being introduced in such an absurd way. It points out that the decision making process of the Government is out of control. I reiterate that I will not have a bar of the retrospective legislation. I will not support it and I know my colleagues in the National Party will not either. Mr COHEN(Robertson-Minister for Home Affairs and Environment)(5.39) —Tonight in this cognate debate I want to make my remarks on tax changes regarding the film industry. I hope that I will make a slightly more measured contribution than the honourable member for Hume (Mr Lusher) did. No industry has excited the Australian public more than the film industry since its renaissance in the early 1970s. No government has yet found the magic formula that will achieve the much desired yet elusive stability the industry so badly needs. The proposed changes to section 10BA of the Income Tax Assessment Act are an attempt to achieve this. They have the support of both sides of the House-though at the moment only the honourable member for Berowra (Dr Harry Edwards) sits on the opposite side of the House-as the industry itself has always had such support. Wherever one goes in Australia, from the clubs and pubs to the boardrooms of business and right here to Parliament House, there is unanimous pride in the achievements of the industry. Picnic at Hanging Rock, Breaker Morant, Gallipoli and The Man From Snowy River, to name but a few, are films that not only have warmed and entertained Australians but also have had world wide success, even in the highly competitive American market. Today, five of the top 50 films screening in the United States are Australian. It would be an exaggeration to suggest that Australian films are sweeping the world but it is true to say that our films are amongst the most exciting developments in the film world during the past decade. Australia is no longer an unknown, largely boring land mass somewhere in the southern hemisphere. Jack Thompson, Mel Gibson and Judy Davis are almost as well known as our piddling koalas. Fred Schepsi, Bruce Beresford and Peter Weir are in constant demand in the United States to produce and direct films. The new Aussie wave of film making is not a fortunate accident; it happended because a few people had vision and determination. They were called dreamers, living in fantasyland. Australia once had a thriving film industry credited with producing one of the first full length feature movies, Soldiers of the Cross. Until recently, however, the efforts of pioneers such as Ken Hall, Charles Chauvel, Frank King Sr and Raymond Longford had been largely in vain. Despite a few attempts after World War II with films such as The Overlanders, Eureka Stockade, Bitter Springs and Bush Christmas, by the 1950s the Australian film industry had virtually ceased to exist. For the next 20 years films about Australia were made here by British and American producers and actors. Much as I admire John Mills and Ernest Borgnine, it was absurd to see them play a couple of Australian cane cutters in Summer of the Seventeenth Doll. Occassionally an Australian actor such as Rod Taylor or Peter Finch made it overseas but he did so without having been part of a local industry and without being identifiably Australian. The critical year for the industry was 1970. People like Phillip Adams, Tony Buckley and our colleagues the Minister for Science and Technology (Mr Barry Jones) and the President of the Senate lobbied the government of the day to revive our film industry. The then Prime Minister, John Gorton, responded by appointing Phillip Adams, Barry Jones and the present honourable member for Wentworth (Mr Coleman) to an interim film committee that visited such countries as France, Poland, Canada and Sweden, the governments of which financially supported the establishment of indigenous film industries. The committee recommended that Australia have a film school, an experimental film fund and a film bank. But then John Gorton was sacked and the new Prime Minister, Sir William McMahon, appointed Peter Howson, not exactly the most visionary of members of parliament, to be the Minister responsible for implementing the committee's recommendations. When Howson failed to take any action Phillip Adams publicly resigned. The following day he received one of the famous McMahon telephone calls with the promise that the committee's recommendations would be accepted. The Australian Film Development Corporation started operating in 1970. I am delighted to say that the Minister for Science and Technology is now in the House. He is one of the very few pioneers of the renaissance of this industry, and Australia can be proud of the role he played. The Australian Film and Television School had to wait until the Whitlam Government took office in 1972. Though the film industry has enjoyed bipartisan support it has not been without its critics. Fortunately, parliamentarians have been active supporters of the industry and these current amendments to the Income Tax Asessment Act are a further indication of the support the industry receives from the Parliament of Australia. There are critics who believe that the present tax incentives are too generous. I think they fail to understand fully how the film industry differs from other commercial activities. Until 1977, the cost of a film was written off over 22 years. The Taxation Office regarded the costs of film production as being the same as for the establishment of any other business. Thus, the wages paid to producers, directors, actors and film crew were treated in the same way as wages paid to those who built a factory. These expenses are the capital investment and, as in other enterprise, are not tax deductible-they are part of capital formation. Most successful films continue to earn money for a number of years. After cinema release, there are re-releases, television sales and video cassette sales. That was the major reason for depreciation being allowed over 22 years. If the purchase of land, buying of shares, building of a factory, setting up of a shop, is not commercially successful, the asset will normally have some resale value. In some cases it is even possible to lose money on the operation and still sell the asset for more than the purchase price. However, if a film is a financial flop, and there are significant numbers in that category, the only thing that can be done with it is to throw it in the waste bin. The product is not an 'asset' but a can of celluloid. Herein is the key difference between film making and most other forms of investment-the very high failure rate of films in commercial terms. In the United States of America the success rate is one in 10. In Australia it is about one in five or one in six. Since 1970 some 29 films out of 139 made in Australia returned profit. Only very few have provided very large returns to the investors, namely Mad Max, Mad Max II and The Man from Snowy River, which, I might add, is breaking all records. The revival of the industry was the result not of investment but of the involvement of the Australian Film Development Corporation and other State film bodies. In 1977, to reduce direct government involvement and allow market forces to operate, the Federal Government permitted films to be written off over two years-50 per cent in each successive year. At long last the Government had recognised that producing a film was different from building a factory. It accepted that the 80 per cent production costs of a film that consist of wages should be treated as a normal business overhead and granted tax deductibility. The deduction ought to have been allowable within one year. This decision initially was presented as a major concession. I think that the former Treasurer, the honourable member for Bennelong (Mr Howard), who is now in the House, introduced legislation on this matter. As I said, the decision was presented as a major concession. It was not. It was merely the correction of a previous misconception. However, this apparently generous concession failed to attract investors in significant numbers. Investment in the film industry was still a considerable risk because if a film failed to reach the break-even point it was no great satisfaction to investors to have 60c in the dollar written off in tax if 40c in the dollar was going to be lost in four out of five films. Under this arrangement 100 per cent could be written off over two years. Government had still failed to acknowledge that investment in films was much akin to oil exploration-if one does not strike oil, all one has is a hole in the ground. I make the point that two different types of people are involved in the film industry today. One group consists of writers, directors, producers, actors and the film crew. They are the people who, no matter what the price, want to remain in the industry because they love it and they would even starve to stay in it. The other group consists of investors who want to invest money. The bottom line for them is profit. There is nothing wrong with that. The Government offers an incentive and the investors pick it up. They are entitled to make a profit. But they will stay in the industry only if there is a bottom line, which is profit. Mr Barry Jones —Or a good chance of it. Mr COHEN —Or a good chance of it. When the point is reached where the investment is not attractive with tax write-offs the investors will simply withdraw en masse. In late 1980 the Government announced that it would provide a 150 per cent tax write-off plus a tax exemption on 50 per cent of the investment. Thus, on an investment of $1m an investor on the 60c marginal rate would receive a $900,000 tax write-off. Additionally, if the film netted $1m, he would not pay tax on the first $500,000. The initial reaction of most people, myself included, was to regard this as an unbelievably generous incentive, especially attractive to tax avoiders. On closer examination the concession was not nearly as generous as it seemed. First of all, the first 100 per cent, as I said earlier, should always have been deductible. Secondly, a number of expenses such as prospectuses, legal fees, brokerage and marketing costs were not allowable. Marketing costs were permitted as deductions only when income from the film was forthcoming. These expenses amounted to approximately 15 per cent of the total costs, thus only 85 per cent was brought into calculation. The effective tax benefit was 128 per cent, not 150 per cent. If honourable members accept my proposition about capital formation, the net real tax write-off was 28 per cent. To make matters worse, the Government decided that the film had to be completed in one year. The resulting combination of an apparently generous tax write off-I am not saying that it was not generous but it was not as generous as it appeared to be-- Mr Howard —You made a mistake about the year. Mr COHEN —Yes. The resulting combination of an apparently generous tax write-off with the requirements for the film to be completed within one year led to chaos. Everyone rushed to take advantage of the benefits. The number of Australian films produced in 1981-82 leaped to an all-time high, stretching resources to the limit. Not surprisingly, costs sky-rocketed. When the dust had settled, a lot of shoddy films had been made and many investors had been left with their fingers burnt. It was true that if an investor put $1m into a film with an effective tax write-off of 128 per cent, he needed a return of approximately only $240,000 to break even. However, three out of five films did not return $ 240,000. This is the most important point that people must remember. One out of five broke even and the fifth went into profit. In the 1982-83 financial year investors gave the film industry a wide berth with only about a dozen feature films being made. The Fraser Government then promised investors the present amendments. These would allow the films to be made in two years and prevent the bunching-up that had occurred previously. I believe that it is important to restate the objectives of those who fought so valiantly for the re-establishment of the film industry. They wanted an industry that would foster our unique cultural identity. They hoped that by employing Australian producers, directors, actors and technicians, they would create a strong, viable industry that in time would stand on its own feet. They expected that this would project abroad the desired image of Australia with the concomitant spin-off for trade and tourism. It was envisaged that when this objective was reached, those employed in the industry and the tax revenues they gained by it would repay the Australian taxpayer for his initial investment. Obviously, we have not yet reached that point. Although Australia is producing some excellent films, many are still of inferior quality although I realise that quality requires a subjective judgment. This year, it is anticipated that approximately $40m will be invested in Australian films. The cost to the taxpayer will be approximately $6.5m. This assumes that investors on the marginal tax rate otherwise would have invested their money in projects returning a minimum of 60c in the dollar in tax deductions. This takes no account of the tax and social service clawback that would be evident were the 2, 000 to 3,000 people employed in the industry not working. I believe that we must now assess the industry honestly to ensure that it continues to work towards those original objectives at an acceptable cost to the Australian taxpayer. During the past 10 weeks I have spent many hours discussing the future of the industry with the dedicated people who work in it. I am very proud to be the responsible Minister. However, I am aware that the industry has its problems. It has its rogues interested only in taking advantage of the tax benefits. It has its incompetents who are never likely to make a quality film. It has those who believe that the film industry has an unchallengeable right to limitless amounts of taxpayers' money. I am sure that everyone in the Parliament wants the present amendments to achieve the objectives I outlined earlier, namely to have an industry that is viable, stable, competent and, above all, Australian. I want the market to be as free as possible. Earlier, the various Federal and State government film bodies, in determining which films should be made, in some cases chose well and funded superb films. In other cases, subjective and value judgments impaired the right decision being made. That will always happen when someone has to make a judgment about which films should or should not be made. It is a matter for concern that there is no way of regulating the number of films made, nor their cost and therefore the limit of the Government's contribution. The present system is too open-ended. I hope that the industry will regulate itself, to ensure that Australia makes high quality films that are both an expression of our cultural and national identity and a commercial success. In concluding, I would like to quote from David Stratton's excellent book, The Last New Wave, in which he states: . . . the men and women who work in the Australian film industry make up as fine a group of people as anyone would wish to know. Collectively, they are achieving something unique and very special. Thankfully, our film archives will be able to preserve their achievements for posterity. Their work will last forever and in generations to come, Australians will look back with gratitude to the people who brought about the Renaissance of the Australian cinema while capturing the Seventies on film. I agree with those sentiments entirely. Mr CADMAN(Mitchell)(5.58) —The House is engaged in a debate on a number of tax measures that have been introduced by the new Government. In many ways they represent an excursion by it into the unknown. Some of their aspects that are unknown and difficult have been outlined very capably by the Deputy Leader of the Opposition, the honourable member for Bennelong (Mr Howard). I wish to refer to only a narrow aspect of the measures that have been proposed by the Minister for Finance (Mr Dawkins), those relating to the deduction of tax at source from payments for work and services rendered. These provisions have arisen as a result of discussions in the community over a long period and as a result of concern expressed about the level of cash payments, designed to avoid the obligation of the recipient to pay taxation. Various estimates are available of the size of the cash economy. The most reliable appear to indicate that it involves an amount of $1,500m to $2,000m. It represents the most significant part of tax avoidance that has not yet been tackled by the nation. No Government supporter who has spoken has given the previous Government credit for being the first in Australia's history effectively to tackle tax avoidance issues. It moved strongly in that direction by means of successive measures, which caused much concern within the community at times, but were nevertheless needed to stamp out tax avoidance. The last remaining aspect of tax avoidance that warrants serious attention by this House, by the Parliament and by those who have a concern for the revenue and the reduction of the amount of income tax that must otherwise be imposed on individuals, is that concerned with the cash economy. Tax avoidance by the receipt of cash is prevalent in the Australian community and the Government has moved to tackle a sector in which it feels that cash payments present difficulties of tax collection. It has selected persons and firms operating within the building and construction, architectural, consulting engineering, surveying and other technical building services, joinery and cabinet making, road transport, motor vehicle repair and cleaning industries. They represent a wide spread of industries in which are found a large number of small businesses that are operated by self-employed individuals. My concern about these measures is based on three aspects. The Government has come forward with legislation that I believe contains some very objectionable features. It hopes to gain 90 per cent compliance so that cash payments which will not attract taxation will amount to only 10 per cent. Time will tell whether the Government will be successful in its endeavour to attain that objective. The legislation proposes a complicated series of procedures involving applications and form filling and seeks to place on the payee the obligation for the payment of taxes. That is appropriate but the legislation contains no indication of an understanding of the complicated nature of what is being attempted. My first objection is to the proposal that there be an across the board tax at a certain level. I believe that an across the board tax which is to be applied to both materials and labour, to both design and work done, and to both non- taxable items and taxable items is most objectionable. I support strongly the suggested movement to indirect taxes and believe that by that technique taxes can be applied to both materials and services. But to apply an income tax measure across a wide range of goods and services is a most objectionable feature. I would like to provide the House with some details concerning the way in which what is proposed can affect individuals. I am obliged to a firm of accountants for anonymous details concerning the work of some of its clients. I take first the case of a Melbourne metropolitan trading company, a roofing subcontractor. It is a large company with a gross income of $305,000. The net profit of a company of that size, making allowance for all proper payments, in the year under examination was $11,600. If withholding tax were imposed the company would be forced to provide $30,561 for that purpose. It is interesting to look through the accounts of the company and note that only a third of its activity involves wages. The rest involves deductible items of service, including electricity, hire of plant, insurance and those other factors which are properly deductible items, yet such items are to be taxed by this tax at source proposal. It is completely improper to impose a tax on such items. Even though the money is perhaps withheld for a temporary period only, it is improper to impose a tax on such items for that period. If we take what I believe to be more like the average situation, a subcontracting carpenter, a husband and wife partnership with a gross income of $53,000 a year-not a large income for husband and wife-from which all their expenses and overheads need to be deducted, that family business, those self- employed people, made a basic net profit of $11,000. This is a family with four children with a net profit of $11,000. If this tax goes forward, as it will, and if a withholding tax or a tax at source, as it is now known, is applied to that family business, there is required from that business an additional $5,300. More than half of its net profit in fact goes to pay this tax at source and this tax at source is applied not only to the net profit but also to all other factors. The net profit in this instance is the means by which the operators, the husband and wife, furnish a living for their family. So they are taxed not only on their $11,000 profit but also on all aspects of the costs of running their business. In an instance such as this, the $5,000 that they are required to pay in the form of a tax at source imposes on them an increase of 50 per cent in their calculable profits for tax purposes. Businesses of various types have various overhead costs and components in their production. One moves from the building industry, from which the examples I have given come, to the trucking industry, the road transport industry. If one looks at the cost of purchase of very expensive equipment, the running costs of which are massive, one will find that the labour component, the return or the net profit to the operator, may be 25 per cent of his total cost. His accredited wages, shall we say, are 25 per cent of the total cost of the business and 75 per cent of his costs will be taxed by this process. There are other organisations, other businesses, where labour is the main content of their activity and materials and goods comprise only a small part of their total cost. In that instance, we are applying a 10 per cent tax to that business by these measures and that organisation will pay close to a 10 per cent tax on what will be its taxable income. But in the first example that I gave, that of the road transport industry, the tax on what becomes, under today's conditions, the taxable part of its operations, increases to a tax not of 10 per cent but of 40 per cent. I believe that these measures have not been properly thought through. They are extremely difficult for the type of people who are operatives in the building and construction industry, the design industries, the technical support industries, and the road transport and motor vehicle industries. The Government has decided to move into that area. The other aspect of the 10 per cent tax paid monthly to which I object is the discrimination that it imposes against these types of business, the ones designated by the Government as compared with other sorts of self-employed family operated businesses where the tax is paid at the end of the year after normal accounting processes. This proposal takes 10 per cent consistently, on a monthly basis, right throughout the year. Now where is the fairness of a system which, in some circumstances, imposes a monthly requirement on a family business , when there is another family business down the street or across the road which pays tax under another type of system? I believe it is highly discriminatory. The Government has selected these areas, as it well could, but it has chosen to apply to those industries a type of tax that I believe is discriminatory and disadvantageous to those particular industries and businesses. Another factor to which I object in this legislation concerns the cost of collection that will apply to this process. I do not believe that accurate figures have been provided for the cost of collection. I draw to the attention of the House the multiple form filling in processes that must take place, the extra computing services that will have to be applied by finance officers, the matching process of a myriad of returns coming from all over an area in which a company does business, matching the information against the name of the person performing the subcontracting service and, finally, the multiple banking processes. I believe that these areas are complex and that they impose a cost that has not been calculated on the provisions under discussion. I suppose the most significant factor, however, is the prospect of the unionisation of both the road transport industry and the home building and construction industry. I wish to draw to the attention of the House a report prepared for the Government of New South Wales by Commissioner G. A. Burns, entitled 'Commission of Inquiry into the Nature and Terms of Employment in the New South Wales Housing Industry' . I quote from the final passages of that report. It is an extensive report carried out by a knowledgeable individual with the support of the Labor Government of New South Wales, and promoted by both the Building Workers Industrial Union of Australia and the Builders Labourers Federation. Commissioner Burns says: I think that anyone who has read the Report so far will have arrived at the conclusion that I am deeply distrustful of what is proposed by Mr McDonald-- That is the spokesman for the Building Workers Industrial Union-- and of what, I believe, would flow from those proposals. This is so. A lot of my distrust flows from my conviction that must is hidden so far as intentions are concerned. This makes for suspicion. I am left in an area of conjecture . . . This industry-- That is the building industry-- is far too important to society and to the economy to be placed at risk by allowing it to be interfered with in a manner which is not openly and faithfully specified. I have only suspicions. I cannot prove that the BWIU intends to move the industry over to day labour. I have doubts about the assurance given-which assurance was repeated many times. I think that in all of the circumstances these doubts must be accepted as reasonable-particularly in view of the heavy responsibility which I carry in writing this report. These measures in fact provide that interference that Commissioner Burns talks about. They in fact move a category of people away from what has been regarded as self-employed individuals to an area in which they can be deemed employees. The previous Treasurer was concerned about this and in a Press statement to the Australian Financial Review on 3 March, he gave assurances concerning this tax, and intimated that positive legislation would be provided in the Conciliation and Arbitration Act to prevent such an occurrence. No such assurances have come from this Government. It has not provided any assurances that Commissioner Burns expressed is reflected in reports that have been provided in Western Australia relating to carpenters, and a wages board inquiry in Victoria into piece-work rates for bricklayers. Around the nation concern has been expressed in this area. With this measure, the Government is changing the process completely. I think that the limit of $10 ,000 for reporting is far too high. If one looks at the home building industry, without moving into the trucking and other industries that are affected, one must know that alterations and additions above $2,000 and owner-building together account for about 40 per cent of the recorded private home building industry. So, although 40 per cent of the activity in the building industry is above $2,000, the Government provides a limit of $10,000 before reporting must commence under these sources tax provisions. I believe that the Government has proved to be inadequate in its handling of this difficult area. It has walked away from its responsibility in the area where there is the greatest avoidance. It has not seen fit to tackle it effectively. Therefore, I will move amendments seeking to take up those areas of my concern in the Committee stage. I conclude by outlining the difficulties that I have had with this proposal. Firstly, it will increase costs in the building industry. The 10 per cent that will be charged will be added on to costs. Australia has the most efficient home building industry in the world; we are now moving to make it less efficient. This tax measure will add 10 per cent to the cost of all factors. The clerical costs will be greatly increased. There are discriminating factors within the legislation concerning one type of business or another. The level of compliance that will be achieved by this measure will be only slightly more, and at a greater cost than compliance which could be brought about by different techniques-ones that do not impose such heavy demands on these important industries and self-employed people within our community. Debate (on motion by Mr Kent) adjourned. Bill presented by Dr Blewett, and read a first time. Dr BLEWETT(Bonython-Minister for Health)(6.18) —I move: That the Bill be now read a second time. This Bill gives effect to the Government's proposal, announced by the Treasurer (Mr Keating) in his economic statement of 19 May 1983, to introduce an income test on those age and service pensions for persons aged 70 and over which are currently paid free of an income test. The provisions of the Bill cover both age pensions paid under the Social Security Act 1947 and service pensions paid under the Repatriation Act 1920. Since November 1978, age and service pensions have been determined free of an income test in respect of persons aged 70 years or more at the May 1978 rates. The single rate is $51.45 a week and the combined married rate is $85.80 a week, or $42.90 a week each. However, pensioners have been eligible for a higher indexed rate subject to normal income test. The Bill amends these arrangements by introducing an income test which will apply to those pensions which are currently paid free of an income test. Where a single person's income is $200 a week or below, and a married couple's combined income is $333 a week or below, pension will continue to be paid at current rates. However, the rate of pension will be reduced by a dollar for each two dollars of income in excess of those limits. Pension ceases to be payable to a single person when income reaches $302.90 a week, and in the case of a married couple when combined income reaches $504.60 a week. In the case where a married person is being paid the single rate of pension by reason of separation due to illness, pension ceases to be payable when combined income reaches $538.80 a week. In any other case where a married person is being paid the single rate of pension, the pension ceases to be payable when combined income reaches $504.60 a week. In the case of a married pensioner couple, where one is under 70 years and the other is 70 years or over, the rate of pension for the person over 70 years will be calculated in accordance with the new income test, and the rate payable to the person under 70 years will be calculated in accordance with current income test arrangements for persons under 70 years. Blind pensioners will continue to be paid age or service pension free of an income test. It is estimated that these changes will bring savings of approximately $167m in 1983-84. This figure is based upon an estimate that about half of some 220,000 current income test free age and service pensioners will have their existing entitlement reduced or terminated. In particular, $7m will be saved in 1983-84 in connection with service pensions whereby an estimated 6,000 people will be affected by the new arrangements-4,000 will have entitlement reduced and 2,000 will cease to be eligible for pension. The proposed amendments will apply on and from the first pension pay day after 1 November 1983, which will be 3 November in the case of age pensions and 10 November in the case of service pensions. Arrangements are being made to contact all age and service pensioners affected by these changes before the amendments take effect in order to ensure as smooth a transition as possible. Mr Deputy Speaker, these measures arise from the Government's commitment to the development of a fair system of retirement incomes based on an awareness of those in greatest need. I commend the Bill to the House. Debate (on motion by Mr Steele Hall) adjourned. Debate resumed. Mr KENT(Hotham)(6.24) —There are a number of tax measures being debated by the House tonight. Yet the speakers who preceded me dealt mainly with the Taxation ( Unpaid Company Tax) Assessment Amendment Bill and the Taxation (Unpaid Income Tax-Dividends) Bill. I except the honourable member for Robertson (Mr Cohen), who dealt with those parts of the Bills which will assist the great Australian film industry. The honourable member for Mitchell (Mr Cadman), who preceded me, took all his 20 minutes talking about the Income Tax (Payments for Work) ( Consequential Amendments) Bill. He was, of course, sorry for the building industry, which suffered greatly under the hands of the former Government which he supported here for seven years. The measures that we have introduced to impose taxes at the rate of 10 per cent on payments for work are, of course, measures which his own mates were proposing in the last Parliament. If honourable members cast their minds back, they will remember that the then Government members were complaining about the cash economy. When we raised the matter of the tax avoidance which was so freely allowed by the Fraser-Howard Government, Government members came back and said: 'What about the cash economy? '. The honourable member for Mitchell had his answer today, and he was not very happy about it. Earlier this afternoon we saw the former Treasurer, the honourable member for Bennelong (Mr Howard), shedding crocodile tears for tax avoiders. Actually, he was saying that we were introducing a measure which, in a way, is a capital gains tax, and a retrospective one, and he argued that those people who managed to evade the tax to be paid on dividends or to evade their fair share of income tax by various schemes such as dry Slutzkins, wet Slutzkins, slippery Slutzkins, or whatever Slutzkin one cares to call it, were doing so quite legally. The honourable member referred to the High Court decision, Sir Garfield Barwick's decision, that certain avoidance and evasion of taxes practised by shifty lawyers, accountants and crooked businessmen were quite legal. It might very well have been so in that decision, but let us not forget that Sir Garfield Barwick was quite good himself at using trusts for his little kids to minimise his own taxes. I would say that he was somewhat partial in that judgment. However, we are debating today the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983. This was introduced by the Minister for Finance (Mr Dawkins ) to correct the halfway measures introduced last year, half-heartedly, by the former Treasurer, now the Deputy Leader of the Opposition. If those members of the Opposition who are still here with us-those who managed to escape the anger of the Australian people-cast their minds back, they will recall the difficulty with which the former Treasurer introduced the unpaid company tax legislation last year. We had two goes at it before he managed to come forward somehow with some compromise foisted on him by the Western Australia Branch of the Liberal Party of Australia. Honourable members will recall that the former Liberal-National Party Government acted only after the revelations in the report of the Costigan Royal Commission into the Activities of the Federated Ship Painters and Dockers Union, and even then only after enormous pressure from the people of Australia, who suddenly realised that they had to pay $15 to $20 more tax per week because the Fraser-Howard Government failed to combat tax evasion and tax avoidance. Honourable members will recall how the Liberal Party agonised for weeks over the question of whether to cast the net to catch the tax avoiders. I do not blame the former Treasurer for being so hesitant in introducing the Taxation (Unpaid Company Tax) Bill, better known as the bottom-of-the-harbour legislation, as he was, quite rightly, afraid that he might catch in the net an assortment of names from the Queen's Birthday Honours List and some well known members of his own political party. Honourable members will recall that we, in opposition, had to urge and prod the former Treasurer to take steps against the tax avoiders and that we, the then Opposition, supported the Bill that he so belatedly and so half-heartedly introduced. Indeed, without our support, the former Treasurer would have been defeated, because many in his own party opposed that Bill. I wonder, Mr Deputy Speaker, whether this would be a convenient time for the House to adjourn. If so , I should like to continue my remarks later. Mr DEPUTY SPEAKER(Mr Mildren) —I agree with the honourable member. Sitting suspended from 6.30 to 8.30 p.m. Mr KENT —Before the suspension of the sittings for dinner, I was saying how reluctant the former Treasurer was to introduce the Income Tax Bill last year into the Parliament. When the Bill was finally passed, with our support, we stated that we would act to strengthen the legislation and remove the escape clause that the Liberal Party inserted into the Bill for the use of its rich friends. I wish to congratulate the Minister for Finance for his prompt action in introducing this Bill. No one can accuse us of not carrying out our election promises. During the election we campaigned on the issue of tax avoidance and evasion. It took us only a few weeks to introduce this Bill, which is an addition to our arsenal to fight large scale tax avoidance. Compare this with the miserable performance of the Fraser-Howard-Peacock mob. During the seven years they were in government the tax avoidance industry mushroomed. Indeed, it was the only industry that was not hit by the economic depression that the former conservative Government created. Tax avoidance schemes were frequently advertised as freely as massage parlours, yet the former Government failed to act to stamp out the tax avoidance industry. The Commissioner of Taxation bombarded the former Treasurer with letters warning him about the loss of revenue caused by tax avoidance. He wrote so many letters to the former Treasurer that when he was forced to table them in the Parliament it looked as though he was tabling a telephone book. The point I make is that it was easier to move a mountain than to get the former Treasurer to take steps against his tax cheating mates. Finally, as I said, public indignation forced the former Treasurer to act. But even then his legislation was only a partial response. This is the reason why we had to bring the Taxation (Unpaid Company Tax) Assessment Amendment Bill before the House. This Bill aims to recover tax on profits made by shareholders from the dividends which they would have had to pay had those companies not been sold and sent to the bottom of the harbour just prior to dividends being declared. Another part of this Bill has the effect of closing the escape hatch, to do away with the so-called innocence clause for those smart operators who, according to the Liberal Party, were unknowingly benefiting from tax avoidance. Honourable members opposite want us and the Australian people to believe that there are some innocent millionaires, some innocent owners of companies, who received hundreds of thousands or, indeed, millions of dollars more from the sale of their companies than their real value. They want us to believe that poor innocent shareholders were not aware that their companies were being sold and sunk to the bottom of the harbour. According to honourable members opposite the shareholders are still wondering why their bank balances suddenly increased by millions of dollars. However, these shareholders were not so naive and innocent as to offer the tax man his share, but gratefully accepted the God-sent profit and greedily tucked it in their large pockets. Be that as it may, it is only appropriate that such poor, innocent shareholders pay their share in tax and therefore contribute, even if somewhat unwillingly, to the welfare of the Australian people. Tax evasion costs the Australian people $7,000m annually. This Bill will ensure the collection of an extra $570m of tax evaded in addition to the $590m that the former Treasurer targeted for. In itself it is only a small measure, but it is a great improvement on the inaction of the previous Government. It goes a long way by giving notice to the tax avoiders that this Government intends to recover the full amount that they evaded. There is something wrong, not only with the former Government which tacitly approved tax avoidance and evasion, but also with a tax system that allows evasion and avoidance. There is something wrong with a system under which we send people to gaol for stealing $5 while we allow white collar crooks freely to advertise their shady business. In last week's issue of the Australian Financial Review the following advertisement appeared: Tax Avoidance is Alive and Well in Australia!!! A complete four-cassette recording (six hours) is now available of what was said at my recent TAX SURVIVAL CONGRESS . . . hard-core, practical methods . . . how to delay your tax claim for AT LEAST FIVE YEARS . . . how to salvage your assets in the meanwhile . . . TWELVE NEW, PROVEN, HAWKE-PROOF WAYS TO EARN A TAX -FREE INCOME, HOW TO KILL A TAX INVESTIGATION. Cheques ($250) to Dr Peter Clyne, 23 Elizabeth Bay Road, Sydney 2001. Tel. 358 3244. Telex AA-20067 WELCOME! Besides his address Mr Clyne even put his photograph into the advertisement so that our tax investigators do not need an identity kit. Such advertisements are not aimed to offer a service to wage and salary earners but to assist the rich to evade their obligations. It would not do any good to my former mates on the railways, or in the metal trades where I worked before, to go to Mr Clyne to do their tax returns as the pay-as-you-earn system is such that the tax from the wage and salary earners is deducted before they even see their pay envelopes. The ordinary wage and salary earner does not know what a dry Slutzkin, a wet Slutzkin or a slippery Slutzkin is or how a bottom-of-the-harbour scheme operates. But they understand the words of Professor Mathews who, when remarking on the tax burden of the poor and the wage and salary earners, said that it is not a question of whether the rich pay enough taxes but that they can please themselves whether they pay any at all. While no one likes to pay taxes, the working people of Australia accept the burden but they demand that it be imposed with equity and be used to conform with our accepted standards of social justice . Unfortunately, the rich have a different idea. They avoid contributing but at the same time they are the first to dip their greedy fingers into the public purse. I see that members of the National Party are not in the chamber. Since Federation the conservatives, the servants of the establishment, enacted taxation laws full of loopholes for the unscrupulous rich to use, while they made damn sure that the rest of the community coughed up. Since Federation the conservatives, the representatives of the landed gentry and the rich, made sure that the laws, especially the taxation laws, favoured the rich and discriminated against the poor. Even though the objective of our progressive taxation is to finance government spending and to divert resources to the public sector, as well as to redistribute wealth, the property classes and their shifty lawyers managed to make a mockery of the tax system. With impunity they used every illegal means to evade and every possible legal means to avoid paying taxes. For many years the ordinary Australian taxpayer was unaware that the rich had shifted the tax burden on to their shoulders. Let us see what Professor Mathews had to say about this in a somewhat more scholarly way. He said: But while the existence of tax evasion (fraud) and avoidance (use of legal loopholes to avoid tax liability) has been widely recognised, and while attempts have been made to quantify the loss of revenue resulting from some avoidance techniques, it is usually naively assumed that the nominal effects of taxation policies are the same as their real effects. In terms of equity effects, the advantage claimed for progressive personal income taxes over other forms of taxation depends on the premise that all persons actually pay the taxes they are intended to pay. If this is not so, and if some persons have greater opportunities to evade or avoid taxes than others, the advantage is illusory and the progressive rate structure is irrelevant to the question of an equitable distribution of the tax burden. That is interesting. Let us look now at what Professor Mathews had to say further about our taxation system. He said: While the total extent of tax avoidance and evasion in Australia must remain somewhat speculative, it may be concluded thay they are significant in absolute terms; they are increasing; and they are undermining both the stability and the equity of the tax system. Attempts have been made to close tax loop-holes, but these have served to complicate the system without achieving any lasting results . As soon as one device is blocked another emerges in its place. Apart from its effects on equity and the threat it poses for the continued acceptability of the tax system as a whole, tax avoidance is associated with a substantial waste of resources as accountants, lawyers and businessmen have combined to establish a whole new industry devoted to manipulating and exploiting weaknesses in the system. Ordinary wage and salary earners do not usually read publications like Russell Mathews's 'The Structure of Taxation' from which I quoted. But the information was available to the former Treasurer who is a shifty lawyer himself. He knew quite well what his rich friends were doing. Mr SPEAKER —Order! The honourable member should withdraw the term that he used with regard to the former Treasurer. It is unparliamentary and it is an offensive term. Mr KENT —I withdraw. He knew quite well what his rich friends were doing. Yet he failed to act. He closed his eyes and ears and did not want to stop tax avoidance. He was advised by the Commissisioner of Taxation about the tax avoidance on a massive scale that the Fraser Government had tolerated. When Mr Howard, finally forced to act, introduced the Taxation (Unpaid Company Tax) Bill , it aimed to recover only a small proportion of taxes avoided, in total $570m. The Bill that we are discussing today will have the effect of recovering almost double that amount. But even that is far from the $7,000m lost to revenue annually. There is something fundamentally wrong with our whole tax system when it allows the rich to avoid illegally and evade legally their obligations. Because of that the community suffers. I illustrate the point I am making. Only last week a number of under 18-year-old unemployed youths came to me to describe their plight. They have to live on $40 a week, pay board from that miserly pittance and spend money to go job hunting, dress and so on. I told them that I was ashamed that politicians like myself who receive $80 a day expenses when in Canberra expect them to live on $40 a week. I promised that I would bring their plight to the notice of the Parliament and the nation, as I am doing now. However, I could not promise them immediate relief knowing that the previous Government left an empty kitty. There is just simply not enough tax revenue until the rich fulfil their obligations to improve the plight of those kids who are forced to live on $40 a week. There is something fundamentally wrong with our taxation system, there is something fundamentally wrong with our nation which allows rich individuals and companies to evade their taxes to the tune of $7,000m a year while teenage kids are forced to sleep in parks and eat dog food. I finish by again quoting Professor Mathews. He said: Indeed, it is plausible to argue that the taxation system has become a major instrument for redistributing incomes and wealth in favour of the rich. I hope that this Government will act swiftly to review our whole taxation system to prevent this from going further. Mr CONNOLLY(Bradfield)(9.45) —I think the observations made by the honourable member for Hotham (Mr Kent) require some response from the Opposition. Firstly, his final observation was that we needed to see a fundamentally changed system of taxation. That is a view which was shared by the former Treasurer, the honourable member for Bennelong (Mr Howard), and is certainly a view which is shared by many members of the Opposition. There is a tendency, however, for members such as the honourable member for Hotham to work on the premise that taxation avoidance is something which is unique to those who vote Liberal and is not something found with people across the main stream of the Australian community. Perhaps he made the fundamental error of confusing evasion with avoidance. This whole issue was argued very substantially last year. The former Treasurer, the honourable member for Bennelong, has made a greater contribution towards stopping taxation loopholes in the Australian taxation system than any other Treasurer since Federation. I make that point for a very strong reason because I was in Opposition in the days of the Whitlam Government. I do not recall that any of the three or four Treasurers who went through this House during those years made any significant change whatsoever in the whole area of taxation evasion and avoidance about which they were obviously well aware. This point needs to be emphasised because tonight we see a proposal to make further amendments to legislation which was brought in by the Liberal-National Party coalition when it was in power. There is always a tendency in this area to say that too little is done too late. But the simple fact is that the honourable member for Bennelong, when Treasurer of this country, brought in more taxation legislation than any other Treasurer since Federation. That is on the record. Any honourable member of this House, regardless of whether he wishes to know the facts or not, can find that out for himself. This cognate debate tonight relates to a package of taxation proposals. The principal one relates to the extension of the recoupment provisions of the Taxation (Unpaid Company Tax) Assessment Amendment Act which, as I said, was introduced by the previous Government. In addition there is also a series of other problems which have been created by the Government in relation to the introduction of taxation deduction systems on subcontractors. This is a first sample of taxation reform from the new Labor Government. Like so much before it, it regrettably represents another broken promise. The Prime Minister (Mr Hawke) promised the Australian people that the Australian Labor Party would not introduce a capital gains tax. Yet these amendments not only effectively introduce a capital gains tax but they have gone further than that-they have introduced it retrospectively. The proposals are therefore grossly unfair and vindictive. They will put into question the Labor Party's rationale for equitable taxation policy and give the private sector very good reason to fear what is yet to come in the total area of taxation reform from this Government. During the debate in this Parliament in September-October 1982, the then Opposition told us on numerous occasions-the current Minister for Finance (Mr Dawkins) made the point-that the loopholes as they then saw them in the Government's Bill would allow at least $7,000m to escape the net. Again, tonight , the honourable member for Hotham used that figure. We have been told in the second reading speech of the Minister for Finance that these draconian amendments will produce the miserable amount of $500m to $600m. I ask the question: What of the other $6.5m odd which we were told we were losing last year? Am I not right in therefore concluding that if these amendments, which are the sum total of the Government's major reform of taxation to date, are only demonstrating the Government's capacity to obtain this amount of money, one therefore has no alternative but to conclude, as the former Treasurer said last year and repeated in this House again tonight, that we had already effectively closed off all the major loopholes such as the Slutzkin schemes, bottom-of-the- harbour schemes and so forth. This does not mean that, in the future, other schemes will not be found. Of course, the government of the day has the fundamental responsibility, when that evidence is brought forward, to take the necessary legislative or administrative action to close them off. But the key question is that the basis of the claim for this legislation was that the Government would find ways of stopping some $7,000m escaping the net. That is a figure which the Government drew up; we did not draw it up. Yet, when this Government had the opportunity in this legislation to demonstrate some capacity in this area it has had to admit that the best it can do is to recoup $500m or $ 600m. On that basis one is right to assume that the Government is not genuine in trying to amend legislation which, in fact, has been demonstrated to be completely effective in stopping the problems for which it was originally introduced. Evidence clearly shows that the previous Government's legislation has worked and that the changes proposed by the Labor Government are simply vindictive and examples of the small-minded approach which a doctrinaire socialist government will take regardless of the evidence before it. The charges made against the previous Government that we were soft on tax avoiders have been proved groundless. The Bills before us bear little resemblance with the taxation avoidance legislation of the previous Government. Consequently, we will not support proposals which impose a retrospective capital gains tax, and in addition a new tax on revenue which was never subject to illegal evasion which was the basis of our recoupment legislation. We oppose the Bills because they either reverse the decisions made in last year 's legislation, or contain amendments which were moved by the Labor Party in opposition and were rejected by the then Government because they were unfair and unnecessarily draconian in their impact. These are not normal Budget Bills, nor normal revenue raising legislation. The Government has had to face the choice which all governments have to face, between cutting expenditure or increasing taxation. On the basis of the Government's mini-Budget last Thursday it has made a minimal impact on cutting costs and has chosen a surreptitious approach towards taxation which will give every Australian taxpayer ample reason to believe that it is on the verge of breaking yet another promise, and that income tax will rise substantially in the next Budget. I ask any member of the Government sitting opposite tonight to challenge what I have just said on the evidence which has been put before the House. The road to increasing taxes is always easier than reducing costs, but the easy answers are not necessarily the right ones. In this Bill, the Government has retrospectively created a liability for taxation which had not previously existed. If companies had continued trading, the liability would not have arisen . The Government has artificially created a situation where it can tax despite the fact that there has been no illegal act in the past. In Government, we did not seek to create a new tax liability, only to redeem an existing liability-to redeem tax due from an illegal act. The tax imposed by this legislation is a new tax and in no way can be related to a prior taxation liability. These amendments will not only tax accumulated profits but also accumulated reserves held by companies. In addition to the 50 per cent tax rate, victims of this legislation face an added tax of 60c in the dollar. This is indisputably a capital gains tax which could have a disastrous impact on the confidence and the ability of the very people on whom this Government must depend to help create the jobs in the private sector and inject the capital which is the engine of our national development and is so essential for our national recovery. This legislation will artificially render illegal, acts done by companies years ago and will render liable for taxation the accumulated reserves which were legitimately set aside often for development purposes. As I said before, the original recoupment legislation was based on the premise that a tax liability had existed and that it had been evaded by illegal means, but here we see that a company which paid its due company tax, plus Division 7 tax on retained profits, will now find itself due to pay further tax at the rate of 60c in the dollar on its accumulated reserves. If this is an example of the Labor Party's belief in taxation equity we can legitimately ask: Where will it all end? As an example of the Government's vindictive approach, those who have fallen foul of its new taxation net are given only a paltry 30 days in which to meet their liabilities. This is not only unrealistic; it is patently absurd. Companies and individuals are deemed to have incurred tax in an area of legitimate operations. They did not break the law. Consequently to remove the 12 -month grace period in the original Act is nothing more than sheer spite. Under current economic circumstances there is no point in forcing individuals into bankruptcy and companies into liquidation with the result in loss in jobs and creating at this time a genuine commercial concern as to the future direction of taxation policy under this Government. These amendments to the Taxation (Unpaid Company Tax) Assessment Amendment Bill retrospectively reverse the High Court of Australia decision in the Slutzkin's case that if as little as $250 of company tax has not been paid following the sale of shares, regardless of reason, there will be no distinction between the inability to pay tax because of some fraudulent transaction as distinct from a non-fraudulent transaction. Consequently, the shareholders who have sold their shares will now be taxed not only on the revenue profits of the company which have already been subject to tax, but on other profits including capital reserves which have never been liable to taxation in the past under existing Australian company law. The Act does not pay any regard as to whether the dividends, if paid to a vendor by a company, would have been taxable in whole or in part. However, if a shareholder did not sell shares but stripped the company and left it unable to pay its income tax, whether by fraud or otherwise, the shareholder will not be deemed to have derived such a dividend, but will continue to enjoy both the accumulated revenue and capital profits of the stripped company free of taxation. The fact that the Government has failed to stop this loophole demonstrates one of the weaknesses of this Bill. Again this shows that in its urge to change the law at any cost it has not done sufficient basic work to see what areas are worthy of reform as distinct from those which demonstrate merely a callous and vindictive approach to people, many of whom have not broken the law. This amending legislation greatly extends the scope of retrospective tax into new areas and introduces grossly unjust, extreme and punitive measures. The amendments are directed at further victimising vendor-shareholders who are already required to pay all taxes under the existing legislation. The Bill introduces a new dimension into Australian tax law. It seeks to deem a prescribed amount of the consideration received from the sale of shares as a taxable dividend. It establishes a precedent which could eventually lead the Government to applying it to all share dealings in both public and private companies. It establishes a new capital gains tax which will be selectively imposed on a broad group of taxpayers. It imposes tax on capital profits, whether realised or not, and it does not permit the adjustment of such profits which may have arisen solely due to the sale of assets, including business good will, which is totally ignored in this Bill. Furthermore, the Bill also taxes illusory gains which are generally mere book entries transferring the value of assets from one company to another. The Bill will impose tax on capital profits and accumulated revenue reserves in a company even after taxes have been paid and the vendor-shareholders having left adequate cash reserves in the company to enable it to meet company tax on the current year's profit at the time of sale. It does not take into account the fact that the purchaser of the company may have misappropriated those cash reserves and failed to ensure that the company could meet its Division 7 distribution requirement. The full liability falls on the previous shareholders, regardless as to whether they are responsible. The amendments totally ignore the fact that such circumstances would be beyond the control of the vendor- shareholder who took every prudent means of ensuring that due taxes would be paid at the time of sale. Clause 8 of the Bill will impose a new tax liability on a deemed dividend comprising the undistributed tax paid on revenue and previously non-taxable capital profits of the company, regardless of when those profits were derived. The result will be that vendor-shareholders will be liable to recoupment tax and personal tax aggregating in excess of 81 per cent of the companies revenue profit in the year of sale, irrespective of the fact that any illegal act by the new owner or promoter of the company was beyond the control of the vendor- shareholder at that time. Clause 6 involves changes in the disclosure provisions. It removes the need for the Commissioner of Taxation to advise all shareholders of the company's liabilities and requires that the Commissioner inform only the major shareholder . Probably, the people in the Australian Taxation Office naturally want legislation which requires the minimum possible involvement of their officers. But the simple fact is that in this House we are meant to be passing legislation which is fair and reasonable, especially to those people who will be on the receiving end of the effects of these particular amendments to the legislation. One therefore has to ask a serious question. Where we are dealing with private companies in particular, and where there has been a spread of share owners, is it satisfactory that the Commissioner of Taxation regards it as his responsibility to advise only the major shareholder? What about the minor shareholders? Will they be able to use that as the excuse when the Commissioner of Taxation, a mere 30 days later, goes to those people and says: 'You have not paid your tax and because of that I will now apply to you a further punitive tax rate of an additional 20 per cent because of your failure to pay'? In many cases these people may not even have been advised of the fact that they have a responsibility under this Bill to pay tax. But as the provision stands at the moment there is no onus on the Commissioner of Taxation to inform anybody of his liability except the major shareholder. In addition, the abolition in clause 21 of the 12 months time to pay provision and its replacement by a mere 30 days, as well as a 20 per cent late payment penalty to which I referred, totally ignore the economic reality facing both individuals and companies in Australia today, as well as the problems this could well cause to their employees in finding sufficient funds to meet these requirements. For example, clause 5 removes what was previously known as the innocence clause and thus vendor-shareholders will have no recourse to equity in cases where the promotor did not act illegally and sought to limit the company's income tax liability by legal means. These amendments indicate the Government's desire to confiscate the largest possible amount of tax from a group of vendor-shareholders, the majority of whom have not been guilty of any illegality in relation to their shares. The existing law was passed through the Parliament during the last session of the last Liberal Government. It was the handiwork of the honourable member for Bennelong (Mr Howard) who, as I said earlier, put more legislation on the statute book of this Commonwealth directed at combating the real problems of tax avoidance in Australia than any other Treasurer. In these amendments we have simply seen a small-minded approach, particularly by the Minister for Finance (Mr Dawkins), who has taken the view that one should pursue people at all costs, regardless of the concepts of fairness or reasonableness and who sees that as his role in society. I respectfuly suggest that in the years which have yet to pass by, the people in this Parliament and the people of Australia will expect of the present Government a more systematic approach to the real problems of taxation in this nation. The fact is that the levels of taxation are too high and that is one of the reasons why in recent years we have seen a tendency for more and more people to look for forms of avoidance. But, as I said earlier to the honourable member for Hotham (Mr Kent), there is a fundamental difference betwen evasion and tax avoidance. It is the primary responsibility of the Commonwealth and of the Parliament to do all we can to stop people from evading tax. But we are deluding ourselves if we seriously suggest that one section of society alone is responsible for tax avoidance. The simple fact is, as the honourable member for Bennelong has said in the House tonight, that unless we are prepared to restructure our taxation system and have a better balance between direct and indirect taxation we will not get to the primary problem of Australia's taxation arrangements as they currently stand. That is a challenge I leave with the current Government and I ask honourable members opposite what they will do about it. Dr THEOPHANOUS(Burke)(9.5) —I want to make a few brief comments in view of the fact that we want to pass through all stages of these taxation Bills tonight. I begin by replying to the remarks of the previous speaker, the honourable member for Bradfield (Mr Connolly), who gave us a peculiar rationalisation in trying to cloak the fact that certain people did not pay their due taxes, knew that they were not paying their due taxes and effectively escaped paying those taxes. We were told that this legislation is an imposition on the civil liberties of these people. We were also told in the same breath by the honourable member that in fact his Government did more than any other government and that the honourable member for Bennelong (Mr Howard) did more than any other Treasurer to deal with the tax avoidance and evasion industry. Nothing could be further from the truth. The fact is that for the seven years of the previous Government we had a mushrooming tax avoidance and evasion industry. Everyone knew about it to the point that how one could compile these various schemes to avoid tax was being advertised in the newspapers. Everyone knew that these schemes were in operation ; they were advertised. I remind the House that it was only in the last two years that the previous Government even attempted to do anything about these matters. What happened then? As soon as the honourable member for Bennelong brought in some measure, we saw advertisements appear in the newspapers stating: 'How to avoid Howard's new measures'. What did the former Treasurer do? Did he take up the recommendation which we made time and again while in Opposition to ensure by retrospective means that these measures were dealt with? Not until the very last few months of the previous Government did it finally come to this recognition, elatedly. Members of the Opposition try to tell us that they have been very vigilant on this matter. Their arguments are disgraceful arguments in support of tax avoidance and evasion promoters. Such people have been to this House to see various members of parliament. We know that they came to lobby especially the Australian Democrats senators on this matter. Who are they? They are the same tax sharks and the same people who put out the advertisements. They came to lobby the honourable members now in Opposition, and they fell for it. Mr Robert Brown —They are the benefactors. Dr THEOPHANOUS —They are the benefactors, as the honourable member for Hunter said. Opposition members try to defend those people on the basis of some claim about civil liberties. Let us be clear about this: What was going on was a crooked scheme that involved companies that went to the bottom of the harbour. The people who benefited did not have to pay tax on the dividends that they should have received. Therefore, it is logical and correct-- Mr Tuckey —What about the tax deductible union dues when they are given to a political party? Is that tax avoidance? Mr DEPUTY SPEAKER(Hon. Les Johnson) —Order! The honourable member for O'Connor will be given the opportunity to speak, as I understand it, in the near future. I ask him to refrain from interjecting. Dr THEOPHANOUS —He has a habit of interjecting when I speak. I will continue on that important point 'namely' that what we are doing with this legislation is completing the legislative process in the way in which it should have been completed by the previous Government to ensure that those people who benefit from those crooked schemes will be dealt with and will pay their due share of taxation. We heard a lot from the honourable member for Bradfield about how income tax has risen. Income tax, he says, has gone up and up and up. One would think that we rather than them had been in Government for seven years. Whose fault has it been that income tax has gone up? Which government promised cuts but in fact increased income taxes imposed on workers and their families? This is the group that did this, yet now they come here and say: 'Isn't that a terrible tragedy?' Mr Connolly —You tell the House that you are not going to increase taxes. Dr THEOPHANOUS —The honourable member need not worry; I will come to that point. 'Is it not a terrible tragedy', the honourable member asks us, 'about all these increases in income tax?' Members of the Opposition are the ones who are responsible for these increases because they failed to implement other forms of taxation which would have been more equitable. Mr McGauran —What forms? Dr THEOPHANOUS —Of course the honourable member's imagination would not stretch that far. I suggest to the Opposition that several forms of taxation are possible, but I will not announce them to the House now. To do so would give the Opposition delight but it would pre-empt the Federal Budget. Mr Cadman —Don't let that hold you back. Mr DEPUTY SPEAKER —Order! This is a very stimulating address but I ask the Opposition not to be so responsive. Dr THEOPHANOUS —It is my fault for responding to interjections, Mr Deputy Speaker; I apologise. Let me continue with my theme about these severe increases in income tax. We will attempt to ensure that income taxes, at least those imposed on low income families, the poorer section and even the middle income section of the community, are not increased and, if possible, are reduced. That is what we are aiming at. But look at the fiscal situation that the Opposition has put us in. It has made it very difficult. We are in an incredible fiscal situation. The highly praised honourable member for Bennelong hides his head in shame every time this matter is mentioned. So he ought to, because he offered a most irresponsible Budget last year and behaved most irresponsibly in describing what was going to happen in relation to that Budget. He did not even understand his own economic theory. He said that unemployment would increase, but unfortunately he failed to take into account the extra cost of the unemployment benefit. That extra cost was forgotten. Consequently, as every member of the last Parliament knows, we suddenly had a revision of the Budget Estimates a few months after the Budget was brought down because the unemployment benefit was increased but no account had been taken of that. Yet these incompetents come here and try to tell us to run an economy and what is correct taxation procedure . Let us proceed to consider other aspects which have been attacked by the Opposition in relation to the other tax measures embraced in the several taxation Bills before the House. One philosophical thread goes right through this matter; that is wherever possible, support the rich and damn the poor. That is the philosophy which honourable members opposite espoused for seven years and it is the philosophy they continue to espouse. They cry about the imposition of taxes on people who have been avoiding tax, such as those contractors in the cash economy who have not been paying their taxes. In not just one report but in several reports the Government has been asked to act on this matter. So, we take action and we are criticised by honourable members opposite. The fact is that many of these enterprises are substantial, in nature and can afford to pay their tax. There is absolutely no reason why they should not be required, as the Income Tax Assessment Amendment Bill requires them, to pay in this way. The requirement is a reasonable one; it will not put undue pressures on business, as we have been told by honourable members opposite that it will do. As I have said, whenever a situation arises in which sombody who is rich is asked to pay tax, we are told immediately: 'Oh, this will be bad for business'. This is not only an absurdity but also a failure to comprehend the way in which money flows in an economy. That is something members of the Opposition do not understand because they still have not got beyond their monetarist lessons. These measures are being imposed in order to ensure that everyone in the community pays his due share of tax. In that respect the measures ought to be universally supported by this House. Something very strange in relation to the Liberal Opposition is that one never knows what position its members will adopt on any measure because they are totally confused. An example of that is the speech made by the Leader of the Opposition (Mr Peacock) yesterday in response to the statement of the Treasurer (Mr Keating). One did not know whether he wanted, on the one hand, expansion or, on the other hand, contraction; whether he wanted more spending or less spending . One did not know whether he was arguing for more monetarism, which is the view of the honourable member for Bennelong, or whether he was arguing for a more sensible expansion, which is the view of some of his other colleagues, such as the honourable member for Boothby (Mr Steele Hall) to name one. The Opposition's economic approach is so totally incoherent at present that one just does not know what it is on about. The new Leader of the Opposition said after the election was lost that it was time for the Liberal Party to reassess its philosophy. When will we get this reassessment? When will we know at least what its general approach is so that we can predict the view it will take on a particular measure? If we knew something of those principles at least we would have some idea of what honourable members opposite are on about and some idea of the viewpoint they will take on measures such as this. Had we known that at the time these Bills were presented, for example, then, perhaps we would have expected them to come into the House and disgracefully oppose the first two of these Bills to collect money which people gained from bottom-of-the-harbour schemes. What kind of liberalism is that? Is it liberalism to let people get away with this kind of robbery? Is this the new version of liberalism? I can say to you, Mr Deputy Speaker, that if this is the new version of liberalism the Australian Labor Party will be in government for a hell of a long time. Mr Robert Brown —John Stuart Mill would turn in his grave. Dr THEOPHANOUS —As the honourable member for Hunter says, John Stuart Mill would turn in his grave if he heard about this. He would not understand their version of liberalism. As I recall, John Stuart Mill-we are talking about the father of liberalism-made it very clear that everyone should pay his due share of taxation . This is one principle that honourable members opposite have not been following . A series of amendments is to be moved by Mr Cadman which, as I have said, will basically- Mr DEPUTY SPEAKER(Hon. Les Johnson) —Order! To be consistent, I remind the honourable member to refer to other honourable members by their electorates rather than their names. Dr THEOPHANOUS —The honourable member for Mitchell (Mr Cadman) proposes to move amendments that would result in the legislation losing all its force and power. What we are concerned with is this: Why is the Opposition proceeding along these lines and not assisting us in trying to collect the sort of revenue that has to be collected if we are to have a sensible Budget deficit and a sensible economic policy in the future? Honourable members who are listening to this debate know the answer, and that is that the benefactors of these people, the people who have lobbied in the last few days, are the ones who will benefit if the amendments are passed. But the amendments will not be passed. We will ensure that we fulfil the program for which we were elected according to the consistent principles for which we were elected and not the inconsistent principles that the Opposition has been following. Let me say in conclusion that the tax debate has not ended-it is just beginning . There are, of course, other forms of tax that need to be considered and discussed, especially various forms of wealth taxes which we will consider. Those sorts of taxes will be considered in a rational fashion and we hope to see the Opposition adopt a responsible attitude in relation to these matters. The honourable member for Bradfield mentioned only one thing-indirect taxes. That is his answer to income tax. That is all his imagination extends to. His imagination cannot extend to anything beyond that. I ask him to study the forms of tax available in other countries. If he does, he might find out that there are many other forms of tax besides income taxes and indirect taxes. Mr Ian Cameron —What do you suggest? Dr THEOPHANOUS —As I said, honourable members will hear about them in the Budget . However, let me get back to indirect taxes. We were told by the honorable member for Bennelong and the honourable member for Bradfield that we have to go in for indirect taxes. Of course, that form of taxation would suit them a lot, would it not? Then the tax burden would fall more on the poor, the unemployed and low income earners. That is what they want in the tax debate. They want to shift the tax burden to those who can least afford it. That is their strategy. They refuse even to think about taxing the rich and those who can afford to pay. Our taxation policy is redistributive. It is based on the principle that those who can pay will pay and those who cannot because they are unemployed or too poor need to be assisted. That is the principle which the Labor Party has propounded for the whole of its history. That principle will continue to be propounded in this Parliament. I urge the House to support the Bills. Mr BRAITHWAITE(Dawson)(9.24) —In rising to speak on these taxation Bills I say that Government members who have spoken in this debate have provided us with a great example of inconsistency. The honourable member for Burke (Dr Theophanous) who has just spoken, while being entertaining also mentioned that there were new taxes to be considered. I suggest that if the Government were to impose a tax on logic, common sense and consistency the honourable member would be due for a massive refund. The honourable member for Hunter (Mr Robert Brown), who speaks with some logic on taxation matters, bears out what I feel is the position of members of the Government, namely, that many of them do not really know the full implication of these Bills. Others do not want to know them. They believe that the legislation amounts to a kick in the ribs for the capitalist society and that is the way they want to leave it. However, other things are involved in the legilation. People are involved. These people include unionists-they could be members of the Federated Ship Painters and Dockers Union-and investors. We are talking about people right across the whole spectrum. I believe that we should be concerned if people are involved. The civil liberties aspect of the legislation has been mentioned. I believe that we represent people and we should be making legislation in such a way that people can follow the law with a certain amount of consistency. Whilst we are not seeking to protect people with this legislation we should not attack them and destroy their civil rights and liberties. That is basically what the legislation before us is designed to do. It makes illegal today or tomorrow something that was legal yesterday. I refer to the beginning of the legislation to deal with bottom-of-the-harbour schemes. One of the Bills before us, which is described as an Act to impose a tax in respect of certain unpaid income tax, goes right back to 1 July 1971. The Slutzkin scheme was known at that time yet for the three years Labor was in government between 1972 and 1975 not a thing was done in that regard. Now, 10 years later the Labor Party intends restrospectively to make illegal something that was legal the last time it was in government. I think that this very vital principle has been conveniently overlook by the Government in bringing this legislation forward with undue haste. The honourable member for Hume (Mr Lusher) mentioned earlier in this debate that the Government was proposing a retrospective capital gains tax. Such a tax offends in two ways. The Government has said quite categorically that there will be no capital gains tax. Yet, I can demonstrate-- Mr Steele Hall —You can't believe them from one day to another. Mr BRAITHWAITE —Well, it changes its position in many ways and it has done so over the last couple of months. I just want to explain the situation as far as companies are concerned. Most of the companies that will be involved under this legislation will come from the private sector, not the public sector. The legislation before us computes a dividend on which personal tax is to be paid. In that situation accumulated capital profits, whether they be from the sales of property, from the revaluation of assets of from the creation of goodwill, set aside not in a capital reserve but in accumulated profits, can now be assessed. The Government also overlooks the fact that the dividend is normally computed by allowing an 80 per cent retention of profit in a particular year. Again, that has been neglected and not taken into account. This is a further attack on the long established principle in respect of corporations in this country. In fact, this action infringes, if not common law, certainly corporate law as we have come to know it. In the past, capital profits could be passed on to shareholders in liquidation without being assessable. This Bill makes no attempt whatsoever to separate profits gained in an illegal manner and those gained in a correct manner. It overlooks altogether the innocents. Some shareholders in companies who might have been involved in such arrangements could be innocent in their own way. They could have been led into something quite unwittingly. This type of thing also has been overlooked in the legislation before us that seeks to tax the dividend component in bottom-of-the-harbour schemes. Since 1977 I have consistently voted against retrospectivity because I believe that it infringes our civil liberties. We have an example of this in relation to a taxation commitment. How much further can governments go in regard to retrospectivity in other measures? I believe that restrospectivity is a critical part of the legislation before us. We have heard a lot of nonsense about the cheats and the bludgers who are involved in tax avoidance schemes. I agree with some of the things that have been said. But those schemes were operated legally. They were not legislated against by the Labor Government in 1972 to 1975. But now, 10 years later, the present Labor Government wants to try to correct that situation. In that respect I believe that we should give this legislation careful consideration. I suggest to Government supporters that perhaps it has been the subject of undue haste and that many of them would be quite ignorant of its actual provisions. The other aspect of the Government's attack on the company structure is to be found in the Government's economic statement of last week, which announced that the rebate in respect of the first $1,000 of dividend income is to be rescinded. Mr Robert Brown —Not many pensioners are earning that. Mr BRAITHWAITE —I am not worried about it in that respect. When we consider equity in taxation right across the board we must realise that the income of companies is being assessed twice and sometimes thrice. That is neither consistent nor equitable. So far as equity is concerned, when you do that you take a step backwards. The legislation before us also covers quite a large range of other areas. The Income Tax Assessment Amendment Bill picks up, in respect of the current year, 1983, a lot of items that were mentioned in the Budget. The Government is now honouring those commitments. Insofar as payment for work and services is concerned, it could quite easily be said that the Government has gone soft in this area. The original proposal was that 30 per cent of contract gross income, in respect of work costing $4,000 or more, was to be withheld. The figure has now fallen to 10 per cent of the contract price in respect of amounts of $10,000 and above. It will be interesting to see what the monitoring system reveals. But the cash economy presents a still larger problem. I mentioned this subject in an address on taxation in this House two weeks ago. The cash economy of this country involves an amount of between $5 billion and $7 billion. That is the amount of actual tax lost, not income involved. Everybody should be concerned about that and there must be some commonality in this Parliament in supporting the effort to collect those taxes that have been illegally evaded. So far as the taxation concession in respect of accelerated depreciation is concerned, although provision is made for it in the legislation, I note that it is to be rescinded from 1 July. Provision for accelerated depreciation is fair and reasonable and provides an incentive to business to invest in equipment that can be turned to production and profitable use. The permitted depreciation on non-residential buildings merely conforms to the arrangement already in place with regard to tourist accommodation. Over the last few years the film industry has had the benefit of the opportunity to produce some great national films, of which I would just mention Breaker Morant, The Man from Snowy River and We of the Never Never. Also, the production of certain great documentaries has been possible only because of the tax incentives that have been offered. That part of the legislation which sets out to streamline such assistance will provide still further encouragement in this regard. The removal of the tax incentive in respect of fuel storage and conservation is short-sighted. It was brought in to try to overcome a critical fuel shortage, not because of the purchasing arrangements with the Arab countries. It was designed to meet a situation in our own country. That assistance has meant that additional fuel storage has been provided on the farms and at the ports. I would like to know when the Government intends to fulfil its promise, made in many areas, to remove the excise in respect of tourists' boats and power generation on islands. Its presence has had a detrimental effect upon the tourist industry and upon off-road vehicle users. Other legislation, which heralds the introduction of Medicare, removes, as from 30 June 1983, the tax rebate in respect of basic medical and hospital cover. I am sure that the effect of that will not only be one of higher taxation. Its overall effect on the country will be great. As has been mentioned, the eventual costs of the proposed Medicare arrangements are likely to include the loss of up to 5,000 jobs under the accepted private schemes, increased medication and over- servicing and the denial of medical assistance and access to the poor because of the overcrowding of public facilities. I would have hoped that the Minister for Health (Dr Blewett), who is at the table, might have studied the English experience so far as such schemes are concerned. I have been asked to curtail my comments in regard to this legislation in order to allow its passage tonight in, I hope, an amended form. I simply bring these matters to the attention of the Government in an effort to beseech at least its back benchers if the Cabinet and the Minister cannot understand the difficulties involved, to try to come to grips with some of the major problems presented and offer a real argument for the legislation instead of the rhetoric that we have heard here tonight. Mrs KELLY(Canberra)(9.36) —Throughout the speech of the honourable member for Dawson (Mr Braithwaite) I have listened intently in an effort to understand the points made by the Opposition in relation to this package of legislation but I became rather confused when the honourable member tried to explain how it was possible to cheat by not paying the appropriate tax and do so legally. It is all done legally and therefore it is okay! I am really amazed that members of the Opposition should be surprised at what has emerged in this legislation. The Government has merely proceeded along the lines of which it gave notice last October in this very chamber and which it reiterated many times in the lead-up to the election. Suddenly, last week at the Opposition party meeting, a decision was made to oppose this legislation, though much of it had been introduced, although in a different and modifed form, by the previous Government last October. At that time a start had been made at long last on the road to trying to do something about tax evasion in this country. The new Labor Government has clearly demonstrated that it is sick of procrastination on this issue; that it intends not to talk about the matter but to get on and legislate. That is what is so significant. It represents the real difference between the position of the Opposition and that of the Government. The Taxation (Unpaid Company Tax) Assessment Amendment Bill and the Taxation ( Unpaid Income Tax-Dividends) Bill are a direct result of promises made by the Government when in Opposition, the previous Government's legislation having been seen as defective in a number of ways in dealing with bottom-of-the-harbour schemes. First, no attempt had been made to recoup personal income tax avoided under the bottom-of-the-harbour schemes, tax which should have been paid when accumulated company profits were distributed as dividends to company shareholders. The second aspect that we criticised was that no effort had been made to recoup sales tax evaded through the use of the bottom-of-the-harbour types of sales tax schemes, which were also subject to the Crimes (Taxation Offences) Act of 1980. These sales tax schemes had exploded in recent years and we felt that existing legislation was not sufficient to overcome them. We believed, and stated quite clearly in this Parliament, that because of these deficiencies an amount of at least $600m in tax was being lost through straw company tax evasion schemes. The first set of legislation in relation to these tax avoidance schemes, that which was introduced last October, was brought down by the previous Government only because, in electoral terms, it knew that it had no choice. If it had had such a political choice this Parliament would in no way have seen that legislation. It came to the fore only because of the Costigan Royal Commission report, which illustrated vividly a history of government inaction against the so-called bottom-of-the-harbour schemes. I suppose it is really not surprising to us, as members of the Government, that tonight the Opposition is now turning around and opposing the legislation that is before this House. Initially, the schemes were found to be operating in Perth in 1973. As the honourable member for Dawson (Mr Braithwaite) said, they were identified in 1973 when Labor was in government, and after a close examination of existing law, a decision was taken by the Australian Taxation Office in 1975 to prosecute the persons involved in one scheme. Prosecution was to be under the Crimes Act for conspiring to defraud the Commonwealth and liquidation proceedings were commenced to recover the tax owing. But these proceedings never got off the ground for reasons outlined in the Costigan report involving negligence in both the Crown Solicitor's Office and the Australian Taxation Office. Several legal opinions were obtained from both within the bureaucracy and from private practitioners that prosecutions could successfully be launched against these schemes under existing law, but still the previous Government never attempted to do so. Instead, it relied on an eventual Crown Law Office opinion that prosecution would not be successful. That was its excuse for doing nothing until the end of 1980 when, as a result of the Costigan report, because of the electoral backlash, because it knew it had to face the people in a very short time, it then decided it would take some sort of action. But as we said, in October last year the members of the then Opposition made it very clear that we believed that the legislation was severely deficient. The legislation that we have before us tonight only reinforces the points that we raised last October and attempts to strengthen that legislation. The previous Government was, supposedly, first made aware of the schemes at the beginning of 1978. A decision was made later that year to enact new legislation against these schemes. That legislation, the Crimes (Taxation Offences) Act, was not passed until the end of 1980. So the previous Government's five-year delay in taking action is totally inexcusable. During this period, bottom-of-the- harbour schemes mushroomed, causing huge revenue losses. The previous Government itself admits that up to $600m in lost taxes are involved, although other estimates involve figures many times larger than that amount. The previous Government should have either proceeded with prosecutions to test existing law or indicated, as soon as it was aware of these schemes, an intention to legislate against them back to the date of announcement. Although the schemes were virtually stopped in 1980, huge amounts of tax remained unpaid, and that is the issue that we are addressing in this legislation. Only after the revelations of the extent of tax evaded contained in the McCabe-Lafranchi and Costigan reports, was the previous Government forced by public pressure to act. The Opposition argues that moneys should not be collected from vendors who had no knowledge that they were involved in tax avoidance schemes. However, they benefited from such schemes, even if they had no knowledge of the fraud. While they benefited, who lost? The people who lost were the pay-as-you-earn taxpayers . Taxation revenue does not appear from the sky. If it is not collected from one source, it has to be collected from another, and the simple solution for everyone was that the PAYE payers kept forking out of their pockets. It is impossible to assess accurately revenue losses due to tax evasions. However, it has been estimated that the black or underground economy, as it is referred to, accounts for as much as 10 per cent of the nation's economy. Not only does this represent a substantial loss of taxation revenue, but also, very significantly, it distorts the economy. The annual Report of the Commissioner of Taxation and the 1981-82 Budget Estimates provide statistics on tax outstanding as a result of tax avoidance activities. They list, for example, in the period 1980-81, $973m. So well documented information has been provided which demonstrates quite clearly that, firstly, the Opposition, which was then the government of the day, acted only under forced electoral pressure when it had a number of independent reports presented which clearly demonstrated that tax evasion and avoidance schemes were rampant in the community. It then had to act. We, as the then Opposition members , pointed out that there were serious deficiencies in the recoupment of that money and now the present Opposition is surprised that the government of the day has gone along to keep its electoral commitments. We have not procrastinated. We have decided that we must proceed with this legislation on the grounds of equity . We believe that every taxpayer in this country should pay what is his due and it is the intention of this Labor Government that we will no longer tolerate the situation referred to by Professor Russell Mathews in 1980 when he said that tax avoidance flourished on such a scale as to make personal income tax a voluntary tax for the rich non-salary earner. Under the Labor Government, those days are over. What we want is a fair and equitable tax system. The Bills before us tonight will contribute substantially to that. Mr SPENDER(North Sydney)(9.46) —In the 10 minutes which I have to speak in this debate, let me start by putting certain propositions about this law to this chamber. First of all, there is the need for certainty in the law. Secondly, there is the need for adherence to the rule of law, and by adherence to the rule of law I do not mean the retrospective overturning of a decision of the High Court of Australia. That is quite contrary to the adherence of the rule of law. Thirdly, there is the principle which has to be considered in tax legislation, as it must in any other legislation, that within the law a citizen is entitled to order his affairs. For those who would say, on the part of the Government, that this is some recent creation of the High Court, let me remind them that in 1927 one of the leading justices in England said: It is trite law that His Majesty's subjects are free, if they can, to make their own arrangements, so that their cases may fall outside the scope of the taxing Acts. They incur no legal penalties and, strictly speaking, no moral censure if, having considered the lines drawn by the Legislature, for the imposition of taxes, they make it their business to walk outside them. The fourth point to bear in mind is this: There is a great distinction between what is legally permiss- ible and socially undesirable. We can all differ on the view as to what is desirable or undesirable but the question as to whether, a matter is legally permissible is one that should be left to the resolution of our courts. In this case, we have, in the Taxation (Unpaid Company Tax) Assessment Amendment Bill a proposition which is aimed at reversing, retrospectively, a decision of the High Court. After the decision of the High Court in Slutzkin's case, one had essentially three courses open to one. Mr Robert Brown —That was a shameful decision. That is the sort of decision you like. Mr SPENDER —First of all, where there were accumulated profits in a company and where taxes had been paid on those profits, one could trade one and use those accumulated profits for the purposes of business; secondly, one could wind up the company and distribute the profits and the revenue profits and only the revenue profits would be subject to tax under section 47. Thirdly, one could sell on the basis of the decision in Slutzkin's case, and for those ignorant idiots such as the honourable member who interjected and said that it was a shameful decision, let me remind him that the High Court simply interprets the law. It lays down the law in accordance with the legislation passed by this Parliament and if this Parliament does not change the legislation, so be it. The central vice of the proposal which is now before the Parliament is that it overturns retrospectively the decision in Slutzkin's case. I will give an example as to how it works. First, let us assume a case in which there is a company that has two shareholders. It has nil liabilities save tax and has paid all of its past tax. Let us assume that it has-I will use simple figures so that the Government can understand-$100,000 of accumulated revenue profits and $100, 000 of capital profits. That would add up, as any Government member could understand, to $200,000. Let us further assume that it has $250 in current unpaid company tax and a paid up capital of $20,000. Under the formula which is worked out in this Act the value of the company, minus its paid up capital, minus the unpaid company tax, is to be the deemed dividend. In the case that I gave, that is $179,750 which, for each of the two shareholders, would then be $ 89,875 on which they would pay 60 per cent tax. That tax would be paid in reference to profits, half of which would never have been taxable in the hands of the company or on a winding up. To make the illustration even clearer, let us assume that the same company had no accumulated revenue profits; it simply had $200,000 in capital profits. The result is that under the operation of this legislation each of the shareholders would pay $56,925 or more. On what? They would pay it on a deemed dividend of a capital sum, which is a capital gains tax. This amounts to the retrospective reversal of Slutzkin's case. The formula is to be found in clause 8, proposed new section 5A (3), of the Taxation (Unpaid Company Tax) Assessment Amendment Bill. If that formula is not as I put it, the Government should amend it so as to make it perfectly clear in the legislation that under no circumstances is there ever to be a tax which is to be attributable to a capital element. But as matters now stand, that is how the legislation reads and that is how it will operate. It will be irrelevant as to why the company tax-the sum of $250 that I mentioned-was not paid. It may have been unpaid as a result of fraud or commercial misfortune. The tax is imposed not only on profits on which taxes had already been paid, but also on profits that were never taxable in the hands of the company itself. No regard whatsoever is to be paid to whether the deemed dividends, if paid to the vendor on a winding up, would have been taxable in whole or in part. The effect is that everything is in under the ill-conceived and ill-drawn proposal, if it can be so described-or otherwise by the deliberate intent of this Government. The consequences of this kind of legislation are perfectly obvious, recalling that it overturns the decision made in 1976 and taxes retrospectively people who relied upon that decision. The consequences are , first, commercial dislocation; secondly, uncertainty; and thirdly, it is a perfectly plain incentive to fraud, because if a government cannot be trusted to accept a decision of a court and to amend legislation afterwards to overcome the decision, but not so as to overcome it retrospectively, many people will say that it is not worth playing the game by the system. They will say: 'Let's go all out for tax evasion'. In the longer term there are some other consequences. First, we are looking to the establishment of a capital gains tax because that is what it plainly is. Secondly, there will be the enshrining of the principle of retrospectivity in the way in which this Government is to conduct its taxing operations. Mrs Kelly —You started it. Mr SPENDER —The honourable member for Canberra said that we started it. The distinction is that the legislation which was introduced fixed upon fraud and fraud alone. This legislation does not fix upon fraud and it deliberately overturns a decision which we did not touch. Nor did we seek to overturn any decision of the High Court by our legislation. Of course, this Government will embalm a principle in this precedent-that of contempt for the law. In the longer term it may also be said that this legislation has all the hallmarks of the Hawke Government-a lack of opportunity for public debate, brought in as it was last week and to be passed this week; no opportunity for the professional bodies to examine it or to consult or talk with the taxation officers, if they deign to see professional officers, or to talk with the Minister for Finance if he could find the time or if he deigned to see them. Deliberately or accidentally, we have enshrined the proposition of deceit. Nowhere in the second reading speech is there to be found any reference to Slutzkin's case. Is that deliberate or accidental? Is it through incompetence or design? Whatever I might think of the capacities of the Minister who has the conduct of this legislation, I do not think that he is so incompetent as not to understand what was being done-that Slutzkin's case was being retospectively overturned and that a capital gains tax was being imposed on the Australian public in the guise of recoupment of tax. This is certainly one of the most dangerous pieces of legislation and one of the most deceitful attempts to pass legislation under a different guise that this House has ever seen. Mr DAWKINS(Fremantle-Minister for Finance)(9.58) —in reply-I rise to respond in this debate. First, I thank honourable members who have contributed to it. I want to answer a couple of the major arguments which the Opposition has offered against the proposals which the Government has before the House tonight. Before doing so, I indicate that we are not talking tonight about something which has crept up by stealth on the Parliament or the people of Australia. It had been foreshadowed by the Australian Labor Party in Opposition months ago and during the election campaign. Anybody who tries to argue that there has not been adequate notice of what the Government is now doing is simply flying in the face of history. Indeed, the Deputy Leader of the Opposition (Mr Howard) in his contribution tonight indicated that there was nothing new in what was being proposed to the House. He said that the Government was either attempting to overturn amendments which had been made by the then Government after it introduced its original recoupment legislation last year, or had attempted to enforce amendments proposed by the then Opposition which had been rejected by the then Government. I think the Deputy Leader of the Opposition was substantially right. The Government on this occasion is giving effect to the view which it expressed during the debates last year and again undertook to the people of Australia during the election campaign at the beginning of this year. So to pretend that we are engaged in an exercise in deceit is quite clearly a contradiction of the English language. We have made it perfectly clear-indeed, quite courageously we made it clear months ago, years ago-that we intended to act according to these particular principles. We have argued that we shall never deal with the tax avoidance industry in this country and conclusively wipe it out unless we embrace the principle of retrospectivity. That is not a novel principle. It has been employed by governments in other countries and it has been found in those countries to be totally successful. What it means is that as soon as the Government indicates its preparedness- indeed, its determination-to act retrospectively against blatantly and unambiguously contrived tax avoidance schemes and will act retrospectively back to the time when they were first used, that is the most effective weapon, the weapon which is most feared by the tax avoiders in this and any other country. So, one of our first acts as a government was to indicate our preparedness to act in that way in respect of any artificially contrived schemes which appeared during the life of this Government. I acknowledge that the Deputy Leader of the Opposition was right and that the tax avoidance industry in this country has faltered; in fact, it is staggering to a certain death. But the certainty of that death has been made absolute only by the fact that this Government has indicated its resolve to act retrospectively in respect of any artificially contrived schemes which come to light during the period of this Government. What we have said is that when such schemes arise we are prepared to act retrospectively back to the date of first known use of those schemes. Mr White —This is not the end of it. Mr DAWKINS —The honourable member for McPherson says, 'This is not the end of it '. He confuses two quite separate issues. In the first instance, we said what our position was in relation to the bottom-of-the-harbour exercise-I shall come to that shortly. In respect of any new schemes the details of which we were not aware of prior to the election, we do not intend to act retrospectively. We are not trying to remake history or to right the manifest wrongs of seven years of Liberal neglect in relation to tax avoidance. We have made that perfectly clear. What we are saying, however, is that to the extent that artificially contrived schemes come to light during the period of this Government we are prepared to go back to the time of first known use. That is the weapon which the tax avoidance industry most fears. I confidently predict that we have really seen the end of tax avoidance in this country. I do not disparage the belated actions of the former Government in this regard, but what I am saying is that those actions would be for nought if that final step had not been taken by this Government and that final declaration had not been made by this Government in respect of these issues. In relation to these schemes, we have taken the view of the former Government: That the bottom-of-the-harbour exercise was quite fraudulent; that it was entirely bereft of any justification. If it were not for the Labor Party last year the legislation proposed by the former Government would not only not have got through the Senate; it probably would not have got through this House, either. It was only because of our preparedness to embrace the views of the former Government in respect of the particular category of bottom-of-the-harbour schemes that the legislation, which the Deputy Leader of the Opposition quite rightly prides himself on having put on the statute books, would have made it to the statute books. We were quite unambiguous about our support for those measures. However, we were also quite unambiguous and quite outspoken at the time about our views that the then Government was not going far enough in respect to these measures. As the Deputy Leader of the Opposition has said, we indicated that we wanted the measures to go further in a number of respects. We did not agree with the amendments which the then Government introduced after the introduction of the Bills. What we are doing on this occasion is to reverse the amendments which the then Government introduced, it having succumbed to pressure either from its back bench or from the tax avoidance industry at the time. We believe that the original intent of the then Government was correct and we are simply ensuring that the original views of the then Treasurer, now the Deputy Leader of the Opposition, in fact achieve what was his original ambition, and that is to appear on the statute book in their pristine form. It cannot be argued that what we are proposing tonight is in any sense deceitful or unexpected. We said at the time that those moves by the then Government were wrong and that we believed they should not have occurred. We also indicated at the time that we believed that the Government should have proceeded to collect the personal income tax which would have been paid had the benefits of those schemes been received by the recipients in the form of dividends; that is, that we believed that the personal income tax involved should also have been collected. Indeed, I wrote to the then Treasurer during the process of that debate, on 1 October, and raised these questions with him. He responded to my colleague, the honourable member for Gellibrand (Mr Willis), the then shadow Minister responsible for economic matters, and indicated that substantial amounts of tax had been escaped in relation to these schemes. It has been argued tonight that we have abandoned the acid test which the former Government employed to determine those areas in which retrospective legislation was justified; that is, it has been argued that it is only where there is an element of fraudulence, it is only in the sort of exercises which were involved in the colloquially termed bottom-of-the-harbour schemes, that which ought to have attracted the admittedly extreme opprobrium of retrospective tax, was justified. We have agreed with that. We agreed with the Government at the time. What we are doing on this occasion is to attack no scheme which was not at the same time involved with a bottom-of-the-harbour scheme; that is, there is no area which had not some fraudulent component in it in relation to the measures we are taking tonight. The Deputy Leader of the Opposition has argued that we are inventing a new tax, that we are imposing a new liability. He has argued that we are introducing into the tax law a new tax which had not, before the passage of this legislation, previously existed. He is not that much of a fool. He knew what he was doing when be introduced and successfully passed through this Parliament Part IVA of the current income tax law. He knew what he was doing then, and he knows full well that if any company went to the bottom-of-the-harbour after Part IVA was in operation exactly the same kind of taxes would be collected as are intended to be collected as a result of this legislation. He knows that Part IVA goes beyond the collection of unpaid company tax and goes to the point of collecting the unpaid income tax which would have been paid had the benefits been received by the shareholders in the form of dividends and been taxed in the normal way. Let us not be deceived by the belligerence or aggression of the Deputy Leader of the Opposition. He knew what he was doing when he introduced Part IVA. He knows what Part IVA now means. On this occasion we are simply extending the principles that he introduced quite properly in relation to Part IVA to the areas which he retrospectively acted against late last year. So let us not have any of this nonsense about a new capital gains tax. To the extent that what is happening tonight represents a tax on capital profits, that is exactly the same principle which is included in Part IVA. Some magnificent argument has been elaborately constructed in recent times about how if these companies had been liquidated, rather than sent to the bottom of the harbour, the capital profits would not have been taxed. Of course that is true, but these companies were not liquidated. They continued in operation. If the designers of these schemes had been interested only in avoiding the tax on the capital profits of course they would have liquidated the companies. That would have been the sensible course, but they were not happy with that. They wanted to avoid not only the tax on the capital profits but also the lot. So they dumped the companies at the bottom of the harbour in a quite fraudulent manner and ensured that they avoided the tax not only on to the capital profits but also on the current year profits and the accumulated profits of those companies. Very few other substantial matters have been raised by the Opposition. The Deputy Leader of the Opposition raised the issue that some penalty is involved in relation to the measures which we are proposing tonight. I have no idea what he is talking about, except that he may be saying that in some circumstances the tax which will be collected from these measures will be at the rate of 60c in the dollar rather than 46c in the dollar. I am not sure whether that is the point he is making, but if it is, let me answer it in this way: It would have been perfectly consistent with everything the Labor Party has said over the last year and more that we should have not only collected the tax in the then current dollar terms but also we should have added an amount to ensure that it was collected in real dollar terms. That is, we should have denied the benefit which the recipients or the tax avoiders had in relation to the use of those ill- gotten funds during the years in which they had the use of them. We decided against that course. Had we decided to collect the tax in real terms instead of historic dollar terms, the amount collected would not have been $570m, it would have been $840m. So let us not have any argument about penalties being applied to these matters. If the Deputy Leader of the Opposition is pointing to the fact that in some circumstances the rate of tax will be higher than the company rate, that is perfectly sensible and logical because we are talking about collecting personal income tax. The rate at which we will collect it will be approprite to the level of income in the year in which these dividends would have been received, other than for the device which was employed to ensure that the dividends were not received but rather that the benefits were received in inflated share prices. Let us not have any nonsense about penalties being applied in this instance. The Deputy Leader of the Opposition embarked on his crusade tonight saying that the Labor Party, when in opposition, had indicated that a vast bonanza of tax avoided was there ready for the taking. There was a rather quaint inconsistency in his argument. In the first instance he said that because we claimed in opposition that there was $7 billion out there to be collected and because, having got into government, we decided to collect what he described as a measly $507m, we were not to be trusted and that we were entirely hypocritical in our protestations before the election. But in his next breath he went on to say that what we were intending to do in collecting that $570m was far too much and that, indeed, we were embarked on a quite scurrilous exercise. Quite frankly, the Deputy Leader of the Opposition cannot have it both ways. Let me indicate the veracity of the claims which we made. The figure of $7,000m related to tax avoidance and tax evasion. I have collected some statistics in relation to tax avoidance which occurred during the years 1975 to 1982. What is revealed is that on the basis of verifiable statistics an amount of $2.7 billion went uncollected as a result of the neglect of the former Government. That is in respect of tax avoidance itself. The Deputy Leader of the Opposition said tonight that in his view tax evasion was vastly more important than tax avoidance ever was or is ever likely to be. Mr Howard —Now. Mr DAWKINS —Now. The former Opposition, the Labor Party, said that there was one amount relating to tax avoidance-the figure that has now been verified is $2.7 billion-and another amount relating to tax evasion. It does not take much imagination to inflate the figure of $2.7 billion to $7 billion, on the basis of the observations of the Deputy Leader of the Opposition about the magnitude of tax evasion, and to realise that the Labor Party was not far off the mark in making those sorts of claims. Indeed they were the claims not only of the then Opposition but also of independent authorities. During the evening the Government has had representations concerning the time in which to pay. I foreshadow that tonight we will adjourn the debate after the second reading of these Bills and will introduce amendments in the Committee stage to give effect to those changes. Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member's time has expired. Question put: That the Bill be now read a second time. The House divided. (Mr Deputy Speaker-Mr P. C. Millar) Ayes . . . . . . . . . . . 70 Noes . . . . . . . . . . . 44 —— Majority . . . . . . . . . 26 —— Baldwin, P. J. Jacobi, R.Beddall, D. P. Johnson, LesBilney, G. N. Jones, BarryBlanchard, C. A. Keating, P. J.Blewett, N. Kelly, R. J.Bowen, Lionel Kent, L.Brown, John Keogh, L. J.Brown, Robert Kerin, J. C.Brumby, J. M. Klugman, R. E.Campbell, G. Lindsay, E. J.Charles, D. E. McHugh, J.Charlesworth, R. I. Maher, M. J.Child, J. Mayer, H.Chynoweth, R. L. Mildren, J. B.Cohen, B. Milton, P.Cross, M. D. Morris, AllanCunningham, B. T. (Teller) Morris, PeterDarling, E. E. Morrison, W. L.Dawkins, J. S. Mountford, J. G.Duffy, M. J. O'Neil, L. R. T.Edwards, Ronald Punch, G. F.Everingham, D. N. Reeves, J. E.Fatin, W. F. Saunderson, J.Free, R. V. Scholes, G. G. D.Gayler, J. Scott, J. L.Gear, G. Simmons, D. W.Gorman, R. N. J. Snow, J. H.Griffiths, A. G. Staples, P. R.Hand, G. L. Steedman, A. P.Hayden, W. G. Theophanous, A. C.Holding, A. C. Uren, T.Hollis, C. Wells, D. McM.Howe, B. L. West, S. J.Humphreys, B. C. (Teller) Willis, R.Hurford, C. J. Young, M. J. Adermann, A. E. Howard, J. W.Andrew, J. N. Hunt, R. J. D.Anthony, J. D. Katter, R. C.Braithwaite, R. A. Killen Sir JamesBurr, M. A. Lloyd, B.Cadman, A. G. Lusher, S. A.Cameron, Ewen (Teller) McGauran, P. J.Cameron, Ian MacKellar, M. J. R.Carlton, J. J. McVeigh, D. T.Coleman, W. P. Macphee, I. M.Connolly, D. M. Moore, J. C.Cowan, D. B. Newman, K. E.Dobie, J. D. M. O'Keefe, F. L.Drummond, P. H. Porter, J. R.Edwards, Harry Robinson, IanFife, W. C. Rocher, A. C.Fisher, P. S. Ruddock, P. M.Goodluck, B. J. Shipton, R. F.Groom, R. J. Sinclair, I. McC.Hall, Steele Spender, J. M.Hawker, D. P. M. Tuckey, C. W.Hicks, N. J. (Teller) White, P. N. D. McLeay, Leo Wilson, I. B. C.Beazley, K. C. Street, A. A. Question so resolved in the affirmative. Bill read a second time. Clause 1 (Short title). Progress reported. Consideration resumed from 18 May, on motion by Mr Dawkins: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Dawkins) read a third time. Debate resumed from 18 May, on motion by Mr Dawkins: That the Bill be now read a second time. Mr HOWARD(Bennelong)(10.27) —I move: That all words after 'That' be omitted with a view to substituting the following words: 'Whilst not declining to give the Bill a second reading, the House is of the opinion that it contains inadequate provision to protect the independence and continued survival of sub-contractors'. I moved the amendment for reasons which have already been more than adequately explained by my colleague, the honourable member for Mitchell (Mr Cadman). This amendment deserves the support of this Parliament. Mr DEPUTY SPEAKER(Mr Millar) —Is the amendment seconded? Mr Steele Hall —I second the amendment. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. Consideration interrupted. Mr DEPUTY SPEAKER(Mr Millar) —Order! It being 10.30 p.m., I propose the question: That the House do now adjourn. Mr Young-I require that the question be put forthwith without debate. Question resolved in the negative. Consideration resumed. The Bill. Mr CADMAN(Mitchell)(10.31) —by leave -I move: (1) Clause 65, page 61, line 36, proposed section 221YHA, paragraph 3 (c), omit '$10,000', substitute '$2,000'. (2) Clause 65, pages 76-79, omit proposed section 221YHQ, substitute the following section: Deduction exemption certificates ''221YHQ. (1) Subject to this section, on application in writing by a person, in a form approved by the Commissioner for the purposes of this section, the Commissioner shall issue a deduction exemption certificate under this section to the person in relation to a specified period. '(2) The Commissioner may refuse to issue a deduction exemption certificate to a person (in this sub-section referred to as ''the applicant'') if- (a) the applicant is, at the time of receipt by the Commissioner of the application for deduction exemption certificate, in default in his obligations under any Act administered by the Commissioner; or (b) in the opinion of the Commissioner the issue of a deduction exemption certificate to the applicant may have the consequence of avoidance of tax on any prescribed payment to the applicant; or (c) the applicant has not previously lodged an income tax return with the Commissioner. '(3) Subject to section 221YHS, a deduction exemption certificate remains in force during the period specified in the certificate as the period during which the certificate remains in force. '(4) Where a payee has properly furnished a deduction form to an eligible paying authority in relation to a prescribed payment and- (a) if the payment is to be made to the payee in person- (i) the payee has declared in the deduction form that a deduction exemption certificate has been issued to the payee in respect of the period specified in the declaration and has not been revoked, (ii) the payee has produced to the eligible paying authority a deduction exemption certificate issued to the payee and applicable to the time when the payment is to be made, and (iii) the eligible paying authority has no reasonable grounds for believing that the deduction exemption certificate has been revoked, or (b) if the payment is not to be made to the payee in person the payee has declared in the deduction form that a deduction exemption certificate has been issued to the payee in respect of the period specified in the declaration and has not been revoked, the eligible paying authority shall not make any deduction from the prescribed payment under paragraph 221YHD (1) (a).''. The two amendments apply to two aspects of the legislation. The first amendment seeks to lower the exemption that is proposed by the Government. The Government' s proposal of $10,000 is far too high for the provisions of this legislation. I propose that the amount of $2,000 be substituted for an amount of $10,000. It is a fact that within the building industry 40 per cent of alterations and additions above $2,000, together with the owner-builders, constitute 40 per cent of the recorded private home building activity. It seems to me that under those circumstances major portions of the building industry are not caught within this proposed legislation. Under those circumstances I have no alternative but to put to the Government the proposition that it has gone weak on what it claimed was a tax avoidance measure and that it is not willing to go to the length that is needed to prevent cash payments being made. I further predict that unless the Government is prepared to accept the amendment to substitute the figure for $2, 000 then we will see massive processes of splitting payments whereby owner- builders and others will be positively encouraged to split their payments in such a way which avoids the provisions of the proposed Act. The $10,000 limit will provide for owner-builders to seek to split their payments in such a way that they will be slightly under the $10,000 with successive payments, thereby avoiding the provisions of the proposed Act, to report the amount of the payments. Compliance will be reduced. Indeed, the capacity to collect tax from cash payments also will be reduced. We are talking of a major section of the area about which the Government claims it is concerned , that is, the cash payments area. What the Government has failed to realise is that a major proportion of building in Australia today is carried out by owner- builders. It is a simple process, both in Victoria and New South Wales, to apply for a licence. Owners are encouraged by builders to carry out this process on their behalf, thereby avoiding the responsibility that a builder may have under State legislation to carry through certain procedures. This legislation picks up that mistake. In fact, it will encourage builders to have owners apply for a licence to build. In that way the builders themselves will avoid their obligations under this legislation. The Minister must realise that it is a mistaken measure and that the only way in which it can be properly dealt with is to reduce the exemption from $10,000 to $2,000. I now move to the second amendment which is to proposed new sectio 221YHQ. Mr Howard —It is a very dangerous provision. Mr CADMAN —It is a dangerous section of the proposed Act. What I propose in my amendment is to move the onus of issue of a deduction from the applicant to the Commissioner of Taxation but, by that process, to also insert provisions for protection against tax avoiders. In this way the Commissioner himself becomes the person who is liable for the onus to issue a deduction exemption certificate . The Commissioner can make an assessment as to whether the applicant is a proper person. The protection for the Commissioner and for the revenue is contained in this amendment. The applicant must provide details of his previous tax record. Also he must be able to assure the Commissioner that he is not involved in tax avoidance, nor will he seek provisions of cash payments as tax avoidance. The applicant must have previously lodged income tax returns with the Commissioner. Those are perfectly proper protections for the revenue in such a way that the Commissioner can be assured that there is no way in which an applicant is seeking to avoid payments and that the applicant has a sound and proper record over a long period. The amendment goes on to provide that should the Commissioner issue an exemption certificate he can call on the applicant at any time to produce evidence. He can say that the applicant is denied the process of a certificate. The whole protection that the Government seeks is put in place by the Commissioner being made aware of every applicant and every process in this area. This legislation is absolutely deplorable. It strikes at the major business activity area of Australia, that is, the small self-employed businessman, the contractor and sub-contractor. The provisions of the legislation as proposed by the Minister will only encourage further avoidance and further techniques. I have outlined the way in which some of those avoidance measures which will be entered into and encouraged can be dealt with and which, at the same time, protect the status, well-being and continuing viability of the individual involved in subcontracting. The Minister will have on his head-I am sure he is aware of this-the bankruptcies that will follow through the introduction of this tax. An increase in the unemployment benefit will be necessary in industries which are under great pressure at the moment. The industries at which the Government is striking are under pressure. They need to be assured that the Government has a continuing interest in their well-being but, at the same time, the intention of both the Opposition and the Government must be that there shall be no avoidance of cash payments, that the cash economy and the $2,000m that is being used in the cash economy is properly dealt with. The proposed measures will cover that and, in fact, are a worthy addition to the Bill. Mr DAWKINS(Fremantle-Minister for Finance)(10.40) —The Government does not accept the amendment. The amendment proposes that in relation to reporting provisions for householders the limit be decreased from $10,000 to $2,000 in respect of work contracted for by a householder. We have looked carefully at this. The honourable member for Mitchell (Mr Cadman) seems to be under a misapprehension that we are imposing a new tax. Of course, we are not imposing a new tax; we are simply imposing a new method of collecting a tax which has always been legally due. I further remind the honourable member for Mitchell that indeed this is a proposal of the former Government on which it did not get round to legislating. Mr Cadman —The $10,000? Mr DAWKINS —No, wait a minute. The proposals of the former Government were to set the limit at $3,000. We carefully examined that. We carefully discussed the matter with the industry. We carefully considered the consequences on householders. We carefully considered the revenue implications of the change from $3,000 to $10,000 as a limit and we discovered that the amount of revenue involved would decline only from $17m to $14m. Under those circumstances, particularly bearing in mind that these are new procedures-procedures which householders are not used to-it was not worth pursuing and battering householders in relation to smaller contracts which they might enter into involving alterations to their homes or whatever. I further indicate to the honourable member for Mitchell that we are actively pursuing the possibilities relating to the co-operation of State and local governments to ensure a greater level of compliance with these measures than would be possible if they were acting on their own. I am confident that what we are proposing is a cautious approach. It is designed not to inconvenience householders but at the same time it is designed to strike at that aspect of the cash economy involved in this area. On the balance of issues that have to be considered, I think it is a reasonable approach. We have amended a number of other aspects of the former Government's proposals. I think that, given that we obviously have to keep this matter under review, the $10,000 is both equitable and appropriate in the circumstances. Mr TUCKEY(O'Connor)(10.42) —In regard to Division 3A of the Income Tax Assessment Act, we have heard a lot of talk this evening about the villains of the piece in the area of tax avoidance. I am trying to identify the villains in this particular piece of legislation. I have an idea it might be the fellow who unfortunately mistakenly fails to deduct tax from somebody who carries out some work for him. Mr Dawkins —Why don't you go back and read it. That is not what it is all about, you great twit. Mr TUCKEY —I know a lot about it. If I am great I have something over the Minister for Finance (Mr Dawkins). It appears that this piece of legislation states that if one has a contract one is a tax risk yet if one handles numerous small cash transactions one is not. This shows the paranoia of the Minister at the table. He will go for anything that he thinks he can plan. The honourable member for Melbourne Ports (Mr Holding), who is seeking to interject, need not worry. We will talk about his royal commission at some time. We should look at proposed new section 221YHH. It provides for deductions from prescribed payments . It states: Where an eligible paying authority other than a government body fails, at the time of making a prescribed payment to a payee, to deduct from the payment the amount required to be deducted under this Division-- Mr Dawkins —I raise a point of order, Mr Deputy Chairman. The erudite speech of the honourable member for O'Connor might be more appropriate when we get to the amendment to which he is speaking. It has not yet been moved. Mr TUCKEY —I will take a point of order in reverse, Mr Deputy Chairman. My understanding of the agreement is that we are dealing with the Bill as a whole. Mr Dawkins —That is not for the amendment that we are discussing now. Mr TUCKEY —Just ask the gentleman in the chair, Mr Minister. What is his ruling? The DEPUTY CHAIRMAN(Mr Mountford) —There is no point of order. We are dealing with the Bill as a whole. Mr TUCKEY —The next time the Minister uses the word 'erudite' he should use his brains. He is singularly short of them, which is why he could not pass his university exams. He is a failure but he is pretty smart with his mouth. He is not denying that. The point I am making is that this Bill has as many penalties in it for the people who just happen to employ someone as it has in it penalties for tax avoiders. It is time that some of the people who sit behind the Minister asked themselves how this will affect some of their constituents. I will read proposed new section 221YHH again. It states: Where an eligible paying authority other than a government body fails, at the time of making a prescribed payment to a payee, to deduct from the payment the amount required to be deducted under this Division, the eligible paying authority is liable to pay to the Commissioner by way of penalty- This relates to the person who made the payment; not the person who received it. It continues: (a) An amount (in this section referred to-- Mr Holding —Have you declared your personal interest in this legislation? Mr TUCKEY —I am quite happy about my position at any time. I have not yet been accused of taking bribes. It has been very close to your-- The DEPUTY CHAIRMAN —Order! The honourable member will address his remarks through the Chair. Mr TUCKEY —The proposed section continues: (a) an amount (in this section referred to as the 'undeducted amount') equal to the amount that the eligible paying authority failed to deduct; and (b) an amount equal to 20 per cent per annum of so much of the undeducted amount . . .I am not sure what that means but I get the feeling that it relates to a householder who involves himself in a contract relating to the building of a house. But, of course, if one is a householder or any other person in Australia who employs some person and that person advises that he has an exemption or a variation and one unfortunately believes him when he does not have such exemption, one is liable. One has only to look at that proposed section to find what rights the Commissioner has to give an exemption. Firstly, one has to be in business for three years. That mitigates against anybody who wants to go into a new business. The fact is that anybody going into a new business needs every penny he has but will now have to forgo 10 per cent of his revenue. That is a wonderful arrangement for encouraging investment and encouraging people to go out and give it a try! I give the example of a truck driver who might aspire to be a truck owner. In the first three years that he drives his truck he has massive repayments-- Mr Holding —Oh! Mr TUCKEY —The honourable member is not worried about such people. He does not believe in people owning anything. He does not want them to own anything because they escape his net. When they own something his party will not have them any more and that is what he is worried about. This Bill mitigates against anybody getting into business. There is no way that they would be able to afford to have 10 per cent deducted from their revenue. In the Bill the Commissioner of Taxation is not advised that he may give certain variations on certain exemptions; he is advised that he will not give exemptions or variations unless very stringent rules are met. The Commissioner is a man who is known for his conservatism and he and his employees will not give those variations or those exemptions. I know a great deal about the trucking industry and I know that the average subcontractor and the average small businessman does not have the revenue to be able to afford to have 10 per cent of it removed from him. He will have one choice and that will be to increase his revenue, which means that some poor housewife will have to pay more for her freight. Freight is the highest component of costs in Australia. If he does not do that he will go broke, and we know the consequences of that. There is no middle ground for the average subcontractor. Government members should not laugh about this because some of them probably received a lot of votes from such people. Above all, 50 per cent of the penalties-they range up to $25,000 in this provision-are aimed at people who have committed no more offence than to pay somebody and mistakenly not withhold the required amount of tax. I am wondering how the average John Citizen will be able to deal with the 22 pages of this provision to find out whether he has to make deductions on behalf of the Government. When he does that he will be confronted by people who say: 'I have an exemption, I just failed to bring it with me but I want my money now; I'm in a hurry, I'm desperate'. Mr Holding —Oh! Mr TUCKEY —It has never happened to the Minister; he has lived in another echelon. He is one of the Labor people who have never worked for a living. There is a yard full of them over there; they do not know the reality of life. Mr Porter —They are champagne socialists. Mr TUCKEY —That is right, they are champagne socialists-the great workers. We asked about this the other day and one bloke on the other side got up and said: 'I have worked for a living, I am a tradesman'. How many of them can say that tonight? The question we have to confront is: Who does this legislation hurt most? It will not gain the Government a lot of revenue. It will get some in the beginning because it is moving forward the requirement to pay tax. That is all it is doing; it is making a forward tax claim on a lot of people who are paying taxes. They were paying taxes because they had contracts. The next stage involves the people who do not have contracts. I hope that tonight the Government might indicate that it will get really and truly into the tax business and put audit totals in everyone's cash registers. Is it prepared to promise that it will do that? If it did that it would really be getting into the tax area, into those little amounts of money. By admitting that $10,000 was a limit in terms of the real cash economy the Government has abrogated any real opportunity to attack the cash economy. It has purely and simply got into the contracts that are established and it has got into the people who are already paying taxes. The only thing it has achieved is to get the taxes 12 months in advance. It is also imposing huge penalties on the people it has now asked to collect the taxes on its behalf. The penalties go up to $25, 000. I hope the Australian public realises the method in the Government's madness. We have had plenty of that, particularly from the Minister for Finance (Mr Dawkins). They are the issues I want to raise. I want to say again that, in relation to many small contractors, the suggestion is that if one has a $25,000 a year fuel bill and earns $100,000 he is no different from another contractor who has $10, 000 of outgoings and has $100,000 of revenue. I know that the Minister's second reading speech says that the Government will make arrangements for that, but look at the rules it has written for making those arrangements. They all start with the words 'The Commission will not'. The Commissioner will rely on those rules. They do not say 'The Commissioner may' or 'The Commissioner should'; it is all a case of 'The Commissioner will not'. Those provisions will not apply to the average small businessman. He will be stuck with a huge revenue drain that he cannot afford. The DEPUTY CHAIRMAN(Mr Mountford) —Order! The honourable member's time has expired. Progress reported. Motion (by Mr Young)-by leave-agreed to: That Standing Order 103, the 11 o'clock rule, be suspended for this sitting. Consideration resumed. Amendments negatived. Mr DAWKINS(Fremantle-Minister for Finance)(10.54) —I move: Clause 65, page 78, before proposed paragraph 221YHQ (3) (a) insert the following paragraph: '(aa) a reference to the Commissioner being satisfied that there is no reasonable likelihood that tax will be payable in relation to a year of income by an applicant for a deduction exemption certificate shall, in the case of an applicant being a partnership or the trustee of a trust estate, be read as a reference to the Commissioner being satisfied that there is no reasonable likelihood that there will be any net income of the partnership or trust estate, as the case may be, in relation to the year of income;'. This amendment which is of a purely technical nature is intended to clarify one of the conditions for issue of a deduction exemption certificate contained in proposed sub-section 221YHQ (2), which is to be inserted by clause 65 of the Bill. One situation in which an exemption certificate may be issued under the proposed sub-section is where the Commissioner of Taxation is satisfied that, in relation to a particular year of income, the person concerned will have no tax liability. As noted in the explanatory memorandum that has been circulated to honourable members in my name, an example of the kind of situation envisaged would be where the applicant has significant carry forward losses from previous years which, when set off against projected income of the year in question, would result in the person having no tax to pay for that year. Because the term 'applicant' as used in proposed sub-section 221YHQ (2) includes a partnership or a trustee of a trust estate, could be argued that a partnership, or the trustee of a trust estate who has fully distributed trust income to the beneficiaries, would not technically have a tax liability in relation to the year of income. This is, of course, because it is the partners and the beneficiaries who would be liable to pay tax on partnership or trust income distributed to them. It was never intended that a partnership, or a trust estate that distributed net income, would, by that circumstance, be liable to obtain an exemption certificate and there is some doubt that, when read in context, a court would interpret the provision in this way. Nevertheless, the Government has decided that the matter should be put beyond doubt by removing the possibility that such an applicant would be able to obtain an exemption certificate on the basis of the technical argument I have outlined. The amendment will clarify that, in relation to this particular criterion for the issue of an exemption certificate in its application to a partnership or the trustee of a trust estate, it will be necessary for the Commissioner to be satisfied that there is no reasonable likelihood that, during the relevant year of income, there will be any net income of the partnership or the trust estate. I commend this amendment to the Committee. Amendment agreed to. Bill, as amended, agreed to. Bill reported with an amendment; report-by leave-adopted. Bill (on motion by Mr Dawkins)-by leave-read a third time. Consideration resumed from 19 May, on motion by Mr Dawkins: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Dawkins) read a third time. Consideration resumed from 18 May, on motion by Mr Dawkins: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Dawkins) read a third time. Consideration resumed from 18 May, on motion by Mr Dawkins: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Dawkins) read a third time. Consideration resumed from 18 May, on motion by Mr Dawkins: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Dawkins) read a third time. Consideration resumed from 18 May, on motion by Mr Dawkins: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Dawkins) read a third time. Message from the Governor-General recommending appropriation announced. Bill returned from the Senate with an amendment. Ordered that the amendment be taken into consideration in Committee of the Whole House forthwith. Consideration of Senate's amendment. Senate's amendment- Page 7, clause 12, line 37, at the end of the clause, add 'in respect of any period in relation to which the agreement, arrangement or indication, as the case may be, applies'. Mr DAWKINS(Fremantle-Minister for Finance)(11.5) —I move: That the amendment be agreed to. This request arises from a motion moved on behalf of the Government in the Senate as a result of its attention having been drawn to a problem that exists with clause 12 as originally proposed. As I pointed out in my second reading speech, the Bill provides that, where an amount paid under a so-called 50-50 arrangement-of the kind formerly entered into by the Commissioner of Taxation-is ultimately refunded, the refund is to be paid to the taxpayer free of interest. That is the effect of clause 12 of the Bill. In its present form the clause provides that a taxpayer who entered into a 50- 50 arrangement with the Commissioner in respect of a particular amount of disputed tax is not to be eligible to receive interest in respect of any amount paid in accordance with the arrangement. On further examination the Government has decided that, where one of these old 50-50 arrangements has run its course, it is appropriate that any amount previously paid under the arrangement should carry interest, but only from the time when the arrangement comes to an end. This means that taxpayers who paid disputed tax under such an arrangement and those who pay disputed amounts in the future without the benefit of a 50-50 arrangement will be on an equal footing as regards the receipt of interest on amounts ultimately refunded as a result of a successful objection or appeal. I commend to the Committee the amendment which will give effect to the Government' s decision. Mr HOWARD(Bennelong)(11.6) —It appears on the face of it that the amendment requested by the Senate in fact gives effect to what the Minister for Finance ( Mr Dawkins) has set out in his statement. In those circumstances the Opposition will not offer any opposition to the request from another place. Question resolved in the affirmative. Resolution reported; report adopted. South Australian Government-Nuclear Testing-Taxation on Lump Sum Superannuation- Passport Applications-Legal Representation for Aborigines-Community Employment Program Motion (by Mr Young) proposed: That the House do now adjourn. Mr STEELE HALL(Boothby)(11.7) —This Parliament should be aware of the dark history that lies behind the continual harrassment of the South Australian Police Force by South Australian Labor Party politicians. Yesterday Mr Giles, the third South Australian commissioner since 1978, resigned. He has said that he is not leaving because of his relations with the South Australian Government. However, after he was told about the ending of the police interpreter services, he is reported as saying: 'We might have to accept it, but we do not necessarily agree with it'. Additionally, the President of the Police Association of South Australia said police were 'irate and disgusted' at the decision. Given the track record of the Labor Party antagonism to the police in South Australia, the public has a right to know whether Mr Giles has been subjected to undue pressures and pushed into early retirement. Over the weekend the honourable member for Hindmarsh (Mr Scott) called for the South Australian Government to play a 'special role' before the royal commission set up to investigate the Australian Security Intelligence Organisation, and Combe affair. In this way the South Australian Labor Party is spreading its venom against those whose duty it is to maintain law and order and to collect information about potential terrorists and criminals. If in fact the South Australian Government is going to get involved in the way the honourable member for Hindmarsh suggests we need to examine its record in the Salisbury affair. In 1977 a report by Mr Acting Justice White on the South Australian Special Branch's activities was used by the former Premier, Mr Dunstan, to hound the Police Commissioner, Mr Harold Salisbury, out of office. This was a vindictive and disgraceful action and it was based on a politically motivated report submitted by Mr Acting Justice White. The Acting Justice was given the task of examining the Special Branch files and if, in his assessment, they were improper or in disorder he was directed by his Commission to have Mr Salisbury correct any faults and errors. For reasons which have never been disclosed, he did not follow his terms of reference and reported to the Government without giving Commissioner Salisbury the right and duty which was set out in those terms of reference. We certainly are, however, painfully aware of the result. The Premier, Mr Dunstan, reacted hysterically as if the report revealed new details about ASIO and the South Australian records, whereas in fact he had already been informed of them by Salisbury months before. This strange behaviour of the judge and the false indignation of the Premier produced one clear result-the sacking of Salisbury and the destruction of most of the files of the South Australian Special Branch. However, to the great credit of the South Australian people, this fabrication and the heaping of blame on Salisbury rebounded on the Labor Party and its leader. Premier Dunstan mysteriously resigned and his successor was thrashed at the next election. This vindictive sacking of Salisbury, which was contrived because certain members of the Labor Party were mentioned in Special Branch files, is no qualification for the South Australian Government to involve itself in the new ASIO inquiry. The erratic behaviour of the Prime Minister in continuing to comment on the Combe affair outside of the House but refusing to answer questions inside, and the gradual leaking of the unfolding story of the rejection of the former Labor Party Secretary by his previously close friend and colleague, the Prime Minister , must be throughly examined by the Royal Commission. We can do without further attacks on prominent officers and on our security organisations by the South Australian Government. Harold Salisbury may now live in England but the injustice that he suffered is still vividly remembered in South Australia. The honourable member for Hindmarsh will do his party a service if he reverses the recommendation at the weekend that the South Australian Government involve itself in the Combe-ASIO affair and it keeps well away from a vindictive search for scapegoats for Labor Party antagonism to security organisations. I believe that if the South Australian Government does step out of the State field into the Federal field to pursue ASIO it will again get its answer at the polls. That answer will mean certain defeat. Ms McHUGH(Phillip)(11.12) —Mr Speaker, you will have noticed yesterday that women in this Parliament displayed their solidarity with their sisters throughout the world who object to the arms race. I rise tonight to express my concern about the resumption of nuclear testing in the Pacific by France. I am appalled at the way in which the French Government is seeking military prestige and political power at the expense of the peoples of the Pacific. We have had the fifty-third explosion of a nuclear device at Mururoa since 1975. Prior to that date, the tests were conducted by France atmospherically, until world wide opposition stopped that particular form of testing. France then decided to go underground and conducted the tests on the coral atoll of Mururoa. Terrible blunders have occurred during testing. In 1979 a bomb detonated half way down the shaft. A part of the reef gave way, causing a giant tidal wave which killed two men and injured four others. I hope that honourable members opposite will continue to approve of the rest of the terrible things that I am going to tell them. In the same year, two decontamination squad members were killed in a laboratory explosion while handling acetene gases during a cleaning job. In 1981 a violent storm tore open a flimsy plutonium storage facility and washed potentially lethal wastes into the sea. In all of these incidents official reports have been shrouded in secrecy. In fact, the story of nuclear testing in French Polynesia has been one of government intrigue and deception. In defending the French Government's policy, the Defence Ministry claims that the test are 'clean'. Of course it makes that claim, but some admit that the long term effects of the blasts remain a scientific mystery. For instance, as a result of the underground testing since 1975 the atoll surrounding a five kilometre wide lagoon has sunk two metres, almost to sea level. There is also the huge garbage dump of radioactive waste-some of it covering 20,000 metres of Mururoa Atoll-which is a continuing source of danger for many years to come to the people living in this region, which ultimately includes Australia. In addition, there is the leakage from beneath the atoll of radioactive material. The seepage of this material into the sea over the years will be quite massive. My party supports the declaring of a nuclear free zone in the South Pacific. Our platform supports the South Pacific states, trade unions and other organisations in opposing the testing of nuclear weapons, nuclear devices and nuclear weapons systems in the region. Pacific states have become increasingly concerned and militant about the testing and are looking to Australia to show a lead on the issue. Australia will have a chance in August, at the South Pacific Forum, to show some initiative. We will be able to press not just for an end to all testing but our complete opposition to any country with ideas of using the South Pacific region for the dumping of its nuclear waste, as our policy also states. Our government intends to support international efforts to end all such nuclear testing, for example, through a comprehensive nuclear test ban treaty. Mr WHITE(McPherson)(11.16) —I would like to say a few words tonight about the Government's intention to tax lump sum superannuation. We can only put it down to yet another Hawke deception. The Prime Minister (Mr Hawke), in his statement of 15 April, again misled the Australian people. Anyone who reads the newspaper report of the interview in question must come away with the impression, from what he said, that there would be no taxation of lump sum superannuation. Lots of people came to me, as I am sure constituents came to all honourable members about that time, because there was a great deal of concern. I said: 'There is the report. The Prime Minister prides himself on his honesty. There is what he said'. Lo and behold, just a little over a month later what do we have but a repudiation of his word-taxation on lump sum superannuation. We have come to expect, in the short space of about three months, that when the Prime Minister says something the opposite will happen. Ask any journalist in the gallery how much faith he still has in the Prime Minister's word. The superannuation situation is just a debacle. I think it is best summed up by this statement in the Courier-Mail of today: In its efforts to stop 'double-dipping', the Federal Government has created confusion bordering on chaos among members of superannuation schemes. . . . Clearly, it should have waited until all these details, and more, were settled before announcing its changes. It did not. Instead it foisted a half-baked idea on an unsuspecting public ill- equipped to deal with the inevitable confusion its hasty actions have caused. I want tonight to highlight the confusion and despair that it caused in one section of the community that least deserves it. I refer to Australian servicemen who, from now on, will suffer because of this decision of the Government. The fact is that servicemen, by the very nature of their calling, are forced to retire early. Most servicemen are retired before the age of 50. At that time they need some capital to start again in a second career. They need the capital with which to buy a house, to educate their children and to re- establish themselves in a normal, civilian life. Servicemen undergo constant turbulence. They do not have the advantage of living in one spot and accumulating property and capital. Therefore, when they retire they need a lump sum with which to re-establish themselves. In 20-odd years in the Army I lived in 25 different houses. The honourable member for Bass (Mr Newman) served about the same time and lived in I am not sure how many houses. We cannot expect these people, after giving that sort of service, to come out and start again without the aid of some capital. Once it becomes widely known that servicemen are to be disadvantaged, any career counsellor in this country, any headmaster, will tell pupils or others who consult them: 'Do not go into the services because when you have finished you will get nothing out of it; you will be unable to start again'. Another thing that will happen-honourable members will be able to watch it happen-is that there will be a mass exodus from the services as a result of this decision. From now on, anyone with 20 years up will be penalised if he stays any longer. I urger the Government to think about this sector, which is vital to the defence of this country, before it pursues this matter any further. Mr MAHER(Lowe)(11.20) —As from 1 May, solicitors and barristers throughout Australia are no longer authorised to witness Australian passport applications. This ruling came from the previous Government and was apparently announced in the House by the former Minister for Foreign Affairs in a speech on 8 December 1982. This decision of the previous Government, which emanated from a recommendation of the Stewart Royal Commission of Inquiry into Drug Trafficking concerns me greatly. Although I am no longer a practising solicitor, I have a great regard for the legal profession in our nation, the people who work in the law and the people who founded our Parliament and wrote our Constitution. I would point out to the House that they were all lawyers. Many lawyers have served honourably in this House. Some of them are still serving, mainly on the Government side, in a very honourable way. I would point out that there is no profession which is more regulated and restrained in relation to overcharging and dishonesty than the legal profession. Regular checks in all States are undertaken of solicitors' trust accounts and all bills of costs prepared by solicitors are subject to taxation. No such rules apply in relation to medical practitioners, dentists or any other professional group. The whole idea which came from the previous Government strikes me as being quite Gilbertian because a dentist can witness a passport application but a family solicitor cannot. A doctor or a public servant of 10 years standing can witness a passport application, but a barrister practising in the Supreme Court of a State or in the High Court of Australia cannot witness a passport application. Where the farce arises is in relation to members of parliament. Members of parliament, Federal or State, are the first groups specified on the new passport application . They can witness an application for an Australian passport, but if the member of parliament is a solicitor or a barrister, he has to ignore that. So I am bringing this matter to the attention of the Minister for Foreign Affairs (Mr Hayden) hoping that a second look can be taken at this new ruling which applies from 1 May. Surely all passport applications are subsequently checked by the Australian Federal Police. We are told that there is a police check. The whole procedure is only a witnessing procedure. The fact that the family solicitor cannot witness an application, I believe, will put more work on to persons such as members of parliament because many people would be reluctant to go to the dentist to have a passport application witnessed. The whole idea is, to me, unfortunate because it tends to discriminate against solicitors and barristers. No fee is involved. There is no question that solicitors were charging to witness passport applications. The very application itself, the new application which I have scrutinised, says that no fee can be charged. I am raising this matter tonight on the adjournment of the House because I believe that there has been a slur against the legal professions throughout our nation. Solicitors feel insulted and several who have spoken to me have felt that they have been classified as second class citizens. Having served in articles and having worked in solicitors' offices, both in the private and public sector, I feel that the Minister should re-examine this decision in relation to Australian passports and, if necessary, amend or regazette a regulation to allow solicitors and barristers to take their place with the other professions in witnessing passport applications. Mr PORTER(Barker)(11.25) —In Western Australia, according to figures recently released by the Australian Institute of Criminology in relation to a census of Australian prisoners, 32.6 per cent of prisoners are Aborigines, while the Aborigines constitute only about 2.4 per cent of that State's population. If nothing else, these figures indicate the need for legal representation of Aborigines in the courts similar to that available to the non-Aboriginal population. I want to draw to the attention of this House a matter which I have raised with the Minister for Aboriginal Affairs (Mr Holding) and I do so because of the urgency of the situation. The Ngoonjuwah Council Inc. in the Halls Creek area in Western Australia has approached me because it fears that it is about to lose the services of its Aboriginal legal aid field officer, a Mr Martin Stevens . According to the Council, Mr Stevens is required to service a large area in the Kimberleys covering some 20 communities. He has to service these widely spread communities as well as attend meetings with mining companies and, of course, he attends the Halls Creek court where, I am told, he sees some 15 to 25 people a day. The problem which Mr Stevens has in carrying out those duties is that he is not provided with transport. Mr Stevens has therefore had to borrow cars or hitch a ride with departmental officers or friends. It appears that he has now become so frustrated by the situation that he has threatened to resign if he is not given access to transport. Mrs Kathy Yarrik, in a letter to me dated 18 May, said: I have spoken to Mr Stevens today and unfortunately he considers he has no alternative but to resign as Field Officer, during our lengthy conversation he mentioned the areas in Perth he has contacted and I spoke to the Executive Officer Mr Culbung this morning without any results whatsoever. Therefore I can understand his and sympathise his decision. Mr Culbung is the executive officer of the Aboriginal Legal Service of Western Australia. I am informed that the reason the request from Mr Stevens has not been met is that no funds are available. I think it would be appropriate to remind the Minister of the Australian Labor Party's policy on Aboriginal affairs announced before the election. On page 23 of its policy it stated: Labor would immediately increase support for Aboriginal legal aid services so that they could provide full and adequate legal services for their Aboriginal clients. Bearing in mind the fact that the nearest Aboriginal legal aid is some 550 road miles away at Kununurra, I believe that as a matter of priority the Minister should investigate the claims made and sympathetically consider this application . The Minster has, as he says, replied to me today. Part of that letter states: . . . I am faced with the prospect of having to wait until the next Budget allocations to have the appropriate funds available. Mr Holding —Read out what I said before I said that. Mr PORTER —I understand the Minister's perhaps embarrassment because if he had read the Senate Estimates in which his Department appeared, at page 136 of the Hansard of Senate Estimates Committee D he would see that Mr Toohey indicated that $25,000 which had been allocated to a project in Alice Springs would not, in all likelihood, be used. He said: . . . by the time the architects get in and the technical people are advised on the renovations and repairs that are needed, we will probably not spend any cash this year, . . . Those are the words of a departmental officer from the Department of Aboriginal Affairs. So there is $25,000 for starters. Mr Holding —Not for legal aid. Mr PORTER —Ah, not for legal aid. I suggest that the Minister read the Senate Estimates Hansard. Mr Toohey said that out of $75,000 going to the Alice Springs legal aid, $25,000 would not be used. Prima facie, on the evidence given to me, I believe that this case is worthy of the Minister's urgent attention. There is no doubt that the legal service provided is meeting an undeniable need in the area and it should not be allowed to collapse through Government inattention or inactivity. Mr PUNCH(Barton)(11.29) —I should like to take this opportunity to draw to the attention of the House and in particular the Government the very suitably targeted objectives and provisions of the Community Employment Program as it relates to my seat of Barton. In the 18 months up to November 1982, my seat of Barton has the distinguished ranking in the grand Liberal-National Party strategy of dislocation, destruction and disorientation of the national economy, of having the third fastest rate of growth in unemployment in Australia. With the wholsesale collapse of the manufacturing sector, the downturn in the building and construction industries and consumer purchasing power decaying, the task in my seat, before greatly improving employment statistics, is indeed to reverse the momentum of unemployment at this time. This Government has a mandate to do this, specifically through job creation programs. The Community Employment Program is remarkably well-conceived for the purposes of my seat because it has as one of its fundamental strengths flexibility. This flexibility is present in its eligibility for funds provisions and in how much sponsors must contribute. A further point of flexibility is the type or work eligible for qualification, as well as the percentage of non-labour costs. Its structure of administration is also flexible in that it recognises the legitimate role of all three levels of government-local, State and Federal- as well as the voluntary groups across the community, in getting Australians back to work. But its major strength is its flexibility in that various disadvantaged groups in my electorate can now all have an opportunity to find work through this type of program. Young people-that is, those under 24-are out of work in my electorate by a ratio of 13:1 for jobs available. For the unskilled amongst this group, this program offers under its guidelines the only real hope of employment at the moment. Indeed, for many the opportunity of six months work is important to their personal development. They will gain not only a sense of being socially useful but also a new dimension in life-getting up and going to work in the morning. This is a dimension of their lives they have been deprived of for the last seven years by those who sit opposite. Very importantly for my electorate, this program adds an important opportunity for those over 45 years of age who are currently unemployed, many of whom see themselves as now being permanently on the scrap heap. An interesting statistical indication of the burden of unemployment is present in my electorate . I refer to the burden on the forgotten unemployed over the age of 45. The comparison of unemployed by age is as follows: In the 15 to 19 years age group, the unemployed represent 22.7 per cent of the total; in the 45 years and over age group they represent 16.3 per cent of the total. But of the 15 to 19 years group, 21.9 per cent have been unemployed for longer than six months; whereas of the post-45 years age group 49 per cent have been unemployed for longer than six months. Furthermore, the percentage of the 15 to 19 years group that has been unemployed for longer than six months represents 4.94 per cent of the total unemployed in my electorate; whereas the percentage of the over-45 years group that has been unemployed for longer than six months represents 8 per cent of the total. Clearly, the post-45 years age group is significant in the ranks of the unemployed in my electorate. It is therefore significant that our program has a central point local government and related local community works. Many of the 45 years and over group will find rewarding work in socially orientated works of lasting value to our local community-be they clerical, administrative, welfare orientated or manual. In the last 12 months Hurstville council gained $118,000 in State Government grants for employment generating works, which employed 65 people in the Hurstville municipality. It received not one cent from the previous Federal Government. It is my hope that, in allocating the $86.3m provided for New South Wales under the Community Employment Bill, the Government will have my seat of Barton uppermost in its mind. Motion (by Mr Young) agreed to: That the question be now put. Original question resolved in the affirmative. House adjourned at 11.34 p.m. The following notices were given: Mr Hurford to move- That, in accordance with the provisions of the Public Works Committee Act 1969 and by reason of the urgent nature of the work, it is expedient that the following proposed work be carried out without having been referred to the Parliamentary Standing Committee on Public works: Contruction of major city earth station buildings at Sydney and Perth for Aussat Proprietary Limited. Mr Lionel Bowen to move- (1) That the following matters be referred to the Joint Committee on the Broadcasting of Parliamentary Proceedings for inquiry and report: (a) the televising of the proceedings of the Houses of the Parliament and their committees in the present and the new Parliament House; and (b) the radio broadcasting of the proceedings of the Houses of the Parliament and their committees including the continuous and simultaneous broadcasting of both Houses. (2) That the committee, for any purposes related to this inquiry, have power to send for persons, papers and records. (3) That a message be sent to the Senate acquainting it of this resolution and requesting its concurrence. Mr Willis to present a Bill for an Act to amend the Ombudsman Act 1976, and for related purposes. Mr Willis to present a Bill for an Act to amend the Complaints (Australian Federal Police) Act 1981 and certain other Acts in consequence of the enactment of the Ombudsman Amendment Act 1983, and for other purposes. Mr Barry Jones to present a Bill for an Act to approve and provide for carrying out an agreement entered into between the Commonwealth, New South Wales, Victoria and South Australia with regard to the River Murray, the Menindee Lakes and other waters, and for other purposes. Mr Hurford to move- That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Provision of air conditioning to main instructional building, Schools of Transport and Catering, Puckapunyal, Victoria. Mr Hurford to move- That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Garden Island N.S.W., modernisation stage 2. Surface preparation and preservation facility and oily bilge waste treatment plant. Mr Hurford to move- That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: R.A.A.F. Base Williamstown, N.S.W. -F/A 18 Hornet facilities development. Mr Lionel Bowen to move- That the sessional order of 4 May 1983 amending standing order 48A, relating to the adjournment of the House, be suspended for the sitting of the House on 23 August 1983. Mr West to present a Bill for an Act to amend the Migration Act 1958 and for related purposes. Mr Hurford to move- That, in accordance with the provisions of the Public Works Committee Act 1969 and by reason of the urgent nature of the work, it is expedient that the following proposed work be carried out without having been referred to the Parliamentary Standing Committee on Public Works: Alterations to accommodation at 134 Ferrars Street, South Melbourne, Vic., for the Stratplan Network of the Department of Social Security. The following answers to questions were circulated: Question No. 162 Dr Klugman asked the Minister for Immigration and Ethnic Affairs, upon notice, on 18 May 1983: When will the Fry committee report on overseas qualifications, which was submitted to the previous Government on 21 December 1982, be presented to the Parliament. Mr West —The answer to the honourable member's question is as follows: The report of the Committee of Inquiry into the Recognition of Overseas Qualifications in Australia was presented to the Parliament on 12 May 1983.