Wednesday, 7 September 1983 Mr SPEAKER (Hon. Harry Jenkins) took the chair at 10.30 a.m., and read prayers. Issue of Writ Mr SPEAKER —It is my intention to issue a writ on Wednesday, 12 October 1983, for the election of a member to serve for the electoral division of Moreton in the State of Queensland in the place of the Hon. Sir James Killen, KCMG. The dates in connection with the election will be fixed as follows: Date of nomination, Friday, 21 October 1983; date of polling, Saturday, 5 November 1983; and date of return of writ, on or before Saturday, 31 December 1983. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the honourable the speaker and Members of the House of Representatives in Parliament assembled. The humble petition of certain citizens of Australia shows : That, with the exception of the Australian Capital Territory and the Northern Territory, all State Parliaments have enacted chiropractic legislation. That chiropractors provide a safe, effective and economical health care service that is complementary to medicine. That the introduction of a Federally funded health care system restricted to the services provided almost exclusively by the medical profession restricts the freedom to select the health care practitioner of one's choice and does nothing to reduce the high cost of health care in Australia. That a financial disadvantage will be incurred by those citizens utilizing chiropractic care, many of whom find that their health complaints do not respond satisfactorily to traditional approaches. Your petitioners therefore pray that the House of Representatives in Parliament assembled ensures that chiropractic services are included in Medicare when it is introduced. And your petitioners as in duty bound will ever pray. by Mr Andrew,Mr Bilney,Mr Braithwaite,Mrs Child,Mr Chynoweth,Mr Cross,Mrs Darling,Mr Drummond,Mr Fife,Mr Gear,Mr Hollis,Mr McVeigh,Mr Millar,Mr Peter Morris and Mr Shipton. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of concerned people respectfully showeth their desire to stop the commercial exploitation of the kangaroo. Your petitioners therefore humbly pray that your honourable House re-apply the ban on the export of kangaroo products. And your petitioners as in duty bound will ever pray. by Mr Bilney,Mr Robert Brown,Mr Brumby,Mrs Child and Mr Chynoweth. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: This petition of certain citizens of Australia shows: That payments to contract and sub-contract owner-drivers of trucks are likely to be reduced by ten per cent on implementation of the new system of tax deduction at source from payments for work and services; That profit or personal remuneration constitutes a very small part of payments received by owner-drivers, compared with capital and running costs and government charges; and That a deduction of ten per cent of gross payments would not only be much greater than required to protect the revenue, but would also cause hardship to owner-drivers and their families. Your petitioners therefore pray that the government will not require tax to be deducted from payments to owner-drivers. And your petitioners as in duty bound will ever pray. by Mr Drummond,Mr Rocher and Mr Tuckey. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia shows: That at present, certain infertility treatments including; Hormonal Drugs, Procedures and Laboratory Services, are not covered by any Health Insurance due to Non-Itemisation on the Commonwealth Rebate List. The psychological and emotional stress of infertility is therefore increased by the added financial stress. Your petitioners therefore pray, that the Parliament will view our plight to create life with sympathy, by recognising our needs, and taking action to include the abovementioned items on the Commonwealth Rebate List. And your petitioners as in duty bound will ever pray. by Dr Charlesworth and Mr Rocher. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We the undersigned citizens of Australia, Believing that men and women are equal but different, Convinced that Australia can provide equal opportunity for all citizens without foreign treaties, Concerned that ratifying the UN Discrimination Convention would give a Communist-dominated international committee the power to judge Australia's laws, Humbly petition that your honourable House will not ratify the UN Convention on the Elimination of All Forms of Discrimination Against Women. And we will always thus petition. And your petitioners as in duty bound will ever pray. by Mr Andrew. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That the 1983 Budget imposition of the excise on grape spirit used in fortifying wine places at risk the future of the fortified wine industry in Australia. That the requirement to pay the excise within 7 days of the fortification occurring is inequitable. That the excise will be reflected in increased costs to the consumers of fortified wines of up to 100% and consumer choice will be restricted. That this will cause reduced fortified wine sales which will result in reduced intake of grapes from grapegrowers. Your petitioners therefore humbly pray that the Federal Government will reconsider their previous decision and either withdraw this tax or modify its method of application and collection. And your petitioners as in duty bound will ever pray. by Mr Bilney. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of we, the undersigned citizens of Australia, respectfully showeth: That no new legislation be enacted to degrade existing superannuation schemes. Your petitioners therefore humbly pray that your House urge all politicians to support this petition. And your petitioners as in duty bound will ever pray. by Mr Bilney. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned respectfully showeth: That expenses incurred by disabled people in earning a living are not presently tax deductible. That the full and effective participation of disabled people in all areas of society, especially employment, is inhibited by the extra financial burden of equipment necessary for entry into the workforce, such as motorised wheelchairs. That this disadvantage could be lessened by offering tax concessions on the purchase of these necessary items, thereby releasing the financial pressure on disabled people who desire to work. Your petitioners most humbly pray that the Parliament amend the Income Tax Assessment Act 1936, to allow expenses incurred by disabled people in earning a living to be tax deductible. And your petitioners as in duty bound will ever pray. by Mr Lionel Bowen. The Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia showeth that: The Universal Declaration of Human Rights affirms the principle of the inadmissibility of discrimination and proclaims that all human beings are born free and equal in dignity and rights and that everyone is entitled to all the rights and freedoms set forth therein, without distinction of any kind including distinction based on sex. However extensive discrimination against women continues to exist. It is an obstacle to the participation of women on equal terms with men, in the political , social, economic and cultural life of this country. It hampers the growth of the prosperity of society and the family and makes more difficult the full development of the potentialities of women in the service of this country and of humanity. Your petitioners therefore humbly pray that the Commonwealth Government will act to ratify the convention of the elimination of all forms of discrimination against women. And your petitioners as in duty bound will ever pray. by Mr Cross. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia shows that we are concerned: (1) That the Committee of Review into the Impact of Radford College exceeded its term of reference; (2) That the composition of the Committee excluded representation from many interested parties concerned with education; Your petitioners therefore pray: (1) That the Government not implement the recommendations of the Radford Report ; (2) That the new funding guidelines of the Commonwealth Schools Commission be suspended; (3) That the Government base its funding on principles and justice and concern for the best education of all Australian schoolchildren. 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 respectively showeth: That the very large number of vehicle component parts imported into Australia is having a serious and detrimental effect on the workforce and the availability of jobs in the vehicle component parts industry in Australia. Your petitioners most humbly pray that the tariffs on imported vehicle component parts be substantially increased to the point where it becomes uneconomic to import, and vehicle manufacturers and assemblers in Australia will be forced to produce vehicle component parts locally thereby creating more employment opportunities in Australia. And your petitioners as in duty bound will ever pray. by Mr Howe. 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 the 1978 Termination of Pregnancy Ordinance prohibits abortions from being carried out otherwise than at a hospital conducted by the Capital Territory Health Commission; and that a proposal has been made for the conversion of the North Canberra Health Centre into a Women's Health Centre with an associated abortion clinic. Your petitioners therefore humbly pray that the Government, the Minister for Territories and Local Government, and the Minister for Health, will give a categorical assurance that no abortion clinic will be established in the ACT. And your petitioners as in duty bound will ever pray. by Mrs Kelly. 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 Mildren. 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 the members of the Women's Services of the 1939-45 War not at present considered eligible for Defence Service Home Loans should qualify as 'Australian Soldiers' under the Defence Service Homes Act. They volunteered for service with the Naval, Military and Air Forces, serving wherever they were sent in whatever capacity they were required and yet are refused Defence Service Home Loans. They took the oath to resist His Majesty's enemies which meant to fight His Majesty's enemies, and although not used in actual combat in war zones, they were available for that use and had a sufficiently grave need arisen would have been used, to serve with distinction as have women of other lands. In accordance with the Acts and Regulations of the period, the women of the Military Forces had enlisted for service anywhere, some of the Naval women to sail in any waters, others with service on warships optional, while the women of the Airforce could have been sent to Papua New Guinea or other territories under the control or care of Australia. Ex-servicemen of the Royal Australian Navy, the Australian Imperial Force and the Royal Australian Air Force who volunteered in the 1939-45 War but were not sent to War Zones are granted home loans. Not to grant eligibility to all Ex- servicewomen of the 1939-45 War is injust and unfair. Your petitioners therefore humbly pray that you favourably consider amending the Defence Service Homes Act by repealing Sub-section 4 (2A) (b) (c) (d) of the Principal Act as amended by No. 137 of 1978, and grant eligibility to all members of the Women's Royal Australian Naval Service, the Australian Women's Army Service, the Women's Auxiliary Australian Air Force, the Australian Army Medical Women's Service, and the Voluntary Aid Detachment of 1939-45 War. And your petitioners as in duty bound will ever pray. by Mr Mildren. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled: The humble petition of the citizens of Queensland respectfully show: Last year, over 3,300 people died on Australian roads; Alcohol is a factor in 50% 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 Mrs Darling. 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-Holden, respectfully show- 1. That the management of General Motors-Holden 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, states: ''The overall objective of our South Australian rationalisation plan has been to eliminate all productive activities on the Woodville site''. 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-Holden to retain its operations at the Woodville plant. And your petitioners as in duty bound will ever pray. by Mr Scott. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled: The petition of certain undersigned persons (citizens of Australia) (electors of the Division of Perth) shows-concern and dismay that Fr Brian Gore, an Australian citizen and missionary priest in the Philippines is charged with subversion, possession of explosives and of inciting rebellion, warrant of arrest pertaining to which have been issued and arrived on 18 October 1982 Your petitioners therefore pray that you do all in your power to urge the Philippine authorities to cease harassment of Fr Gore and to allow him to continue his missionary work without threat or fear of arrest; furthermore, if a warrant of arrest is to be served, that Fr Gore be allowed his right to legal advice and representation and of access at all times to his friends and religious colleagues. And your petitioners as in duty bound will ever pray. by Dr Charlesworth. 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 personalized 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, personalized 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 Cross. To the Honourable the Speaker and members of the House of Representatives of the Parliament of Australia in Parliament assembled. The Petition of Residents of Mount Riverview. Respectfully sheweth that there is a genuine need for a Post Office Agency selling stamps, Money Orders, letter and parcels registration and all business of a normal suburban Post Office, to serve the needs of a large and growing area placed approximately three and a half kilometres from such nearest facilities. The area has many aged and invalid people who cannot reach Blaxland to transact business. The local chemist, situated in Mount Riverview Shopping Centre, is eager to handle such an Agency, and is a competent and reliable person to do so. Your Petitioners therefore humbly pray that your Honourable House will give earnest consideration to our request for such an Agency at a very early date. And your petitioners as in duty bound will ever pray. by Mr Free. Petitions received. Mr CADMAN(Mitchell) —I give notice that, on the next day of sitting, I shall move: That this House- (1) condemns the Government for its incomprehensible attitude to the means testing of aged pensioners; (2) calls on the Minister for Social Security to make clear statements of Government intentions and end the uncertainty facing all retirees and pensioners ; (3) recommends that the Minister for Social Security and the Government either scrap the proposal or go back to the drawing board and start over again, but make no announcements until the matter has been thought through; and (4) suggests that the Government seeks a transfusion of intellectual competence by consulting the Australian electorate. Mr BRAITHWAITE(Dawson) —I give notice that, on the next day of sitting, I shall move: That this House- (1) Notes- (a) the extra cost burdens placed on residents outside of major manufacturing areas and particularly those in northern Australia with the application of sales tax on freight and the cost of fuel, and (b) the promise by the Australian Labor Party to remove sales tax on freight when in government and to decrease the price of fuel by 3c per litre, (2) condemns the Labor Government for failing to show regard, concern and understanding for the people of the north by not meeting its election commitment and by imposing greater freight costs by increasing the price of fuel; and (3) calls on the Government to discontinue its discriminatory action against northern Australians by immediately implementing its election promises. Mr IAN CAMERON(Maranoa) —I give notice that, on the next day of sitting, I shall move: That this House- (1) deplores the fact that 600 homosexual teachers attended a conference in Melbourne on the weekend of 3-4 September; (2) records the fact that they called on the Queensland trade unions and Australian Labor Party to embrace homosexual teachers in Queensland; and (3) asks the Queensland National Party Government to ban the next proposed conference of homosexual teachers to be held in Queensland. Precedence Mr LIONEL BOWEN(Kingsford-Smith-Leader of the House)(10.37) —I move: That, unless otherwise ordered, Government Business take precedence of General Business on each day of sitting until the Appropriation Bill (No. 1) 1983-84, the Appropriation Bill (No. 2) 1983-84 and the Appropriation (Parliamentary Departments) Bill 1983-84 have passed all stages in the House. This is a normal notice of motion for this time of the year, the idea of which is to allow the Appropriation debates to take place, and in that sense every honourable member has a chance to participate. To that extent, General Business debates are postponed until we complete the Appropriation Bills. I do not think that I need say any more. It has been customary for both sides of the House, when in government, to move this type of motion to enable the Appropriation Bill debate to continue. I foreshadow that it will continue tomorrow; certainly tomorrow evening. We hope that there will be an extensive debate on the Appropriation Bill, in which every honourable member can participate. Mr SINCLAIR(New England)(10.38) —The Opposition does not oppose the motion, but there are a few observations that I should like to make about the proceedings of this House as they now occur. The first observation is that this is the first of the sitting weeks under our new sitting hours. Under these new sitting hours we begin at 10.00 a.m. We all noted that the Prime Minister (Mr Hawke) did not bother coming into the House for the commencement of procedures, nor did most of the Ministers. The people of Australia need to recognise the indifference that the Prime Minister has to this place and the fact that the hours were changed not for the convenience of honourable members but so that Ministers could hide away in their offices somewhere and not bother to attend the principal forum of the nation. I can well understand the Prime Minister's concern, for his performance in this place has not been adequate. It is quite apparent that he is always a little tender on those many issues on which he varies from the policies of his party. I think it is most unfortunate that neither he nor many of his senior colleagues have deigned to come and join us at the beginning of this sitting. One would hope that in future, with these changed sitting hours, we might see some of the Ministers in this place. Indeed, even now, Mr Speaker, as you will know, there are large areas of vacant places-- Mr Kerin —I am here. Mr SINCLAIR —The honorable member is a junior Minister. I know he is here. He is not a member of the Cabinet. That is again one of the matters that the people of the bush have registered. The second matter I wish to comment on is that yesterday in this place we had only 10 questions. I have asked for a record of the number of questions to be prepared, but I think-- Mr Rocher —We didn't have any answers. Mr SINCLAIR —I do not think there were any answers, if one is honest, as my colleague said. I think it is of interest that, on page 692 of the Senate Hansard of 24 May 1982, your colleague, the President, examined the statistics of the questions that had been asked over recent times. Might I ask whether you, Mr Speaker, might in the same light consider the number of questions asked and perhaps, at your convenience, make a statement to this House along the lines of that made by the President. It seems to me that the nature of Question Time is important. Ministerial answers have been not only largely irrelevant but also far too long. We know something of the verbosity and the waffle of the Prime Minister. Mr Hayden —You are reading my old speeches. Mr SINCLAIR —Yes, I am, actually. By God, they are accurate now! They were totally inaccurate then. I think it is quite unacceptable for the members of this place to be treated with the indifference and contempt that Ministers are showing during Question Time. It is quite essential that Ministers provide brief , accurate answers to questions. I believe the number of questions asked yesterday was, if not a record low, very close to a record low. It is essential that we have brief answers to questions and that 16 to 18 questions should be asked in the three-quarters of an hour allotted to Question Time. This is, of course, of particular importance because we now have a designated time for questions. Instead of Question Time being at the commencement of business it is now at 2 o'clock in the afternoon. So Ministers have all the morning to swat up on whatever smart replies they might see fit to provide. They have an opportunity at Question Time to provide brief, accurate answers. After all, questions from the other side of the House are highly structured. Yesterday, every question from the Government side was a Dorothy Dixer. The answers were tailored for the purpose. If Ministers are to provide those answers in that order, surely to goodness they can practise in the morning so that at the 2 o'clock Question Time we can have brief responses instead of those rather extended replies to which we were subjected yesterday. Mr Speaker, perhaps I might impose on your kindness and consideration to prepare a response for this House in the manner of that provided by the President and to which I draw your attention on page 692 of the Senate Hansard of 24 May last. The third matter is that the result of this motion will be a specific refusal to give the members of this place an opportunity to discuss General Business until the Appropriation Bills have passed all stages of this House. The Opposition recognises that this is a usual motion, as my colleague the Leader of the House (Mr Lionel Bowen) has suggested. But I think we need to recognise that , if there is a long Budget debate-that is, not long in the sense of the time allotted to it, but long in that it stretches out over the weeks while the Government introduces and tries to pass its legislation-the Government will be hiding behind this motion to deny us the opportunity to introduce private members' Bills, to introduce General Business and to discuss matters as we properly might do in this place. General Business is for private members. General Business enables members of the Opposition to canvass the many notices that are already on the Notice Paper. Only this morning some excellent notices were given by members of the Opposition, and we seek to have the opportunity to debate them. This motion will deny us that opportunity until the Budget is passed. I ask the Leader of the House whether he can ensure that, while the debate on the Budget is an extended debate, we do not spend all our time talking about Bills so that the Budget debate will not conclude until a couple of months time when perhaps we will get on to talking about some of those notices of motion. We seek adequate time to debate the Budget and an assurance that not many Bills will be intruded. If Bills are intruded, it will take longer to finalise the Budget. As a result of the passing of this motion we will be denied an opportunity of debating those many motions which honourable members from both sides of the House have already put on the Notice Paper. The Opposition does not like the fact that the product of our passing of this motion will be to deny us that opportunity. However, we accept that the motion is common practice and therefore we will not oppose it. Mr Speaker, if the Government is to adhere to these changed sitting hours and changed practices in the Parliament, Ministers certainly need to attend this place at the commencement of proceedings. I am disappointed that even now, some little time after I have commenced, after you have said prayers and petitions have been received, the majority of the Ministry is still absent. Mr LIONEL BOWEN(Kingsford-Smith-Leader of the House)(10.46) —in reply-I thank the Opposition Leader of the House, the right honourable member for New England (Mr Sinclair), for his support of the motion. It was a pity that the Leader of the Opposition (Mr Peacock) was not here because obviously he would have been impressed with the performance. Mr Sinclair —He was here. Mr LIONEL BOWEN —He was not here. If the Opposition Leader of the House ever changes party he has a good chance of becoming the Leader of the Opposition. Let me make it clear that this matter is not a new one. For the benefit of the distinguished gentleman who is the Opposition Leader of the House, I inform him that on 26 August 1981, when moving the same motion, he said: This motion is one which normally is moved at this stage. It is one that reflects the fact that members are able to canvass any issues which concern them or their electorates . . . we believe it is appropriate that the motion again be put to the Parliament this year and passed. Honourable members will note that when I replied, in opposition, I took about one minute flat. The distinguished Opposition Leader of the House took 15 minutes of what he considers to be valuable time to enter into wide ranging debate about what is wrong with this Parliament. Honourable members will notice that a matter of public importance is not listed on the daily program. Why? Because the distinguished Opposition Leader of the House said that due to our changed sitting hours half past eight in the morning was too early to submit one. We agreed that one could be submitted at anytime until 12 noon. We arranged this to suit the Opposition. We also said: 'Would it not be more appropriate to have Question Time at 2 p.m. when Ministers will be here?' We enjoy Question Time every day. We think it is getting better from our point of view. I can understand honourable members opposite complaining bitterly . I will not delay honourable members opposite for too long, but they have been very critical of the fact that only 10 questions were asked yesterday. Let us look at the precedents. Only 10 questions were asked on 27 October last year when the present Opposition Leader of the House was in charge. Only 10 questions were asked on 26 August last year when he was in charge. Only nine questions were asked on 18 February last year, again when the honourable member was in charge. Only nine questions were asked on 17 February last year, when he was in charge. I hate to say this, but this is the piece de resistance: On 7 September last year only five questions were asked. So enough of this nonsense. We want a parliamentary debate on the Appropriation Bills. I offer this suggestion to the Opposition Leader of the House: If his members do not want to talk on the Budget we will confine the debate and go back to General Business. If they do not want to participate in the Parliament on these matters we will accommodate them. Honourable members behind me want to participate in the Budget debate because they have something to tell the people of Australia. I do not think we ought to delay the House any more, but I am disappointed to have such reluctant support to a motion which has always been moved until this year by my friend the Opposition Leader of the House. Question resolved in the affirmative. Mr SPEAKER —I respond to the Deputy Leader of the National Party. I will consider the statement that has been made in the Senate and see whether it is appropriate to make a similar statement to the House. Mr LIONEL BOWEN(Kingsford-Smith-Leader of the House)(11.30) —I move: (1) That the resolution of appointment of the Joint Select Committee on Electoral Reform be amended: (a) by inserting after paragraph (3) the following new paragraph: ''(3A) That the members of the committee hold office as a joint committee until the House of Representatives expires by dissolution or effluxion of time.'', and (b) by omitting paragraph (14), as amended, and substituting the following paragraphs: ''(14) That the committee have leave to report from time to time. (14A) That the committee report as soon as possible.''. (2) That a message be sent to the Senate acquainting it of this resolution and requesting its concurrence. The motion talks about the resolution of appointment of the Joint Select Committee on Electoral Reform and its term of appointment being altered by inserting a paragraph that ensures that the members of the Committee hold office as a joint committee until the House of Representatives expires by dissolution or effluxion of time and by substituting paragraphs which state: (14) That the committee have leave to report from time to time. (14A) That the committee report as soon as possible. I understand that the report of the Committee will be made available next week. It is important that we have the benefit of that report. The Chairman of the Committee has advised that the Committee has agreed to the terms of a report which is currently being printed and will be presented next week. The Chairman has also advised that the Committee has identified several specific matters within its terms of reference that it would like to consider at greater length. It is for that reason that this motion seeks to enable the Committee to continue to sit after 15 September next. As a select committee with the direction to report by a specific date, the Committee's existence would come to an end unless we gave that extension. In other words, if the Committee were to present a report it would no longer be able to continue, and it would be out of business from the point of view of taking further evidence. The terms of the motion moved will enable the House to have the benefit of the Committee's recommendations in considering proposed electoral legislation and allow the Committee to pursue the matters as identified at greater length. A similar motion will be moved in the Senate, and that will enable the Joint Committee to continue. It is virtually a machinery motion which meets with the accord of all members of the Committee and, I understand, the Opposition. It enables the Committee to continue to function. I do not think there should be any objection to this proposal. Mr STEELE HALL(Boothby)(10.53) —The Opposition does not oppose this motion. In fact, because when the motion of appointment was passed through the House the Opposition expressed the opinion that the Joint Select Committee on Electoral Reform would need more time to assess evidence and produce a view on this important question, the Opposition supports the motion. I am sure that the House and the public will find the report, when it is presented here, a useful document furthering the matter of electoral reform and the development of electoral procedures, with which the community is so intimately concerned at election time. It will not be without controversy. I am sure that we will see following that report some energetic debate in this House and among members of the public. There is one cloud, however, that hangs over electoral matters in this House and in the community; that is, that the Minister who presided over electoral matters for the Government and presided over the setting up of this Committee is no longer a Minister. The electoral matters are now administered by a Minister holding the portfolio temporarily in this House. I do not think this does justice to this very important question when it is coming to a peak in the public's mind at the presentation of the report next week. It seems to me that the Prime Minister (Mr Hawke) should draw his gage from the matters of national security and other matters which have forced the resignation of the Minister because he leaked matters of vital importance to the Cabinet Sub-Committee on National and International Security. He leaked these matters on the day that he learned of them. The Prime Minister should turn his mind from that to the question of electoral matters and he should permanently fill this position. As I have said, it is not good enough to develop this question when the portfolio is held temporarily pending the Ministry being filled. We know the Prime Minister is under pressure from his left to maintain this position and to keep it open for the possible return of the Minister who resigned. I suggest that the severity of the Minister's offence in national security, the offence that could give to other nations who are linked to Australia's security-- Mr Scott —I raise a point of order. The motion deals with the Electoral Reform Committee, of which the honourable member is a member, as I am. I think his remarks should be addressed to that matter. Mr SPEAKER —I have listened carefully to the honourable member. He has made reference to the former Minister responsible for electoral matters who had an association with the Committee. I must admit that I was listening to his last statements carefully because it seemed to me that he was getting very close to dealing with matters that should be dealt with in a substantive motion. I invite him to take care in his further remarks. I call the honourable member for Boothby. Mr STEELE HALL —Thank you, Mr Speaker. I was dealing with the portfolio as it affects electoral matters. But it is a matter of public knowledge and of much discussion that the former Minister was forced to resign. I reiterate that I think it is not good enough that this portfolio is not held permanently at a time when this debate is coming to a head. The Government owes it to this House and to the public to fill that portfolio now so that the community can look ahead and see some consistency of view from the Government-a view which must soon be put in response to this Committee's report. I was simply drawing attention to the fact that the honourable member has gone from the Ministry because of his offence in relation to national security. The Prime Minister should turn his mind from the offence that the Minister committed in breaching national security. That, of course, was his offence, an offence which apparently affects any possibility of filling this portfolio. I believe that the Prime Minister should fill the portfolio. He should recognise that the Minister is an unacceptable candidate for the Ministry because of his offence. That is a simple statement. The Minister offended in relation to the national security of this country. It would be the view of our allies that that honourable member should not be reinstated to the Ministry. The Prime Minister should recognise that. Mr SPEAKER —Order! The honourable member is transgressing the warning that I gave him earlier. I invite him to return to the matter before the House. Mr STEELE HALL —Thank you, Mr Speaker. I will leave that question to the Prime Minister. I would like him to consider those remarks. The Coalition has a good deal to offer any further study that the Committee may make. As I said when I first spoke to the motion establishing the Committee, the Opposition saw that more time would be needed and so moved in this House. Therefore, the Opposition has pleasure in supporting the motion that the Committee be given further time to study some of those issues that will be itemised in the report to be made next week. Dr KLUGMAN(Prospect)(10.57) —I would just like to reply to the honourable member for Boothby (Mr Steele Hall) on one point. The honourable member for Boothby claimed that the Prime Minister (Mr Hawke) has kept open the position of the Special Minister of State because of pressure from the socialist left in the Australian Labor Party. I assure the honourable member and others that, for some considerable time, I have not been accused of being a member of the Left and that I strongly support that position. Mr LIONEL BOWEN(Kingsford-Smith-Leader of the House)(10.58) —I thank the honourable member for Boothby (Mr Steele Hall) for his support of the motion. I make it very clear, however, that I deplore the remarks he made about the honourable member for Port Adelaide (Mr Young) who I think would be able to say clearly that he has done everything appropriate by resigning from his position as a Minister. I think it is unfair and quite beneath the normal credibility that I have always attributed to the honourable member for Boothby to attack a man in this position. I make it very clear, as I said yesterday in the House, that that very matter is still the subject of determination by Mr Justice Hope. The honourable member is pre-judging it here, Mr Speaker, by casting aspersions on the merit or otherwise of other actions. In other words, a sanction already operates here. I think we need say no more about it. It is deporable to think that the former Minister-who is not even a member of the Committee-is attacked on the basis that the Committee itself is not able to continue its work when in fact the whole idea of this motion is to enable the Committee to complete its report and further deliberations. It just does not add up. We have a very effective Special Minister of State who will be able to deal with all matters that are reported from time to time by this Committee. Perhaps the Opposition would be better advised to get on with the issue of electoral reform rather than party politics. Question resolved in the affirmative. Bill presented by Mr Hayden, and read a first time. Mr HAYDEN(Oxley-Minister for Foreign Affairs)(11.02) —I move: That the Bill be now read a second time. The purpose of this Bill is to authorise a special contribution by Australia of $A67.84m towards the sixth replenishment of the resources of the International Development Association, or IDA as it is commonly called. IDA, established in 1960, is an affiliate of the World Bank, and assists its poorest member countries by providing long term, highly concessionary credits for sound development projects, utilising grant funds provided by donor countries. IDA is the largest and, in our view, the most effective development assistance institution in the world. It is an efficient institution capable of undertaking generally large scale development projects in a technically proficient way while at the same time ensuring that benefits flow either directly or indirectly to the poorest members of society. The projects which IDA finances are subject to the same rigorous standards of appraisal that the World Bank applies to its ordinary lending operations on near commercial terms. They are systematically monitored and evaluated. A recent overall survey of IDA's experience concludes that IDA lending has been effective in promoting development-not only through the high economic rates of return achieved averaging 18 per cent, but also through its impact on development policies and through its success in developing institutions. This effectiveness was confirmed in a critical study done by the United States Treasury. IDA has shown a great capacity to adapt to changing aid needs; in particular, by gradually shifting its lending to the poorest countries and to poor people within these countries. It has also been remarkably successful in attracting increased financial support-at least until very recently. Finally, an enlarged membership, which now includes China, places increasingly heavy pressure on IDA' s development assistance. IDA's projects cover a wide range of activities, but it is notable that roughly one third are directed to the promotion of agricultural and rural development. Other priority sectors include energy, transport and communications. Overall there is a balance between traditional infrastructure projects, such as roads and dams, and newer style projects designed to benefit poorer groups more directly. Because of the emphasis on the poorest countries, IDA credits are increasingly concentrated on countries outside Australia's immediate region. They serve to complement our own, obviously limited, aid efforts outside our region and in certain instances can be regarded as a substitute for a larger bilateral aid response. I mention here India, which is a major recipient of IDA credits and which is a country whose enormous needs for development assistance far exceed our capacity. I also mention sub-Saharan Africa, the development assistance needs of which are similarly very great, but where it is difficult, particularly for a country like Australia, to ensure that such assistance makes a real contribution. IDA is currently running up against serious funding difficulties as a result of the decision by the United States Administration to stretch its total contribution to the sixth replenishment over four years instead of three. One result, in the absence of offsetting measures of the kind covered by this Bill, is a greatly reduced ability by IDA to enter into project commitments from July 1983 onwards-at a time when IDA's main recipients are still suffering from the adverse effects on their economies of the prolonged world recession and the increasingly difficult environment confronting poorer countries in borrowing on international capital markets. IDA's funding problems were recognised by the Association's donors in 1982. Consistent with Australia's long standing attitude of strong support for IDA and in company with virtually all other donors, the previous Government decided to make a special, additional contribution to IDA equal to one-third of its original pledge to the Sixth 3-year Replenishment. This decision was announced at the annual meetings of the World Bank's Governors in September 1982. Some 20 donors, including Japan, the Federal Republic of Germany, the United Kingdom, France, Canada, Denmark, Italy, Norway, Sweden and New Zealand made similar decisions. The present Government wishes to honour this international commitment in the appropriate way, which is the purpose of this Bill. Our contribution to IDA normally takes the form of promissory notes which are then encashed over several years as the Association incurs project expenditures. This legislation will allow Australia to lodge an unqualified instrument of contribution to the Association, which assures the Association that Australia's commitments will be honoured and that the funds required for the encashments are appropriated out of Consolidated Revenue. Encashments relating to this special contribution are not expected to be significant in the current financial year, and allowance has been made in the aid budget. I would add that this special contribution is very much a 'one-off' response to exceptional needs. We envisage that the Seventh Replenishment of IDA will start in July 1984 and we are heartened by the recent decision of the United States Administration to pass a critical supplementary appropriation for the Sixth Replenishment. I used the occasion of this year's Organisation for Economic Co- operation and Development Ministerial Council meeting in May to express Australia's strong concern at the funding problems of IDA. As honourable members will know, Australia has always been a strong supporter of IDA. There has been general agreement, on all sides of the House, that IDA is a highly effective channel for the disbursement of development assistance to the poorest countries throughout the world. This Bill provides an opportunity for honourable members once again to demonstrate their bi-partisan support for IDA and our willingness to recognise, through our support of this institution, the development assistance needs of the poorest developing countries. I accordingly commend the Bill to honourable members. Debate (on motion by Mr MacKellar) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Housing and Construction and Minister Assisting the Treasurer)(11.07) —I move: That the Bill be now read a second time. The purpose of this Bill is to enable Australia to consent to an increase in its quota in the International Monetary Fund, and to make the consequent payment. A country's quota in the IMF determines, as well as its financial subscription to the fund, its voting power in the Fund, its rights to draw from the Fund and its share in any allocations of special drawing rights-SDRs-by the Fund. From time to time the Fund reviews the levels of quotas in the light of developments in the world economy, the international monetary system and changes in the relative economic position of Fund members. In March this year, in the context of the eighth general review of quotas, the Fund's Board of Governors approved a resolution proposing a 47.5 per cent increase in the aggregate level of Fund quotas to SDR90 billion. The resolution also proposed that 60 per cent of the overall quota increased be distributed among members in proportion to their relative economic positions in the world and 40 per cent in proportion to their existing quota shares. For this purpose, relative economic positions are measured by a set of formulae which take into account gross domestic product, the level and variability of current external payments and receipts and the level of international reserves. One consequence of this method of distribution is that percentage increases in quota proposed for individual members vary considerably around the aggregate quota increase of 47.5 per cent. The quota increase will come into effect when members accounting for at least 70 per cent of existing quotas have consented to their proposed increases. Individual member countries wishing to consent to their proposed quota increases are required to do so by 30 November 1983 and, assuming the 70 per cent threshold has been reached by then, to pay the increase in full by 31 December 1983. As at 2 September 1983, 34 members holding 15.25 per cent of total Fund quotas had consented to their proposed increases. The increase in Australia's quota proposed under the review is from SDR1,185 million to SDR1,619.2 million, an increase of 36.6 per cent. Clause 4 of the Bill approves consent to this increase. Australia's increase of 36.6 per cent is smaller than the average increase of 47.5 per cent. As a result, our share in total quotas will decline from 1.94 per cent to 1.80 per cent. This decline stems from the procedures adopted for distributing the overall quota increase. As I have mentioned, the procedures that have been adopted by the Board of Governors are designed to realign members' quota shares so that they more accurately reflect their relative economic positions. Since, in these terms, Australia's present quota share somewhat overstates our relative economic position in the world, we qualify for a smaller quota increase than the average. As provided for in the IMF Articles of Agreement and the eighth quota review resolution approved by the Board of Governors, 75 per cent of the additional quota subscription will be paid in Australian dollars and the remainder in SDRs and foreign currency. Clause 5 of the Bill allows for part of the quota subscription to be paid in the form of a non-negotiable, non-interest bearing security as provided in section 7 of the principal Act. The Australian dollar component of the increase is to be paid in this way. The foreign currency and SDRs required to pay the balance of the increase will be purchased from the Reserve Bank; clause 6 of the Bill approves an appropriation for the purpose of acquiring foreign currency and the SDRs will be purchased under the standing appropriation of section 5A (6) of the principal Act. The purchase of SDRs and foreign currency from the Reserve Bank is a financing transaction and as such has no effect on Budget outlays or on the Budget deficit. The issue of the non-negotiable, non-interest bearing security has no effect on the Consolidated Revenue Fund. It is a promise to pay the Fund Australian dollars in the event that the Fund needs more of our currency than it presently holds. In that event, which is unlikely, there would be a call on the Consolidated Revenue Fund, but again, no effect on Budget outlays or the deficit. The timing of the eighth general review of quotas was advanced considerably in the light of concerns about the stability of the international financial system. In supporting the quota resolution in March this year and by consenting to Australia's quota increase now, Australia will help augment the Fund's financial resources. These resources have been depleted by a high level of drawings from the Fund by its member countries, particularly over the past year or so. The increase in quotas, the Fund's principal source of resources, will enable the Fund to continue to provide temporary balance of payments assistance to members facing serious debt and external payments problems and to promote a stable international monetary system. Such stability is, of course, in Australia's interests. By supporting the quota increase, we will also increase our drawing rights and our entitlement to any allocations of SDRs, as well as protect our voting power in the Fund. I commend this Bill to the House. Debate (on motion by Mr McVeigh) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Housing and Construction and Minister Assisting the Treasurer)(11.14) —I move: That the Bill be now read a second time. The purpose of this Bill is to seek parliamentary approval for Australia to take up its entitlement to subscribe to additional shares in the capital stock of the Asian Development Bank. Honourable members will be aware that the Asian Development Bank is a regional development finance institution. It was established in 1966, with its headquarters in Manila, for the purpose of lending funds, promoting investment and providing technical assistance to developing member countries to foster economic growth and co-operation in the Asian and Pacific regions. Essentially the bank harnesses the financial strength and technical expertise of its developed member countries for the benefit of developing member countries. Capital subscriptions provide a pool of funds for lending and a basis for the Bank to borrow further funds in world financial markets in larger amounts and on better terms than are available to developing countries. In addition to its ordinary lending operations, the Bank provides loans on highly concessional terms to poorer developing member countries. These are funded from direct contributions by developed member countries to the Asian Development Fund within the bank. To the end of December 1982, the Bank had lent about $US11.5 billion to its developing member countries for projects covering all the major sectors of economic development from major infrastructure developments in the transport, communications, industry and energy sectors to projects in agriculture, education, water supply and urban development. In 1982, the Bank approved loans totalling $US1,731m, of which $US546m was on highly concessional terms to poorer developing member countries. Australia's contributions to the Asian Development Bank as at 31 December 1982 comprised: Firstly, paid-in capital totalling $US107m; and secondly, contributions to the Asian Development Fund totalling $US151m. In addition, as at 31 December 1982 Australia had a contingent liability to the Bank in the form of callable capital of $US444m. The Bank has never called on such capital and conducts its operations in such a way as to ensure that that should not become necessary. The callable capital does, however, underpin the Bank's borrowing operations. Following an examination of the adequacy of the Bank's capital base for its operations during the 1980s, the governors of the Asian Development Bank approved, in April 1983, a resolution increasing the authorised capital stock of the Bank by 105 per cent, equal in value to approximately $US9 billion. This should enable the Bank to increase the level of its lending to developing member countries in the region. Under the terms of that resolution, 5 per cent of the increase is to be in the form of paid-in shares. The remaining 95 per cent is in the form of callable capital. Australia voted in favour of the resolution authorising the capital increase. The text of the resolution, including the number of shares to which each member is entitled to subscribe, is attached to the explanatory memorandum to this legislation. Members, including Australia, are entitled, but not obligated, to subscribe to this authorised increase. Australia's entitlement under the reso- lution is to an additional 52,433 shares, comprising 2,622 paid-in shares and 49,811 callable shares. At current exchange rates, this represents $A721m, of which the paid-in element amounts to some $A36m. It is envisaged that 40 per cent of the paid-in element would be paid in cash in five equal instalments of about $A2.9m a year from 1983-84 and that the remaining 60 per cent would be in the form of five promissory notes in equal amounts to be encashed over the years 1988 to 1992. The Bill is similar in form to the Asian Development Bank (Additional Subscription) Act 1977, which provided for Australia's last capital injection to the Asian Development Bank. Essentially, the Bill empowers the Treasurer to enter an agreement with the Asian Development Bank for the purchase by Australia of its entitlement of additional paid-in and callable shares and to issue promissory notes to the Bank in payment. The Bill also appropriates the funds necessary to make payments under such agreement. As honourable members are aware, Australia has been an active supporter of the Asian Development Bank. We have regarded it as an effective and efficient vehicle for regional co-operation and development. Honourable members will also be aware that this Government attaches particular priority to the needs of developing countries within our region. Accordingly, we believe it to be in Australia's interest to continue this policy of support for the Asian Development Bank by taking up in full the increase in the capital subscription to which it is entitled. I commend the Bill to honourable members. Debate (on motion by Mr McVeigh) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Housing and Construction)(11.20) —I move: That the Bill be now read a second time. This Government was elected to office on 5 March 1983 with a commitment to boost the nation's economy, to provide a better deal for those in need and to give priority to reducing unemployment. Our housing policies are an essential element of our national recovery strategy. We have an ambitious and innovative program for action in housing. Our program is designed to achieve the dual objectives of ensuring that housing plays a key role in our economic recovery and ensuring that Australian families can gain access to adequate housing at a price they can afford. The main elements of our program are, firstly, to provide more effective assistance to low income families seeking to buy a first home-and to ensure an adequate supply of housing finance at affordable interest rates; and, secondly, to generate additional activity in the housing industry in order to stimulate job creation and economic growth-to re-establish confidence in this vital industry and to increase the availability of public housing and other innovative forms of low cost housing for the large number of needy households in the community. We have made a significant start in just under six months. We consulted carefully with all areas of the housing and finance industries before we announced targets and programs. Arising from our careful assessment of the industry we set an activity target rate of 130,000 to 135,000 commencements a year by the second half of 1983-84. We will be working with the financial institutions to ensure sufficient finance is available to meet these targets. We have rationalised existing home ownership schemes and designed a new more effective scheme to assist low income home buyers-the first home owners scheme. To get the housing industry moving without delay we removed the savings requirement from the existing home deposit assistance scheme. We have provided a 50 per cent increase in Commonwealth funding for public housing and have given the States strong financial concessions to increase their own spending in this area. But we are not resting on our laurels. There are other major areas of our program to be implemented. We have commenced work on the renegotiation of the Commonwealth-State housing agreement. A key feature of the renegotiation will be a focus on more innovative approaches to the provision of public housing. We are reviewing the operation of the mortgage and rent relief scheme. As a result of this review it is likely that States will be given increased flexibility to introduce measures in co-operation with local government and community organisations to expand the range of low cost rental housing for people with an acute need for housing. Discussions will be held with the States and community groups on the need to increase the supply of low cost rental accommodation through programs to expand community housing. We have an important commitment to the introduction of a community housing expansion program. In all these ways we will be working with the industry, the States and the community to ensure housing is given the priority it requires and deserves. The Government has a comprehensive housing package. The first home owners scheme is a major component of that package and the Bill before the House provides for a flexible beneficial scheme to assist low to moderate income earners into home ownership. In a full year we believe that some 50,000 deserving households will be helped by our scheme and will receive all the social and economic benefits that flow from the security of home ownership. By stimulating housing activity the scheme will also directly improve employment opportunities in housing and related industries. The Bill before the House provides for the Federal Government to assist financially people building or buying their first home on or after 1 October 1983. To be eligible for assistance applicants must satisfy an income test and must occupy, or have an intention to occupy, that dwelling as their principal place of residence. The scheme is a major departure from previous home ownership assistance programs. Earlier programs concentrated on providing a single grant linked to savings accumulated over a period; the greater the savings, the larger the grant . We consider this to be a discriminatory arrangement that did little to assist those potential home buyers most in need. We have therefore developed a scheme which provides for financial assistance over the first five years of home ownership. The spread of benefits is specifically designed to help people meet their loan repayments. Indeed, because of the annual benefit, eligible applicants will be able to service a much larger loan than otherwise would be the case. The Bill recognises that potential home owners have different financial requirements. Some require assistance with their deposit, others require increased borrowing potential, while others need help with their repayments. Because of this the scheme will provide for three options. For instance, applicants may opt for all of their entitlements to be paid over a five-year period and so increase their borrowing potential to the maximum. Alternatively they may opt to commute some of their entitlement to a lump sum to be paid at the time of purchase. In this way they will have increased money available for the deposit on their dwelling. The scheme has been developed in close consultation with housing industry organisations and financial institutions. Their co-operative attitude has been most encouraging and I wish to place on record my appreciation of their efforts. The scheme is designed to encourage first home owners to apply when they are arranging their finances. In this way the scheme will be of real benefit in meeting the specific needs of applicants at the right time. More importantly, it will also ensure that assistance is directed towards housing, rather than towards incidentals, as has been the case with past schemes. My Department will be making available explanatory material to those who are involved with first home buyers including lending institutions, real estate agents and builders, to help them assist home buyers who may be eligible. Brochures outlining details of the scheme will be widely circulated and special measures are in hand for the active promotion of the scheme to ensure that those in need are aware of their entitlements. Available assistance will in many cases be the very thing to enable low income families to buy their own home. Furthermore, my Department of Housing and Construction is setting up ground floor offices in the central areas of the capital cities to assist the public with their inquiries. We aim to have offices in outer suburbs of Sydney and Melbourne and there will also be regular promotions in country areas. The Bill before the House sets the conditions for eligibility for assistance and provides the guidelines to be adopted in the administration of the scheme. The Bill also provides for the making of regulations which will cover the income test to be applied, the amount of benefit payable and the manner of payment. The regulations will also cover the circumstances in which assistance will be adjusted during the five-year subsidy period. I would therefore now like to summarise the main features of the new scheme including the provisions which are to be included in the regulations to be made after the passage of this legislation. The first home must be acquired on or after 1 October 1983. The date of acquisition is the contract date for purchase or construction of the home, or in the case of an owner-builder, the date construction commenced. The dwelling can be new or established and be a house, home unit, flat or other type of self- contained fixed dwelling which meets local government standards. First home owner applicants may be single or married. Joint applications from individuals sharing a home will also be acceptable. Ordinarily all parties to the home acquisition, and their spouses, will be required to join in the application. Exceptions will be made where, for example, a parent joins in the contract simply as a guarantor to meet the lender's requirement and will not live in the dwelling. In the case of migrants, at least one applicant must hold the right to permanent residence in Australia before assistance can be paid. An income test will apply generally to income in the financial year before home acquisition. For those buying a home this financial year, the income test will be to the combined taxable income of husband and wife or other joint applicant for the financial year 1982-83. Full assistance will be payable where taxable income is $24,300 or less. Assistance will reduce for taxable incomes above that figure, reducing to zero at $27,900. The taxable income limits will be adjusted each year in accordance with movements in average weekly earnings. In the event of an applicant's current taxable income being less or likely to be less than for the year before home acquisition because of unemployment, loss of overtime or cessation of work or other such circumstances, the Bill provides for the more recent income to be tested. Where an applicant was not resident in Australia for the whole of the financial year before acquiring his home, the income test will be applied to that applicant's income in the first full financial year as a resident. The amount of assistance will depend not only on income but also on the number of dependants. Applicants with income below $24,300 in 1982-83 and with two or more dependants will be eligible for the maximum assistance of $7,000 payable over five years. With one dependant, the assistance will be $6,500 payable over five years. The Bill provides that children born or adopted up to 11 months after home acquisition will be included in the calculation. As I mentioned earlier, applicants will be able to convert part of the assistance to a lump sum. In the case of those entitled to maximum assistance, applicants with two or more dependants will have the choice of receiving $2,000 in a lump sum and $4,500 over five years or $3,500 in a lump sum and $2,750 over five years. Those who choose a lump sum payment will have a reduced ongoing subsidy because they will have the benefit of immediate access to a considerable portion of their entitlement. For those who are entitled to smaller levels of assistance, for instance those with one or no dependants, different lump sums will apply. Mr Deputy Speaker, I seek leave to incorporate in Hansard a table which sets out the various levels of entitlement for different family sizes. Leave granted. The table read as follows- BENEFITS TO FIRST HOME BUYERS-FIRST HOME OWNERS SCHEMEMAXIMUM BENEFITS OPTION (ii) OPTION (iii) OPTION (i) Lump sum plus Lump sum plus subsidy only subsidy reduced subsidy Home buyers without children- Year 1 1,800 1,500 1,000 2,500 550 2 1,400 800 450 3 1,000 600 350 4 600 400 250 5 200 200 150 Total 5,000 1,500 + 3,000 = 4,500 2,500 + 1,750 = 4,250 Home buyers with one child- Year 1 2,300 1,500 1,500 3,000 750 2 1,800 1,200 650 3 1,300 900 550 4 800 600 450 5 300 300 350 Total 6,500 1,500 + 4,500 = 6,000 3,000 +2,750 = 5,750 Home buyers with two or more children- Year 1 2,400 2,000 1,500 3,500 750 2 1,900 1,200 650 3 1,400 900 550 4 900 600 450 5 400 300 350 Total 7,000 2,000 + 4,500 = 6,500 3,500 + 2,750 = 6,250 Mr HURFORD —I thank the House. Mr Deputy Speaker, I also seek leave to incorporate in Hansard a table which shows the benefits payable for different income levels. Leave granted. The table read as follows- BENEFITS AVAILABLE UNDER THE FIRST HOME OWNERS' SCHEME (Total $ over five years) Option 1 Option 2 Option 3 Lump sum and reduced subsidy Lump sum and reduced subsidy Subsidy Reduced Reduced Income only Lump sum subsidy Lump sum subsidy $ $ $ $ $ Home buyers without children- 24,300 5,000 1,500 3,000 2,500 1,750 24,300 5,000 1,500 3,000 2,500 1,750 24,500 4,722 1,417 2,833 2,361 1,653 25,000 4,028 1,208 2,417 2,014 1,410 25,500 3,333 1,000 2,000 1,667 1,167 26,000 2,639 792 1,583 1,320 924 26,500 1,944 583 1,167 972 681 27,000 1,250 375 750 625 438 27,500 556 167 333 278 194 27,700 278 83 167 139 97 27,900 . . . . . . . . . . 27,900 . . . . . . . . . . Home buyers with one child- 24,300 6,500 1,500 4,500 3,000 2,750 24,300 6,500 1,500 4,500 3,000 2,750 24,500 6,139 1,417 4,250 2,833 2,597 25,000 5,236 1,208 3,625 2,417 2,215 25,500 4,333 1,000 3,000 2,000 1,833 26,000 3,430 792 2,375 1,583 1,451 26,500 2,528 583 1,750 1,167 1,069 27,000 1,625 375 1,125 750 687 27,500 722 167 500 333 306 27,700 361 83 250 167 153 27,900 . . . . . . . . . . 27,900 . . . . . . . . . . Home buyers with two or more children- 24,300 7,000 2,000 4,500 3,500 2,750 24,300 7,000 2,000 4,500 3,500 2,750 24,500 6,611 1,889 4,250 3,306 2,597 25,000 5,639 1,611 3,625 2,819 2,215 25,500 4,667 1,333 3,000 2,333 1,833 26,000 3,694 1,056 2,375 1,847 1,451 26,500 2,722 778 1,750 1,361 1,069 27,000 1,750 500 1,125 875 687 27,500 778 222 500 389 306 27,700 389 111 250 194 153 27,900 . . . . . . . . . . 27,900 . . . . . . . . . . Mr HURFORD —I again thank the House. The level of benefit for each option and for various numbers of dependants will be covered in the regulations. People will be encouraged to lodge their application as soon as they enter into a contract. My Department will then provide an approval advice setting out the entitlement under the three options and asking them to select an option and to provide payment directions. Lenders will be involved in this process to enable them to take the benefit into account when arranging the financial package. Income and the number of dependants will be tested only at the time the application is orginally assessed. Changes in subsequent years will not affect the level of assistance. To obtain the assistance, each applicant must occupy or intend to occupy the dwelling as his or her principal place of residence. The scheme is to assist low to moderate income earners into home ownership and not to subsidise investment in housing for income or capital gain purposes. The assistance, once approved, will be paid monthly, generally to a nominated account in either a bank, building society or credit union. The subsidy will continue for the five years subject to continued ownership and occupancy of the home. The circumstances relating to cessation of the subsidy will be covered by the regulations. We propose that if the home is sold or if an applicant no longer occupies and has no intention of ever again occupying that home as his or her principal place of residence, the subsidy will cease. In this way, the Government will not be paying subsidies to those who no longer own a dwelling or where the dwelling is being used as an investment property. Regarding ownership and occupancy, the onus will be on those receiving the assistance to inform the Department if they permanently lease or sell the dwelling. If they do not, then they will be liable for a severe penalty and will need to repay any benefit they obtained wrongly. Because the benefit will be paid over five years, our intention is that the regulation will include provision which will protect the rights of each applicant. For instance, where two or more people buy a home and one subsequently leaves permanently or sells his or her share of the home, then payments due to the other applicants remaining in the home will not cease. There will also be instances where a married couple permanently separate or are divorced with one of the partners leaving the dwelling. To cover adequately the range of situations which will inevitably arise for some home owners during the first five years of home ownership, we propose that the regulations will provide for each applicant to have an equal share of the assistance. In this way those who continue to own the dwelling and regard it as their principal place of residence will continue to receive their normal entitlement. The payment to the applicant who permanently leaves the dwelling will cease but will not automatically be lost completely. There will be cases where people sell their home or leave it to move to another location because of medical, employment or other reasons. We do not wish to disadvantage these people. We propose that the regulations will provide for the subsidy to recommence if an applicant buys another dwelling within 12 months of selling or permanently leaving the first. The subsidy will also recommence if an applicant re-occupies or re-establishes the intention to reside in the first dwelling as principal place of residence. Where any of these events occur, the applicant will not lose any of the remaining entitlement. The subsidy will continue from where it left off. Should a spouse in a joint application die during the period, the assistance will automatically be transferred to the remaining spouse. For a sole beneficiary, the assistance will cease. The assistance is tax free and non- repayable. It will also not count as income for means test purposes under the Social Security Act. The First Home Owners Bill provides for significant assistance to those seeking to obtain their first home. Its objective is to encourage and assist persons to purchase or build their first home. One characteristic of the scheme is flexibility, and it will be administered in a sympathetic way to provide maximum assistance consistent with helpful legislation. This Government is committed to home ownership. That is what this new scheme and this particular Bill are all about. Additionally, the scheme will provide significant stimulus to housing activity and employment in the building industry and elsewhere in the economy. The scheme has received overwhelming support from the industry and the community alike. I thank my Department for a lot of hard work that up to this stage has gone into producing the Bill, and I am glad to see the Secretary to my Department present on this important occasion. Accordingly, it is with pride and pleasure that I commend the Bill to the House. Debate (on motion by Mr McVeigh) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Housing and Construction)(11.36) —I move: That the Bill be now read a second time. This Bill provides for amendments to the Home Deposit Assistance Act 1982 arising from the introduction of the first home owners scheme on 1 October 1983 and the removal of the savings provisions from 1 August 1983. Presently, the Act provides for eligible first home owners who acquire their dwelling on or after 18 March 1982 to receive a grant of up to $3,500, depending on their income, savings history and number of dependants. The First Home Owners Bill will apply to those who acquire their first dwelling from 1 October 1983. An amendment to the Home Deposit Assistance Act is therefore required to terminate assistance under that Act in respect of dwellings acquired after 30 September 1983. The Act currently provides for savings to be held in one or more of the approved forms for at least one year immediately before the date of the home contract. The grant is paid on the basis of one dollar for every dollar saved in an acceptable form with a maximum basic grant of $2,500 where there have been two or more complete years of savings. On 21 July 1983, I announced that the Government would remove the savings provision to take effect from 1 August 1983. This amendment will mean that first home buyers contracting to buy or build a dwelling between 1 August 1983 and 30 September 1983 will no longer need to hold acceptable savings to qualify for a home deposit assistance grant. The amount of assistance will depend solely on their income. Those who purchased prior to 1 August 1983 will still need to meet the savings requirement. My Department is presently examining applications for assistance under this proposed amendment to enable those affected to be advised of their likely entitlement subject to the passage of this amendment. This will allow for speedy payment to those who will benefit from this amendment and who are arranging for their financial package with this in mind. The removal of the savings requirement is consistent with the Government's first home owners scheme under which savings will not be a prerequisite for assistance. Our aim is to help low to moderate income earners into home ownership, particularly those who have been unable to save. The responses to this initiative have been considerable. It has already provided a stimulatory boost to the housing industry. There will be no arbitrary cut-off for applications under the Home Deposit Assistance Act. Considerable personal difficulty was caused by the previous Government's decision to apply a short cut-off to the old home savings grant scheme, and we will not repeat that mistake. Nevertheless we will be urging people who bought before 30 September 1983 to lodge their applications promptly. The Government, in line with announced policies, has also introduced a Bill to amend the Income Tax Assessment Act. The effect will be that there will be no new entrants to the first home buyers loan interest rebate scheme after 30 September 1983. That amendment will also extend eligibility under the tax rebate scheme to cover those first home buyers who acquire their dwelling up to 30 September 1983 but who do not occupy it by that date. At present the tax rebate scheme commences from the date of occupancy. The provisions of the Home Deposit Assistance Act Amendment Bill are in keeping with our overall housing philosophy . I commend the Bill to the House. Debate (on motion by Mr McVeigh) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Housing and Construction)(11.40) —I move: That the Bill be now read a second time. This Bill provides for the repeal of legislation which authorised sale of the Housing Loans Insurance Corporation to the private sector. It also extends the Corporation's charter to allow it to insure commercial building loans. The previous Government proposed to sell the Corporation to the private sector. This move was opposed by virtually all areas of industry associated with the encouragement of home ownership in Australia. Despite this, the previous Government had introduced legislation, as part of the Commonwealth Functions ( Statutes Review) Bill 1981, to provide for the sale of the Corporation. One of the first actions of the Hawke Labor Government was to announce it would not proceed with the proposed sale. This decision has been warmly welcomed by the finance and building industries. At the time of the announcement, I indicated that, in line with our election policy commitments, the Government would be looking at ways of expanding HLIC's role, while at the same time ensuring there was no unfair competition with private sector ventures. The first stage in that process is to extend the Corporation's charter to provide for the insurance of commercial building loans. In addition to the insurance of normal home ownership loans, the Corporation is already empowered to insure loans for commercial housing projects, such as major flat and home unit developments, retirement villages and the like. Inclusion of commercial building loans is a natural extension of the Corporation's existing charter. By assisting the borrowing prospects of persons wanting to buy or build commercial property, this extension of the Corporation's charter will lend support to the Government's priority aims of stimulating the building and construction industries and generating employment opportunities. It is, of course, also a practical demonstration of the Government's commitment to constructive ways of assisting business, particularly the small business sector. The Bill will enable the Corporation to insure, in respect of commercial buildings, a similar range of loans to those it can already insure for housing. It will provide for insurance of loans for the purchase, construction, alteration, improvement or extension of buildings and structures or the acquisition and development of land. The scope and direction of the Corporation's activity in this area can be controlled through existing powers given to the Minister for Housing and Construction under the legislation and the Government will be looking to see that HLIC moves cautiously into this new field of business. It intends that at least in the early stages HLIC will concentrate on loans for small to medium scale projects. It should be clearly stated that this is expected to be a relatively minor part of the Corporation's total activities. HLIC will be expected to seek appropriate reinsurance cover on this new field of business from available commercial sources. At the second stage of ensuring that, as far as possible, HLIC competes on an equal footing with the private sector mortgage insurers, the Government has decided that HLIC should pay to the Commonwealth an amount related to the reinsurance costs that private firms need to take out. The new annual payment will be introduced in 1983-84, and work is now proceeding to establish the basis for determining the payment. At a later stage, a further amendment will be introduced to provide a separate specific statutory provision for this new payment. Mr Deputy Speaker, this Bill marks the end of a period of great uncertainty for the Corporation, its staff and clients. I would like to place on record my personal appreciation to the directors and staff of the Corporation for their efforts during what must have been a very difficult time. During this period the Corporation has continued to achieve a fine trading record with a profit every year. HLIC has been a real success story in housing. Its forward looking approach and competitiveness have assisted many Australian families into home ownership. We will be looking to further ways in which the Corporation can play a greater role in assisting with the Government's housing objectives. I commend the Bill to the House. Debate (on motion by Mr McVeigh) adjourned. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industry)(11.43) —I move: That the Bill be now read a second time. This Bill provides for an amendment to the Barley Research Levy Act 1980 to give effect to decisions taken by the Government when framing the 1983 Budget. The effect of the amendment will be to increase the maximum rate of levy payable under the Act from 20c to 50c per tonne. The rate of levy effective from 1 October 1983, however, will be 30c per tonne compared with 20c at present. The levy applies to all barley delivered by a grower to another person, unless that person is storing it on the grower's behalf. The amendments contained in this Bill are in response to a submission from the Australian Wheatgrowers Federation and a recognition that continuing increases in the cost of research have eroded the real value of levy collections. In accepting the Australian Wheatgrowers Federation's submission, the Government has recognised the need to increase productivity in grain production so that Australia remains competitive on world markets. We also need to be able to meet the increasingly exacting quality characteristics required by purchasers of barley. This requires increased research especially in such areas as improved crop varieties and cropping systems and disease control. The recent drought severely reduced the funds available for research in 1983-84 and it has been necessary to curtail essential work in a number of areas. Reserve funds maintained by the five State barley industry research committees and the Barley Industry Research Council have been largely exhausted in maintaining ongoing research programs. The Commonwealth matches industry contributions on a dollar for dollar basis and the Bill reflects the importance the Government places on the need for continued research into significant issues facing the grain growing industries. The new levy will enable present levels of barley research to continue, assist the industry to increase its productivity and maintain Australia's competitiveness on world markets. I commend the Bill to the House. Debate (on motion by Mr McVeigh) adjourned. TAXATION (UNPAID COMPANY TAX) ASSESSMENT AMENDMENT BILL 1983 [No. 2] Debate resumed from 23 August, on motion by Mr Hurford: That the Bill be now read a second time. Mr HURFORD(Adelaide-Minister for Housing and Construction and Minister Assisting the Treasurer) —Mr Deputy Speaker, may I have your indulgence to suggest that the House have a general debate covering this Bill and the Dividend Recoupment Tax Bill as they are related measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. Mr DEPUTY SPEAKER(Mr Mildren) —Is it the wish of the House to have a general debate covering these two measures? There being no objection, I will allow that course to be followed. Mr HOWARD(Bennelong)(11.48) —The Opposition parties will oppose these measures at all stages in both Houses of the Parliament. This batch of legislation is further evidence of the bankruptcy of the claim made by the Australian Labor Party in opposition that the former Government had been soft in its efforts to pursue and curb the incidence of tax avoidance in our community. We have now had a period of six months in which the Labor Government, under the stewardship of two Ministers responsible for taxation matters, could have demonstrated to the community that there were left untouched large areas in which sophisticated and costly tax avoidance measures had flourished, and had been allowed to flourish, by the former Government, to the detriment of the entire community. The fact that after six months all the present Government can do is to produce a scaled down version of the Dawkins legislation that was rejected by the Parliament in May of this year is a clear and dramatic demonstration of the fact that the charges made by the Labor Party in opposition that the former Government had been soft on tax avoidance were utterly false. The Government demonstrates by its inaction how false those charges were. If those charges had been correct why have not we in this Parliament been treated to Bill after Bill closing down all the loopholes that we left untouched ? Why has not the Treasurer (Mr Keating) come into this Parliament with anti-tax avoidance measure after anti-tax avoidance measure? Why is it that the only anti -tax avoidance legislation that the Government can produce is legislation that retrospectively imposes a penalty on people who are already liable to pay evaded company tax under the provisions of the former Government's legislation? I say to the Minister for Housing and Construction and Minister Assisting the Treasurer (Mr Hurford) that, although he was not one of those in opposition who regaled the former Government about its alleged inactivity in the area of tax avoidance, he is going to hear plenty from us in opposition about what the former Opposition said on this subject. The fact is that the former Government covered the field. It was the former Government that launched a blitzkrieg on tax avoidance in this community and it was the former Government that effectively closed down the tax avoidance industry. The fact is that we have nothing better from the Government than this scaled down but still objectionable version of the legislation, which was not really anti-tax avoidance legislation but in many parts retrospective capital gains tax legislation and which was rejected by the Parliament in May. So not only does the Opposition state here and now that it will oppose this legislation at all stages in both Houses of the Parliament but also it states quite categorically that this is further evidence of the emptiness and bankruptcy of the claim made by the Labor Party in opposition that we have been soft on the tax avoidance industry. It is the Government which has demonstrated this by its inaction and its inability to act because there are no substantial sophisticated tax avoidance arrangements left to strike at. If my claim is wrong I invite the Treasurer, the Minister Assisting the Treasurer or indeed anybody else on the Government side to point out during this debate the tax avoidance schemes that we have not taken action against and that this Government is taking action against. In the course of doing so I invite them to explain why, after six months of government, the Government has not taken some action against these tax avoidance arrangements. That was a hypocritical claim when it was made and it has been demonstrated to be a totally hypocritical claim by the fact that the Government has not taken any action. The Opposition will oppose both of these measures at all stages in both Houses of the Parliament. The Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 [No. 2] is a scaled down version of the legislation that was rejected by the Senate in May of this year. Although it does not contain some of the more objectionable provisions that were contained in that legislation it is still objectionable on a number of quite significant grounds. The Bill retrospectively imposes a totally new liability for personal income tax, unlike the previous Bill which recouped a tax liability which already existed and remained unsatisfied. This legislation imputes a distribution of lawfully retained earnings, already subject to recoupment tax under the Fraser Government's legislation, in the hands of the vendor shareholders. We put it to the House that there is a vast difference between a piece of legislation that on the one hand says 'We are going to recoup, albeit from those who gain the benefit, tax which has been illegally evaded but was always due and payable' and legislation such as this which says: 'It is not enough to have recouped what should have been paid in the first place, but for good measure we are going to make scapegoats out of the people who have been subjected to that recoupment legislation'. We are going to impose retrospectively a totally new taxation liability. We are going to impose a penalty in a backdated manner on people who have already met their lawful debts under the previous Government's recoupment legislation. That is not good enough for this Government. It has not been able to find any genuine examples of tax avoidance that have been left untouched by the Fraser Government. Honourable members opposite want to demonstrate how tough they are and how good they are, so they can go before their branches and say: 'We are doing something about tax avoidance. We are going to make scapegoats out of the people who were made subject to the recoupment legislation'. If that is not an empty, barren exercise in this whole area I cannot think of one that is. It is a phoney, cynical, hypocritical exercise on the part of the Government to parade this legislation as genuine anti-tax avoidance legislation. No doubt honourable members opposite will say to the community: 'Those terrible people in the Opposition parties, they are stopping us from implementing our mandate; they are stopping us from implementing our program'. Mr Hurford —Hear, hear! Mr HOWARD —'Hear, hear' says the Minister. I will say something about the Labor Party's mandate on tax avoidance in a moment. Labor Party members will say to the community: 'These terrible Liberals and these terrible people in the National Party are frustrating the mandate of the lawfully elected Labor Government. If they did not interfere with this legislation we would be able to do all of these other you beaut things'. The fact is that that is a McCarthyist tactic. It is based on the well-known McCarthyist principle that first of all one finds a scapegoat, then one makes the most extravagant claims under the sun about that scapegoat and then one repeats the lie upon lie, upon lie. It is an exercise in McCarthyism to brand those who oppose this legislation as being friends of the tax avoidance industry. It is a total exercise in McCarthyism for that sort of attitude to be taken. Let me remind the House that the Attorney-General (Senator Gareth Evans), when he was Opposition spokesman on legal matters, before calmer forums and when questioned about the attitude of the Labor Party in government towards retrospective legislation in the taxation area, stated on 1 November: Our legislation would not be penal in character but simply seek to recover-like the Government's bottom of the harbour legislation-the tax which was avoided. They were the words of Senator Evans who is now the first law officer of this Government. I am going to test this legislation against that promise made by Senator Evans when the Labor Party was in opposition and demonstrate how much the Labor Party has departed from that commitment and to what extent this legislation totally corrupts the principle that was laid down by Senator Evans when the Labor Party was in Opposition. This legislation is penal in character. How else does one explain the fact that under this legislation only a very small number of companies are treated in a penal manner? How else can one explain the fact that under this legislation only a fraction of private companies which have retained earnings lawfully gained, on which company tax has been paid, are singled out for this discriminatory treatment? As I said a few moments ago, it has not been enough for this Government to say to vendor shareholders: 'You should never have engaged in these schemes in the first place. We supported the former Government's efforts to recover the illegally evaded company tax. That is in the process of being paid, but as far as we are concerned that is not enough. We have to go further. We have to make a punitive, discriminatory scapegoat example out of you and we have to slap this penal tax on you'. By doing that, the Government is going totally against the undertaking that was given by Senator Evans on 1 November. This legislation is not only penal but also highly discriminatory. It effectively imposes a penalty under the false and misleading description and guise of being recoupment of illegally evaded and unpaid tax. This legislation is not directed at tax which is still outstanding. This legislation is directed at retrospectively and artificially imputing a distribution of retained earnings to certain vendor- shareholders in private companies and putting a personal tax on it. By no stretch of the imagination or no twist of the English language can that be other than a penal tax upon the activities of this group of vendor-shareholders. The Government has, in effect, said that because people have been involved in these schemes it will not only recover the tax illegally evaded, which was achieved by the Fraser Government's legislation, but also, for good measure, punish those people with an additional penalty and a discriminatory tax. The Government might earn a few more marks if it came into this Parliament and said: 'Well, that is really what we are doing. We are singling these people out. We are putting them up against a wall and saying: ''You paid your debts to society by meeting your obligations under the recoupment legislation, but that is not good enough because we need some scapegoats on this issue. We said we would do a lot about tax avoidance and we cannot find any areas that the former Government has left uncovered so we are going to have to single you out and impose a penal tax on you''.' That is the substance of what the Government is doing in this area. It is one thing to recover unpaid tax through retrospectively shifting the liability to those who have gained the benefit of the non-payment, which was the effect of the Fraser Government legislation. It is entirely another thing to impose retrospectively a totally new taxation liability. This Bill has three glaring anomalies. Firstly, the new tax liability applies only to a small fraction of companies and is, therefore, highly discriminatory, and that discrimination cannot be justified on any ground other than the determination of the Government to treat the people who were involved in these schemes in some kind of penal manner. As I said, the Government would earn some marks if it were honest enough with this Parliament and the Australian community to concede that that is precisely what is happening in this particular situation . Secondly, if the companies concerned had been sold to any other purchaser under exactly the same conditions, the liability under this legislation would not have arisen. Once again that demonstrates not only a glaring anomaly, but also a clearly discriminatory approach by the Government. It is an approach that cannot be justified other than on the basis of the scapegoat principle. The Government has to find somebody to shoot, so this group of people might as well do. Nobody likes them because they have been involved in bottom of the harbour schemes. The fact that they have already paid up under the former Government's legislation the tax that was illegally evaded is not really to the point. Let us not worry about the mere technicality that they may have met their liabilities under that legislation. Let us not worry about the fact that we are retrospectively imposing a penalty. That is a minor detail in the eyes of the Government determined to get a few token runs on the board in the tax avoidance debate. Thirdly, of course, if any of these companies had continued in business-as is known by the Minister Assisting the Treasurer, Mr Hurford, who is at the table, and the honourable member for Hunter (Mr Robert Brown) and others who follow these matters very carefully and occasionally bring some objectivity to these debates-these taxation liabilities would not have arisen. I turn now to the second reading speech of the Minister Assisting the Treasurer . He quite wrongly described the after-tax profit as taxable dividends if the companies had continued to operate as going concerns. That is quite wrong. What guarantee had the Minister that if the companies had continued to operate as going concerns there would have been a distribution of dividends? That is just an assertion on his part. It demonstrates the total artificiality of what he is doing by this legislation, and it exposes the wrong thinking behind this legislation. If these companies had continued to operate, it would not necessarily have followed that there would have been a distribution of dividends . That may not have, in fact, happened. The fact that the Minister made that statement demonstrates how artificial this legislation is. He makes a totally wrong assumption in describing the after-tax profits as taxable dividends. They become taxable dividends only if, in fact, there is a distribution-and if the company had continued in business there would not have been a distribution. But the Minister makes the totally false imputation that all the companies, in fact, made a distribution. This indicates just how false and artificial is the basis upon which this legislation has been erected. The tax proposed to be recovered by this legislation cannot be regarded as tax lost to the revenue by virtue of the sale of vendor shares, nor can it be regarded as escaped personal tax. Any tax on retention allowances that is lost to the revenue is due entirely to the activities of promoters. I find it very strange indeed that a party which, during the last election campaign, made as part of its small business policy a commitment-the Minister would be very well aware of this-that it would totally get rid of what was left of what is colloquially called Division 7 tax. In other words, as a gesture towards the small companies in Australia, the Government was going totally to get rid of what remained of Division 7 tax. It has not done it yet, but I know it was a commitment for the lifetime of the Parliament. I make no criticism, at this stage, of the fact that that particular commitment has not been met. That, of course, was a commitment that recognised the importance to private companies in Australia of retained earnings. That measure was designed to help companies have greater use of their retained earnings. This legislation goes right against that . This legislation imposes an additional penal tax on retained earnings. It is based on a totally incorrect assumption that all retained earnings are automatically distributed. That illustrates the phoney basis upon which this legislation has been erected. In some cases more than 100 per cent of the original profits earned will become payable as taxation under this legislation. The Minister looks at me rather quizzically. He wonders how I worked that out. I seek leave to have incorporated in Hansard a short and simple table which illustrates the truth of the proposition that I make. Mr DEPUTY SPEAKER(Mr Mildren) —Is leave granted? Mr Hurford —I raise a point of order. The usual courtesies are to allow the Minister at the table the opportunity to have a look at the document before it is incorporated. Mr HOWARD —I am very happy to extend these usual courtesies. Mr Hurford —A source is usually given on such a table. I recommend to the shadow Treasurer that, in future, he observe both those procedures-give the source and have the courtesy to let the Minister at the table know in advance. Mr DEPUTY SPEAKER —Is leave granted? Leave granted. The table read as follows- 1982 1983 $ $ 1. COMPUTATION OF TAX ON COMPANY Taxable Income of Company 100.0 100.0 Less: Company Tax (applied to 1981 year of income @ 46%) 46.0 46.0 Distributable Amount 54.0 54.0 Less: Retention Allowance, say 70% 37.8 16.2 Less: Undistributed Profits Tax @ 50% 8.1 Balance of Retained Earnings 8.1 2. SUMMARY OF TAXES PAYABLE Vendor Recoupment Tax Company Tax (as above) 46.0 46.0 Undistributed Profits Tax (as above) 8.1 Section 226 (1) Additional Tax (Note: Commissioner has discretion to apply maximum of 100% penalty for failure to furnish information) . . 46.0 (max.) Personal or Dividend Recoupment Tax (assumed rate of 60% on $54) . 32.40 54.1 124.40 Mr HOWARD —Thank you, Mr Deputy Speaker. I thought leave would be granted because the Minister is a courteous Minister. As I mentioned earlier, this legislation goes against the pre-election undertakings which were given by Senator Gareth Evans about the nature of retrospective legislation that would be introduced by a Labor Government. Not only is the legislation penal in character , but it does not merely seek to recover tax which has been avoided or evaded; rather it goes much further and retrospectively imposes, for the first time, a totally new taxation liability. It has not been enough for the Government, under this legislation, to go beyond the principles of the former Government's legislation and impose retrospectively a totally new taxation liability which is a massive extension of what the former Government did, but it has seen fit to tinker with the provisions of the former Government's legislation dealing, as it did genuinely, with the issue of recouping illegally evaded company tax. The Government has removed from the former Government's legislation the so-called innocence clauses dealing with vendor- shareholders. Let me go through some of the consequences of that particular decision. The honourable member for Hunter nods his head as if indicating that he thinks the Government is on the right track in having that particular provision removed. Let us go through some of the consequences and then the House can make a judgment as to whether the Government is, in reality, on the right track. Firstly, this will have the effect that at all times some vendor-shareholders will be affected, notwithstanding the fact that at all times the target companies were correctly maintained in relation to the taxation, companies and all other Acts. Secondly, at all times the target companies have had, and still have, real live directors and officers with a professional registered office and have maintained records in a professional manner. Thirdly, no criminal, fraudulent or unlawful act has been committed by any party including the innocent vendor and the purchaser. Fourthly, there has been no dumping of the records. In other words, in the parlance of the trade, nothing has been sent to the bottom of the harbour. Fifthly, there have been no men of straw involved at any stage in the transactions. Finally, no offence has been committed by any party against the Crimes (Taxation Offences) Act 1980 even if that Act had been in force at the relevant time. Maybe now I might ask again whether the honourable member for Hunter thinks the Government is on the right track in taking provisions out of legislation that will have the effect of inculpating vendor-shareholders, notwithstanding the fact that all the conditions and criteria that I have just read out have been met. In other words, this legislation will get people who could not, by the criteria understood at the time of last years debate, be regarded as having been involved in bottom of the harbour schemes. Even that must make the honourable member for Hunter, with his willingness to support instinctively Government legislation in this chamber, think again. It is not surprising that, over the course of the last few months, more than a few articles have appeared suggesting that a number of members of the Government , including perhaps the Prime Minister (Mr Hawke) and the Treasurer were not all that keen about this legislation. A couple of months ago the story seemed to be getting around that this legislation had really been master-minded by the Minister for Finance (Mr Dawkins) who was previously responsible for taxation. One of the reasons why the Australian Taxation Office was taken away from the Minister for Finance and given back to the Treasurer was that the Treasurer and the Prime Minister were not all that happy with the way in which the Minister for Finance had handled this legislation. Maybe this legislation had put a few noses out of joint that should not have been put out of joint as far as the Government was concerned. Maybe it was getting a bit close to the bone as far as some of the Government's own friends were concerned. So the Government had to take control of the legislation away from the Minister for Finance and give it back to the Treasurer. One of the things that the Minister for Housing and Construction, who is seated at the table, can explain when he is replying to this debate is whether there is any substance in those allegations. Mr Hurford-It has nothing to do with the Bill. Mr HOWARD —I have been told that there is absolutely no substance in the allegations. Mr Deputy Speaker, through you, I can only say to my friend who is seated at the table representing the Government that there was quite a lot of talk around this place that a lot of people in the Government were secretly relieved that the Senate had knocked this legislation off a few months ago because it realised that it had gone much too far. The Government ran the risk of blurring the impression that it was trying to create in its desire to be all things to all men-that, when it came to dealing with the business community of Australia, the Government was not going to take any 'ad hoc', disruptive decision and it was not going to do anything that would be very disturbing or disruptive. Perhaps my friend and colleague who is seated at the table can say a few things on that subject when he is replying to this debate. Not only does this legislation retrospectively, wrongly and in a totally discriminatory fashion, impose a new taxation liability, a penal taxation liability, a taxation liability based on only one concept-that is, the concept of finding a scapegoat to try to get some phoney runs on the board in the tax avoidance debate-but also it interferes with in a quite unjustified way, and brings within the ambit of the former Government's recoupment legislation, vendor-shareholders who could not properly, according to the definitions of the debate on the bottom of the harbour legislation of last year, be regarded as having been involved in bottom of the harbour arrangements. It also quite absurdly and unrealistically abolishes the 12-month provision that was inserted in the legislation by the former Government. What possible common sense can lie behind the decision by the Government to abolish that provision? Surely it is realistic and common sense that, if companies are obliged under the terms of the recoupment legislation to meet a taxation liability that has been outstanding for a number of years, for which no provision has been made, which was not expected and the meaning of which could involve severe dislocation for a business and some employment consequences, to say to those vendor- shareholders- this is happening in many cases under the existing legislation-'Okay, let us make an arrangement for the payment of the taxation outstanding over a period of 12 months'. Surely that is the common sense of the situation. Surely that would commend itself to a government that wants to take a common sense and not a punitive approach in this area. But even that is not good enough for those on the Government side who want a bit of blood in this area, who want to get some phoney runs on the board. They have to take out that 12 month provision because they are so desperate to be able to go back to some of their ideologues in their branches and say: 'We have really been tough on this tax avoidance issue. We told you that we would discover a whole lot of schemes that the former Government had not covered up. We have not been able to find any new schemes but we can totally bury those who were involved in the schemes that the former Government unearthed, notwithstanding the fact that they have already met their taxation liabilities'. This is not genuine anti-tax avoidance legislation. It is a discriminatory, punitive measure which is not based upon the desire of the Government to eliminate genuine, sophisticated, anti-tax avoidance schemes. It is based upon a desire of the Government to find scapegoats. It retrospectively imposes a punitive taxation liability. It singles out a small number of private companies. It will cause justifiable concern within the business community. It will be seen by many fair-minded people around Australia who supported the principle of the former Government's legislation as a gross extension of what was involved in that legislation and being in no way comparable with that legislation. The Opposition, therefore, will vote against this legislation. We will reject the McCarthyist smear that, in so doing, we are the friends of tax avoiders in this community. The fact of the matter is that our credentials in wiping out tax avoidance are well and truly known throughout this community. The fact that the Government has not been able to produce any genuine, anti-tax avoidance legislation during its first six months is a demonstration of that. The Treasurer, who has now come into the chamber, has had two opportunities to do this. He had his mini-Budget in May and he had his Budget in August of this year to identify all those tax avoidance arrangements that we left untouched. What has he done? Nothing! He has not produced any enormous tax rip-offs that the former Government left untouched. In fact, he has demonstrated by his inaction on both those occasions that the former Government had well and truly covered the field as far as effective, anti-tax avoidance legislation is concerned. He has demonstrated the emptiness of the rhetoric he and his colleagues used in opposition. The final demonstration of the bankruptcy of their position on tax avoidance, both in opposition and in government, is this miserable piece of legislation-not genuine tax avoidance legislation, but legislation shamefully based upon the principle of finding a scapegoat and adopting the McCarthyist technique of a smear. Mr KEATING(Blaxland-Treasurer)(12.18) —So this is the new Liberal Party. This is the new Opposition-the fair and reasonable approach of the honourable member for Kooyong (Mr Peacock) and the honourable member for Bennelong (Mr Howard). In fact, what we have seen in the last day is the same old gang doing the same old things for the people they have protected all these years. Yesterday we heard a disgraceful statement by Senator Dame Margaret Guilfoyle when she was talking about the principle of retrospectivity being offensive when retrospectivity was the basis of the legislation which the former Government introduced. She relied upon such remarks as 'inequitable', 'arbitrary', and 'vindictive' to try to apologise for the former Government's slavish attention to the people who had exploited the tax laws of this country. There is no point in the former Treasurer getting up in this chamber and fulminating about his role in cleansing the Australian taxation system. For five years the honourable member for Bennelong, as Treasurer, allowed the tax avoidance industry to run rampant in this country. It was exposed only by the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union which was appointed simply to try to embarrass the Australian Labor Party because somebody thought there was some criminal activity on the waterfront in Melbourne. We found that there was some criminal activity all right. The criminal activity involved all the people who support, subscribe to, vote for and are connected organisationally with, the Liberal Party of this country-the great who's who of Melbourne and Sydney business-who were mixed up in-- Mr Howard —Why do you not name a few of them? Mr KEATING —I do not have to name them. They were named in the Costigan report- lists and lists and lists of them. You know, as I know, that you sat there for five years and did nothing about it. You now come in here with this puny argument about McCarthyist tactics and make suggestions to us. You know damn well that when people have the capital benefit on the sale of these things they have the expectation of the value of the retained earnings. It is a stupid debating point to say that these things were legal in the year in which this company stripping took place, because once the companies were stripped, the tax at distribution could never be paid. You know that. So why go on with this ruse, this stupidity, this dishonest argument with which you come into this chamber apparently as the mouth almighty for the Liberal Party to camouflage in fact the disgraceful and unprincipled notions of behaviour of your own party room? Yesterday we saw the behaviour of the Opposition in the Senate on the prescribed payments system which, in fact, you introduced in the last Budget. Yet you are now trying to suggest that the regulation should not be gazetted. You have this matter being looked at by a committee, although we have seen massive fraud of the revenue in the building and other industries. The Opposition is now talking about voting against the Government's changes in the superannuation area where indeed there have been enormous anomalies in respect of the treatment of tax on lump sum superannuation versus pension superannuation . It is the same with the assets test. There has been an enormous leakage of public funds. You people simply stand for rorting. That is what you are all about. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The Treasurer will address his remarks through the chair. Mr KEATING —What the members of the Opposition stand for is, simply, rorting. Their mission in life is to protect every rorter in the country. They make that clear. I would have thought that the new leaders of the Opposition would have turned their backs on the days when they were soft on tax avoidance, rorts and distortions in the Tax Act, and start to look at some equity. But no; they have been here a couple of months and here we go again. One can just imagine the tone of the debate inside the Liberal Party party room on matters such as this. In government the Liberals had some responsibility to the nation, but in opposition they are a bunch of political prostitutes seeing what they can do to ingratiate themselves with the people who finally turned their backs on them at the last election-their own supporters. Let me deal with this issue in principle. I do not want to spend much time on it. The garbage which the honourable member for Bennelong has just proffered does not deserve a reply. He talked about the question of innocence. In fact, he is now arguing a case which he overlooked. He dismissed the question of innocence or guilt by simply addressing, in his legislation, the question of who , in fact, were the recipients of the funds. Mr Howard —That is right. Mr KEATING —You did. So why come in and argue to us that we should in fact invoke another principle? Mr Spender —Is that an answer? Mr KEATING —You are now suggesting that there are changed circumstances. There are no changed circumstances. Mr DEPUTY SPEAKER —Order! The Chair is occupied. I ask honourable members to address their comments via the Chair. Mr KEATING —The point of this legislation is that we are attempting to recover the personal tax on the distribution of the retained earnings of these companies which were sold at the time-- Mr Howard —You do not have personal tax on retained earnings. Mr DEPUTY SPEAKER —Order! The honourable member for Bennelong was heard in silence. I expect him to extend the same courtesy to the Treasurer. Mr KEATING —The issue is that there was an expectation that the sale price of these companies included not only the stripped company tax but also the value of the retained earnings. That is the point at issue. The former Government went for the company tax and left the retained earnings question. This legislation seeks to repair that position. The Deputy Leader of the Liberal Party is saying that there is a case in equity in one sense, but not in another. That is nonsense. What happened was that he could not get the support of his party to take action when he was Treasurer. Because this Government is doing it, the Opposition is now hiding behind the sort of blanket ruse that it is a McCarthyist tactic on the part of the Government to suggest that we should recover these moneys. Quite obviously we have on our hands the continuing moral decay of the coalition parties under whom for five years we saw massive growth in tax avoidance. When we finally had the Costigan report, the former Treasurer came here and hid behind a line in that report which talked about the secrecy provision of personal income tax returns which the former Treasurer knew did not preclude a discussion about the nature of the schemes. It was not important in that sense to know the names of the individuals. But the honourable member for Bennelong, the former Prime Minister and honourable member for Wannon hid behind that flimsy piece of argument for two weeks. They were hoping that finally the debate would fade away so that the honourable member for Bennelong could maintain his position as Treasurer. Finally, the whole onus of public opprobrium was directed at the Commissioner of Taxation because the former Treasurer and the former Prime Minister were prepared to let everybody believe that it was all the fault of the Australian Taxation Office. When the Commissioner of Taxation published what is now referred to as the telephone book of letters- Mr Howard —I published that. Mr KEATING —You published it because the Commissioner insisted. That is why. In the telephone book of letters we saw letter after letter to the former Treasurer and the Government talking about the continuing growth of these tax avoidance schemes. Yet the former Treasurer sat on his backside and did nothing about it until the Costigan report exposed the whole tawdry episode over all those years. The Government was then forced by public opprobrium to do something about it. It did not even do it all. We are about to do the balance of things which should reasonably be done. Yet we have to put up with abuse about McCarthyist tactics and the like. If the Opposition wants to support the tax avoidance industry let it do so; but let it say so. Let it say where it stands and not suggest to the Government that in some way it is using McCarthyist tactics. Let us hear from the honourable member for Bennelong where he stands with his party on its reported proposals to vote against the change in the superannuation tax arrangements which he argued, to his credit, inside his party for years should have been changed; but he could not get enough support. Let us also hear where he stands regarding the assets test-the haemorrhaging of public funds which is going on with the avoidance of the income test. Where is there a defence in equity from the Liberal Party in these issues or, more blatantly, the prescribed payments system which he, as Treasurer, introduced. The Opposition is now suggesting that it should vote against the regulations because they are too harsh. Indeed, this Government not only delayed implementation of that legislation but also reduced the payment from 25 per cent to 10 per cent and variations below that. Despite that, members of the Opposition now have a Senate committee looking over the legislation to see whether they can find enough room in their consciences- Mr Howard —What has this got to do with the Bill? Mr KEATING —It goes to the whole shabby attitude the Liberal Party adopts to the whole question of equity in the tax system and the payments system of the Commonwealth in respect of tax avoidance. Obviously, the Liberal Party is not in government. It is reverting to type. It is going back to its old colours; that is, soft on tax avoidance and apologists for all the rip-off merchants who make every other Australian pay more than their fair share of taxation. There is $60m in this Budget. This issue is a Budget measure. As I said in an interview this morning, the coalition is back to its old antics of attacking the first Budget-not only just a Budget but the first Budget of a Labor Government. The ultimate loss to revenue if this Bill were to be defeated would be $270m, which other honest taxpayers would have to pay to make up the forgone revenue from people who were involved in bottom of the harbour activities. Let us be clear about that. The honourable member for Bennelong is defending the activities of those people who are involved in bottom of the harbour operations, saying that they should be able to keep the money and that the ordinary taxpayers of Australia should make up the difference. I totally reject that notion. I reject any charge of McCarthyist activities on the part of the Government. The Government is doing what is only right and proper and what should have been done by the former Government. I reject the display of mock indignation by the honourable member for Bennelong as an apology for what he was not prepared to do, and was not able to get his party to support, when he was Treasurer of this country. Mr SPENDER(North Sydney)(12.30) —We have just heard from the Treasurer (Mr Keating) one of the most rambling, disjointed and incoherent addresses that this House could ever have heard upon an important issue. The address makes clear one of two propositions; either that he is a party to seeking to deceive this House and the Australian people about the underlying principles that activate the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 [No. 2], or that he does not understand his own legislation. I remind the House at this stage that in the course of his reply-if it could be so termed-to what the honourable member for Bennelong (Mr Howard) said, he said two things about the only two things he said upon the Bill which is now before the House. He stated that once stripped, tax distribution could never be made. Honourable members should note the use of the word 'stripped'. Lastly, just before he referred to the honourable member for Bennelong making an apology-I thought how apt it was that the Treasurer should use those words, since he could only be described as an apology for a Treasurer-he stated that the honourable member for Bennelong was defending people involved in bottom of the harbour activities. The Government, through the Treasurer, through the second reading speech and through the explanatory memorandum to the Bill has said that we are here dealing with bottom of the harbour activities, that this Bill is concerned with evasion and stripping, and with getting at people who were involved in bottom of the harbour activities. That is a grave, fundamental and deliberate misrepresentation of what this Bill proposes to do. Let me make clear just how far the Government has gone in seeking to mislead the House and the Australian people. The second reading speech which was delivered by the Minister for Housing and Construction (Mr Hurford), who would not have understood what he was saying, so I excuse him of any deliberate complicity, in reference to the earlier Bill of the same title, stated: The major purpose of that Bill was to . . . recover personal tax avoided by former owners of companies that were the subject of bottom of the harbour schemes. That same second reading speech stated that the Bill: covers essentially the same ground . . . It was stated on page 2 of the second reading speech as circulated: The Government has now decided that the recovery of personal tax should be confined to such tax avoided in respect of the liberated after tax profits of those years of income where evasion of primary company tax was involved. Later, reference was made to stripping of pre-tax profits. One sees again and again the reference to stripping and evasion. The speech continued: . . . The recovery of personal tax will, however, be confined to the tax related to after-tax revenue profits of the stripped company for those years of income in respect of which primary company tax was evaded. Once again, we see the juxtaposition of two concepts: Stripping, a deliberate action designed to denude a company of its capacity to pay company tax, and evasion, a deliberate act. For those who do not understand the meaning of the word 'evasion' or the difference between evasion and avoidance, I remind the House how the word 'evasion' was described by Mr Justice Dixon who, in the case of Denver Chemical Manufacturing Co. v. the Commissioner of Taxation, whilst pointing out that it was unwise to try to define the word 'evasion', said this: It is probably safe to say that some blameworthy act or omission on the part of the taxpayer or those for whom he is responsible is contemplated. One is therefore dealing with deliberate activity, deliberate wrong-doing. In the presentation of this Bill the focus has been on wrong-doing. If one refers to the explanatory memorandum, one finds precisely the same thing. At page 3 of the explanatory memorandum, this statement appears: This Bill together with the associated 'Rates' Bill will extend the scope of that legislation so as to also recover from the former owners of companies stripped of pre-tax profits the personal income tax they avoided through those schemes in respect of the profits on which primary company tax was evaded. At page 8 of the explanatory memorandum, to round off but a few of the references to evasion and stripping which are to be found in the second reading speech and the explanatory memorandum, this statement appears: One of the tests which must be satisfied before a liability for recoupment tax can arise requires the identification of the particular arrangement (the ' stripping arrangement') which rendered the target company unable to pay all its company tax. This test accompanies other tests in the legislation that effectively limit the scope of the legislation to those cases where the company has been stripped of its pre-tax profits. That statement is demonstrably false. But anyone who read the second reading speech and the explanatory memorandum and who listened to the one or two brief words that the Treasurer was able to direct to the Bill would believe that this Bill had, as its fundamental premises, first, that it was concerned with stripped companies-that is, companies which were deliberately stripped-and, second, to cases where company tax had been evaded as a consequence of companies being deliberately stripped. That supposition would be to misunderstand gravely what this legislation does. One of the key clauses in this legislation is to remove from the Act which was passed last year-the Taxation (Unpaid Company Tax) Assessment Act 1982-sections 5 (1) (h) and 5 (2) (h). The relevance of those sub -sections is that it is those sub-sections, and those sub-sections only, which bring into play the concept of evasion and stripping. I remind the House what was said by the former Treasurer, the honourable member for Bennelong, when he presented the Taxation (Unpaid Company Tax) Assessment Bill (No. 2) 1982 to the House last year. In his second reading speech he stated: . . . a Bill . . . to recover from former owners of companies that were stripped of a pre-tax profits the amount of company tax that has been evaded as a consequence of such strips. The emphasis was upon stripping and evasion and that was central to the whole exercise, as the present Treasurer should know and as his advisers most certainly know. It was pointed out in the explanatory memorandum that there were nine tests for determining whether a vendor-shareholder would have a liability to recoup the unpaid company tax liability of the stripped company. The key test is now to be removed. It was also pointed out in the explanatory memorandum that the test in sections 5 (1) (h) and 5 (2) (h)-the paragraphs which are to be removed by the legislation now before the House-reflect the basic test of the Crimes (Taxation Offences) Act 1980 that a person who has entered into an arrangement for the purpose of securing a company will be unable to pay its income tax. That is to be removed. It is no longer to be of any consequence that all the actions of all the parties were quite innocent. They may still be caught . It is no longer of any consequence that legal avoidance may not have been contemplated. They may still be caught. Let me emphasise that the very thing on which the original legislation was predicated is to be removed, and this removes the elements of evasion and stripping. All one can say is that for this Government to pretend, as the Treasurer does, that we are here concerned with stripping, with evasion or with bottom of the harbour schemes-and he dredged up bottom of the harbour scheme events in 1982 in his sad attempt to answer what had been put by the honourable member for Bennelong-is, as I have said, either a deliberate misrepresentation of the effect of the legislation now proposed or evidence that he as Treasurer does not understand what the Bill does. The seriousness of what is contemplated may be judged by the consequences. Once stripping and evasion are removed the whole case put by the Government to this House and to the people is falsified, as the advisers to the Treasurer must know, and as the Government, if it has the least degree of competence, must know. It is not the fault of the advisers; the Government stands or falls on what it puts before the House, and it is the Government that must accept responsibility for the explanatory memorandum, for the second reading speech and for what the Treasurer has said. The practical consequences of the removal of the two provisions to which I have referred are that, once a primary taxable amount is established where a company is sold and it attracts the operation of the formula in section 5 (1) (d), all that has to be shown is in effect a shortfall under the formula for the purposes of determining whether the Taxation (Unpaid Company Tax) Assessment Act applies, no matter that the vendors sought to provide fully for tax, no matter that we are concerned with a shortfall of only a few dollars and no matter that the reason that the tax was not paid thereafter was due to commercial misadventure. But where that takes place, unless the same business is carried on, which most frequently is not the case, the vendors are to be caught. They are to be caught back to 1972 under these proposals. They are to be caught for a primary taxable amount which was in no way attributable to any wrong-doing on their part, to any attempt to avoid or evade. In short, there is a complete derogation of any attempt to distinguish between those who engaged in stripping exercises and those who acted honestly and who fairly sought to provide the taxation liability . That approach degrades the need for certainty before the law, degrades equally the essential and elementary proposition of fairness in the application of laws, be they revenue laws or any other laws, and certainly degrades any argument that this Government is concerned with fair taxation shares. Debate interrupted. Sitting suspended from 12.45 to 2 p.m. Mr McVEIGH —I direct my question to the man who the Cattle Council of Australia says is the powerless Minister-the Minister for Primary Industry. I ask: Did the Minister tell the Queensland Rural Press Club last week that his Government's decision on imported grain harvesters was 'quite silly' and was taken while he was absent in Papua New Guinea? Mr Peacock —That was a quotation, was it? Mr McVEIGH —It was a quotation. Did the Minister, in relation to the decision to tax fortified wine, refer to some of his ministerial colleagues as 'dills'? Mr Peacock —Another quotation? Mr McVEIGH —That was another quotation. With reference to increased export inspection charges, has the Minister conceded that he lost? In light of these statements, reflecting concern that the Government has no real interest in rural Australia, will these decisions be changed? Mr KERIN —Any reference I made on the grain harvester question was to the wisdom of the Industries Assistance Commission. The answer to the rest of the honourable gentleman's question is no. Mrs CHILD —My question is addressed to the Prime Minister. What effect will the Opposition's threatened rejection of Government taxation proposals in the Senate have on the Government's Budget strategy and the prospects for national economic recovery? Mr HAWKE —The Government's Budget strategy has been carefully calculated to provide a very substantial stimulus to economic recovery while at the same time avoiding excessive pressures in the financial markets. With those twin objectives in mind and after careful and wide consultation, the Budget deficit was deliberately kept to a level less than $8.5 billion. It is now a matter of general recognition that those twin objectives and the level of the deficit designed to achieve them have received widespread support and commendation from the business and financial communities of Australia. In that context the Budget strategy and the figuring involved in it, as would be appreciated, depends critically on a number of taxation proposals. Some of those proposals-I refer particularly to the recoupment legislation and the arrangements in regard to lump sum superannuation-will obviously have greater impacts in the years beyond 1983-84 and are, of course, essential to the strategy of being able in those outer years to rein in the Budget deficit and thus reduce the pressure of that deficit on financial markets, so making way for the claims of the private sector on the financial markets in the process of recovery. Once that essential strategy, which has been widely endorsed and accepted by the business and financial communities of Australia, is understood, it can be seen that the Opposition, by threatening to oppose those measures, is in fact opposing the possibility of recovery which is involved therein. It is doing that by threatening to oppose those measures just as it is threatening to oppose the regulations which are necessary to make the prescribed payments system or withholding tax system of the shadow Treasurer, the Deputy Leader of the Opposition, work. The Opposition, in other words, is opposing measures which are essential to hold the Budget deficit to less than $8.5 billion and which are essential to the economic recovery this year and in the years ahead. The extreme hypocrisy of the Opposition is demonstrated in these circumstances by its concomitant call for a reduced deficit alongside its opportunistic rejection of every measure which is designed to increase taxation or reduce expenditure without at any point, I remind honourable members, offering any alternatives of comparable dimensions. The people of Australia are entitled to ask: What are the Opposition's real alternatives? Would it in fact allow a higher deficit or would it raise taxation on ordinary, honest Australian wage earners? What government expenditures would it cut? By this stage of 1983 the position of the Opposition has been made quite clear. At the beginning of the year it was exposed before the Australian electorate as being incapable of speaking honestly in the fiscal and budgetary area. Now, six months later, it is equally incapable of being honest in this area. It attacks this Treasurer, it attacks this Budget, it attacks the level of the deficit, it attacks the level of-- Mr Tuckey —Mr Speaker, I raise a point of order. In looking at the things that a question shall not be, I draw your attention to standing order 144. Mr SPEAKER —Order! We are not dealing with a question; we are dealing with an answer. There is no point of order. Mr HAWKE —It is a measure of the incompetence of honourable members opposite that they cannot distinguish between a question and an answer. As I said, the incompetence and the dishonesty at the beginning of the year are now being compounded by the hypocrisy and the dishonesty at this stage of the year. Mr Tuckey —Mr Speaker, I would like to complete my point of order. I drew your attention to standing order 144, which says that questions will be out of order if they relate to debates in the current session. This matter was debated this morning. Mr SPEAKER —There is no point of order. Mr HAWKE —As I said, the incompetence and dishonesty of the earlier part of the year are now being compounded by this very simple situation. The strategy of this Government, calculated to ensure economic recovery, has been endorsed by the business and financial community. A deficit of under $8.5 billion is critical to that strategy. This Opposition is opposing measures calculated on the expenditure and revenue sides to achieve that result. In the process, it is crowing on and on, saying: 'We would have a $7 billion deficit'. The simple arithmetic of these matters is as follows: To bring the deficit down from $8.5 billion to something like $7 billion one would have to increase taxation or cut expenditure programs. It is about time the Opposition came clean in this matter and stopped its opposition to legitimate and endorsed expenditure programs of this Government-legitimate programs calculated to restore equity in the taxation system of this country. It is about time the Opposition said to the people of this country: 'These are the increased taxes that we as an Opposition would favour, these are the programs that we would cut out and this is how we would reduce the deficit to $7 billion'. Mr ANTHONY —I will direct my question to the Prime Minister when he cools down. Did he meet the honourable member for Port Adelaide this week to discuss the honourable member's desire to return to the Ministry? Will the Prime Minister now move to fill the ministerial vacancy created by the honourable member's resignation, or will he admit that he is indeed being forced to keep the honourable member's seat warm? Mr HAWKE —I had a meeting with the honourable member for Port Adelaide earlier this week. It was not to discuss his desire to return to the Ministry. I have already answered this question. Let me repeat the situation, because there is a group of slow learners on the other side. The honourable member for Port Adelaide tendered his resignation to me on 14 July. I accepted it. It is quite clear that circumstances involved in the resignation of the Minister go to matters which are being considered by the Royal Commission on Australia's Security and Intelligence Agencies. I said in my first answer in respect of this matter that there is a variety of views. There is the legitimate opportunity for different views as to the appropriate course of action in regard to the filling of the vacancy caused by the resignation of the Minister. But the relevant facts are: The Minister resigned; he is not now a Minister. The duties of the portfolio that he had occupied are now being discharged, and discharged very capably. It is a legitimate view to hold that, given the fact that the circumstances surrounding his resignation are being considered by the Royal Commission, it is appropriate to leave the filling of the vacancy in the number of Ministers until such time as the Royal Commissioner has brought down his report. I repeat that there is no evidence whatsoever to sustain the proposition that, as the right honourable member put it, a seat is being kept warm for the honourable member for Port Adelaide. I make it clear, as I did when I first addressed myself to this question in this House, that I take the view, and I believe that every other member of the Government takes the view, that no member who has done something that requires action to be taken should be deemed to be incapable evermore of resuming a position in the Ministry. The honourable member for Port Adelaide is currently suffering a penalty in respect of the matter which caused him to tender his resignation. The question of how long that will go on will, in part, be affected by the report of the Royal Commissioner. I make it clear that the Party which constitutes the Government will consider this matter in due course. I hope that at some time in the future this Government will be able to regain the services of the honourable member for Port Adelaide. That decision will be taken by this Government at the appropriate time. Mr BILNEY —My question is addressed to the Treasurer. It refers to the claim by Senator Dame Margaret Guilfoyle, the shadow Minister for Taxation, that the Government's recoupment legislation-I will read these next words slowly for the benefit of the National Party members, as they are long words-is 'inequitable, arbitrary and vindictive'. Mr Braithwaite —Spell them. Mr BILNEY —I will say them again-'inequitable, arbitrary and vindictive'. Mr SPEAKER —Order! I invite the honourable member to proceed with his question and to ignore interjections. Mr BILNEY —Very well. Thank you, Mr Speaker. Mr Sinclair —Mr Speaker, I raise a point of order. The recoupment tax legislation, about which this question is being asked, is currently before the Parliament. I draw your attention to the standing order which is relevant to that matter. Mr SPEAKER —I realise that there is such a standing order. But I also know that it is the practice of the House, when the Budget and the Budget legislation have been introduced, not to be so restrictive as to prevent questions in that area from being asked, otherwise many matters could not be raised before the Parliament. Mr Howard —Speaking on the point of order, I point out, Mr Speaker, that the question is directed to the Treasurer. The Treasurer participated in the debate on the recoupment legislation before the suspension of the sitting for lunch. Frankly, if he forgot to answer the question in that debate he ought not to have a second go. Mr SPEAKER —Order! I call the honourable member for Kingston. Mr BILNEY —I ask the Treasurer: Is it not a fact that the retrospectivity, of which Senator Dame Margaret Guilfoyle has complained, was the principal distinguishing feature of the former Government's recoupment legislation? Mr KEATING —I can understand that the honourable member for Bennelong does not want a hiding twice in a day. Of course, the legislation is entirely equitable and it should have been introduced by the former Government. Claims about vindictiveness and the McCarthyist smear which the honourable member for Bennelong introduced this morning are simply red herrings to excuse the breakdown of morality inside the Liberal Party. The whole question of retrospectivity was the principal characteristic of the former Government's legislation. In fact, it is very instructive to look at the so-called retrospectivity which Senator Dame Margaret Guilfoyle described in her Press statement yesterday as being so offensive. I turn to the speech made by the former Treasurer on 23 September 1982 in which he said: Our normal and general reluctance to introduce legislation having any retrospective element has, on this occasion, been tempered by the competing consideration of overall perceptions as to the equity and fairness of our taxation system and the distribution of the tax burden. Quite obviously there is a complete credibility gap between what the Liberal Party was saying in government and what it is now saying in opposition. This whole ruse about retrospectivity simply means that now that the spotlight of government is off the Liberal Party its members are going back to their old colours of protecting the tax avoiders in this country. They are apologising for all the rip-off merchants with whom they have been associated for years. They are basically saying that honest taxpayers can foot the bill and pay the $270m, overall, or the $60m this year which they believe should not be collected from people who have been in the tax avoidance industry. All this phoney argument hangs upon the ruse that if somebody breaks in they say: 'You can have this, but you cannot have that'. When we see massive and contrived tax avoidance with company tax stripping they say: 'You cannot strip the company tax, but you can strip the current year retained earnings'. What a point of distinction and what nonsense! We are seeing the continuing breakdown of the Liberal Party with its supposed new look leadership of the honourable member for Kooyong and the honourable member for Bennelong. These supposedly fair and reasonable people are simply reverting to type, going back to their old habits and protecting the same people . As the Prime Minister mentioned this morning in respect of the prescribed payments system, which, indeed, the former Treasurer introduced, the Liberal Party is now trying to suggest that those regulations should be defeated in the Senate. In respect of the superannuation tax changes, which are equitable and which the former Treasurer wanted to bring in but could not get through his Cabinet at the time, the Liberal Party now wants to remove them. It wants to deal with the assets test. This is the Party which we are told is fair and reasonable. I put it to the House that this is a blatant apology for the tax avoidance people, the rip-off merchants, whom honourable members opposite have protected in the past. They will be exposed for protecting them again. Mr PEACOCK —Talking about protecting people, I ask a question of the Prime Minister. I refer him to an article, appearing in the current issue of the Bulletin and written by Mr Richard Farmer, a journalist who appears to have remarkably good access to Cabinet information-indeed, sometimes even before Cabinet itself. I put to one side the question whether there was yet another telephone call. Mr SPEAKER —Order! The Leader of the Opposition should ask his question. Mr PEACOCK —The article claims that the Cabinet is considering dispensing with the services of Sir William Cole, who is the Chairman of the Public Service Board, against Sir William's wishes and replacing him with Dr Peter Wilenski. I ask the Prime Minister: First, is this correct? Secondly, is the Government displeased with Sir William's performance in the position? Mr HAWKE —The quality of the question from the Leader of the Opposition can be judged by his pathetic introduction which, again, goes to issues which he knows are the subject of consideration and decision by the Royal Commission on Australia's Security and Intelligence Agencies. I can assure the Leader of the Opposition and all other members of this House that I am looking forward to the report of that Royal Commission infinitely more than the Leader of the Opposition should be. In regard to the substance of the question, it is the case that the term of the Chairman of the Public Service Board expires later this year and, as a responsible Government, we are examining what should happen at the time of the expiration of that appointment. Mr BEDDALL —I ask the Prime Minister whether the savings that the Government achieves from its decision to introduce an assets test on pensions and to tax lump sum superannuation payments will be used to help ordinary Australian pensioners and other Australians in need. Mr HAWKE —Both the initiatives referred to in the question by the honourable member will undoubtedly enable the Government to maintain and increase social security payments to those members of the community most in need, including old age pensioners, in the years ahead, so contributing to the objective which the honourable member mentions. Before developing a more detailed answer to the honourable member, I should say that in respect of this issue the arithmetic of pensioners and of the pensioner constituency should be understood. It has been made quite clear by the Treasurer and by other Ministers directly responsible for handling this matter in the post-Budget situation that it will be a small minority of those who currently get pensions who will not receive the same benefit in the future. If in fact this Government, or any government in the future, is to be able to give the greatest benefit to the pensioners who need it , then it has to be in the position, as would any government, that it is not putting out money to people who do not need it. The great majority of pensioners in this country deserve-and, under this Government, will get-a better deal. But our capacity to do the right thing and improve the position of the great majority of pensioners in terms of the question asked by the honourable member depends upon the Government's capacity not to have dissipated its money in respect of people who do not need that outgoing. Both of the measures referred to by the honourable member will remove fundamental inequities in the pension system. In the case of the assets test, it is quite unfair-I suggest that any reasonable person will see that it is quite unfair-that pensioners with very substantial assets can qualify for a full pension while many on relatively modest incomes receive reduced pensions or nothing at all. As I have tried to point out in this House and elsewhere for a long period, if people have any real decency and concern about the future of this country they have to understand the future demographic facts. They are quite stark and unavoidable. They are that this country will have an increasingly aging population and that a smaller proportion of employed people will have the responsibility of supporting relatively larger numbers of retired people. Without the difficult measures that this Government has taken, Australia would soon be experiencing crippling pressures to impose added taxation to meet those burdens of the aging population. The Government has had to take courageous initiatives. In taking those, it has forestalled those pressures that otherwise would apply. As a result of what we have done, those measures have allowed some increases to be provided to people in the community dependent upon the social welfare system who are most in need of assistance. The Opposition's announcement yesterday that it would repeal the proposed assets test and the superannuation taxation legislation reflects the Opposition's extreme cynicism and extreme hypocrisy. Given the Government's commitment to reducing the structural deficit in the process of economic recovery-and any government must do so-we have to take action which reduces the requirement for outlays in areas in which there is no need. Let me look at what the Opposition has to say about this matter. It has had the absolute gall to say, in that announcement, that it would not go ahead with those measures. It says that that would enable it then to have a co-ordinated approach to retirement policy. The fact is that the Opposition has no policy at all, let alone a totally co-ordinated one, and by cutting off the measures about which we are talking it would shut off two of the major options which are necessary for any government if it is to have a co-ordinated approach in regard to total retirement incomes. In that context, I ask that all honourable members look at the hypocrisy, particularly of the Leader of the Opposition, in regard to what he is saying now-that he and those behind him would cut out this Government's measures which are related to ensuring that social welfare payments will be paid on the basis of need. I ask members of this House and particularly the Leader of the Opposition, in the light of this hypocritical statement, to remember what the now Leader of the Opposition had to say on 9 September 1981: Expenditure on social security and welfare will be a key area of Government spending for the future. Already it amounts to $9.9 billion or around 27 per cent of total Budget outlays. He went on to say: The value of all pensions has increased and more people are taking up the age pension. Since 1970 the number of income support recipients has risen from 15 per cent of the working-age population to about 27 per cent. He then said: With an aging population this ratio will move even higher. If the Commonwealth Government is to respond to this growing need and to protect the real incomes of those relying on it for support, without imposing an increasingly onerous taxation burden on the workforce, then a fundamental reassessment of the taxation welfare system is unquestionably required. He continued: Needed decisions will demand a good deal of courage from Government leaders. There one can see, revealed in all its naked hypocrisy, the position of the Leader of the Opposition. In 1981 he said that what this Government has now got the courage to do was the necessary thing to be done. In conclusion, may I say that while we reveal- Mr Newman —I raise a point of order, Mr Speaker. Could you arrange to have the loudspeakers turned off? It is getting a bit loud. Mr SPEAKER —Order! I call the Prime Minister. Mr HAWKE —I can understand that those opposite do not want to hear revealed the hypocrisy of their leader. But there is one saving grace about at least one member of the Opposition. While the temporary Leader of the Opposition is revealed for his hypocrisy, we will excuse his deputy, because I want to be fair to the Deputy Leader of the Opposition, as I was yesterday. It is well known that the Deputy Leader of the Opposition supports the Government's approach in regard to what we are doing in means testing and assets testing the pension. It is well known that the Deputy Leader of the Opposition supports our approach. This fact is reported on the front page of today's Sydney Morning Herald, which notes, and notes appropriately, that he was absent from the shadow Cabinet meeting which took the decision. Mr PORTER —My question is directed to the Treasurer. I refer him to his Budget Speech, in which he stated that in addition to $207m being provided for programs administered by the Department of Aboriginal Affairs: Other spending specifically to assist Aboriginals will total about $167. Is the Treasurer aware that on the same evening the Minister for Aboriginal Affairs issued a statement which said that spending by other departments would be 'at least $130m'? That is some $37m less than the Treasurer stated on the same evening. Will the Treasurer explain whether it is he or the Minister for Aboriginal Affairs who has misled the Aboriginal people, and why? Mr HOLDING —After the Budget was introduced an officer of my staff was telephoned at 12.30 at night by the shadow Minister for Aboriginal Affairs who had excitedly been thumbing his way through the Budget Papers and believed he had found a discrepancy. The resources of the Department and its officers had been made available to try to explain the matter to him. We were not prepared to visit him late at night, particularly when he had run out of fingers and toes. Nevertheless, so that he can understand and realise that there has been no misleading of Aboriginal people, let me take him through the exercise slowly so that he can comprehend it. The so-called difference which was referred to concerns a figure of $130m which was the best estimate available at the time. It has since been confirmed that a figure of $133.401m represents the estimated funding of other Commonwealth departments for special programs for Aboriginals in 1983-84, including some $7m under the community development employment program earmarked for Aboriginal employment. The honourable gentleman will realise that that was a significant figure in the Budget allocation for Aboriginal Affairs. It simply involves a reallocation of funds which were otherwise being paid out as unemployment benefits. Other Commonwealth departments' special programs totalled $133.401m. There was a component for payments under the Aboriginal Land Rights (Northern Territory) Act which total $14.196m and the Department of Aboriginal Affairs salaries and administrative costs which total $19.089m. Those amounts came to a total figure of $166.686m, which, as the officers of my Department would have pointed out, made the Treasurer's estimate of $167m, being the figure available from other sources for the Aboriginal portfolio, very accurate indeed. The difference which has confused the honourable gentleman- Mr Gear —That is not difficult. Mr HOLDING —I realise that. The confusion on the part of the honourable gentleman arises from the fact that he did not take into account those significant sums of money which were involved, as I have indicated, in other areas. The funds made available by this Government to Aboriginal people have been welcomed by Aboriginal people throughout Australia and certainly serve as a marked contrast to the mean and penny-pinching attitude of the former Government which the honourable gentleman supports. Mr RONALD EDWARDS —My question is directed to the Treasurer and it concerns interest rates. In light of the concern over interest rates expressed by the financial community and the media, will the Treasurer please advise the House as to the outcome of the most recent Federal Government bond tender? Mr KEATING —Honourable members will be aware that, for the second time since the Government came to office, it has let a bond tender of $1.5 billion. I think this fact alone shows the Government's resolve to get the money supply under control, particularly after five years in which we saw monetary targets overshot by the former Government. The market's response to the tender, despite the Cassandras on the other side of the Parliament, particularly the Leader of the Opposition, demonstrates its confidence in the Government's handling of monetary policy and, more generally, the Budget strategy. The result of the tender was that yields were slightly lower than the last very much smaller tender of $1, 000m, and well below those at the same time last year. The tender was covered with a record number of bids and a record value of bids which exceeded the value of the tender a couple of times over. I think that indicates that there is a general understanding that inflation will decline in the year ahead, leaving scope for interest rate falls. There is no doubt that the market believes in the Government's medium term strategy-the bond tender result is an endorsement of that-its monetary policy and the Budget strategy. That is, of course, in marked contrast to the remarks of the Leader of the Opposition in his reply to the Budget Speech in which he forecast interest rate rises and alluded to what he saw as differences between Government policy and Budget Statement No. 2 in respect of interest rate effects . After addressing an Institute of Directors luncheon attended by 500 people in Melbourne, an Institute of Directors luncheon attended by 400 people in Brisbane and another business luncheon attended by 350 people in Sydney in the week after the Budget, I can assure the Leader of the Opposition that the general response by business was one of confidence in the Government's strategy. It underlines the fact that the Liberal Party has nowhere to go with business. The only response we have seen was the former Treasurer's National Press Club speech in which he again held out the nirvana of the free market for labour in Australia, which everyone in business regards now as practically irrelevant, particularly given the fact that there were major differences of opinion between those on the front bench of the Oppostion, including the honourable member for Balaclava and the honourable member for Bennelong. If the judgment is that the bond tender result was a barometer of the opinion of business as to the medium term economic strategy of the Government, it was very much a ringing endorsement. Mr BURR —My question is directed to the Prime Minister. At a meeting on 25 May 1983, with all Tasmanian members and senators, did the Prime Minister-- Mr Hodgman —Except me. Mr BURR —I take the point made by the honourable member for Denison. He claims not to have been present at that meeting. At that meeting with the Tasmanian members and senators, did the Prime Minister give an unconditional guarantee that the Government would not in any way tamper with the Tasmanian freight equalisation scheme? Why then has the appropriation for freight equalisation been reduced by 28 per cent in the recent Budget? Mr HAWKE —I am extremely indebted to the honourable member for his question because when I was recently in Tasmania-I may be forced against my will to say something about that in answering this question-I had the opportunity of speaking with representatives of the Chamber of Commerce and they expressed their gratitude to my Government, and particularly to the Minister for Transport , for the way in which they had dealt with this matter. They expressed their understanding of the simple economic fact, which of course would escape the comprehension of the honourable member, that the reason why the Budget shows a decline in the amount under that item is that it simply reflects the decline in tonnage operating as a result of the economic downturn which was brought about by the economic policies of the Government of which he was a member. That is why ; and it is understood by the Tasmanian business community to be the case. What in fact is happening in regard to the Tasmanian freight equalisation scheme is that discussions are in the process of being held under the chairmanship of the Minister for Transport. This is understood and welcomed by the members of the Tasmanian business community. They have congratulated, by public statement in recent days, my Government and the Minister for the approach which they have adopted in regard to this issue. But I clearly understand the incapacity of members from Tasmania to understand what is happening in their own State because they do not like what is now happening. So much do they not like it that the honourable member for Franklin, following my visit to Tasmania, came out with what must surely be the most remarkable statement ever made by a member from that State when he said on a public program that he was ashamed to be a Tasmanian. Ms FATIN —What information can the Minister for Transport provide on the circumstances which led to the sinking of the oil drilling rig, the Key Biscayne , off the Western Australian coast last week? Is the Minister aware of the courage and bravery of those who rescued the rig's crew, particularly the crews of the Royal Australian Air Force and civilian helicopters? Can the rig be salvaged? What action has been taken to ensure that the rig does not create a shipping hazard? Mr PETER MORRIS —I thank the honourable member for Canning for her question. The Key Biscayne, a Liberian mobile off-shore drilling rig, was on a voyage from the Arafura Sea to Cockburn Sound. The voyage commenced on 17 August and in accordance with established marine practice Esso Australia Ltd advised the Australian Coastal Surveillance Centre of the movements of the rig and its progress. At about 10.30 a.m. on 1 September the Coastal Surveillance Centre was advised of the difficulties that the rig was encountering. Later that day emergency rescue procedures were implemented and the 52 crew of the rig were rescued by Royal Australian Air Force and civilian helicopters. The rescue took place in atrocious weather conditions. There were high seas and gale force winds. The rig was unstable. The rescue operation became increasingly hazardous because of the 75-metre high legs of the rig. Mr Carlton —They are higher than yours. Mr PETER MORRIS —On behalf of the Government and, I am sure, all honourable members, including the idiot interjector, I acknowledge the courage and bravery of the pilots and crew of both the RAAF and civilian helicopters who rescued the personnel from the rig before it foundered. The rig subsequently foundered on the evening of 1 September at a point about 60 miles north-west of Fremantle and about nine miles off the coast. The cause of the mishap has yet to be determined, but it is important that this be done. For that reason Captain Clarke, the Regional Director of my Department, has been appointed to conduct an inquiry. It is also important to note that the Liberian authorities have agreed to participate in that inquiry. The honourable member mentioned the question of salvage. Clearly that is a question for the owners of the rig to determine. My understanding is that an assessment will be made when weather conditions permit. Navigation warnings have been issued to advise shipping of the location of the rig, and the owners have been advised that the rig must not be left unattended unless it is marked by a lighted buoy. I add for the record that the question of pollution does not arise in this case because the rig was not carrying a significant quantity of oil. Mr PEACOCK —Can the Minister for Employment and Industrial Relations assure the House that the terms of reference of the current inquiry into industrial relations are sufficiently wide to allow consideration of the views on the conciliation and arbitration system expressed yesterday by Mr Justice Ludeke? If not, will the Minister ensure that those terms of reference are appropriately widened? Mr WILLIS —Of course the terms of reference are wide enough to encompass the views expressed by Mr Justice Ludeke and anybody else who wishes to make any submission or contribution to the Committee of Review of Australian Industrial Relations. The terms of reference provide for a review of the industrial relations system-not just a review of the Conciliation and Arbitration Act in some technical way but a review of the effectiveness and practicality of the industrial relations system in accordance with social, economic and industrial changes which have occurred and are taking place in Australia. I believe that there is absolutely no need to make any changes to those terms of reference, which are more detailed than the matters I just mentioned, to take account of wide ranging views about any change that might be required, in the view of some people, to the industrial relations system in this country. If Opposition members can get their act together and come up with some co-ordinated view they will be able to make that view known to the Committee by way of submission. If they have enough to say they could appear before the Committee in its public hearings. I believe that there is every reason for the House to have confidence that the Committee of Review will come up with findings which are well considered, which are not narrow in their concept, which take full account of the views expressed by any section of the Australian community and which will provide a basis on which the Government can go forward on a path of further change to the industrial relations system in a way which will make it better than the amendments which we will bring forward in the meantime will make it. Mr CROSS —Can the Minister for Finance say whether amendments to the Parliamentary Contributory Superannuation Act 1948, which are currently before the Senate, limit the extent of a commuted sum which a retiring member may receive? Do the amendments deal with the situation of a former member who receives a commuted sum and who returns to service in the Parliament? Has the Minister seen Press reports that a former member who received a commuted sum is seeking re-election to this House? Can he say whether the amendments would apply to such a member? Mr DAWKINS —I have seen the Press reports to which the honourable member for Brisbane referred. They refer to the circumstances of the former member for Fadden and Griffith who is now attempting to return to Parliament in his third seat, having converted the first two he represented into safe Australian Labor Party seats. When he was defeated at the last election I understand he became entitled to an annual pension of about $27,600 and he chose to commute that to a lump sum of 10 times that amount. Before he was entitled to do so the Parliamentary Retiring Allowances Trust, which oversees this scheme, was required to make a determination on whether he and others in his position were likely to return to the Parliament within 12 months. As it turns out the Trust, faced with that question, felt that it was in no position to make a determination on whether it was likely that Mr Cameron or anyone else would return within the next 12 months. It now appears that should he return he will, of course, come back well within that 12-month period. Not only will he have received the lump sum payment but he will be entitled to gain additional benefits which, if he were to remain a member for a further 10 years, would entitle him to a pension of 50 per cent of the going salary of a politician. This is notwithstanding the amendments which are before the Senate and which the Government introduced in order to halve the lump sum entitlements of members and senators. That was an indication of this Government's preparedness to make sacrifices at a time when it recognised that sacrifices were being made in the rest of the community. As a result of those amendments, were Mr Cameron to return to Parliament he would be in a much more favourable position than anyone who is currently a member. He not only would have received over a quarter of a million dollars but also he would be able to line up for another serve, which must be the quintessence of double dipping. The Government has decided that it should review these provisions as they operate, bearing in mind the deficiencies in the existing law relating to members returning to Parliament within the 12-month period, and determine whether Mr Cameron, if successful in his attempt to return, should pay back some or all of the amount which he received. It is my view that if he is successful in getting Liberal pre-selection and in the by-election he has a choice: He can have the money or the job, but not both. Mr PORTER(Barker) —I claim to have been misrepresented. Mr SPEAKER —I take it the honourable member wishes to make a personal explanation as he claims to have been misrepresented. Mr PORTER —I do. The Minister for Aboriginal Affairs (Mr Holding), in commencing an answer to a question I raised with the Treasurer (Mr Keating), suggested that my contacting his office on Budget night had something to do with the question I had raised. He made some assertions as a result of that inquiry. Indeed, I did make a genuine inquiry of the Minister's office in relation to funding for the Aboriginal Development Commission. It had nothing to do with the $37m difference between the Treasurer and the Minister for Aboriginal Affairs. I had a problem in resolving the amount that the ADC was going to receive. My query could not be answered by the Minister's office. It was answered a couple of days later when it was shown that the ADC had in fact changed its allocations in the week leading up to the Budget. That was something over which the Minister had little control. I have no question about that. But the fact that now the Minister is suggesting that the Treasurer in stating that other spending specifically to assist Aboriginals will total $160m and that that includes the administration cost of his Department, I believe, is grossly misleading this Parliament. Mr SPEAKER —Order! The honourable member is now getting away from a personal explanation. Statement of Expenditure Mr DAWKINS(Fremantle-Minister for Finance) —I present the following paper: Advance to the Minister for Finance 1982-83-Statement of Heads of Expenditure and the amounts charged thereto pursuant to section 36A of the Audit Act 1901. Ordered that the statement be taken into consideration in the Committee of the Whole House at the next sitting. Mr KEATING(Blaxland-Treasurer) —Pursuant to section 16 of the National Debt Sinking Fund Act 1966, I present the annual report of the National Debt Commission for 1982-83. Mr SCHOLES(Corio-Minister for Defence) —Pursuant to sections 34 and 35 of the Services Trust Funds Act 1947, I present the annual reports for 1982 of the trustees of the Services Canteens Trust Fund, the Royal Australian Navy Relief Trust Fund, the Australian Military Forces Relief Trust Fund and the Royal Australian Air Force Welfare Trust Fund together with the Auditor-General's report, and audited income statements and balance sheets on these funds. Mr DAWKINS(Fremantle-Minister for Finance) —On behalf of the Prime Minister, pursuant to section 22 of the Public Service Act, I present the Public Service Board annual report for 1982-83. Report and Ministerial Statement Mr DAWKINS(Fremantle-Minister for Finance) —For the information of the Parliament I present a document entitled 'Program Presentation of Appropriations and Outlays-Departmental Estimates 1983-84'. In doing so, I seek leave to make a statement regarding the progress of the Government's budgetary reform measures. Leave granted. Mr DAWKINS —This document presents appropriation and outlay information for each department in a program format. The information, especially the detailed tables on individual programs, is intended to assist Parliament in its examination of the 1983-84 Budget. It is also intended to aid the general public in reaching a better understanding of Government activities. The document provides a cross- reference to data in the Budget Papers and contains an explanation of budgetary concepts, including the relationship between appropriations, expenditure from the Consolidated Revenue Fund, and outlays. This program presentation has been prepared to replace the document which was entitled 'Functional Classification of Outlays-Departmental Estimates', which had been published after the Budget each year since 1980. A review of that document suggested that it was capable of improvement, both in terms of the degree of detail on government activities provided and in the form in which it presented information. That review took account of the views of the Government and the recommendations of parliamentary committees and, in particular, of the report of the House of Representatives Standing Committee on Expenditure entitled 'Parliament and Public Expenditure'. The presentation of program information which has been adopted for 1983-84 should be regarded as illustrative and exploratory. The program structures which have been adopted have been developed within my Department, partly on the basis of the ready availability of information. Accordingly, the presentation will be subject to substantial further development and refinement on the basis of this year's experience, with a view to improved presentation of this information in future years. The presentation of Budget information in the form of this document is but one element of the budgetary processes which needs to be reformed. The Government has already introduced major improvements in the Budget systems. Convening the National Economic Summit Conference, establishing the Economic Planning Advisory Council and publishing forward estimates of outlays and receipts are examples of these reforms. These measures demonstrate the genuineness of the Government's wish to inform the Parliament and the people about Budget issues and to provide them with information such as will permit real debate and the achievement of consensus about economic policy. Also in keeping with the Government's desire to inform the public more fully about budgetary and economic matters, the monthly statement of Commonwealth Government financial transactions is now accompanied by considerably more explanatory material than had been the practice under the previous Government. Closed door discussions on matters which affect society should be avoided wherever possible; such an approach is unnecessary, outdated and is inimical to good decision making. In developing the 1983-84 Budget, the Government also gave close consideration to tax expenditures and their relation to formally defined outlays. In the economic statement of May and in the appendix to Statement 3 in the Budget Papers, the Government published its tax expenditures decisions as they related to programs or functional outlays. Tax expenditures have not been well considered in past budgetary processes and the Government has shown that it wishes to give such concessions consideration equal to that given to outlays. In the countries which I visited recently to discuss budgetary matters, I saw that all governments were grappling with means to better control outlays. Certainly the effort which we exerted in developing the 1983-84 Budget is mirrored overseas, however not always with similarly worthwhile results. In Australia, where recent economic performance has been the poorest for over 35 years, it is especially important that we give strict attention to the efficiency and effectiveness of tax expenditure and outlay programs. Accordingly, the Government has announced that its examination of programs will be a continuing exercise. As I noted before, the presentation of Budget information which led to the development of this new document is but one element of Australia's budgetary processes which require examination. We can learn from overseas governments, especially concerning techniques for reviewing programs. We would like to encourage even further debate on Budget options and priorities before the Budget is finalised. We need to encourage an appreciation in the Public Service that public servants are resource managers as well as policy managers. We have to integrate human resource budgeting into the Budget process. To this end we have this year adopted new measures to ensure better control of resources. Following the introduction of the Budget, proposals for new staffing are now to be considered by the Minister for Finance upon the advice of his Department and the Public Service Board. Consequently, we have introduced a new division in the Budget, division 312, entitled 'Special Funds for Expenditure in Relation to Government Programs at the Direction of the Minister for Finance'. In past Budgets some limited allowance has been made in the salaries and administrative expenses appropriations of individual agencies for staffing effects of new policy proposals. The staffing effects of such proposals were in some instances taken up in a post-Budget review of staff ceilings and the funds allocated as required from the Advance to the Minister for Finance. For this Budget an estimate has been made of the likely staffing effects of new policy proposals and separate provision is sought under division 312. Another major reform involves the presentation of financial impact statements. In future all second reading speeches of Ministers will include a statement of the financial impact of the legislation. These statements will include estimates of any significant costs, revenue and savings arising directly from that legislation where such estimates can be calculated readily and reliably. Where that information is not available, Ministers will include a brief explanation of the circumstances in their second reading speeches and outline in broad terms the expected financial impact of the legislation. Ministers will also attempt to assess the impact on industry and other sections of the community when formulating legislation. While such effects are often indirect and not easily quantifiable, Ministers will endeavour to include this information wherever possible. The Government is taking this action because it believes the community has a right to know the financial and economic effect of government policies and programs. This reform will give tangible effect to this belief. These reforms are only the first step. Consistent with the policies announced in the document 'Labor and Quality of Government', we are actively pursuing other reforms of the budgetary processes. While these other tasks are still in process, the proposals which are generated will be of interest to all in the Parliament as well as in particular to several of the parliamentary committees which will be consulted on the examination of program budgeting, the role of program statements and on other matters which affect the Parliament's methods of consideration of the Budget. The Government will also examine the possibility of publication of further pre-budgetary and post-budgetary information which would be of interest to Parliament and the community as a whole. These measures are but the start of our efforts. As work on further measures is completed, I shall inform the House of our decisions. I thank the House. Mr MOORE(Ryan) —by leave-The Opposition welcomes any move that grants greater access to information, particularly factual information, rather than some of the political information we hear so often at Question Time. Naturally this approach would be welcomed. However, the Minister for Finance (Mr Dawkins) has come forward and said that the Government has already introduced major improvements to the Budget system. It convened the National Economic Summit Conference. What was the major contribution there? Firstly, it got everybody to endorse a Budget deficit of $8.5 billion. We can work backwards from that. Secondly, it established the Economic Planning Advisory Council. As I understand it, a meeting of that Council did not take place until after the Budget was concluded. Those two major reforms to the Budget system seem to me to be somewhat outmoded. The former Government went to some pains to set up genuine consultative meetings with members of the business world and all the interested groups within Australian society. Those were meetings of considerable merit. Things were discussed and points of view were exchanged. In the lead up to this Budget those consultations were thrown out the window. I point to that as a very big difference in terms of an approach to the public. There is not one member of the Opposition who would not be concerned about the whole question of achieving value for the taxpayer's dollar-the question of how the taxpayer's dollar is spent within the departments and the overall management role within the Public Service. It has long been my view that an approach should be made in this place for the greater use of one-line budgetary systems. In that way the management of the departments would be thrown much more on to management's judgement and metal . I am convinced that the response would be positive. In some of the lengthy budgetary processes areas are itemised with so much allotted to one area and so much allotted to another. At the end of a period we have a situation of unspent allocations in a particular account, a slight overspending in another account and a great desire then to spend what is left and to carry forward some of the costs or to curtail services in other areas. I am quite convinced that this is not helpful to the Public Service and to Australia as a nation. I hope that this ongoing review will look at this process as I believe far more benefit would come to the whole of the Australian economy from that concept. Motion (by Mr Peacock) agreed to: That leave of absence for two months be given to the honourable member for Farrer, on the ground of ill health. Mr SPEAKER —I ask the Leader of the Opposition to convey our best wishes to the honourable member. Discussion of Matter of Public Importance Mr SPEAKER —I have received a letter from the Deputy Leader of the Opposition ( Mr Howard) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The threat posed to parental freedom of choice in education by the government's funding decisions. 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 HOWARD(Bennelong)(3.05) —This matter of public importance is about one thing and one thing alone; that is, the defence of the absolute principle of freedom of choice as far as parents are concerned in the education of their children. I think it has been the common belief of most Australians that, over the last 10 years, we had reached a degree of bipartisan support for the principle that there should be effective support for a dual system of education. All Australians, irrespective of their politics or religion, believed absolutely in the principle that there should be freedom of choice for parents, a dual system of education and that the Government, on behalf of the community, should give support to both systems of education. The Opposition believes that the decisions announced by the Minister for Education and Youth Affairs (Senator Ryan) about two months ago represent the thin end of a very large wedge which, if further implemented, will bring about a fundamental change in the system of support for a dual system that has operated in Australia over the last 10 years. There are few things in a free society which are more important than the fundamental right of parents to choose the manner and the place of the education of their children. The decisions announced by Senator Ryan, although clothed in high-sounding principles about supporting the most needy in our community, strike a direct blow at the fundamentals upon which that freedom of choice is based. I, and the Opposition, have two basic objections to what Senator Ryan has announced. Before I come to that I would like to deal with a few facts and some of the background to the question of education funding in Australia. Let me say at the outset that both streams of education have made a special contribution to the development of Australia. One can go around the State system and the private system and find outstanding examples. Both streams have provided very great people to the Australian community. I do not seek in any way to argue that one system is superior to the other. I do not seek to argue in any way that there are not weaknesses as well as strengths in both systems. But the important thing is that, over the last 10 years, we have moved towards bipartisan support for a dual system of education. Australian parents have taken it as their right increasingly to exercise a freedom of choice according to their own taste, and the abilities and the disabilities in certain cases of their children. The second fundamental is to reject the lie that has been put around by the Government which was put around during the last election campaign by the Teachers Federation that, in some way, the Fraser Government had neglected government schools. The fact is that, in 1981-82, 86 per cent of all government funding in Australia went to the education of the 76.1 per cent of children who are educated in government schools. I repeat that 86.8 per cent of all public money went to 76.1 per cent of children in government schools, leaving 13.2.per cent of all government funding going to the 23.9 per cent of children in independent schools. Can anybody argue from those figures that, under the Fraser Government, support for public education has declined and that the former Government neglected support for the government sector in preference for the independent sector? Those figures give a direct lie to that proposition and confound the critics of the Fraser Government's approach towards government schools. But those figures are not the full story of the record of the Fraser Government towards government schools, because over the years the Fraser Government was in office enrolments in government schools declined and enrolments in independent schools increased. They increased because hundreds of thousands of Australian parents voted with their feet in favour of independent schools. They exercised a free choice. They decided that they wanted their children educated in an independent school. I put it to the House that that was their right. They did it for their own reasons. They did it because they thought it would be better for their children. It is not the right of any government of any political persuasion in this country to stand in their way and to say that they cannot do it. But despite that, and despite the decline in public school enrolments, over the seven years of the Fraser Government's period of office the greatest improvement in dollars per head in education in Australia occurred in the government sector. So despite the claims of the Labor Party and the dishonest, prejudiced misrepresentation of the Australian Teachers Federation during the last election campaign, the Fraser Government did not in any sense, shape or imagination neglect the public sector. I believe that the Hawke Government and Senator Ryan have made two fundamental changes to what most people had believed was a bipartisan policy in this area. I believe that those two changes carry with them enormous implications for the future of government support for the independent schools sector. I hope that no person interested in the survival of the independent schools sector is under any illusion as to what the end result of this new policy will be. I do not believe that the independent sector by and large understands the full implications of what the Government is about in this area. I believe the Government is in the business of attacking the fundamentals of freedom of choice in the education area. I think the Government is about the policy of gradually eroding support for the independent sector. I believe that the effect of the Government's policy will be to revive a bitter and divisive debate that most Australians had thought -indeed had hoped-had been finally put behind us over the last 10 years. I believe the Government has made two fundamental changes. Firstly, it has destroyed the percentage link between the cost of educating a child in a government school and the cost of educating a child in an independent school. As every honourable member of this House will know, it was a fundamental principle of coalition education policy that every single school in Australia in the independent sector received 20 per cent of the cost of educating a child in a government school. What that system provided, in the words of leading administrators of the independent schools system, was the very life blood of the survival of the independent schools system, because what it uniquely did was to remove from the annual political whims of Ministers of Education the amount of fundamental government support for independent schools. It guaranteed to every indpendent school in Australia some kind of protection against the ever escalating cost of educating a child at either a government or an independent school. To so many of the independent schools faced with a sharp decline-in the case of Catholic schools a decline in the number of Order teachers and a sharp increase in the number of lay teachers-and the ever increasing cost of educating children and running schools, it provided the life blood of their existence and support. By removing that percentage link formula under the guise of an emotional attack on the so-called 41 wealthy schools in Australia and under the guise of talking about giving more help to the most needy schools in the Australian community, the Government has laid the ground work to erode by neglect government support for independent schools in the future. It will be very easy at Budget time for the Minister for Education to say: 'We can't quite give enough money on a basic grant basis to each independent school to maintain 20 per cent of the cost of educating a child in a government school so we will simply, through erosion by neglect, withdraw support for the independent sector over the years.' The second and, I believe, even more lethal attack on the independent schools system was Senator Ryan's announcement that in future no new independent school will automatically attract Commonwealth capital funding if it can be established that that school will take children away from an existing school. One has only to repeat that to realise the implication that lies behind it because, if fully implemented, that policy will stop the expansion of the independent sector. Why else would one establish an independent school unless one were dissatisfied with the existing facilities in the government sector? Is that what freedom of choice is all about? What freedom of choice do parents have if they cannot establish a new independent school when they are dissatisfied with an existing government school? For the Government to come into this Parliament and say that an education policy with that particular criterion does not represent an attack on freedom of choice is to turn the very expression 'freedom of choice' on its head and to twist the English language in an unconscionable fashion. So I believe that those two new principles-the abandonment of the percentage link and the requirement that capital funding will no longer automatically be available if resources and pupils are to be taken away from a government school-represent a fundamental attack upon the dual system of education, and that they are the tip of the iceberg. All of those who care about the survival and the future of the independent sector ought to understand fully what this Government is about. It leaves far too much in future to the political whim of individual education Ministers. I believe that what the Government has done in this area represents a sell-out to radical elements in the Australian Teachers Federation. It is no secret that the largest financial contribution made to anybody's election campaign in March was the $750,000 contributed by the Australian Teachers' Federation to the Australian Labor Party's campaign. Year after year Labor Party people have come into this Parliament and talked about the contributions of the multinationals to the campaign war chests of the Liberal and National Parties. I do not believe that anything a multinational has ever contributed to either of the Opposition parties can possible rival the three-quarters of a million dollars that was contributed to the ALP's campaign funds in the March election campaign. If a contribution of that size together with certain policies would not be enough, one would have to be enormously charitable indeed to believe that the Labor Party would be unmoved by the attitude of the Teachers Federation towards state aid in Australia. Let me quote from an interview on an Australian Broadcasting Corporation program on 18 February 1983 with Mr Van Davey, President of the Australian Teachers Federation. He was asked the direct question: Are you against state aid for private schools? Mr Davey answered: Yes, we are, and the second reason why we don't go the full way and say '' support the ALP and vote for the ALP'' is because we recognise that in an election campaign there are other issues and people will be looking at them . . . There is no doubt from the words of Mr Van Davey-whose organisation throughout Australia contributed three-quarters of a million dollars to the ALP campaign cause a bare six months ago-where he stands on the question of aid for independent schools. As I said, one would have to be very charitable indeed to believe that the Labor Party is unmoved by the attitudes of the Teachers Federation. The sad fact is that the Australian Teachers Federation does not represent the views of the great majority of teachers in public schools. It does not represent the views and the aspirations of many hundreds of thousands of parents who send their children to government schools. If honourable members want to find the reason why hundreds of thousands of Australian parents, who themselves went through the state education system when it was operting in all its full benefit and effect, have chosen, despite their own background and their own education, to send their children to independent schools I suggest that they will find it in many cases in the radical statements and the attitudes of the Australian Teachers Federation. Some of the policies of the Australian Teachers Federation, not only in areas of education but also in other areas, are anathema to the aspirations of many ordinary middle class Australians. That is the reason why many hundreds of thousands of parents are sending their children to independent schools. We on this side of the House remain totally and irrevocably committed to a dual system of education. We believe in competition. We believe in diversity. We reject a state monopoly in the area of education. We reject the changes announced by Senator Ryan. They are the beginning of a fundamental change and we only hope that the full realisation of what is being done spreads throughout the entire Australian community. Mr DAWKINS(Fremantle-Minister for Finance)(3.21) —At last the Deputy Leader of the Opposition (Mr Howard) has found something on which to disagree with this Government. He has decided to choose education policy as an attempt, presumably, to present himself as the new ideologue of the Liberal Party, the one who not only is able to express rather silly ideas on economic policy in many respects, but also is now trying to develop a facility for commenting on and speaking with great passion on matters of general social policy. However, the Deputy Leader of the Opposition has done something which is to some extent uncharacteristic, that is, he has paid little if any regard to the facts, to the intent of the Government's policy and to the very important goal which I thought Liberals believed in-I certainly thought that that strand of liberalism which he seeks to represent believed in-that is, equality of opportunity. It is all very well to talk about freedom of choice when we are talking about a small number of very privileged schools, the entrance price of which is over $3, 000 a year. Who has freedom of choice to enter those schools? Who has freedom of choice to find the $3,000 a year in order to send their children to schools which is some cases have resources vastly in excess not only of government schools but also of the huge majority of other non-government schools. The Liberal Party has become completely strung up on the interests of the small minority of privileged schools which has always been able to offer higher resources, smaller class sizes, better conditions for their students and has paid very little regard to the glaring inadequacies not only of the government school system-we will leave that to one side-but, more importantly, to the over 80 per cent of non-government schools which exist within group three. When the Karmel Interim Committee for the Australian Schools Commission reported that there was a resource gap of about 25 per cent between the poorest of the non-government schools and the standard of government schools, it was the intention of the then Labor Government, in establishing the Schools Commission and commencing a needs-based funding program for non-government and government schools, to close that gap. Regrettably, after nearly 10 years of the operation of the Schools Commission, seven years of which operated under the former Liberal-National Party Government, that gap still persists. It is that gap that we are concerned about together with the fact that over 80 per cent of non- government schools still operate with a resource level 25 per cent below that which exists within the government system. Where is the freedom of choice in that regard? Indeed, more importantly, where is the equality of opportunity? If somebody chooses to go to a non-government school, I would have thought that the most important consideration was whether the child who was to be sent to a non- government school would be confronted with a standard of education which was remotely comparable with that which was available to the comunity as a whole through the government school system. The Opposition is not concerned about that gap. The gap which it is concerned about, which its policy was determined not only to maintain but to increase, is the gap between the government school standard and that standard which operated in a small minority of very privileged schools. That gap, on average, was about 63 per cent; that small minority of non-government schools had resources at a level 63 per cent higher than those which were available to the community as a whole through the government school system. The obsession with continuing an education system which maintained a privileged and restricted access to the ruling classes within this country was the death knell of Liberal Party policies , particularly in education. It is nonsense to suggest that the Labor Party is embarking on a policy which will divide the community over this very sensitive issue. By last year we had reached a stage where the education debate had become so heated, so controversial and so divisive that it was necessary for some political party to show the courage and, indeed, the foresight to develop policies which would heal the rift which was so delicately and deliberately created by the policies of our predecessors. We set about ensuring that there would be opportunities for non- government schools not only to continue but to expand. More importantly, there would be opportunities for non-government schools, when they were operating below levels considered appropriate for government schools, to improve. We said that we had to return to a strict needs-based funding program whereby the over 80 per cent of non-government schools, many of which operate under appalling conditions and with appalling levels of resources, would be the ones on which we would concentrate and we would work towards improving the circumstances within these schools. Mr Howard —Why were you dropped as shadow Minister for Education? Was it because of your negotiations with the Catholic Education Commission? Mr DAWKINS —That issue was already settled before I left that position. Mr Howard —It was an issue, wasn't it? Mr DAWKINS —The former Government tried to make it an issue in the election and failed because people realised that we needed a new approach, an approach which would do something to quell the divisions on this issue rather than exciting them, which had been the quite deliberate attempt of our predecesors. Our policy starts on the basis that in the first place we believe that all children in Australia, wherever they live and whatever might be the circumstances of their parents, should have equal access to the highest quality of education available. It should not be a two-class system in which a small group of schools have very lavish circumstances and charge high fees. The former Government believed that that group of schools should be available to those people who can afford it and the rest of the community could take whatever was left. We have abandoned that approach. We have said that if a school has, demonstrably, the ability to provide circumstances through its own resources from private sources which are at least as good as those which exist in the government system, they are in a position to look after themselves. The Government should be intent on improving not only the circumstances within the government school system but also, just as importantly, the circumstances in the 80 per cent of schools which operate well below conditions within the government system. That is why in the Budget and in the guidelines that preceded it we have determined that there will be a substantial real increase in relation to the schools in group three-a 3 per cent real increase under difficult budgetary circumstances-and those schools will receive the benefit of that real increase. Even group two, which admittedly is a small group, but a group whose circumstances are roughly comparable with those in the government school system, will receive a real increase of one per cent in the forthcoming school year. That may not please the Liberal Party. The Liberal Party may be upset about the fact that there will be a zero improvement in relation to group one as a whole. Indeed, some schools in group one will in fact lose a portion of their Commonwealth funding. That may be a matter of great concern to them, but it is not a matter of concern to us because we are concerned about improving the circumstances of those schools in greatest need and letting those schools that can look after themselves get on with the job. There is no diminution of freedom of choice. Indeed, we are ensuring that those people who exercise freedom of choice do not have their children confronted by inferior circumstances within some non-government schools. There is a list of new schools which I can read out if the Deputy Leader of the Opposition likes-new schools which have been offered capital grants since March of this year. We have indicated that the program of new non-government schools will continue, but we will introduce new guidelines in respect of which schools will qualify for those grants. It is not and it never should have been a question that anybody who had any old proposition to start a school should be able to do so at Commonwealth expense. Mr Cadman —State governments have the responsibility, and you know it. Mr DAWKINS —Why do you not be quiet, you great goat! We have to remember that in the capital area it is the Commonwealth which provides the bulk of the public assistance to new schools. The States have a very minor role in that area; they have the job of licensing new schools. The old practice was that, so long as one could get a licence from the State authorities-and all one needed was 15 kids- one would be automatically entitled, as money became available, to a capital grant from the Commonwealth. We believe that led to a greatly inefficient use of the Commonwealth's capital resources because at the same time as we were providing capital assistance to State governments to build new schools we were handing out great dollops of capital money willy nilly to non-government schools . Mr Howard —You are going to make it grim. You are going to make it harder. Mr DAWKINS —Just listen. We are not going to make it harder. The Deputy Leader of the Opposition, the great hero of government efficiency, the person who says that he is interested in ensuring that government dollars are well spent, of all people should be enthusiastic about this because we are saying that there ought to be a study of the impact of a new non-government school on existing and planned government school resources. That is only sensible. Why should the Commonwealth be put in a position of providing vast amounts of capital for a new non-government school simply to empty a nearby government school? What sort of nonsense is that? What sort of efficiency is that? We are not preventing people from starting schools. They can start schools wherever they jolly well like, but they are not going to do it with our money if, as a result, they simply duplicate already adequate, or in some cases inadequate, facilities. This was a concern to not only the government school system; it was a very real matter of concern to the non-government school system. The non-government school system has become increasingly alarmed at the unplanned proliferation of non-government schools in areas which are already adequately served by government and non- government schools. Therefore, we have introduced an element of sanity into the provision of capital funding to ensure that that sort of duplication does not continue in the future. It is interesting that in the Deputy Leader of the Opposition's speech on education there was absolutely no word about quality in education, not a word about what schools were on about; there was only this question of maintaining and enhancing privilege. We are concerned about improving the educational opportunities of all kids. We are concerned that only half as many kids who start in government schools finish up in year 12 compared with those in non- government schools. We are concerned about the resource levies in government schools. We are concerned about the adequacy of the curriculum in government schools. We are concerned that so many kids and so many parents decide to desert schooling at a crucial stage. Of course, it is all right for the schools that honourable members opposite went to and indeed the school I went to where there is a capacity to look after the individual circumstances; but that is because they are so well off. We want to ensure that government schools are in an equal position to provide the same range of opportunities and the same richness of educational experience which will encourage more children to stay on at school for longer and, therefore, have a better chance of getting a job. Mr McGAURAN(Gippsland)(3.36) —Today the Government stands revealed with its previous litany of deceptions exposed. No education body in this country, no teacher, no parent, no student in the non-government school sector should have any doubts whatsoever about this Government's policy. The Government, during the election, managed to disguise its true attitude towards non-government schools, but that pretence is now ended. The pretence has been ended by no one more distinguished than the Minister for Finance (Mr Dawkins). I refer to an article in the West Australian newspaper of 22 November 1982. It was written by Mr Ron Banks, the paper's education writer. It is headed: 'WA's private schools safe, says Labor'. It goes on: 'None of Western Australia's private schools would have their funding cut by a Federal Labor Government'. Labor's spokesman on education, Fremantle MHR John Dawkins gave this assurance as part of the Party's attempt to promote this new Federal policy to the public. There is more: Mr Dawkins says that none of the private schools in Western Australia operate at a fee level that would disqualify them under Labor from the same sort of federal funding they now enjoy. That must come as quite a shock to the parents of students at the Presbyterian Ladies College in Perth because that school had its funds severely cut by Senator Susan Ryan recently. You tell me, Minister, having heard that, whether you have any proper regard for the truth, whether or not your Prime Minister- Mr DEPUTY SPEAKER(Hon. Les Johnson) —Order! I ask the honourable gentleman to address his remarks through the Chair. Mr McGAURAN —Mr Deputy Speaker, having heard that remark, could you as a bystander regard this Minister as having any proper regard for the truth? That is to be expected from this Minister who, when he was shadow Minister for Education, was regarded as a severe embarrassment and liability to the then Opposition. Perhaps I should say that he was more of an embarrassment and a liability at the time than he is at the moment; so much so that his colleagues would not permit him to go into the election as shadow Minister for Education, such was his bitterness, such was his narrow ideologue approach to education and the issue of non-government funding. So, his sanctimonious reassurances to this House and to the people of this country fall on deaf ears because he is not to be relied upon and his Prime Minister (Mr Hawke) is not to be relied upon. They are not the only members of this Government who are not to be relied upon. I refer to the Minister for Education (Senator Ryan). First off, I refer to a Canberra Times report on 23 June 1981 which reads: The ACT Branch of the ALP has called on the Party to adopt an 'integrated public school' policy, in which private schools could be integrated into the public education system and fully funded, in return for full financial accountability and nondiscriminatory enrolment policies. That was on 23 June 1981. Senator Susan Ryan in the Canberra Times on 25 August 1982 was reported to have said that there had never been an Australian Capital Territory Australian Labor Party policy for integration. She said: The ACT Branch wanted it moved at the national conference but it was never moved and this year it was dropped [from ACT policy]. That is simply not the case. It is Australian Capital Territory ALP policy that the public school and non-public school systems be merged. The Government's policy could not be further removed from that of the Opposition. Today Australians have a choice between a government seeking to impose its will by way of an integrated school system and an opposition which will protect the freedom, a very basic freedom, of parents to choose their children's own education. The Opposition is not prepared to stand by idly whilst hard-working, decent Australians are denied a basic right which previously was a guaranteed right in our democracy. The Minister's obvious obsession with the so-called wealthy private schools blinds her to the realities of the situation. The realities are, first, that the overwhelming number of parents who send their children to non-government schools do so at great personal sacrifice and hardship. Normally both parents work to enable their children to attend. Secondly, non-government schools reach such a high standard of education because of extremely prudent management and dedicated teachers. There is no wastage. Thirdly, numerous government schools have higher funding and better facilities than most non-government colleges or schools. Two examples in Melbourne are University High School and Melbourne High School. They are two schools which have far better facilities and greater funding than most non-government schools. Yet they are not on the famous hit list of Senator Ryan. The fourth reality to which Senator Ryan is blinded is that the burden on the Treasury if non-government schools are integrated will be quite crippling. The fifth reality is that religious freedom, the right to choose the school which practises the faith of one's choice, is paramount. It is unquestionably of the utmost importance. Government schools do not permit religion to be taught; consequently parents have every right to send their children to a school of their faith. Senator Ryan is so blinded by her narrow ideology that she is not capable of recognising non-government schools for what they really are. They are, first, an inestimable saving in government expenditure. They are the cheapest form of education under a dual system that a government could ever devise. Secondly, they represent the inalienable rights of religion and choice for parents in our democracy. Senator Ryan has made very clear this Government's policy in relation to non-government school funding. To repeat myself, every education authority in this country must now know that the duplicity that this Government practised in order to win an election has now been revealed. I refer honorable members to a quesion addressed by my colleague Senator Peter Baume in the other place to Senator Ryan. He asked: How then does she explain her written statement in the Sydney Morning Herald of 10 October 1981? This is the section that Senator Ryan wrote- The freedom to send one's children to an independent school is bought at too high a price for the rest of society. That unequovically states her position and that of her Government. Her answer to Senator Baume's question was this: It is the kind of flourishing phrase that I like to think is typical of some of my written work. Mr Howard —And she is the Minister for Education and Youth Affairs! Mr McGAURAN —She is the Minister for Education and Youth Affairs. She continued: At the same time there was a very generous funding of schools which were already providing schooling in the private sector at a very high standard. Under those circumstances, I believe that the price of individual choice is too high . . . If this Government has any regard for the basic rights of this country and for consistency and honesty in government, and if this Prime Minister has any regard for honesty, they will distance themselves from that statement by Senator Ryan, which clearly enunciates a policy of integration of the two school networks in this country. Furthermore, the report on Radford College, it has been recently revealed, has exceeded its charter, exceeded it authority, stating that where a non-government school is to be established in an area which will affect already exisiting government schools, the Government will not provide funding. As this Government knows, in any area other than highly developing urban areas, there is not sufficient growth to enable non-government schools to satisfy that very strict, very harsh and unjust criterion. In conclusion, Senator Ryan and this Government have never clearly stated to the Australian people that they will not allow the non-government school sector to suffer. I call upon her to do just that. This Opposition will not stand by idly nor, I believe, will the Australian people tolerate any longer this Government's and this Prime Minister's duplicity and, moreover, stupidity in pursuing a nonsensical education policy. Mr FREE(Macquarie)(3.46) —The proposition embodied in the matter of public importance raised this afternoon by the Deputy Leader of the Opposition (Mr Howard) is a phoney one. Its basic assumption is false, it denies the reality of the distribution of educational resources across the community and it is part of a continuing campaign by the Opposition to misrepresent the Government's intentions, which are to raise educational standards and provide assistance where it is needed most. The Leader of the Opposition (Mr Peacock) and the honourable member for Gippsland (Mr McGauran) have chosen to ignore the eight objectives which the Government sets out to achieve through its funding decisions. I wonder why, because they were set out clearly enough by the Minister for Education and Youth Affairs (Senator Ryan) in her guidelines statement of 28 July. To refresh their memories-obviously, the education system has failed them along the line-let me spell out those eight objectives. The first seven are: To support increased participation in education by the great majority of young people; to improve public confidence in government schools; to assist in ensuring that each child has an adequate standard of resources-I will return to that objective in a moment; to make special provision for those students who have been prevented from participating fully in the benefits of schooling; to restore stability and predictability in funding arrangements for government and non-government schools through triennial funding; to restore retrospective cost supplementation in respect of wages and salaries for all Commonwealth Schools Commission programs; and to provide for better planning and improved co- ordination in relation to the development of new non-government schools. The Deputy Leader of the Opposition and the honourable member for Gippsland have both had quite a bit to say about this aspect of the guidelines. Let me quote in full what the guidelines say about the establishment of new non-government schools: The Government will continue to support the development of new non-government schools. However, it is implementing new policies that require the proposers of new schools in established areas to provide evidence that these schools will not have a significant . . . impact on existing government and non-government schools. The Government will require proposed new non-government schools in developing areas to be planned where possible in conjunction with government schools. That proposal requires forward planning, will avoid costly and wasteful duplication and, what is more important, will ensure the long term viability of new non-government schools. It is a step that the non-government system has welcomed. The final objective of the guidelines is to provide for greater education and financial accountability. I return to the objective of providing every Australian child with an adequate level of resources. Let me spell it out for the Deputy Leader of the Opposition and the honourable member for Gippsland. Most schools in the non-government sector are in group 3. These are the neediest schools. Many of these schools operate at resource levels of 70 per cent or less of the level of resources in government schools. The Government had decided to increase resources in these needy schools. I think I have spelt it out clearly enough. Because of financial limitations and considerations of equity, the Government has decided that these additional funds should come partly through some reallocation of funds. To provide help where it is most needed, direct grants to non-government schools which have chosen to operate at high resource levels will not be as generous as they were in the past. That is what the Opposition would have us believe is a threat to the entire non-government system. It is really a mild reallocation from a handful of resource-rich schools to the very many non-government schools that are in real need. The 'shock, horror' reaction of the Opposition is not good enough. It is synthetic and it is contrived. The Labor Party's commitment to the needs principle is an historic one and it is well known. It has been well known for the past 15 years. In 1973 the Interim Committee for the Australian Schools Commission, set up by the Labor Party, recommended that assistance to resource- rich schools should be phased out over a two-year period. These grants were maintained by the Liberal and National parties in the Senate. Despite that setback the Labor Party has never waivered in its commitment to needs based funding. Let us look at the effects of the present Opposition's funding decisions over the past seven years. The priorities of the Liberal and National parties when in government, were, first, to provide a basic grant of 20 per cent of the government school costs to students in non-government schools, irrespective of need; and, secondly, to provide a needs supplement-10 per cent to schools in group II and 20 per cent to schools in group III. The principle of applying help where it was needed most, where it could do most good and where it could help the most children ran a very poor second. As a result, the learning gap-the gap between the resource-rich and the neediest schools-was, after seven years of Liberal-National Party government, as wide as ever. Taking the government school standard as 100 per cent, the most resource-rich non-government schools are operating at 180 per cent whereas the neediest non-government schools-the ones at the bottom of group III comprising the bulk of non-government schools- continue to operate at some 70 per cent of government school resources. It is clear where the concern of the Opposition lies. It is not interested in the bulk of non-government school students in these schools which are operating at 70 per cent of government school resources. The policies of the former Government failed to close that gap. Indeed, between 1977 and 1983 the grants for high resource schools increased at twice the rate of those for lower resource schools. It also failed to recognise the appallingly low secondary retention rates in the great mass of Australian schools. Honourable members will be aware that these are very poor schools in Australia compared with those in other countries. In Australia around 35 per cent of the 15 to 19 year old age group is in full time education. In Japan the level is 76 per cent; in the United States of America it is 72 per cent; and in Canada it is 66 per cent. Within Australia retention rates vary very greatly from one school to another, from single figure rates in the neediest, most disadvantaged schools , to over 90 per cent in the many group I schools. Clearly, if we are going to lift standards in this country and provide more resources and better learning environments in the neediest areas we must provide additional funds to them. It is obvious that in a difficult budgetary context there must be some reallocation. What the Government has said to the 41 schools at the top of group I is that in 1984 their recurrent grants will be reduced from 20 per cent of standard cost to 15 per cent. Those 41 schools will still get a total of $13m from the Commonwealth-a fact not acknowledged by the Deputy Leader of the Opposition and the honourable member for Gippsland. Those 41 schools will still get $254 for each primary school student and $402 for each secondary school student. The savings from that small reduction from those 41 schools at the top of group I will be fed into schools in group II and group III. In 1984, 2,000 non-government schools will receive increased grants in real terms. Mr Deputy Speaker, let me give you an example and spell the position out in dollar terms so that people will understand. Take a school at the top of group I-one of the 41 schools. That school receives fees of $3,300 per pupil in private income. From the Commonwealth it will receive this year $536 per student. From the State-it varies from State to State -it will receive around $400. So the total income available to that school will be $4,200 per student. Resources provided in government secondary schools per student will be $2,680. But that is not the important thing. Schools at the bottom of group III may be operating on resources as low as $1,600 per student. That is the learning gap expressed in dollars-$4,200 at the top and $1,600 at the bottom. Nobody in the Government is out to threaten the group I schools but we are out to achieve a measure of justice through reallocation to students in the neediest schools. We are simply saying that if this small number of schools- 41 out of 2,200 non-government schools-chooses to operate at such high resource levels they can easily afford a small reduction to assist those in need. I turn briefly to the more blatant misrepresentations made by the Deputy Leader of the Opposition. Any suggestion that this policy is the thin end of the wedge is nonsense and he knows it. To speak, as he did, of a single non-government system is nonsense and he knows it. There is a whole range of needs. To speak of erosion of support for the independent sector is absolute nonsense because funding under the guidelines for the non-government sector as a whole has been increased. The proposition is blatantly false. It is an attempt to misrepresent the Government's intentions. Mr DEPUTY SPEAKER(Hon. Les Johnson) —Order! The honourable member's time has expired. The discussion is concluded. Report of Public Works Committee Mr SAUNDERSON(Deakin) —I present the first report of 1983, relating to the provision of air-conditioning to the main instructional building, schools of transport and catering, Puckapunyal, Victoria, of the Parliamentary Standing Committee on Public Works, together with minutes of evidence. Ordered that the report be printed. TAXATION (UNPAID COMPANY TAX) ASSESSMENT AMENDMENT BILL 1983 [No. 2] Second Reading Debate resumed. Mr DEPUTY SPEAKER(Hon. Les Johnson) —Before the debate on this Bill is resumed I remind the House that it has been agreed that a general debate be allowed covering this Bill and the Dividend Recoupment Tax Bill 1983. Mr SPENDER(North Sydney)(3.57) —Before the adjournment of the debate I was speaking of the patent unfairness of this legislation. I now draw together two elements which illustrate not only that the Government has sought to mislead this House and the Australian people but also that it is really acknowledging that it is taking away from the existing legislation the provisions which would exculpate those who did not engage in stripping and evasion exercises or benefitted from those exercises. The Minister for Housing and Construction (Mr Hurford) in his second reading speech stated: The major purpose of that Bill-- Referring to the Bill earlier before the House-- was to give effect to this Government's election undertaking to recover personal tax avoided by former owners of companies that were the subject of bottom of the harbour schemes. That Bill, with certain changes, is now being resubmitted to this Parliament. Let me juxtapose that with what is said later in the second reading speech where it is stated: The Bill proposes to remove one of the pre-conditions to liability for recoupment tax-the requirement that the company was by a stripping scheme rendered unable to pay its tax-which was inserted by the previous Government, it seems for presentational purposes. It was inserted, as was made clear at the time and as would be known by the Treasurer (Mr Keating)-if we are to be afforded the benefit of his presence in the chamber at any time-so as to avoid harming those who were not engaging in stripping exercises and in cases where companies had not evaded tax. However, it is proposed by this Government to remove those provisions and so to subject the innocent together with those who had knowledge, to tax, so long as otherwise they would be caught and many companies plainly will be caught. What possible justification can be advanced for measures which remove the elements of stripping and evasion as the pre-condition for liability on the part of the vendors, which make no attempt to distinguish in favour of the innocent and which go back to transactions which took place as long ago as 1972? This is an important measure. It is a measure which the Government hopes will bring in $270m overall and $60m in this financial year. Yet the Treasurer has made no attempt to answer the criticisms of this Bill made by the honourable member for Bennelong (Mr Howard). We would be glad to see the Treasurer here to answer what has been said against this Bill and his own handling of it. Has he had enough? Are we to have the pleasure of his company here? Those who were present here when he sought to debate-one can only say that he was seeking to debate-the measure before the House will recall a truculent rambling presentation, which reminded one of a schoolboy who had not done his homework being cross-questioned by his master; in this case the master being the honourable member for Bennelong. If we are going to see the Treasurer-and we certainly hope that we shall see him-we would be glad to know from him what are the answers to the questions raised by the honourable member for Bennelong. Where are the new proposals that the Government says it is necessary to put in place to smash tax avoidance? Where are they after six months and after one mini-Budget and one Budget? What is the real reason for the removal of the preconditions for liability established in favour of those persons who could only be described as innocent in every respect? How is it possible to justify the removal of those provisions from the legislation so that the innocent will be caught? What are the reasons for that? Why is it that the Government persists in misdescribing its proposals as bottom of the harbour legislation, as legislation which is sought to catch evasion, as legislation which is sought to catch stripping, when its own proposals remove the preconditions of precisely those elements, so that regardless of a person's conduct those who were engaged in selling shares in companies and who are utterly blameless of any ill-doing will be caught? Mr RONALD EDWARDS(Stirling)(4.02) —It is appropriate for me to be following the honourable member for North Sydney (Mr Spender) in the debate. Earlier we heard from the honourable member for Bennelong (Mr Howard). Much has to be made in this debate of the question of the intentions. I notice that the honourable member for North Sydney has just spent a lot of time talking about the fact that people were innocent with respect to the schemes that we are pursuing in these two items of legislation, the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 [No. 2], and the Dividend Recoupment Tax Bill 1983. I should like to deal with that question of innocence in a moment. These measures were introduced in May. At that time, honourable members may be aware that, of course, they foundered in the Senate. The reason for that was that objections were raised by people in the other place that these measures would cause some financial damage in the community. With that in mind and with the benefit of further discussions, the Government has now reintroduced these measures. The intention of the major Bill, which is the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 [No. 2], has been to collect personal tax which was avoided by people who engaged in bottom of the harbour schemes. That brings me to my point. What were the intentions of those people who engaged in bottom of the harbour schemes? It is all very well for the honourable member for North Sydney to have spoken about the consequences of actions, and in legal terms one might deal with the consequences of actions; but if we look at the intentions, I think that we have a much clearer picture. I am very clear as to the intentions because I was addressing an accountants' conference in Perth in 1978 when people were marketing schemes that paralleled the Curran and Slutzkin arrangements, and those people were willingly participating in bottom of the harbour arrangements. It is not good enough to stand up in this House in 1983 and pretend that these things did not happen. They did happen. The intentions were clear and precise. It is not good enough to deal with consequences; one must go back and look at intentions, because when one is amassing an argument it is important to get clear what the intentions were. Interestingly, the honourable member for Bennelong, with a great deal of foresight and accuracy, when he was Treasurer, had a speech delivered in 1978 to the Institute of Chartered Accountants in Perth. The honourable member for Balaclava (Mr Macphee) delivered that speech. In the speech, the then Treasurer spoke about these contrivances to deliberately evade and avoid paying tax. He suggested to the accounting profession at that time that if it did not get its house in order, it would be subject to government regulation. I believe that the then Treasurer was right: There were schemes that existed; those schemes were being marketed; there were people who were advertising those schemes in the Australian Financial Review and in financial newsletters to which one could subscribe. It is not good enough now to pretend that those actions did not take place and that those intentions were not there. They were very clear. Those intentions were very precise. We have had discussion in this place about the questions of tax avoidance and tax evasion. Clearly, as the honourable member for North Sydney has mentioned in relation to the explanatory memorandum to the Bill, one speaks about tax avoidance as being the minimisation of the impact of tax by taking advantage of all lawful allowances and benefits. Tax evasion, in correct terms, about which the honourable member for North Sydney has spoken, refers to the wilful attempt to escape the impact of taxation through subterfuge or other infractions of the law; the wilful and unlawful activities involved in reducing one's liability to tax in a manner not intended by provision of the income tax legislation. It is clear that a great deal of tax evasion was practised. It is also clear that tax avoidance was practised. However, as a consequence of a great deal of debate-some of that debate was initiated by the previous Government, and the debate has continued under the present Government-it is now much clearer in the minds of the public that to engage in certain activities of tax avoidance can also be deemed by the Australian Taxation Office to be the wilful minimisation of one's tax in a wrongful way. It is important to understand that, because in this legislation what we are saying is: What were the intentions of people at the time when they engaged in that practice? The intentions can be established. They can be established very clearly from the promoters of the schemes, with whom these people did business. There were attempts, through the efforts of stripping companies, to minimise people's tax commitments. I do not believe that it is good enough in 1983 to now say that those intentions were wholly honest and wholly open. It is very difficult, in the Australian community, to sell the notion of equity when we are willing-as some members opposite seem to be-to turn a blind eye to the deliberate attempts by others to avoid and evade paying tax. It is interesting, in terms of the sort of equity about which we talk in this place, just to look at examples of the lack of equity from the previous Administration. I chose to get some examples of breaches of industrial awards that occurred under the previous Administration. There were 64 breaches of industrial awards in three years under the previous Government. The total amount of penalty that was exacted by that Government amounted to $7,931 out of 64 breaches. People on the other side of this chamber see fit to put the boots into the union movement and into the Australian community; but when it comes down to enforcing that practice of equity across the board they show a distinct lack of willingness to pursue that equity. That is something to which people here and in the broader community must pay attention. It is not good enough to now say 'We are opposed to the practice of retrospectivity'. As I have already indicated, the then Treasurer knew about these practices in 1978. If he did not know about them, why did he have a speech delivered to the Institute of Chartered Accountants in Perth by the honourable member for Balaclava, saying that these unlawful contrivances should not be pursued by the accounting profession? They continued to be pursued by the accounting profession. The accounting profession knew about them in certain instances and it welcomed them in certain instances. I believe that the then Treasurer was correct in identifying it. But it is not good enough now to state that one cannot turn around and say that those practices were unlawful. He knew that they were unlawful then. They were deliberate contrivances to avoid paying tax, and they existed. In the context of this debate it is important to reinforce another point in the minds of the electorate and in the minds of honourable members. This measure, within this Budget, represents an important item with respect to revenue raising . We have gone through an immense exercise in trying to contain our expenditure and in trying to minimise the impact of tax practices upon the community. This measure in the Budget aims to recoup a total of some $60m. It should aim to recoup some $270m over time. Now as a result of the amendment from the May statement we are forgoing some $280m, and that was because of obstruction in the other place. It seems that we are facing the same sort of obstruction again and, I believe, for equally dubious reasons. Those on the other side knew at the time that those practices being pursued were not in fact practices that either the accounting profession or the legal profession should have endorsed, nor should the business community have endorsed them. I think it is very interesting to look at the business community of Western Australia. One of the awkward things that arose out of the continued turning of a blind eye to these practices by the previous Government was a distortion in the practice of the business community. I think it is interesting to speculate for a moment. There are many new members in the Federal Parliament from Western Australia. Why? The reason is that the tax rackets went not only into the business community but also into the Liberal Party in Western Australia; and the community knows it and the people on the other side know it. The damage that it wreaked has not been removed because the same old gang are still in charge, still with the belief that they can kick unions and the general community but cannot touch any of those whom they sought so desperately to protect. I go back to this point again. Those on the other side have to know that in terms of equity we have to set standards. The standards set by the previous Government were not satisfactory. The standards, as acknowledged by the previous Treasurer, had to be changed; but the previous Government took so long to do it. Now the Opposition is saying to us: 'How dare you have the gall to come in and put through legislation which collects tax that we should have had the courage to collect but did not because we turned a blind eye to it.' As I have indicated here, clearly when it came to the matter of industrial law the previous administration did not have any courage. I repeat: In the area of industrial law we look at breaches of awards and examples of people being underpaid; migrant women have worked long hours and are underpaid. The Opposition when in government sought to collect $7931 in breaches of industrial awards by employees in three years, yet this is the same crew who believe that they can come into this place-as Senator Dame Margaret Guilfoyle took a stand on principle yesterday with respect to retrospectivity-and say: ' What a terrible Government we have'. This is a Government which, incidentally, has before this House the report of the inquiry concerning the Deputy Crown Solicitor's Office in Perth. Why the Deputy Crown Solicitor's Office in Perth? That is where a lot of the tax rackets were pursued. There is no dispute about that; and the people on the other side know that. They also know that an Attorney-General suffered grievously because of the failure of that Office to pursue these matters. I believe that, when we are looking at this matter, it is not good enough at this late time for people to say: 'We do not know why you are pursuing these matters in this way'. Honourable members know why. It is because our intention is to collect tax that the previous Government should have collected and did not collect. The only way in which we can collect it is through a retrospective measure. Why? It is because some of those companies that previously existed no longer exist. That is why, in the explanatory memorandum, we talk about an imputed value of dividends. Why? It is because there is no longer any company in which to look at the distribution of dividends, so one has to impute values to them. Why are there no companies? It is because there were promoters of phoney companies that disappeared. Where? The language is common; they disappeared to the bottom of the harbour. That is very clear and very precise. I do not believe it is good enough to engage in arguments about consequences, as the honourable member for North Sydney has done. When we look at the question of intentions we see that the intentions of those who were promoting those schemes at the time were very clear . The intentions were to avoid and to evade paying tax. In these circumstances it is very important, as a Government trying to pursue the principle of equity, that we establish some principles of equity. With respect to these tax measures, these are the principles we are working towards. How can honourable members stand up in this place and say that we have to take some of the unpalatable measures that we were taking with respect to assets tests and superannuation and at the same time not pursue the principle of equity in taxation? It is very important to pursue the principle of equity in taxation. We are pursuing that principle of equity, and the reason for that action is very clearly that it was not pursued by the previous Government. In the later days when that Government began to react and become concerned about the grievous impact of the tax avoidance industry upon business and upon itself, it acted. I believe credit has to be given for that. It did act. But, as I said earlier, if the speech given in Perth in 1978 by the honourable member for Balaclava on behalf of the Treasurer to the Institute of Chartered Accountants in Australia were to suggest that these artificial contrivances should not be pursued, why did it take so long for the then Treasurer and the then Government to act? The fact that the previous Government did not act has meant that we now have to act retrospectively. One of the significant things about acting retrospectively, as honourable members well know, is that, if a person now engages in a scheme which is shown in the intentions of the legislation to have been an artificial contrivance, that scheme will be outlawed. The honourable member for Bennelong asked why we are not pursuing this wide spread of measures. It is quite clear that what we have done is to put the damper on the promoters of tax schemes; and that is very important. It is very interesting, when we look at the whole debate, Mr Deputy Speaker, with respect to budgetary strategy and equity, that this Government has sought through this legislation to introduce some measure of taxation equity. I believe I have to reinforce the point again concerning intentions. The intentions at the time of the people who engaged in those schemes were artificially and deliberately to avoid paying tax, that is, to engage in a wrong doing within the principles of taxation. Honourable members cannot turn around at this time and say that everything those people did was lawful and honest. It was not. I was there when people were selling schemes at accountants' conventions. They cannot pretend to me; I know what they were on about. When I raised those matters with them and pointed out what the then Treasurer said about them, they said: 'We will do it while we can get away with it'. That is what occurred in Perth. It was the home of these schemes; and people well know it. It is not good enough to stand in this chamber in 1983 and say that this Government is a terrible government because it is pursuing those activities that were followed slavishly in the business newsletters, in the Australian Financial Review, in the National Times, and in the professions, and people did not stamp on them. It was very interesting that the newly elected President of the Australian Society of Accountants, Mr Millar, said that this society will have to pursue questions of upgrading its ethical standards with respect to tax practices. Why? It was because he could see that it was a cancer eating into that profession. To the credit of those professions, they have recognised that fact, but I think it is a great shame that the damage that was done to the business community in Western Australia and to the business community generally was that tax avoidance and evasion became more profitable than legitimate business activity. There is something wrong when a government allows that to occur. Honourable members should try explaining that to people who legitimately pay their taxes. We have fostered a community, one of the great growth industries in Australia, the tax evasion industry. Try telling people that they should go ahead and perform legitimate manufacturing activities and that we will encourage them because we will turn a blind eye to it. Honourable members should try saying: 'We will encourage you to engage in tax evasion and avoidance'. That happened, and we know it happened. I give credit where it is due; the previous Government began to act against these practices and we have continued that pursuit. But it is not good enough now to start splitting hairs and saying: 'What you are doing is wrong. What we were doing is right and what we were doing when we were not doing anything is also right? When the previous Government was not doing anything it did great damage to the business community, and we also know that it did great damage to the Liberal Party in Western Australia and the effect of that behaviour is still working through the Liberal Party. To sum up, Mr Deputy Speaker, this is a very important matter with respect to budgetary stategy. It is a matter which we believe ought to be pursued. We would expect that people on the other side would have taken a positive attitude towards it because we are pursuing it in the interests of budgetary strategy. It is not good enough for people now to turn around and say, in terms of arguments about consequences, that they did not mean this or that. We know precisely what was intended. The intention of this legislation is to collect money that should previously have been collected. I commend this legislation to the House. Mr BRAITHWAITE(Dawson)(4.09) —Listening to the debate on the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 [No. 2] and the Dividend Recoupment Tax Bill, one would infer that the previous Government and the then Treasurer, the honourable member for Bennelong, Mr Howard, had done nothing to act against the tax avoidance area. I am not saying that that is the complete inference, but I suggest to the House that the measure that we are debating today is an extension of the anti-avoidance measure put forward last year. I would go so far as to say that that was the last anti-avoidance practice that was advocated throughout Australia by the promoters whom the honourable member for Stirling ( Mr Ronald Edwards) mentioned. No one has said in this debate so far that about 36 pieces of legislation came through this House in the last five years, under the previous Treasurer, to block tax avoidance schemes and provide an all- encompassing piece of legislation to counteract these types of schemes from their inception so that action would have to be taken retrospectively against people who engaged in them. I want to make two vital points. Firstly, the Treasurer (Mr Keating) tried to enter into the field of anti-avoidance but the previous Treasurer had completed the harvest. I say that without any qualification whatsoever. We should not look at this legislation as an extension of a loophole that was plugged 12 months ago ; it has to be seen in its proper light. It seeks to impose an additional penalty retrospectively. I see it as a vendetta by certain people against people who at that time were not engaged in anti-avoidance-I make the point that there is a difference between anti-avoidance and arte-evasion-but were acting within the law. To seek to apply it retrospectively in this case leaves it open for the Government to apply retrospectively any law. We know what the consequences of that are. I have no hang-ups at all in stating my very firm belief that there should be no retrospective legislation in any area. There should be no penalty imposed on people who at the time were acting within the law. Let us look at the type of penalty that is to be imposed. Let us admit that already company taxation of 46c in the dollar plus the penalty under the legislation of last year has been paid. This legislation seeks to impose, on a maximum basis, a tax of about 66c in the dollar on the balance of that 54c in the dollar after company taxation had been paid. On that basis a person would be left with 18c in the dollar. Who can say that that is not a penalty? One has to look only at the legislation and the rates of taxation paid over the last 10 years to see which governments were high taxing governments. I am not using that as an excuse. Another point I want to make is that no one in the Opposition, and certainly not the former Treasurer, supported anti-avoidance in any form whatsoever. Certainly from the outside it might appear to be a very easy mechanism to plug the loopholes as they are seen to occur. As a previous chartered accountant, I give credit to the professional bodies in the accountancy field throughout Australia. In deference to the loss of practices which they might have suffered they did behave ethically in most cases. What the President of the Institute of Chartered Accountants said at the Perth convention would have been only a reiteration of what the people within the profession were practising at that time. Anti-avoidance practices were used not so much by professional people but by the professional promoters outside perhaps even of the legal or accounting professions. No-one believes that anybody who benefits from an anti-avoidance measure should be allowed to continue after the practice has become known. On the other hand if we are to give confidence to the business sector-I mention this as just one aspect-we have to make sure that the people who plan their businesses and developments can plan in the security of knowing that what they are doing is legal and that they would not suddenly have imposed upon them a retrospective penalty which I have mentioned, 82c in the dollar, for something that they may have believed was quite legitimate at the time. Nobody either in the previous government or in Opposition at the moment would support those types of practices. There is evidence that the Treasurer of the day did act. The reasons why the Opposition is opposing this legislation were soundly put by the honourable member for Benelong but there are other areas to which I want to refer. I have mentioned the lack of confidence of business people to do things. Already we have seen this Government contribute to that lack of confidence in certain areas. The withdrawal of the accelerated depreciation rate is just one example and the neutralisation of income equalisation deposits is another. They are legitimate devices. Thus the confidence that Australia needs to get on its feet is being destroyed. I come back to the aspect of where the taxation burden is falling in this regard. It is falling on after company tax profits. There is a general feeling in Australia that after a government takes 46c in the dollar of the primary taxable income it has taken enough. Yet our laws can impose a triple taxation commitment-once in primary tax, once in the undistributed profits tax and once in the dividend on final distribution. Some people feel enough is enough and 46c in the dollar is all that should be taken out in tax. Already within the period of this Government, we have had the withdrawal of one measure that relieved triple taxation, that is, the exemption from tax of the first $1,000 of dividends from private and public companies. As from 1 July that is no longer a base. I feel that there is general acceptance in the business world that if a person is to be encouraged to earn a dollar for himself he does not want to share too much of it with the government in Canberra which does not make any real contribution towards the earning of that dollar. If we are to give confidence we have to get the tax rates in Australia down. We have to give confidence by providing certainty in the legislation. In this legislation retrospectivity, the high penalty that is being imposed and the lack of certainty are things that we cannot and should not abide by. I hope that this will be the Government's last attempt to try to recoup these illegitimate taxes. The Minister for Finance (Mr Dawkins), who is responsible for tax matters when the previous measure was defeated, made a declaration then about reintroducing this measure. It was introduced in the face of much opposition from this side of the House. The deficiencies in that measure have been corrected in this legislation. The deficiencies in the previous measure were such that he was told that he did not know what he was talking about and neither did the back benchers who supported him. I believe that is the truth. If one looks at this legislation one sees that there are enough loopholes in it to recoup more tax than is intended or is healthy for a parliament of this size and with this reputation. It is important to note that the Minister, having been told those things and after the legislation had been defeated in the Senate on the same argument, with the courage of Senate Harradine, said categorically that he would not reintroduce this measure. Yet we have this legislation back in the House in basically the same form and for basically the same purpose-so that the Australian Labor Party can hang its hat on some anti-avoidance measure which it decribed in the life of the old Parliament as being a loss of between $8 billion and $15 billion per year. The trouble with the Opposition Treasury spokesman of the day-I take up the point of the former Treasurer-is that he could not differentiate between tax avoidance, which had been cleared up, and tax evasion. Tax evasion, not tax avoidance, is the problem in this country. As I said, tax avoidance is a field that has been completely harvested by the previous Treasurer. It is in the tax evasion area that the problem lies. Yet the Government tells us that we are soft on tax avoidance. The Government has suddenly become soft on tax evasion. Legislation relating to the 10 per cent withholding tax was introduced earlier this year. That legislation did not affect the honest taxpayers in the building industry, but it promoted confusion in that industry. That legislation did not come to grips with tax evasion. The first thing that the Labor Party did when it came to office was to lift to $10,000 the ceiling on reportable household work. That is the great area of tax evasion that has not yet been harvested. Householders who employ people at weekends are at risk. That is an area where tax evasion is rife. What do we see in the present legislation? Again it promotes in business confusion and uncertainty that we certainly would not want. We want a confident business sector which can go ahead and do what it should. I challenge the Government. Where does it stand on tax evasion? I would say that it has certainly gone soft on it. The 10 per cent withholding tax, as the Minister for Housing and Construction and the Minister Assisting the Treasurer (Mr Hurford) very well knows, has made an additional tax collector of many thousands of honest taxpayers throughout Australia. It will create so many little slips of paper which will have to be passed across desks that additional people will have to be employed in business to cope with them. That is the Government's only answer to tax evasion. I challenge the Minister Assisting the Treasurer, who is at the table, the Treasurer or anybody else who might want to do something constructive in this area to recognise that the tax avoidance field has been closed, the promoters are out of business, they have gone broke and it is the tax evasion industry that is crippling this country at the moment, not tax avoidance. I suggest that the lack of knowledge of the legislation that the Government exhibited in this House in the first sessional period of this Parliament is being repeated here. The mouthing of platitudes by Government members has revealed the fact that they not know what they are talking about. Even the Treasurer this morning displayed ignorance about the matter and the lack of comprehension of what he is about. This legislation is being promoted only for the very dubious reason, I suggest, that should it again be defeated in the Senate it might then become a reason for a double dissolution at some time ahead . I am prepared to say that that may be the only reason that the Government wants to rehash a discredited Bill in such a way. Mr Robert Brown —There would be nobody left if that were to happen. Mr BRAITHWAITE —I have often suggested that the honourable member for Hunter might have made a better Treasurer than the one we have. I certainly hope that the seat which is being kept warm for the former Minister of State will be filled with somebody with a bit of competence. At least we can talk to this man. He might know something more about what he is doing than does the Treasurer of the day. I certainly hope he does not regard that as the kiss of death. The Opposition is firmly opposed to this legislation on very definite bases. This is retrospective legislation and there is no room in a democracy such as Australia for any government or any Parliament to apply taxes retrospectively and impose penalties, such as I have mentioned. There is no need for the Government to put in this legislation a definition of an imputed dividend which is quite contrary to any form of taxation or business practice and to penalise the people as a result. It creates uncertainty. There is a grave difference between normal business practice in the stripping of a company upon dissolution and the way in which this legislation is to be applied. No allowance is made for a sufficient distribution of 80 per cent. The distribution rate was raised by the previous Government to 50 per cent. There is only a factor of an after-tax profit. There is an imputation that there has been a notional distribution of the total amount and that amount will be assessed. Any reliable accountant who wanted to strip a company would ensure that that distribution was made in such a way that the tax rates would be far less on average than the rates that are being imposed here. I believe this is quite contrary to any taxation practice that has been considered by this Parliament over the years since 1901. This is the first time taxation measures have gone against sound business principles. There can be only one result: If a government is determined to legislate in this way just to vent its spite on some Western Australians, or somebody else how can business in Australia have confidence in planning its economy and its development? Business must be certain that tax laws that apply now will apply in the future. It is on this very definite basis that we take a stand on the principle of retrospective legislation. This legislation offends the first principle of a democracy by retrospectively applying tax. It offends the principles of business and taxation in the manner in which it will be applied. Mr ROBERT BROWN(Hunter)(4.35) —I hope that the reintroduction of this legislation in its present modified form might be the final stage in this sorry saga of prevarication, delaying tactics, subterfuge, misrepresentation and blatant unashamed protection of tax dodgers by the Opposition. The Taxation ( Unpaid Company Tax) Assessment Amendment Bill 1983 and the Dividend Recoupment Tax Bill, which we are in the process of considering in this debate, were a follow-on from legislation which had been passed by the Parliament after it was introduced on behalf of the former Government by the honourable member for Bennelong (Mr Howard), then the Federal Treasurer, on 23 September 1982. That legislation was intended to deal with company stripping operations which had become known as bottom of the harbour schemes or wet Slutzkins. The legislation was reintroduced in a modified form on 21 October 1982 after the notorious ten days of protracted negotiations with the back bench. We know exactly what type of protracted negotiations took place with the back bench on that occasion, where the pressures on the back bench came from and what the effect of those pressures was. That legislation, I said at the time, had been significantly watered down because of the effect it was going to have on members of the Liberal Party of Australia, on financial supporters of the Liberal Party and on people who had given their support to the Liberal Party in so many different ways. I congratulate my colleague the honourable member for Stirling ( Mr Ronald Edwards) for his contribution. He gave a dispassionate and objective assessment of the circumstances and the reality of this matter. It is a pity that the detail of the honourable member's contribution to this debate was either not listened to or not understood by members of the Opposition. I think we should make it perfectly clear that on two occasions at least in the past the present Government made it perfectly clear to the Australian electorate that, given the opportunity, it would extend the legislation which was passed last year. We said that in addition to recouping taxes on current year profits which had been stripped, in government we would take advantage at the first opportunity to ensure that the dividends, the accumulated profits, which would have been taxed had they been distributed in the form of dividends were taxed so as to pick up the tax that had been lost to the Treasury from company after-tax profits. It is all very well for the honourable member for Dawson (Mr Braithwaite) to refer in the first instance to company profits being taxed at 46c in the dollar and the other 54c in the dollar being taxed at a high rate of something in excess of 60c and the result being that something like 82c in the dollar-I think that is the figure he used-was picked out in the form of tax. There is nothing substantially different between that sort of arrangement and the arrangement which exists with a continuing company which legally and correctly pays company tax at 46c in the dollar. When the dividends are distributed the shareholders or the owners of that company pay at their marginal rate of tax the appropriate tax for the dividends they have received. The Government, in the first instance, was quite happy to extract the company tax which had not been paid, but the rest of the accumulated profits-which were then distributed by way of the sale price of the shares of the owners or the vendor-shareholders of the company-would have been taxed had they been distributed to the shareholders. When the shareholders engaged in some smart- Alick practices, strip a company and take out accumulated profits, the honourable member for Dawson, his colleagues and their new-found allies in the Senate believed that in some way these people are being badly treated if they are to be taxed. The people who are being badly treated are those who are required to make up the difference for the $570m that we would have collected- and correctly collected-had we been able to get previous legislation through the Senate. The essential purpose of this legislation is to ensure that the liability of former owners of a stripped company should not be limited only to the company tax which should have been paid. This legislation is designed to ensure that those former owners will also pay the tax which they avoided through the receipt , in a non-taxable capital form, of the after-tax profits. Of course, this is precisely the point which appears to have been lost to the honourable member for Dawson and other people who have supported the sort of proposition which he has been advancing. As I have indicated before, I think it is also important for us to note that, had those companies continued to operate, those after-tax profits would have been taxable as dividends in the hands of those owners. But of course members of the Opposition want to make sure that some type of prize is awarded to these people who were involved, not only in the wet Slutzkin schemes but also in this type of arrangement which is probably best described as one of the dry Slutzkins . Had they done something in the legal way and received the dividends in the legal way, they would have paid tax. But no; people were involved in company stripping arrangements and all these smart-Alick schemes that we saw absolutely multiply under the previous Government-it has been referred to as the largest growth industry in Australia under the former Government-in its deliberate and sustained attempt to make sure that it protected all its patrons, its financial supporters and its members, particularly in Western Australia. The honourable member for Stirling drew attention to some of the other matters which caused great embarrassment to the former Attorney-General as a result of operations in an office in Perth for which he was responsible. In effect, a former owner of a stripped company will be required to pay income tax on the basis that the company had paid a dividend to the former owner at the time of the sale of the shares. That is why we have used the expression 'imputed dividends'. Had the company continued to operate and had all those accumulated profits been distributed in the form of dividends then, of course, the people who became the vendor shareholders under those company stripping arrangements would have been paying their tax in the correct way. We are making sure that those people who avoided paying their tax at that time, through the use of all these smart-Alick schemes, will now make a more appropriate contribution. But I will get back to that very shortly. I am concerned that, in terms of the actual money from which those people have benefited since 1973, the amount that we will finally pick up as a result of this legislation will be very significantly diminished. Why have these changes come about? We are sufficient political realists to appreciate that the form in which the legislation was previously introduced was the most effective and moral form. If we had attempted to get it through the Parliament again and we had sent it across to the Senate it would have been rejected again for exactly the same reasons. I need say no more about that because every member of this Parliament is aware of some of the reasons for the position adopted by some honourable senators. Had the legislation gone back to the Senate in the same form it would have met with the same fate. What are we doing? What are the changes that have been made to this legislation since it was first introduced by the Minister for Finance (Mr Dawkins) about three months ago? First of all-I am not happy about this but these are the modifications that we made-we will no longer seek to recover personal tax on the total accumulated profits of the cashed-up and the stripped company. All those people for whom the honourable member for Dawson expresses such deep and profound concern will know that, despite the fact that we will claw back some of their ill-gotten gains they will still be able to retain all their accumulated profits from previous years. I am sure that that will bring a great deal of pleasure to the honourable member for Dawson and those people who identify with him in this connection. This legislation will now be confined to the tax avoided only in relation to the after tax revenue profits for the year in which the evasion of the primary company tax occurred. In other words, it will apply only to the current year profits. I repeat that I am not happy about that but I am a sufficient realist to endorse what the Government has done, what the Government quite clearly has a mandate to do. This is being sabotaged by people whose policies were rejected on 5 March. Secondly, an implication of this limitation that has been provided in connection with the recovery of that personal tax is that a liability for avoided personal tax will not arise where the only tax evaded for that year was undistributed profits tax under Division 7 of the Income Tax Assessment Act. The second major modification in terms of the original legislation is that personal tax will now not be recouped in respect of any capital profits of the stripped company. Again, I am not particularly happy about that. Let me deal with the first matter, the abandonment of the proposal to collect personal tax on accumulated profits for those years prior to the year in which the evasion of the primary company tax occurred. We should keep in mind that the vendor shareholders received all the accumulated profits of the stripped company when they sold their shares. Those accumulated profits, in effect, were distributed to shareholders in an untaxed capital form. All we are doing is collecting the tax. Instead of allowing those accumulated profits to be distributed to those shareholders in the form of a dividend on which tax is not paid by them we will pick up the tax. We do not resile from that position; we gave an undertaking to do it. We are attempting to honour the undertaking and we are being sabotaged by the very people whose policies brought about their rejection by the Australian people on 5 March. I wish to emphasise another point. I tried to point this out to the former Treasurer when the original legislation was being considered. The Opposition does not seem to understand and apparently the former Treasurer did not and still does not understand, that his own Part IVA of the Income Tax Assessment Act would treat these accumulated profits and the personal income tax which should be paid on those imputed dividends in exactly the same way as we proposed -I use the past tense of the verb-to treat them under the former legislation. I think I should remind the House of a statement that was made by a former Acting Attorney-General in October last year when this Parliament was considering the original legislation of the former Government for the wet Slutzkins. On that occasion the acting Attorney-General said: It is only fair that taxes that were not paid should be recovered from those who received the benefit. That statement was made by a former acting Attorney-General-a person whose political alignment places him in the same school as the present Opposition. Of course that particular statement continued with words something like this: ' Those people who play with fire should expect to get their fingers burnt'. If they are now getting their fingers burnt my heart bleeds for them. My heart bleeds more for those ordinary wage and salary taxpayers who have been ripped off as a result of the benefits that have accrued to all these other people in the community. In addition, I wish to mention the second major adjustment that was made to this legislation since it was first introduced. This concerns the abandonment of the proposed tax on capital reserves. Again, the existing income tax law requires that both revenue and capital profits distributed by an on-going company not in liquidation should be taxed in full. I repeat that the application of the provisions of Part IVA of the present Income Tax Assessment Act-that section which was introduced as a catch-all, anti-avoidance measure by the previous Government; I give it credit for that as well-in similar circumstances would bring about an almost identical result. In the couple of minutes available to me I make reference to the fact that, had we indexed what these shysters had got away with from 1972 to make sure that we recovered the real value to them of those amounts under the original terms of our proposed legislation, we would have been picking up a total of $840m-almost $1 billion. With the earlier legislation, we abandoned our indexation proposal. We were going to pick up only in current dollar terms. That had the effect of reducing the $840m, which vendor shareholders had the use of over that period, to $570m. So in the legislation we introduced a short time ago we would have been picking up $570m. Modifications have been built into this legislation as a result of the rejection of the previous legislation in the Senate-in particular, the abandonment of the recoupment of personal income tax which would have been payable on accumulated revenue profits prior to the year in which the evasion of the primary company tax occurred and the abandonment of the recoupment of any capital profits of the stripped company. As a result of introducing those modifications into this legislation we will recover $270m. That will depend on whether the Senate passes the legislation. The Government has the numbers in this House. We will use the numbers here to satisfy in conscience the mandate we were quite clearly and emphatically given as witnessed by the numbers we have here. The greatest numbers on the Opposition benches are those honourable members who try to squeeze themselves along the front bench. There is no one left on the benches behind them. That is how emphatic the endorsement was that we were given on 5 March. Since 1972 vendor-shareholders have had the use of accumulated tax-which should have been paid but which stayed in their pockets-to the value of $840m. As a result of our gratuitousness, our attempt to be fair and to show some concern and compassion for those people about whom the honourable member for Dawson (Mr Braithwaite) and the former Treasurer, the honourable member for Bennelong expressed concern, the original $840m which we should have picked up-and which I strongly supported that we did pick up-has now been reduced to $270m. Who is to pick up the tab, not only for the difference between $840m and $270m but, if this legislation is rejected again, for the $270m that we ought to be picking up ? It will be the wage and salary earners, the pay-as-you-earn taxpayers in Australia-the people who have been carrying the burden for too long and who this Government, in all conscience and in its attempts to find a more moral, just and equitable structure of taxation in Australia, will ensure will no longer continue so exclusively to carry that burden. Mr ROCHER(Curtin)(4.53) —After watching the performance of the honourable member for Hunter (Mr Robert Brown) I could not help but be reminded of Marcel Marceau, who also entertains by standing on his feet for nearly 20 minutes or more and says nothing. But the Hawke Government persists with what can only be described as some sort of revenge against the comparative few whom it has decided should be persecuted. It persists in inflicting on the Parliament proposed legislation which is similar in most respects to a Bill deferred by a vote in the Senate earlier this year. While this Taxation (Unpaid Company Tax) Assessment Amendment Bill (No. 2) 1983 has had some of the more objectionable provisions of the earlier Bill deleted from it, it still imposes a new retrospective tax. It still suggests an intention to recover unpaid company tax when it will do nothing of the sort. It is in effect proposed to collect taxes which would never have become payable if the written law of the land as interpreted by the High Court of Australia, had not expressly permitted transactions which this Government, despite a whole catalogue of broken promises of its own, somehow judges immoral-more immoral than imposing a new tax burden retrospectively. Let there be no doubt that the transactions it sought to legislate against and the tax advantages which may have ensued were legal at the time they were made. The simple test is if it were not legal at the time existing law could have been utilised to put things right. Similarly, it is retrospective law because if it was not, taxes now to be collected would also have been collectible under the existing law. That these amendments will impose a new tax requires some amplification. To start with, I go back to the misnomer 'unpaid company tax', to which I referred a moment ago. The Bill sets out to impose a personal tax liability, not a company tax. It will be a tax on profits which would otherwise have been lawfully retained by companies. It will be a new personal tax calculated on profits which would never have been distributed if the legal preconditions I have already mentioned had not existed. The transactions which will give rise to new retrospective tax levied on individuals were of a capital nature and were therefore non-taxable. That circumstance has obtained because of a decision of the full bench of the High Court of Australia. The second reading speech of the Minister for Housing and Construction and Minister Assisting the Treasurer (Mr Hurford) acknowledges that the proceeds were of a capital, non-taxable nature. The principal Act by the previous Government takes account of that. Indeed, this Bill would not be necessary if the proceeds had been taxable. The Act to be amended, that is, the principal or existing Act, does not provide for taxing companies or shareholders where the trigger of fraud was absent. It is only this Government that could reach a decision which says in effect that because the laws of three to 11 years ago did not conform with its version of morality, those who have erred should be brought to account regardless of the absence of fraud. It is only this discredited Government that would decide that perfectly legal acts should, with the benefit of hindsight, be now treated as illegal or at best that they should be legislated against as being in its view immoral. If anyone should know about immorality it is this Hawke Government, which did not even wait for the body of its election promises to get cold before breaking them in a manner which must bring the whole concept of its morality into serious question. As pointed out in the debate on the Bill deferred by the Opposition in the Senate, these amendments propose, amongst other things, the removal of subsequent fraud as a necessary pre-condition to the imposition of a new retrospective tax on certain individuals, the raising of taxes and probable penalities on lawfully accumulated undistributed profits and the raising of a new retrospective tax on undistributed profits on which company and legally payable undistributed profits taxes have already been paid. Profits accumulated over many years after mandatory distribution of dividends or payment of mandatory undistributed profits tax at the rate of 50c in the dollar, or both, become taxable under these proposals. These amendments are based on a fundamental misconception. One has to refer only to the Minister's second reading speech to arrive at that conclusion. Amongst other things the Minister said in his second reading speech: . . . those persons should also pay the tax that, as shareholders or other former owners, they escaped through receipt in a non-taxable capital form of after-tax profits that, if the companies had continued to operate as going concerns, would have been taxable as dividends in their hands. That rather pathetic premise is not only to be found wanting in pathos; it is patently wrong. If the companies concerned had in fact continued to operate as going concerns, as the incompetent Minister expressed it, they were and remain entitled to retain undistributed profits which would never have attracted any tax in any form. After meeting normal company tax and normal Division 7 tax, any company is entitled to retain undistributed profits as part of its shareholders' funds free of tax encumbrance. The principal Act passed by the last Fraser Government established a retrospective tax obligation equivalent to avoided company taxes and avoided undistributed profits taxes. It still does. The further tax liabilities to be imposed are both new and additional in cases where sales of shares took place and where there was no evidence of fraud. In the great majority of instances the proceeds of sales by vendor-shareholders under attack in these amendments were loaned to the replacement company or entity which carried on the business of the company sold. The funds which were loaned back in this way to ensure that businesses were operational and unaffected, except as to their capital structure, are still tied up in the businesses. Those funds are still as essential to the continuing viability of the businesses as if no sales of shares had occurred. The funds still tied up in replacement businesses were never dividends to vendor share holders. Consequently, never having been paid or received in cash for the retention and discretionary use of many of the vendors, the funds are not available in either cash or realisable assets for payment of the so-called dividend recoupment tax. Those funds will never be available to pay additional expected taxes while they remain essential to the continuity of the businesses to be destroyed by this legislation. Affected businesses cannot survive such an imposition. Let the Government ponder on that and its implications for employment. Let the Hawke Government continue to rationalise-which it seems to want to do-the loss of private sector employment which it cannot replace even with its profligate spending policies. Despite the status of pre-sale and post-sale avoidance schemes, certain provisions in this Bill will, in effect, warrant assessment of liabilities under the principal or existing Act to be ignored. The Minister's second reading speech asserts that the relevant provisions in the existing Act defy logic. Nothing could be further from the truth. The Act as it stands requires that only those who were beneficiaries of fraudulent acts, even though they did not perpetrate those frauds, should incur a new tax liability. However disagreeable that may be, it is perfectly clear and logical. Fraud had to be present at some stage in the transaction. Fraud had to be present sooner or later. As it was, as I have already indicated, many of those frauds were perpetrated by others-mainly purchasers and sub-purchasers. The McCabe-Lafranchi report made that abundantly clear. The Special Prosecutor appointed by the Fraser Government seems also to have found that out, if one can judge by an absence of prosecution of promoters during the months of this Government's term. Whatever the Minister may say, the principal or existing Act is logical in a way not even remotely apparent in these amendments. The Act as it already operates stipulates that the scheme must have reasonably been expected to succeed. That is stipulated in section 5 (7) (c). It never would have been reasonable to expect that the relevant scheme would secure the result as stipulated in section 3 (12) (b). The scheme was not the stripping arrangement which left the company unable to pay its tax. Despite the spurious reference to a lack of logic in the Act as it stands, it is perfectly logical to retain those pre-requisites. Even this incompetent, illogical Government would be persuaded of the logic of it all, if it were not obsessed with revenge. Mr White —And the Treasurer. Mr ROCHER —And the Treasurer (Mr Keating), as my friend reminds me. During the Committee stage of the previous legislation, which was later referred to a Senate committee, mention was made of the intention to authorise the Commissioner for Taxation to publish the names of those who failed to pay recoupment tax assessments. By devious logic the Government, through its Ministers, has sought to justify such a requirement by making the following statement in the second reading speech: The Commissioner is already required to provide in his annual report to Parliament details of breaches or evasions of the taxation laws and it is consistent with that duty that he be authorised, where he considers it appropriate, to report details of failure to pay recoupment tax. Existing obligations on the Commissioner which require the publication of names do not mean what the Minister claimed that they mean. Not only is such an intention unfair; it is based on misrepresentation of the true position. There is no breach or evasion involved in failure to pay. It is not a breach of any tax Act to fail to pay tax. What provision in which tax Act makes it an offence to pay assessed tax? To my knowledge, there is none. Let the Minister correct me if I am wrong. Again, in the Committee stage of similar, now abandoned, legislation, the Minister for Finance (Mr Dawkins) stated that the Bill, if it became an Act, would be administeed in a way which would ensure the names of those who may be late in paying would not be named in the Commissioner's annual report. It was not in the Act. If he was being fair dinkum on 26 May, one might reasonably have expected to find in this Bill that discretion would not have been left in the hands of the Commissioner. The Minister was no more fair dinkum then than this Government is now. Rather than go over the concerns I expressed on 26 May, I invite the attention of honourable members to my remarks recorded on pages 1074 and 1075 of Hansard, and I invite their attention to the Minister's response. However, it is probably necessary to point out that the Commissioner may, and does, resort to common law if assessed tax is not paid. Failure to pay is not a breach of any statutory provision. As in the previous legislation, this Bill does not attempt to tell us when failure to pay takes place. It does not specify a date, an elapsed number of days or anything of the like. I am obliged to ask as I did on 26 May: When does failure to pay occur? Has someone who is a day late or a week late in making payments failed to pay? Is an outstanding assessment on the day the Commissioner prepares his annual report to be the criterion for determining whether the taxpayer gets his or her name published for all the world to see? Surely, if someone fails to pay because of an inability to pay, nothing is to be gained by publication of a name. Such a requirement smacks of revenge and it contains some of the elements of McCarthyism, to which my colleague the Deputy Leader of the Opposition (Mr Howard) referred earlier in the debate. Because it is a new retrospective tax, there may be very valid reasons why some taxpayers are no longer in a position to pay what is, after all, an unexpected and unplanned for tax assessment. Honourable members should remember that the relevant transaction will have taken place as long as 11 years ago and certainly not less than three years ago. Taxpayers who fail to pay other taxes are not named in the Commissioner's annual report. There can be no sensible justification for recoupment taxpayers being discriminated against. Indeed, because of the retrospective and unexpected nature of the tax, there is every reason why they should not be discriminated against. If this Bill becomes law many vendors will be prejudiced because they accepted earlier recoupment assessments issued under the provisions of the existing Act. Many vendors will have already received company notices of assessments to provisions of the existing Act. Many people, although they may have thought at the time that an objection could have been worth while, have decided against contesting their assessments because to do so would not be worth the candle. Whatever the reason for acceptance of assessed tax, under the existing Act that acceptance has prejudiced some people in their ability to contest successfully assessments which will now flow from these amendments. Although they reasonably thought compliance with the existing Act would see an end to the matter, those same vendors now discover their individual liabilities will be substantially increased. They may, of course, object to dividend recoupment tax assessments. They may not, however, dispute company assessments under the existing Act where the 60-day period for lodging objections has already elapsed. It should be noted that the 60-day objection period has almost certainly already passed in respect of tax arising out of any primary tax assessments of companies. Extending liabilities as it does, the Bill authorising the new dividend recoupment tax should provide that a taxpayer receiving a dividend recoupment tax assessment has the right also to object to the primary tax assessment, even if he or she did not take up an earlier opportunity to object. In urging such a course on the Government, I in no way signal my support for the legislation. The suggestion just made is part of a fall back position and is essential if we are to pay more than lip service to equity. As the Deputy Leader of the Opposition pointed out earlier in this debate, this is not genuine anti-avoidance legislation. It is the product of a Ministry bankrupt of ideas; it is the product of a government bent on revenge. This legislation clearly adopts vindictive measures to bear down on vendors who acted legally at the time they sold their shares and who, under the provisions of the existing Act-the Bill was introduced by the last coalition Government-already have to pay all the tax which would have been payable by the companies had the shares not been sold. For those reasons and others, I believe the legislation should be rejected. Mr GEAR(Tangney)(5.11) —Like my colleagues on this side of the House, I support the measures. I point out to the House that on 5 March the Hawke Australian Labor Party Government ended the Fraser years. As a new member I have no doubt that my presence in this place was in no small part made possible by the tax evasion industry and the compliance of the Liberal Party, especially in Western Australia, with that industry. There is no doubt in my mind that we have a mandate to stamp out tax evasion. In the last Parliament it was made painfully obvious by the present Minister for Finance (Mr Dawkins) and many others of the then Opposition that when we were elected to government we would stamp out the tax avoidance industry by retrospective legislation, if possible. I noticed that yesterday Senator Dame Margaret Guilfoyle came out against the retrospective aspects of legislation that was passed in this place last year. I remind the House about an incident in Western Australia when Sir Charles Court saw no obstacle to using retrospective legislation with respect to a mining company which at the time was under challenge by a smaller mining company in Western Australia, the smaller mining company being locally owned and the larger mining company being a foreign multinational. The laws of the day were changed restrospectively so that the rights of the smaller company were taken away even though it had spent a considerable amount of money preparing its case before the court. So, Sir Charles Court never worried about retrospective legislation and I cannot see why Senator Dame Margaret Guilfoyle should do so. The purpose of the legislation is not to limit the tax recouped from bottom of the harbour schemes to that owed by companies but to include the personal tax that was artificially turned into a capital gain rather than taken as dividends which would be subject to tax. In other words, we got only half the tax; we got that owed by the companies but not that taken by the individuals. They still got the money and hung on to it. This legislation aims to get that money back. The ordinary people whom we on this side of the House represent, the pay-as-you-earn taxpayers, cannot contrive, twist and turn their affairs so as to get out of tax . Their tax is taken out of their pay before they get it. The Dividend Recoupment Tax Bill aims to bring some rationality into the taxation system. The distortions that occurred under the previous system whereby taxes were evaded by the use of smart lawyers and accountants is a matter of deep concern. The first time this legislation came before the Senate the Liberal and National parties were instrumental in its defeat; and we can see them jumping up and down again even though we have taken out some parts of that legislation which they found objectionable. They still oppose it, but that would not worry them because we know that they have been the protectors of wealth for quite some time now and that they are just continuing in that way. Fairness is foreign to them. We have only to look back to 1975 and, I suppose, once again to the Constitutional Convention this year to see that fairness is not part of their makeup. As the honourable member for Hunter (Mr Robert Brown) pointed out, by this legislation we are trying to get back not the close to $1 billion in real terms which was evaded but far less. The honourable member for Stirling (Mr Ronald Edwards) pointed out the part of the Western Australian Liberal Party in this whole fiasco. In fact the fund raising committee of that Party reads like a Who's Who of the tax evasion industry. Even though the Western Australian Liberals might like to think that the worst has gone away, that is not the case because-- Mr Spender —The politics of character assassination again. Mr GEAR —Not at all. All I am saying-and I will say it slowly-is that one Opposition parliamentarian will soon be exposed as a tax dodger when the Christo Moll affair sees the light of day. Mr Rocher —Oh, it's like a page out of the Truth newspaper. Mr GEAR —Well, you only have to wait. It will be very interesting to see, when that does see the light of day, what part you play and whether you still accept that person as a member of parliament. Mr DEPUTY SPEAKER(Mr Mildren) —Order! Will the honourable member please direct his comments through the Chair? Mr GEAR —I am sorry, Mr Deputy Speaker. The honourable member for Stirling also talked about the intention of companies. The intention of companies with respect to the activities they undertook was clearly to avoid paying tax. I would also like to look at the intention of the law. It seems to me that the people who could afford lawyers, QCs or whatever they were, to argue the cases before the courts tried to manipulate the words so that they did not really express the intent of the law. Clearly, they got away with it in some cases, but hopefully with the advent of retrospective legislation that will not be so in the future. An argument used against the initial legislation was that it was a tax on capital. There is no worry about that. There is no rational debate about a capital gains tax in Australia; we can see how that can be twisted and turned by those on the other side of the House. I suppose that the example of the gentleman who takes over companies or fails to do so, realises a great capital asset and pays no tax at all when he in fact makes millions of dollars could be contrasted with the example of one of my constituents who wrote to me the other day because he owed $230 tax. He did not have any income for the whole year. His only income was from social security. It made me wonder about the equity of tax in this country when millions of dollars can be made and no tax paid on it; yet somebody who lives for a whole taxation year on social security benefits is pursued for $230 tax. So I have no qualms about the tax on capital. Another argument used against the legislation was its effect on small business and employment. There seems to be a concern that hundreds of thousands will be put out of work. The evidence of that does not bear up because over 50 per cent of the assessments sent out under the former legislation have not resulted in that criteria being reached. We could point out too that, if the companies were to pay back the tax, they would merely change hands; they would not go out of business. I conclude by pointing out that the Liberals have already signalled their intention to oppose the modified legislation. I was walking through the Senate corridor a few minutes ago when I overheard a conversation to the effect that Senator Chipp had already issued a Press release that three Democrat senators would oppose the legisation again. I do not know whether that is true. If it is, I would like to know from those opposite-none of them have said this but they still have a chance to do so-how we should raise the revenue which they would deny the Government. How are we to make up that short fall that they will cause? I conclude on that point and I wish the legislation well. Mr HURFORD(Adelaide-Minister for Housing and Construction and Minister Assisting the Treasurer)(5.19) —in reply-In closing the second reading debate and thanking those who took part, I want to start with a quotation: We have decided on this course of action because of the essentially fraudulent nature of much of the conduct involved. The legislation will be directed against people who have in effect taken off with moneys which should have been paid as tax to the Treasury. Bottom of the harbour schemes have gone beyond legal avoidance of taxation and represent illegal evasion of tax. Mr Humphries-Who said that? Mr HURFORD —That is a good question. That was said by the former Treasurer, the honourable member for Bennelong (Mr Howard), who opened for the Opposition in this debate, on 25 July 1982 in a statement that he made regarding the recovery of tax evaded in schemes to strip companies of untaxed profits. They are the very companies which are the subject of the legislation before the House. He went on: It is quite clear that the community regards as totally abhorrent and unacceptable, a situation in which a relatively few people had been able to make personal profit from connections with procedures that left the companies concerned without funds to meet a company tax liability existing under the law applicable at the time. Whatever the technicalities maybe, these strips of untaxed company profits were fraudulent in nature on the part of at least one person concerned in each transaction. So far as the tax law is concerned they did not involve legal avoidance of tax but represented illegal evasion. May I point out to the House that the companies which were subject to the legislation brought in by the previous Treasurer, the ones to which the statements I have just read referred, are the very same companies to which this legislation applies. Only part of the tax avoided-indeed, evaded-was collected under the previous Government's legislation. Two forms of tax were evaded or avoided when these companies were sold to crooks, or shysters, as they were described by the honourable member for Hunter (Mr Robert Brown). Primary tax was evaded when the companies were sold and went to the bottom of the harbour, but there were also undistributed profits in those companies on which tax was applicable when those profits were distributed to the owners of those companies, the shareholders. I need to repeat all this, even though it is in the second reading speech, at the end of this debate because it would seem that the very essence of this Bill has not been understood by those on the Opposition benches who have taken part in the debate. The fact is that there was a quasi- liquidation of those companies when they were sold. The revenue due to the people of this country, the tax on those undistributed profits, was avoided- indeed quasi-evaded. The revenue is light of a lot of money which should be collected. This Bill provides for the collection of those extra funds that were avoided, those extra taxes that were quasi-evaded. I am obliged to return to this matter of undistributed profits. I repeat that if a company was properly liquidated, tax was due to be paid on those dividends which would have been paid out of its undistributed profits. We are collecting those funds that should have been paid from those who have received the benefit of them; namely, those who received an amount for the shares in those companies which were sold. It is interesting to quote again a former Liberal Minister in this Parliament who, admittedly a few years ago, when he was Minister Assisting the Treasurer, said in a debate on tax avoidance: I mention that for more than a quarter of a century our taxation law has, in broad terms, treated as dividends, and therefore as income subject to tax in shareholders' hands, any distribution made by a company as a going concern other than a return of paid-up capital . . . The Government considers that this situation constitutes a real threat to revenue and to the general principles on which the taxation law is based. It also considers it gives an unwarranted advantage to shareholders in companies in a position to execute this type of plan as against companies not so fortunately placed. To the credit of the Liberal-National Country Party Coalition Government of that time, it was closing another loophole which was very like the loophole which has now been closed and which is very much the subject of the legislation before this House. The point is that that which under the law seemed to be capital but was in reality revenue-dividends paid out of undistributed profits-should be taxed in the hands of those who received those dividends. That is what this law does. I turn now to some of the points made by the honourable member for Bennelong and the honourable member for North Sydney (Mr Spender). First of all the former Treasurer claimed that the legislation goes against pre-election undertakings. He alleged that the legislation is penal in character. That is just not true. The exact opposite is the case. The Government made a specific and well publicised commitment prior to the election not just to clean up those loopholes that were inherent in the previous legislation relating to primary tax but to recover the personal tax avoided through bottom of the harbour schemes. This is an election promise that we are carrying through in this legislation; we have a mandate to implement the legislation. The legislation is not of a penal character. No penalties or additional taxes are imposed, as might have been the case. The Bill simply seeks to recover tax that ought to have been paid years ago when profits were stripped from companies . It is quite clear that those who sold those shares knew that they were selling them to crooks. No primary tax had been paid. We are not going to those other companies where primary tax was paid when they were stripped; we are going only to the companies where no primary tax was paid and where, quite clearly, the shares were being sold to crooks. We are not even collecting tax on deemed dividends paid out of undistributed profits of earlier years. In this Bill we are only collecting the tax on deemed dividends from profits in those years when no primary tax was paid. It is a very fair way of attacking this problem. I repeat that the legislation does not impose any additional amount to compensate for the fact that repayment of escaped tax will be made in today's money values and not the money values of the years when the tax should have been paid. Both the former Treasurer and the honourable member for North Sydney spoke about the proposal to remove the test which requires that the particular arrangement which rendered a company unable to pay its tax must be identified before a recoupment tax liability can be established. They claimed that the removal of that test would mean that people who made no attempt to escape tax may be caught by the legislation. Once again those claims are totally wrong. Mr Spender —Give us an argument on it rather than simply an assertion. Mr HURFORD —The stripping arrangement test is entirely unnecessary because the other tests in the legislation ensure that only bottom-of-the-harbour schemes are within the scope of the legislation. In this regard, three tests are particularly important. The honourable member for North Sydney has asked me for arguments and of course I will outline them. I am not in the habit of just making assertions: I am in the habit of substantiating my assertions. I will go through the three tests. Firstly, there must be an amount of unpaid company tax. I have already said that that applies in all cases under this Bill. This test would not be satisfied where tax had been legally avoided or where the company had retained assets with which to pay any tax due. Secondly, there is the excess consideration test. It means that the vendor-shareholders must have received a price for their shares which made no allowance for the company tax payable on pre-sale profits; in other words, it was always intended that the company tax would not be paid. In the words of the present Treasurer (Mr Keating ), there must have been an expectation that tax would not be paid. That is clear . I said that in relation to the previous point. These people knew they were selling their shares to crooks. I come to the third test. The 'same business' test means that the legislation does not apply where a company carries on the same business after the sale as it did before the sale. That test by itself is enough to ensure that the legislation could not possibly apply to any normal commercial take-over of a company which is subsequently unable to pay its tax debts because of commercial misadventure. Next there was the argument from the former Treasurer that the legislation is highly discriminatory because it applies only to a small fraction of companies. In other words, he was complaining that the legislation does not apply to dry Slutzkins. Let me respond to that. The proposed legislation is not discriminatory because, like the existing legislation, it applies only to schemes that involve an element of fraud. I have explained that everybody who sold those shares knew they were selling them to crooks. The existing legislation requires persons who benefited from the sale of shares and companies that were stripped of pre-tax profits to make good the unpaid company tax provided the person's share of the unpaid tax was more than $100. So the Government believes it is equally fair and equitable that such persons should also make good the associated personal tax they escaped through these schemes which involved an element of fraud on the part of one or more persons associated with them. In the Government's view there is no valid distinction to be made between unpaid company tax and unpaid personal tax. On the question of whether the proposed retrospective legislation should also extend to the dry Slutzkin schemes, the Government believes that these schemes are distinguishable from bottom of the harbour schemes on the basis that they do not involve any element of fraud. In other words, honourable members opposite are defending those who were involved in fraud. We are confining ourselves only to those cases in which that situation applies. There was a further argument that the Bill seeks to impose a tax on retained profits which would not have borne tax had the company concerned continued to operate. I have already indicated what nonsense that is. We are dealing with a quasi-liquidation situation. The people who sold the shares knew it was a quasi- liquidation situation. The fact of the matter is that profits were not retained in the companies concerned but were liberated to the vendor-shareholders in the form of the sale price of their shares reduced by the promoter's fee. The income tax law as it now stands and as it stood for the whole of the period from 1 January 1972 to 3 December 1980-the period in relation to which the recoupment tax law operates-requires that distributions of profits to shareholders by a company that is a going concern be taxed as dividends. I made this point earlier and I should have mentioned who was involved. The Hon . Peter Howson as Minister Assisting the Treasurer drew attention to this position. Obviously Liberal governments had more morality in those days than the Liberal Opposition has today when they recognised that any deemed distributions out of profits which had been untaxed-undistributed profits-should be taxed when in the hands of those who received those deemed distributions. If the companies concerned were liquidated, such distributions of revenue profits would be fully taxable. I could go on to talk about the previous Government's record in relation to these sorts of affairs, but the time available is short because of the heavy legislative program. But I say this-- Mr Spender —And you are running out a supply of notes. Mr HURFORD —I have much more that I could talk about. Indeed, I have not only these notes but also other notes; so I do not require any rudeness from the honourable member on this matter. I say to the honourable member that he is prostituting the morality to which he referred when speaking in the House on a previous occasion. That is a part of his nature when making the sorts of arguments he has used in this case. He is defending those who clearly sold their shares knowing that they were selling those shares to crooks. Those people were avoiding tax. They were going further: They were quasi-evading tax. You and the Government which you-- Mr DEPUTY SPEAKER(Mr Mildren) —Order! The Minister will direct his comments through the Chair. Mr HURFORD —supported prior to the last election collected most of the unpaid primary tax. This Bill seeks to collect some more of it because you provided some loopholes. Mr DEPUTY SPEAKER —Order! I suggest that the Minister direct his comments through the Chair. Mr HURFORD —Those on the other side who took part in this debate sought to defend a situation in which they were prepared to collect the unpaid primary tax but now they are seeking to defend the indefensible. They are cavilling at what is a legitimate Bill which will collect the unpaid taxes on the deemed distributions from undistributed profits. I believe that it ill becomes them to do so. I have much pleasure in supporting this legislation. I hope the House will do so. Question resolved in the affirmative. Bill read a second time. In Committee The Bill. Mr SPENDER(North Sydney)(5.38) —There has been agreement that we should spend only a limited amount of time in Committee. Therefore, I should like to be as brief as I can in my remarks on certain provisions of the Bill. Firstly, I will deal with the proposal contained in clause 5 which would delete section 3 (12). In respect of that matter I would like to associate myself with the remarks of the honourable member for Curtin (Mr Rocher). Because of the limited time available I wish to say nothing more on that clause. Also I should like to refer to the proposal contained in clause 6 which is that there should be reports on those who fail to pay tax which falls within the ambit of the existing Act and of the Act as it is proposed to be amended. In regard to that matter as well I associate myself with the remarks of the honourable member for Curtin. I point out that there are a great number of reasons why a person can fail to pay tax and that the failure may be in no way linked to any wrong-doing or any desire to avoid that payment of tax. I should like to say something about the proposal in clause 7 to delete sections 5 (1) (h) and 5 (2) (h). The Minister for Housing and Construction (Mr Hurford) said that the answer to what has been put in an argument against that proposal by me and by others is to be found in three propositions. The first proposition is that there should be unpaid company tax. I point out that company tax can be unpaid for a number of reasons, including simple business failure. The second proposition is that the excess consideration test which appears in section 5 (1) (d) is satisfied. I point out that the excess consideration test operates on the basis of assets, minus the total liabilities of the company, plus an amount equal to the total amount of the company liability immediately before the relevant sale time. If one makes a miscalculation and if one has sought to make proper provision but it turns out at the end of the day that one is a few dollars on the wrong side of the ledger, one is caught by that excess consideration test no matter how small the amount of the difference between what should be the consideration calculated in accordance with the Act and what is the consideration actually paid. Of course, people who sell companies in the course of a financial year must always make an estimate of what the tax liability will be. The third proposition, which the Minister failed to elucidate , relates to the same business test. Anyone who has had the least bit of experience dealing with companies in commercial or business terms, or who has had to look at them, knows that frequently when a sale takes place the nature of the business changes, either partially or wholly. The Minister has sought to defend what is proposed on the basis that we are here dealing with bottom of the harbour tax evasion, and he has called in aid what was said by the honourable member for Bennelong (Mr Howard) when Treasurer in addressing the proposal which was earlier before the House, which is the Act which was passed in 1982. But that Act had within it certain mechanisms which attracted evasion and stripping as the triggers which would bring about an assessment for liability. What this Bill proposes to do-and this has never been answered-is to take away that trigger. For the Minister to say that that trigger to which I refer does nothing, for him to suggest that the three elements to which he has referred constitute a substitute, demonstrates that he could not know what will be the effect of this Bill if it were enacted into law. He and the others who have spoken have all referred to bottom of the harbour tax evasion and to stripping. For none of those activities does anyone on this side of the House have any support. We would all condemn them. But there is a great difference between those activities and the kind of activities that can be caught as a result of what is proposed to be done in this Bill. I now refer to what is proposed to be done by section 5A as it would be if this Bill were to become an Act. Section 5A is the section which makes provision for the imputation of a dividend. For the purposes of that section, a calculation is proposed by sub-section (3) of what amounts to the undistributed profits for the purpose of ascertaining tax. If one looks to sub-section (3) one sees that the undistributed profits are to be calculated on a basis that disregards any declaration of dividends that may in fact have taken place. Effectively, a declaration of dividend is deemed not to have taken place. Let me give an example. Let us assume that we have a company which in the 1977-78 taxation year has taxable income of $200,000. Let us assume that it attracts the operation of the proposed section. It has received an assessment of $92,000, and it pays tax of $90,000. Because there is $2,000 unpaid, the operation of section 5A is attracted. But let us also assume that there was a distribution before sale of $ 40,000, on which tax has been paid, which would be in the vicinity of $25,000. The effect of section 5A, sub-section (3), is to ignore that declaration of dividend and to arrive at a figure, for the purposes of the section, which includes the dividend on which tax has already been paid; so effectively the same shareholders are assessed twice; once on the distribution of the dividend, and once again under section 5A (3) by the formula which ignores the fact that a distribution of dividend has been made and tax has been paid on that distribution. It cannot be the contemplation of any just government that that should take place; but it is apparently in the contemplation of this Government that it should take place, just as I should have thought that it could never have been in the contemplation of any just government that the provisions which formed the linchpin of the Act as it presently stands should be extirpated so that stripping and evasion are no longer of any consequence. What we have is a continuation of the rhetoric but an extirpation of the basis on which the rhetoric is founded; that is, that there should be an act of evasion, an act of stripping. In future, if this proposal becomes law, the intentions of those concerned, the honesty with which they acted, will be quite beside the point. They will be caught so long as they come within the narrow confines of the formula which is presently expressed in the existing Act with the amendment that the saving part of the formula, the part which makes a stripping or an evasion essential, is to be taken away. Mr BRAITHWAITE(Dawson)(5.48) —I do not want to take up too much of the Committee's time. I wish just to reinforce some of the matters discussed in the second reading speech. I come to the imputed dividend, where it has been suggested that the arrangements apply to quasi-liquidations and quasi- distributions. It is also suggested that there is no penalty in doing it in this way; but I suggest that by the manner in which the Act at present indicates that a dividend is to be imputed, there is a penalty written into that method of calculation. I say that because if it is a quasi-liquidation, no self-respecting accountant would liquidate a company in a normal sense in this way. Having in mind the accumulated profits and, if it is a private company, the fact that there is only a 20 per cent distribution required, I think that in a normal distribution an accountant, in conducting that arrangement, would do it in such a way that the imposition of taxation would not fall on to a dividend distribution in one lump sum at a certain time. I would think that it was general practice in the accounting world, for those specialising in taxation, to handle a liquidation so as to deal with the penalty rates of tax that are brought into the Act. It is enumerated, I think, right back to 1971, that this is in itself, a penalty because of the manner in which it is imputed. I suggest that to describe it as a liquidation is not true. If that is to be so, it must be recognised that in the method of taxation of this imputed dividend there is a huge penalty. In my speech in the second reading stage I suggested that that penalty amounts to 82c of every dollar of income earned. That is the only manner in which it would be retained. I understand the principles that the Minister is trying to explain in that regard. I believe that this matter should be more carefully looked at. The other aspect that worries me is the fact that trustees can be assessed for taxation purposes in certain circumstances in which they hold shares. As I see it, there is nothing in the legislation which limits the liability of a trust to the assets of the trust only. In cases in which the liability is in excess of trust assets, the trustees may be called upon personally to bear that liability. I am wondering whether the Minister will assure not only myself but also the people outside that there will be no further penalty on a trustee as an individual. Will the Minister indicate to me whether this is a fair interpretation of an imputed dividend and whether the trustee has a continuing liability if the trust cannot meet the commitment. Mr ROCHER(Curtin)(5.51) —Clause 4 proposes to omit section 4 (5) of the principal Act which reads: Where- (a) a person makes a request in writing to the Commissioner that the Commissioner disclose to the person information relating to an arrangement or transaction referred to in paragraph 5 (l) (h) or 2 (h); and (b) the arrangement or transaction was, or in the opinion of the Commissioner, is likely to be, taken into account in the assessment of the liability of the person to pay vendors recoupment tax, the Commissioner shall, notwithstanding section 16 of the Assessment Act, disclose to the person all information (including the identities of the parties to the arrangement or transaction) known to the Commissioner that is relevant to that liability and relates to the arrangement or transaction. Section 3 (12) of the principal Act should, in my opinion, be retained, and I gave my reasons in the second reading debate. If it is retained, section 4 (5) also needs to be retained. In any event, if section 3 (12) is repealed, the provision merely requires the Commissioner to disclose all information known to him that is relevant to the tax liability and relates to the arrangement or transaction. Because the actions of the purchasers or sub-purchasers after the date of sale have given rise to the tax liability about to fall on the vendor, it seems only fair and reasonable that he should be able to obtain from the Commissioner of Taxation any information available as to what happened to the company after the sale. The other matter I wish to raise concerns clause 18 of the Bill which proposes to amend section 21 of the principal Act by restricting the interest free payment period to 12 months instead of 12 months or 'such longer period as the Commissioner in special circumstances determines'. It seems that the Government is prepared to give the Commissioner discretion whether he should print names in his annual report, but it seems that so far at least it is not prepared to allow that discretion to remain with the Commissioner. It seems unfair for the additional words to be deleted; they are available only where special circumstances exist and where the Commissioner so determines. The Act is retrospective and payment of the tax has not been planned for. The tax saving made by the vendor in the year of sale has in many cases been lost in subsequent business operations, for example, investment in land, the value of such investments having subsequently dropped substantially. The power of the Commissioner to extend the repayment period should be retained for, in the words of the principal Act, 'special circumstances'. Mr HURFORD(Adelaide-Minister for Housing and Construction and Minister Assisting the Treasurer)(5.55) —About six points were raised by three honourable members and I hope to be able to answer them in the short time which my Whip has given me. The first point concerning the reporting provisions was raised by the honourable member for Curtin (Mr Rocher) and the honourable member for North Sydney (Mr Spender). The rationale for authorising the Commissioner of Taxation to report a failure to pay vendors or promoters recoupment tax is that failure to pay such tax is equivalent to a continuation of evasion of that company tax. I believe that most of the remarks of the honourable member for Curtin in his speech during the second reading stage were based on a misconception, that is, that the reporting provisions would apply when there was a failure to pay dividend recoupment tax or personal tax on imputed dividends. That is not so. It is only in relation to failure to recoup the evaded company tax that that reporting applies. The second point was raised by the honourable member for North Sydney and it related to stripping arrangements. I went through that point very carefully in my speech in reply during the second reading stage. I believe that in the Committee stage the honourable member is quibbling on that matter. The fact is this: This legislation applies only to those companies to which indeed the former Treasurer's Bill applied and where primary tax was recouped. In all those cases it is clear that the vendors of the shares knew what they were doing; they were selling to crooks. I believe that that is all that needs to be said on that point. The third point related to deemed dividend and to dividend payments generally. It is in the nature of pre-tax profit stripping schemes that no dividend would have been paid prior to the company being stripped. The honourable member for North Sydney went into a hypothetical case and suggested that that might not be so. I do not believe that it would be so. Any such cases would be very few. Where evaded primary tax exists in relation to the current year only, it is relevant to note that under the income tax law any dividends paid during the first 10 months of any income year are treated as distributions of the preceding year's profits and thus would operate to reduce or eliminate the liability for Division 7 tax in respect of the preceding year. In the more unusual case where an unpaid primary tax liability exists in relation to more than one year of income, even if a dividend were paid out of the profits of the earlier year of income, that amount would not be included twice in a former owner's assessable income. There is a well established principle that the income tax law does not operate to tax a person twice on the same income. Accordingly, the view is taken that the proposed legislation would operate only to include an imputed dividend in a former owner's assessable income to the extent that an actual dividend had not already been included. I hope that puts the mind of the honourable member for North Sydney at rest. I appreciate the way in which the honourable member for Dawson (Mr Braithwaite) tackled the points that he made. I suggest to him that I agree that, other things being equal, accountants would organise the liquidation of a company in order to minimise the tax on the dividends paid and would possibly pay it over time. I also say this to the honourable member for Dawson: He probably is forgeting that indeed the only deemed dividends that are taxable on this occasion are those that come out of those years in which there was an evasion of primary tax. Most of these companies -99 per cent of the ones involved in these cases-would have had years of undistributed profits which otherwise would have been liable to tax. But it is only the last couple of years-probably only the last year-to which this legislation applies, so it is not harsh. Lastly, when it comes to the excess liability of trustees, I put the honourable member's mind at rest and tell him that trustees are taxed only to the extent of trust funds in the hands of the trustee. Bill agreed to. Bill reported without amendment; report adopted. Third Reading Question put: That the Bill be read a third time. The House divided. (Mr Deputy Speaker-Mr J. B. Mildren) Ayes . . . . . . . . . . . 68 Noes . . . . . . . . . . . 43 —— Majority . . . . . . . . . 25 —— Baldwin, P. J. Humphreys, B. C. (Teller)Beazley, K. C. Hurford, C. J.Beddall, D. P. Jacobi, R.Bilney, G. N. Johnson, LesBlanchard, C. A. Jones, BarryBlewett, N. Keating, P. J.Bowen, Lionel Kelly, R. J.Brown, Robert Kent, L.Brumby, J. M. Keogh, L. J.Campbell, G. Kerin, J. C.Charles, D. E. Klugman, R. E.Charlesworth, R. I. Lindsay, E. J.Child, J. McHugh, J.Chynoweth, R. L. Mayer, H.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. M. Saunderson, J.Fatin, W. F. Scholes, G. G. D.Free, R. V. Scott, J. L.Fry, K. L. Simmons, D. W.Gayler, J. Snow, J. H.Gear, G. Staples, P. R.Gorman, R. N. J. Steedman, A. P.Griffiths, A. G. Theophanous, A. C.Hand, G. L. Uren, T.Hayden, W. G. Wells, D. McM.Holding, A. C. West, S. J.Hollis, C. Willis, R.Howe, B. L. Young, M. J. Adermann, A. E. Howard, J. W.Aldred, K. J. Hunt, R. J. D.Andrew, J. N. Katter, R. C.Anthony, J. D. Lloyd, B.Braithwaite, R. A. McGauran, P. J.Burr, M. A. MacKellar, M. J. R.Cadman, A. G. McVeigh, D. T.Cameron, Ewen (Teller) Macphee, I. M.Cameron, Ian Millar, P. C.Carlton, J. J. Moore, J. C.Coleman, W. P. Newman, K. E.Connolly, D. M. Porter, J. R.Dobie, J. D. M. Rocher, A. C.Drummond, P. H. Ruddock, P. M.Edwards, Harry Shipton, R. F.Fisher, P. S. Sinclair, I. McC.Goodluck, B. J. Spender, J. M.Groom, R. J. Street, A. A.Hall, Steele Tuckey, C. W.Hawker, D. P. M. White, P. N. D.Hicks, N. J. (Teller) Wilson, I. B. C.Hodgman, W. M. Reeves, J. E. Fife, W. C.Maher, M. J. Cowan, D. B.Brown John Lusher, S. A. Question so resolved in the affirmative. Bill read a third time. Consideration resumed from 23 August, on motion by Mr Hurford: 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 Hurford) read a third time. Debate resumed from 23 August, on motion by Mr Hurford: That the Bill be now read a second time. Mr HOWARD(Bennelong)(6.12) —This legislation, which forms part of a package of Budget Bills, corrects a number of anomalies and inconsistencies in the sales tax law and makes a number of structural changes. It taxes some items at a higher rate and exempts others. Other items are to be taxable at lower rates and other previously exempt items will become taxable. The Opposition will not oppose this legislation. In saying that I observe that the sales tax changes do contradict some of the rhetoric of the Australian Labor Party about indirect taxes. Whilst not opposing the legislation, I do take the opportunity of observing that these measures, and a number of other indirect tax measures contained in the Budget, contradict the rhetoric of the Labor Party about indirect taxes. It is worth observing that in the last Budget indirect taxes rose by three times the amount that direct taxation rose. Although I would be the last to condemn a shift to a greater reliance on indirect taxation, these changes do sit rather oddly with the rhetoric of the Labor Party on this particular subject. I understand that the Treasurer (Mr Keating) will foreshadow some amendments to this legislation during the debate. He was kind enough to warn me in advance of the changes. There will be some changes in the rate to be applied to swimming pools. They confirm information that had been brought to my attention; namely, that there had been some revenue underestimates of taxation collections on swimming pools. It is also worth observing that the effect of this legislation will be to impose a tax on building materials, not at a rate of 2 1/2 per cent, but at a rate of 20 per cent. On a typical commerical building project air- conditioning is 10 per cent of the building cost, and of this 10 per cent some 20 per cent is the cost of ducting. As I understand it, the decision of the Government to maintain the proposal announced on Budget night for ducting of air -conditioning will have the effect that I have just outlined. The tax on building materials is contradictory to the stance taken by the Labor Party in another place when sales tax legislation of the former Government was thrown out of the Senate because, inter alia, it included a tax on building materials. In the debate on this legislation, I wonder whether the Government would be kind enough to explain the rather extraordinary decision that was announced by the Prime Minister (Mr Hawke) during his recent visit to Queensland to the effect that he was going to exempt tourist vessels on a retrospective basis going back a couple of years. It seems to sit very strangely at odds with other announcements that the Government has made in this area. I have also been reminded by my colleague the honourable member for Higgins (Mr Shipton), who is the Opposition spokesman on small business matters, that the legislation that the Government is proposing in this area also involves a sales tax problem with lubricating oils and greases used in the manufacturing process. Whilst the Opposition will not, for very obvious reasons, oppose these measures I do, nonetheless, point out that their introduction, in company with a number of other indirect tax changes contained in the Budget, lies directly counter to the rhetoric of the Government on the issue of indirect taxation and sits very strangely at odds with some of the declarations made by the Government on this subject before the election and the terms and conditions in some areas of the prices and incomes accord. Dr THEOPHANOUS(Burke)(6.16) —I will confine myself to a few brief comments. We have before us the Sales Tax (Exemptions and Classifications) Amendment Bill, which is intended to be part of the overall Budget package in terms of the necessary collections of revenue that the Government needs in order to carry out its overall spending program. The pious remarks made by the honourable member for Bennelong (Mr Howard) are really quite misplaced. It is time that he and other members of the Opposition got their heads together and tried to work out something that remotely resembles a coherent economic strategy rather than trying to make various personal points which are no substitute at all for a coherent policy. The honourable member mentioned that the Australian Labor Party had been opposed in the Senate last year to certain indirect tax changes. Let me make it very clear that we are still opposed to the imposition of indirect taxes on food , clothing, books and other such necessities of life. It was the intention of the previous Government to impose such taxes. We have not changed our position on that matter at all. At no stage have we indicated that we are totally opposed to every conceivable increase in indirect taxation. Such a statement would be an absurdity. Obviously, in certain situations, indirect tax is important because it is a tax on those who can afford to pay. In certain circumstances such tax needs to be imposed or increased. This is a very different proposition from the proposition of imposing indirect tax on low income earners, the unemployed and the poor, who are not in a position to pay. As I have mentioned, in this regard we certainly are not imposing indirect tax on foodstuffs, clothing, books and printed matter. As regards the overall role of indirect taxation in the strategy of this particular Budget, we have had to increase some indirect taxes as a necessary measure, but we have also managed to increase expenditure to a considerable degree without increasing direct taxation. This is a substantial achievement under the circumstances. The Government was faced with a horrifying budgetary situation left to it by the previous Government. One thing that needs to be mentioned in relation to such indirect taxes is the tightening of procedures regarding their collection. We find in the Auditor- General's report of last year relating to excise taxes that there are a considerable number of difficulties and loopholes. I think this is an area that needs to be looked at by parliamentary committees and by the Government to ensure that, where just, indirect taxes are imposed, those taxes are paid and are not avoided. I believe that the measures outlined are quite reasonable under the circumstances of the budgetary situation in which the Government found itself. I urge the House to pass these measures forthwith. Question resolved in the affirmative. Bill read a second time. The Bill. Mr KEATING(Blaxland-Treasurer)(6.21) -by leave-I move: (1) After clause 2, page 2, insert the following new clause: Prefabricated buildings ''2A. Section 6A of the Principal Act is amended by omitting sub-section (2) and substituting the following sub-section: '(2) In this section- ''pre-fabricated building section'' does not include pre-fabricated duct work or pre-fabricated channelling, being duct work of channelling of a kind used in forced draught ventilation or air-conditioning systems; ''taxable goods'', in relation to a pre-fabricated building or pre-fabricated building section, means goods that, if sold separately, would not be covered by any item in the First Schedule, and, in a case where there are incorporated in the building or building section goods (in this definition referred to as the '' relevant goods''), being- (a) duct work or channelling of a kind used in forced draught ventilating or air-conditioning systems; or (b) fittings, accessories or attachments for duct work or channelling of a kind used in forced draught ventilating or air-conditioning systems, includes the relevant goods.'.''. (2) Page 7, Schedule, paragraph 17 (a), omit proposed paragraphs (a) and (b) of sub-item 82 (1), substitute the following paragraphs: ''(a) asphalt tiles, cork tiles, linoleum tiles, rubber tiles, vinyl tiles or other similar floor tiles; (b) channelling used for slides or water slides; (c) vinyl liners, fibreglass liners or other similar liners for swimming pools; (d) components of, or goods designed to form part of, swimming pools, including panels and sheeting; (e) piping or tubing; (f) duct work or channelling of a kind used in forced draught ventilating or air-conditioning systems; or (g) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air-conditioning systems''. (3) Page 7, Schedule, after clause 17 insert the following new clause: ''17A. After item 82 in the First Schedule the following item is is inserted: '82A. (1) Piping or tubing of a kind used exclusively, or primarily and principally, in the construction or repair of, and wrought into, or attached to, so as to form part of, buildings, fixtures, structures or other works, but not including piping or tubing being-Nos. 1 to 9. (a) duct work or channelling of a kind used in forced draught ventilating or air conditioning systems; (b) piping or tubing of a kind used as duct work or channelling in forced draught ventilating or air conditioning systems; (c) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems; (d) piping or tubing of a kind used for slides or water slides; (e) piping or tubing of a kind used in or in connection with beer drawing plant ; or (f) rubber hose or rubber tubing or any hose or tubing of a kind used principally for any of the purposes for which rubber hose or rubber tubing is ordinarily used '(2) Fittings (and parts therefor) for goods covered by sub-item (1), including taps, cocks, valves, faucets, inspection boxes and doors, clear outs, floor wastes, grates, gullies, traps, syphonic connections, pipe heads, shoes, stop blocks, meters and meter covers, hydrants and hydrant covers, hydrant pit frames and covers, valve covers, valve pit frames and covers, and air valve frames and covers, but not including-Nos. 1 to 9 (a) components of, or goods designed to form part of, swimming pools; or (b) filtering appliances or filtering equipment, being appliances or equipment of a kind installed in or in connection with swimming pools '(3) Piping or tubing of a kind used exclusively, or primarily and principally, as part of fixed electrical installations in consumers' premises. Nos 1 to 9 '(4) Materials for use as integral parts in the construction or repair in situ of piping or tubing covered by sub-item (1) or (3), including manholes and inspection shafts used in connection therewith. Nos. 1 to 9'.''. (4) Page 7, Schedule, paragraph 18 (b), omit proposed paragraphs (f) and (g) of sub-item 83 (2), substitute the following paragraphs: ''(f) vinyl liners, fibreglass liners or other similar liners for swimming pools; (g) components of, or goods designed to form part of, swimming pools, including panels and sheeting; (h) duct work or channelling of a kind used in forced draught ventilating or air conditioning systems; or (j) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems''. (5) Page 8, Schedule, paragraph 18 (d), omit proposed paragraphs (c) and (d) of sub-item 83 (3), substitute the following paragraphs: ''(c) vinyl liners, fibreglass liners or other similar liners for swimming pools; (d) components of, or goods designed to form part of, swimming pools, including panels and sheeting; (e) duct work or channelling of a kind used in forced draught ventilating or air conditioning systems; or (f) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems''. (6) Page 8, Schedule, clause 19, omit the clause, substitute the following clause: ''19. Item 84 in the First Schedule is amended- (a) by omitting sub-item (1) and substituting the following sub-item: '(1) Metal building materials (including girders, rods, bars, wire, sheets, mesh, lathing and fabricated units composed of any of those goods, and attachments for such units) for use in the construction or repair of, and to be wrought into, or attached to, so as to form part of, buildings or other fixtures , but not including-Nos. 1 to 9'; and (a) liners for, components of, or goods designed to form part of, swimming pools, including panels and sheeting; (b) channelling used for slides or water slides; (c) piping or tubing; (d) duct work or channelling of a kind used in forced draught ventilating or air conditioning systems; or (e) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems (b) by inserting in sub-item (2) ', duct work or channelling of a kind used in forced draught ventilating or air conditioning systems, or fittings, accessories or attachments for, components of, or goods designed to form part of, such duct work or channelling' after 'equipment'.''. (7) Page 8, Schedule, clause 20, omit proposed paragraphs (b) and (c) of sub- item 86 (1), substitute the following paragraphs: ''(b) liners for, components of, or goods designed to form part of, swimming pools, including panels and sheeting; (c) channelling used for slides or water slides; (d) piping or tubing; (e) duct work or channelling of a kind used in forced draught ventilating or air conditioning systems; or (f) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems''. (8) Page 8, Schedule, after clause 20, insert the following new clause: ''20A. Item 88 in the First Schedule is amended by adding at the end of sub- item (1) 'or fittings, accessories or attachments for, components of, or goods designed to form part of, such systems'.''. (9) Page 11, Schedule, after clause 43, insert the following nexw clause: ''43A. Item 2 in the Third Schedule is omitted and the following item is substituted: '2 Parts, fittings and accessories for goods covered by item 1, but not including- (a) duct work or channelling of a kind used in forced draught ventilating or air conditioning systems; or (b) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems'.''. (10) Page 11, Schedule, clause 47, omit proposed item 11, substitute the following items: '' '11 (1) Vinyl liners, fibreglass liners or other similar liners for swimming pools, being swimming pools that are fixtures '(2) Goods, including panels and sheeting, designed to form the walls or floors , or designed to form parts of the walls or floors, of swimming pools, being swimming pools that are fixtures, but not including- (a) filtering appliances or filtering equipment; or (b) other goods (other than coping) designed to be attached to those walls or floors '12 Containers for goods covered by this Schedule.'.''. As a number of amendments to the Sales Tax (Exemptions and Classifications) Bill have been moved by the Government it may suit the convenience of the Committee if I now speak to all of them. The amendments cover two areas and constitute the Government's response to representations and to a technical review made by the Australian Taxation Office. One group of amendments concerns piping and tubing and aims to better express our policy intentions in this area. The other group of amendments will reduce from 20 per cent to 7 1/2 per cent the sales tax that the Bill proposes to introduce on liners and certain other components for swimming pools. As to the clarifying amendments, clause 8 in the Schedule to the Bill as now framed will confine the existing specific exemption under item 18 for piping, tubing, channelling and guttering to that for use for irrigation, water supply, drainage or sewerage purposes. If it were left at that, a range of piping and tubing that the Government does not intend to tax would have to depend for exemption on certain overriding general exemptions the practical application of which may involve some difficulty and, in some instances, not go as far as required. Accordingly, it is proposed that there be inserted in the sales tax law a new specific exemption item 82A that will maintain exemption for those goods which the Government did not intend by the amendments to exemption item 18 to make taxable. In short, the new item will maintain exemption for piping and tubing, and fittings therefor, of a kind used primarily and principally in the construction of buildings, fixtures, structures and other works. Besides building and other structural pipes, the item will exempt pipes for use in the construction of oil and gas pipelines and will exempt copper, aluminium and brass pipe where it is of a kind used exclusively or primarily and principally in the construction of buildings, fixtures, structures or other works. In proposing changes in this area the Government had it in mind that certain kinds of piping and tubing such as air-conditioning duct work and piping and tubing such as used with beer drawing plant should not enjoy exemption from sales tax. Air-conditioning plant of which duct work forms an integral part is already subject to sales tax, and apart from non-business air-conditioning, all attracts income tax plant depreciation allowances. The new item is framed so as to tax other general purpose piping and tubing that is not of the kind used in the building and construction industries. Some of the other amendments now proposed are consequential upon, and supportive of, these basic intentions. In part they aim to ensure that exemptions intended to remain will continue and, in part, they are designed so that the intended taxing of other items will be effective. Altogether, they do not involve any change in the Budget estimates of sales tax yields. I turn now to the amendments that concern swimming pools. The package of sales tax measures introduced on Budget night involved introduction of tax of 20 per cent on pool filters and related equipment, on fibreglass and other pool liners and certain other pool components and on pool chemicals that had previously unintentionally attracted exemption under an item to exempt chemical used in agriculture. On review, the Government stands by the thrust of these amendments but has been persuaded by industry representations that it would be inappropriate, in a context where ordinary building materials used in pool construction remain exempt, to introduce a tax of 20 per cent on pool liners and other components specifically designed for pools. Instead, we propose a rate of 7.5 per cent. The amendments now proposed will tax at 7.5 per cent, rather than 20 per cent, those liners and component parts for swimming pools that were tax exempt before the Budget, on the basis that the pools are fixtures. Broadly, pools in excess of 9,000 litres capacity are regarded by the Taxation Office as fixtures. Liners and component parts for swimming pools of less than 9,000 litres capacity, not being viewed as fixtures, will remain taxable at the pre-Budget rate of 20 per cent, and that rate will apply to filters, chemicals, pool ladders, hand skimmers, chlorine dispensers, salt, pool covers and hand leaf scoops and rakes for use with swimming pools of any capacity. While the 7.5 per cent rather than 20 per cent rate on liners and other components will of course yield less revenue, that loss is made up by a now expected higher yield than the Budget estimate of yield from a tax of 20 per cent on filters and related equipment. The admendments are more fully explained in the supplementary explanatory memorandum that is being circulated to honourable members and I commend all the amendments to the Committee. Mr SHIPTON(Higgins)(6.29) —Amendments moved by the Treasurer (Mr Keating) seem to improve the situation. There still seems to be an anomaly in relation to piping and tubing. I ask the Treasurer whether it is his understanding of the situation that piping and tubing used in the motor repair industry-there is a quite significant use of tubing and piping in that industry-is still subject to tax. This was an anomalous situation when the original legislation was introduced. If that is so I would welcome the Treasurer's undertaking to look into that matter and, if necessary, introduce a further amendment. I welcome what he has said about swimming pools because the amendment seems to improve the situation. However, I adopt the proposition of the honourable member for Bennelong (Mr Howard) in his speech on the second reading debate. There is another serious area that I believe needs attention by the Government. I refer to the situation concerning oils, greases and lubricants used in factories in the manufacturing process. There still seems to be an anomaly in this area because these oils, greases and lubricants are taxed at a rate of 20 per cent, whereas other items used as lubricants that are not oils and greases, such as synthetic miscibles, are not taxable. The taxing of these oils, greases and lubricants used in the manufacturing process in fact amounts to a substantial change in the philosophy of what is a sales tax, because it is a tax on the process of manufacture rather than a tax on a finished product at a stage in the manufacturing process. So there is the added cost of this 20 per cent increase on oils and lubricants used in the manufacturing process, costs that all small businesses and all manufacturers, large and small, will have to bear. Additionally, the manufacturers of those same oils and greases-I think there are a dozen or so in Australia-are, for the first time, subject to a sales tax of 20 per cent which was thrust upon them overnight without warning. I am grateful to the Treasurer (Mr Keating) who has informed me that piping and tubing used by car manufacturers is still exempt and that the situation is the same as that applying in the repair industry for muffler or exhaust systems. If there are still any anomalies, I am sure that he will look at them in the same spirit in which he has informed me of that situation. Mr HOWARD(Bennelong)(6.32) —I say just two things. Firstly, the Opposition accepts and supports the amendments put forward. Obviously, those affected in the swimming pool area welcome the fact that the sales tax rate will be 7 1/2 per cent rather than 20 per cent. I think it is worth pointing out to the Committee that this change produces a further anomaly; that is, that the upmarket swimming pools will remain exempt from the tax but the downmarket pool manufacturers will pay tax at 7 1/2 per cent, which is an interesting anomaly for an egalitarian government to introduce. But I do not want to sound carping on this matter because the area of anomalies in sales tax law is very difficult. I am not surprised that the Treasurer (Mr Keating) has found it necessary to make some changes. I thought that the original revenue estimates were a little hairy. That equally is not surprising. I do not make any criticism of that because these areas are extremely hard to estimate. Sales tax anomalies are always in the eyes of the beholder. As fast as one alters one anomaly one is bound to create another. Of course, the only real solution to the elimination of anomalies in the sales tax law is to have a totally comprehensive, broadly based, consumption tax at a neutral rate, perhaps excluding things such as food. If one had a nice uniform rate of tax on everything else one would eliminate all of the anomalies, and we would not have all of these problems occurring each year irrespective of who brings in the Budget. Mr Cohen —As long as you exclude clothing. Mr HOWARD —The Minister for Home Affairs and Environment says, 'as long as you exclude clothing'. I have news for him. I cannot have a unity ticket with him on that. However, the Opposition accepts the changes although they produce the further rather interesting anomaly that certain forms of swimming pools, particularly those that can loosely be called 'upmarket', will remain exempt. The final comment I make relates to the presentation of the revenue figures in the indirect taxation area. If I may say so, I think that some of the confusion about estimates may have arisen from the Government's lumping certain revenue yields from excise changes together. For example, the Government did lump together revenue yields from the changes relating to fuel oils and grape spirit. I think that has occurred in a number of other areas and may have led to some of the confusion in this area. But the Opposition accepts and welcomes the amendments. I for one certainly understand the difficulties that are involved in estimating some of these areas. I do not seek to derive any point from the fact that there has been some revision inside an overall balance so far as the revenue estimates are concerned. Amendments agreed to. Bill, as amended, agreed to. Bill reported with amendments; report-by leave-adopted. Bill (on motion by Mr Keating)-by leave-read a third time. Debate resumed from 24 August, on motion by Mr Duffy: That the Bill be now read a second time. Mr DUFFY(Holt-Minister for Communications) —Mr Deputy Speaker, may I have your indulgence to suggest that the House have a general debate covering this Bill and the Television Stations Licence Fees Amendment 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 two measures? There being no objection, I will allow that course to be followed. Mr LLOYD(Murray)(6.36) —The Government, in these two Bills-the Broadcasting Stations Licence Fees Amendment Bill 1983 and the Television Stations Licence Fees Amendment Bill 1983-is quite openly and blatantly using radio and television licence fees to increase general revenue for the Government. There is not even an attempt to talk about cost recovery or inflation. For example, the Minister for Communications (Mr Duffy) in his second reading speech on the Broadcasting Stations Licence Fees Amendment Bill said: The main purpose of imposing a fee on companies licensed to earn income from broadcasting is to contribute to overall Commonwealth revenues. In these two Bills, in the Government action taken in the mini-Budget on Telecom , in the radiocommunications licences fees increase which was also announced by the Minister on the night of the Budget, and in the debate that is going on with the Overseas Telecommunications Commission at present, it is obvious that the Government is using the communications sector as a new source of revenue; in other words, a new branch of the Australian Taxation Office. Everyone associated with communications should recognise what the Government is doing. The Government is, first of all, in these Bills increasing the maximum percentage of gross earnings which can be charged for licence fee purposes. It is lifting that percentage from 7.5 per cent of the gross earnings of television stations to 8 per cent and from 5 per cent to 5 1/2 per cent for radio stations. The two industry organisations, the Federation of Australian Commercial Television Stations and the Federation of Australian Radio Broadcasters, both oppose the increase-and quite rightly. Not only are the fees based on a percentage of gross earnings and not on net profit but also with inflation-I think this is more particularly the case-the stations automatically move into a higher tax bracket; that is, a higher fee-structured bracket in the overall structure. Of course, with inflation and gross earnings together that in no way means any increase in the ability for the radio or television station to pay the fee. There is also the fact that a higher percentage fee has been introduced for the first time. Thus, rather than the fee bearing any resemblance to an ability to pay or just a straight charge for a licence fee for use of part of the spectrum, the way the Government has gone about these increases is actually to reduce the ability of the television and radio stations to make a profit because there has been no indexing for inflation in the gross earnings arrangements for licence fees. The opposite has happened. The fee structure also ignores the fact that many commercial radio stations, in particular, are operating at a loss at this time. The Goverment hopes to increase revenue from television licences from $36m to $47m this year. That is an increase of over 30 per cent in one year-a very dramatic increase in licence fees or, as the Government has stated, government revenue coming from this one source in one year. Of that amount, $2.4m is from the percentage increase in fees. The fees from radio stations will increase from $3.7m to $4.5m, a 25 per cent increase. Once again, that is a very dramatic increase when one considers that the Government believes that the inflation rate this year will be in single digits again, somewhere between 8 per cent and 9 per cent. But those increases, savage as they are, form but a part of the Government's strategy of using communications as a branch of the Taxation Office. For example , with regard to radiocommunications licence fees, the Minister on Budget night also increased the majority of the 60 different types of radiocommunications licences that are issued to about 500,000 Australians or Australian organisations each year. There are about half a million radiocommunications licences. Once again, this is an increase in revenue of about 25 per cent over last year. It is a very savage increase, particularly when one compares it with the increase of 6 per cent in last year's Budget. The Government hopes to receive about $21.5m from radiocommunications licence fees. The Minister, in his statement announcing the increase in the radiocommunications licence fees, betrayed the intent of the Government and revealed a new and dangerous principle . Everybody in the radiocommunications area should be very clear and aware of the Government's intent. I quote from the Minister's Press statement: Mr Duffy said that in former years fees were levied on a cost recovery basis. But as part of the overall 1983-84 Budget strategy the Government had made a decision to exercise its option under the Radiocommunications Licence Fees Act 1982 and include a royalty component in the fee structure. I emphasise that it will include a royalty component in the fee structure. The Minister later said that this measure would raise about $4m this year. Radiocommunications licences are now not just a cost recovery measure by the Government, but an openly stated part of Government taxation policy because for the first time a royalty component has been included. But there is more to come. I refer to the mini-Budget. At the same time when the Government assisted certain of the statutory corporations such as Australian National Line with $90m, Qantas Airways Ltd with $60m and Trans Australian Airlines with $115m, a special tax of $100m was imposed on Telecom Australia-the most financially successful of the Government's statutory authorities. What incentive is there for any Federal Government statutory authority ever to have efficient management, to make a profit or be a success? If it runs at a loss or gets into trouble with superannuation arrangements the Government will give it $ 90m, $60m or $115m, but if it is a success an additional tax of $100m is imposed . Hence, Telecom in an unprecedented move was required to increase its charges twice in one year. The $100m tax on Telecom is an example of the Government moving into a new area of the communications sector as a new and bright source of government revenue, as a new part of the taxation system. That is not the whole story. I refer to the current disagreement between the Overseas Telecommunications Corporation and the Government on the level of dividend to be paid to the Government from OTC. We should remember that OTC is treated and acts as an ordinary private company. It must, and does, pay tax in the same manner as any other company. On top of this, a dividend is payable to the Government and the Government declares what that dividend will be. I acknowledge that not only this Government this year but also previous governments have decided to take almost all of OTC's remaining profit after the payment of taxes. I believe this is a very short sighted attitude by the Government because in obtaining $32m from OTC over two years it is forcing OTC to borrow all the $300m, or whatever is the exact figure it needs, for its new overseas cable projects. That will result in a reduced profit and reduced payments to the Government in dividends in future years as these loans must be repaid over the next five years or so. In other words, the Government is taking the money now and just hoping that something else will come along at a later stage as the loans need to be repaid. I believe it is time for the Government-I do not mean only this Government in this case, but the Federal Government generally-to establish basic arrangements with both Telecom and OTC which can apply on a stable basis in future. At the moment the opposing policies are being applied by the Government to these corporations. Telecom is being required to fund an increasing percentage, now up to 80 per cent, of its capital from retained profit. OTC is not being allowed to invest any of its retained profit in capital expansion and new projects because the Government is taking the lot. I do not believe that one could ever see anything as inconsistent and contradictory as that from one government in one sector of government operations. Licence fees have increased by 30 per cent and 25 per cent. The Government has openly admitted that it is looking for government revenue, not for cost recovery. A royalty component has been included for the first itme in the radiocommunications licence fee area. Telecom has been hit for $100m. All of OTC's profit is being taken from it. Where does that policy leave Australia Post and other areas of the communications sector? Australia Post has just declared a profit of $8.9m. Does that mean that it is next on the Government's hit list as a source of new taxation revenue? If one looks at the track record of this Government in its period of about six months in office, there are not many areas of the communications sector that have not been taxed in some new way to gain money for the Government. I would welcome some comment from the Minister as to what are the intentions of the Government in the communications sector generally with regard to the use of communications as a source of government revenue, as a branch of the Taxation Office. Where does that leave the remaining sectors of communications which as yet have not been hit but which must be rather worried at present about their future? These are Budget Bills. It is not the intention of the Opposition to require a division on these Bills. It is up to those in the communications area to be made aware of and to realise the intent of this Government and the way it is getting at them to obtain more money. But we condemn the Government for turning communications into a branch of the Taxation Office. Therefore, on behalf of the Opposition, I propose to move now an amendment to the second reading of the Broadcasting Station Licence Fees Amendment Bill and at the appropriate time I will move a similar amendment to the second reading of the Television Stations Licence Fees Amendment Bill. Therefore, 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 deplores the action of the Government in extending the use of fees in the broadcasting area beyond cost recovery to a new source of taxation revenue'. The DEPUTY SPEAKER(Hon. Les Johnson) —Is the amendment seconded? Mr Fisher —I second the amendment. Mr CHARLES(Isaacs)(6.50) —I was very pleased to hear the honourable member for Murray (Mr Lloyd), who obviously was speaking on behalf of the great protectors of public enterprise, although I do not think the track record of conservative governments over the last 30 years tallies with his words in that regard. May I just state what the Broadcasting Stations Licence Fees Amendment Bill and the Television Stations Licence Fees Amendment Bill are all about. They provide very modest increases in the maximum licence fee rates. For broadcasting stations the increase in average gross earnings paid as fees is from 5 per cent to 5 1/2 per cent; for television stations it is from 7 1/2 per cent to 8 per cent. Those increases will apply only where the annual gross earning of a station are in excess of $9m. It must be noted that only one radio station in Australia will be affected. Although it was interesting to hear that the Federation of Australian Radio Broadcasters had objected, in fact only one radio station and the 16 biggest television stations in Australia will be affected under these guidelines . It is a fairly modest increase. The honourable member for Murray talked about superannuation, taxation and Budget deficits. He should have a chat with the honourable member for Bennelong (Mr Howard). The Opposition wishes to bring the Budget deficit down by $1,500m to $2,000m, yet the honourable member for Murray says that these fees should stay as they are or be reduced and that no money should be brought in from the communications area. I would like to know what Budget and taxation measures the honourable member for Murray would bring into being were he on this side of the House. There has always been a degree of taxation in the communications area; it is not new. In fact not so long ago I spoke on Bills introduced by the previous Government which lifted the rates. The raising of revenue through enterprises such as Telecom Australia is not new, and I think it should occur. The previous Government took ad hoc decisions which affected not only the communications industry but also the film industry. In 1981 the Fraser Government introduced section 10BA of the tax Act which was supposed to be a cure-all for the film industry. That was a gimmick for the 1980 election and it brought the whole film industry just about into total disarray. It has taken this Government to pull that industry out of that hole. One does not cure industry problems by making one decision or bringing in a quick gimmick during an election campaign; policies have to be thought through. Over several decades we have seen ad hoc decisions in regard to the media, communications and the broadcasting and television industry which have put broadcasting policy in this country into disarray. On the other hand, this Government has moved in a clear and co-ordinated manner in regard to Australia's communications. We have resolved to proceed with the launching of the Australian domestic satellite. It has to be remembered that that idea was first floated in 1979 by the then Minister for Communications, Mr Staley. This Government, in the few months in which it has been in office, has made a firm decision to launch the Australian domestic satellite into orbit in 1985. The Government is now proceeding to finalise its decisions on ownership and transponder use of the satellite system. This should be completed within six to eight weeks when we will be finalising all aspects of this new and very important communications capacity for Australia -another clear step forward for this Government and Australia. This Government has made a clear decision not to proceed with cable television at this time. That decision has been applauded by most people, except the few who I think unrealistically had vested interests in cable television going ahead . Most people who are aware of the difficulties, even the people who put substantial submissions before the Broadcasting Tribunal, realise that it was a correct decision. The inquiries which the Government is now proceeding with through direct and clear-cut decision-making under the guidance of the Minister for Communications (Mr Duffy) have added confidence to the Australian broadcasting industry. The Minister, in his second reading speech, noted that to offset the modest rises introduced in this legislation the Government is considering proposals to encourage the production of Australian television programs. This would be particularly beneficial to the Australian industry. Those proposals are being considered now by this Government and any money that can be generated in that area through legislative amendments such as those before us would be greatly appreciated by the industry. Again, the Government is moving the industry forward in a very positive way. A lot has happened in the communications industry in the last decade, especially in the last few years, and there is a lot more to come with this great revolution in communications. We have seen the Dix Committee of Review of the Australian Broadcasting Commission, now the Australian Broadcasting Corporation. We have seen the seven-volume report from the Tribunal on cable and subscription television and we have heard the whole satellite discussion. The revolution in communications will continue for several decades and we will see many changes. It will be up to the government of the day to move with those changes, for the betterment of Australia and its people, to make those new communications work. The decisions taken by the government of the day-and some of them will be taken by this Government within the next few months-will be vital to the long term benefit of the industry, and thus the country, because I think communications will not only create growth in industry, finance and employment but will also be very important for the country. Therefore, it is important that we encourage the industry. The Australian Labor Party, even when in Opposition, encouraged the integration of the public and private sectors. I have acknowledged before that we on this side of the House are not just public sector people. There needs to be a viable and co-ordinated private sector which is stimulating in its output. I believe that we can find the right mix and that it will be beneficial to this country in many ways. As a result of the explosion in the number of films and television mini-series being made in Australia, mainly by the private sector, the commercial area, some of our programs are now being exported. When I was in New York last year several well-informed people mentioned to me that they were really very interested in seeing Australian programs. They had seen a number of them and they were very interested to see more. Indeed, many parts of the world are looking to this country for greater development in our television and film exporting area. I think it is an area that will not only, as I have said, be beneficial to the related industries but also have a great rub-off internationally for Australia. Even in the foreign affairs area, many nations refer to Australia and know what Australia is all about through its media, through its export of television programs and films. The higher the quality of those exports the better off we will be. I will leave the reference to Telecom and to the Overseas Telecommunications Commission to the Minister when he replies. I am sure he would like to reply to the Telecom and OTC questions that were raised by the honourable member for Murray. I think it is quite amusing, as I said at the outset, to find the conservative Opposition, the conservative Government for nearly 30 years, which over that time badgered public enterprise day in and day out, now turning around - Mr Duffy —It had inquiry after inquiry. Mr CHARLES —As the Minister says, it had inquiry after inquiry into various public enterprises and now it is saying that we are sending Telecom and OTC to the wall. I think honourable members will find that the decisions already made and the decisions that will be made in the next few months and over the next few years by this Government will have quite the opposite effect. We are trying to get the right blend of public and private enterprise in what I believe is a very important industry for this country and, in times of trouble, its defence. I have much pleasure in supporting the Government and the modest rises provided for in these Bills. This is the second set of rises in the last three years, the first having been made by the previous Government. They are modest measures, and I am quite sure that with the ongoing participation and investigation by the Government to offset these rises, with the encouragement of Australian industry and programs, as the Minister mentioned in his second reading speech, the industry and Australia will be all the better. Mr TUCKEY(O'Connor)(7.03) —It was interesting to hear the honourable member for Isaacs (Mr Charles) speak about modest amounts of money, et cetera. I note that he comes from the land of the 10c phone call. The rises might be modest to him but they will not be modest to many people who come from the dollar a minute phone call area and are confronted with these taxes that he so quietly and blithely suggests to us are taxes on a public utility such as Telecom Australia or a private enterprise such as a television station. We are talking about taxes on the community because all taxes domino to the community. Of course, the Government would like to think of television stations as hugely profitable organisations that can bear any tax burden- Mr Charles —They are. Mr TUCKEY —I am glad that the honourable member said that. I was about to say that irrespective of their profitability they will pass taxes on. They will pass them on to their clients. The honourable member, who was a member of the television industry before he came here, should be well aware that when charges increase the advertising budgets of the major companies that require advertising to support their product and to maintain their market share also rise. The cost to the consumer of certain industries believing they need to advertise at the level they do has been shown clearly in many inquiries. It does not matter if honourable members opposite believe that Kerry Packer is the loser under this decision; they are just continuing to show their total lack of knowledge of the business community and how it works. All charges end up with the consumer. The Government is taxing by stealth. That is what the Broadcasting Station Licence Fees Amendment Bill, the Television Station Licences Fees Amendment Bill and all the others that the Government is sneaking in around the back corner are all about. Those Bills are about additional revenue. They have been brought in in a particularly sinister fashion. The Government has said: 'They will catch up with only one radio station and 16 television stations'. Yes, at present that is the case, but where does the Government index the threshold of these charges? When inflation runs rapidly under some of the other budgetary policies that the people opposite have brought forward, what will be their profit from this tax? How quickly will the 16 become 40 and the one become 10? There is no way that inflation will not drag people into this net one by one. Do not let us have it that the rises are modest; do not let us have it that they are of a minor nature as I think I read in the- Mr Charles —Your Government did it. Did you speak against it? Mr TUCKEY —Am I worrying the honourable member for Isaacs? Mr Charles —No. Mr TUCKEY —Well, if I am not, I ask the honourable member to keep quiet. The situation is that this is taxation by stealth and, of course, it is discriminatory. When we look at the Budget Papers we see that last year taxation on telecommunications amounted to $560m and this year will amount to $741m in round figures. From those figures I presume it is reasonable to take $24.255m as being what the Government proposes to collect from the sale of Aussat Pty Ltd equity capital, if it has not changed its mind on that. We are looking at an increase of $156m in the taxes that are levied in this area. Of course, the bulk of that is the $100m that was picked up from Telecom in the mini-Budget. At that time the Treasurer (Mr Keating) said: 'Do not worry about it; it is one of these minor matters. Anyhow, it is a tax on Telecom. Telecom is hugely profitable; it does not charge people much'. He is at least honest enough to tell us as an illustration that in a full year the additional interest charge could be met by a 1c increase in the cost of a local call-the Isaccs call-a commensurate increase in short and medium distance STD charges and a $10 increase in the annual telephone rental fee; in other words, about 10 per cent all round. So that the dollar a minute STD call that many people in the electorate of O'Connor are obliged to make but which people in the electorate of Isaacs are not nearly so frequently obliged to make will go up to $1.10. That is the sort of discriminatory burden that is being imposed by this legislation. If one lives in Isaacs, if one gets one's votes in Isaacs, what is 1c a call or 10c a minute? That is the difference, and that is what we are talking about. The facts of the situation are completely different from the low key, smooth and slinky approach of those Bills. They are the types of Bills that could crawl under the carpet in this chamber without a bump. I have indicated to some extent the people who will pay in these circumstances. They will be the consumers, particularly in relation to the charge on television stations. I was a bit interested in some of the words of the honourable member for Isaacs. Two words seem to be climbing out of the Government benches time and time again. Honourable members opposite like to use the phrase 'in a clear and co-ordinated fashion'. You cannot convince us; you must be trying to convince yourselves. It is unbelievable. You say it and the Prime Minister (Mr Hawke) says it. If you keep telling yourselves you will believe it as you believe in many of your other fibs but you will not be clear and co-ordinated because- Mr DEPUTY SPEAKER(Mr Mildren) —Order! If you wish to have a private discussion you can have it afterwards outside; otherwise direct your comments through the Chair. Mr TUCKEY —Thank you, Mr Deputy Speaker. I will do that. For your information, another comment of the honourable member for Isaacs was that the Government made a firm decision about Aussat. That would have to be the greatest joke I have heard in a long time. The firm decisions were made about Aussat. It was only the Government's procrastination and its supporters coming froward with all their issues and pork barrels, wanting to get a piece of the action, that threw the whole thing back into the pork barrel. The previous Government had a firm and clear position on Aussat. We knew where we were going with it. It took another firm decision of this Government to get it back on the track that it was on before. We are still to know whether it is to be put under the control of Telecom so that we have all of Australia's major inter-city communications under one union so that that union can turn Australia on and turn Australia off. It will be something of a problem to the Government. I read in a newspaper that the Australian Taxation Office is now to go on to a new computer which will be totally reliant on inter-city communications. Even government revenue will be sorely affected. Of course, we are told that the Telecom unions do not have any strikes. They do not need to have any strikes. They have such immense power that they write their tickets, bring them in and they get signed. The situation is that all of this $741m appears to be going to government revenue. In fact, when one looks at direct returns to the consumer one finds that the Australian Broadcasting Corporation will get $289m. We are told that big issues are involved in that the country people are to get a second radio station. I am grateful for that, but I think some people in my electorate, many of whom do not live within even 200 miles of the capital city, would have been grateful for a television station instead of that second radio station. Many of them do not have television and they would have liked the Government to continue the program set down by the previous Government to erect the Mount Marshall television transmitter. Admittedly, some $100,000 has been allocated for projects within my electorate and for that I am grateful. I thank the Minister for Communications (Mr Duffy). It is quite significant that those projects, including $40,000 to be spent in changing the frequencies at Katanning , will allow the people of Albany to enjoy a frequency modulation radio station. I thank the Minister for that. The Government is also upgrading works at Dalwallinu. But of the 48 shire councils in the electorate of O'Connor-as I have said, one is outside the boundaries of city television reception once one has travelled 200 miles in most directions-16 have either little or no television reception. The little reception they have is generally not considered to exist by the Department of Communications. People get such reception at great expense. I think that if the Government is going to tax these people more highly than other people by taxing their communications, it is reasonable that some of the things they desire, which the honourable member for Isaacs takes for granted, such as the choice of television stations, should be provided. These people would like to have just one television station and not necessarily the choice of four. I was advised by previous Government Ministers that the $1.4m project at Mount Marshall, which would have had a quite high labour content and could have created some jobs, would proceed or would be well on its way in this financial year. I looked at the Budget Papers and found that that project did not even rate a mention, although previous Budgets had allowed significant sums for planning and development. We know that project was provided for. We know it was on the way. But, after all, there are not many votes for the Labor Party in the Mount Marshall area. No doubt it was thought better to spend money in some of these other areas. The Government makes quite a lot of noise about jobs. The previous speaker from this side of the House, the honourable member for Murray (Mr Lloyd), raised the issue of where the Overseas Telecommunications Commission will go now that the Government has rapaciously called upon it to give up all its profits. As the Australian Financial Review of 5 September reported, in one fell swoop the Government decided to retain all of the funds it had asked for from OTC and magnanimously gave the Commission the opportunity to spend about $140m on a new cable. Of course, OTC is somewhat doubtful as to whether it should proceed. It is wondering where the funds will come from in the future to pay off the huge loans with which it will be confronted. This is money which OTC wanted to spend and which the Government is quite convinced it can spend more wisely. Of course, the Government will spend this money on job creation schemes. We will have new bus shelters throughout Australia. But we probably will not have a new telecommunications cable to other countries to improve the competitive nature of Australian industry and the ability of businesses to operate in the modern fashion and to make use of the data resources and other things we can get. The fact is that Standard Telephones and Cables could be expected to supply much of the cable for the Indian Ocean leg from Australia. What will happen if the work does not proceed? Okay, the Government will probably lean on OTC. It will probably tell the Commission that it can borrow the money when, of course, OTC could be entitled to use its profits and the capital it has been able to generate in a good job creation project which would have long term benefits. Of course, that does not fit in with the philosophy of the Labor Party. It wants to be seen to be doing everything itself. It wants to be in all these schemes which will not give very much to the community in the future. The Labor Party thinks that any creepy little tax that can be used to raise money for these purposes is fine. Mr Deputy Speaker, there are other problems involving television within the electorate of O'Connor. I would like to take this opportunity to bring some of them to your attention. One of those problems concerns the fact that the previous Government made provision for self-help stations. Some of my people would even have taken up that step. In fact, there are no funds available to get the necessary staff of the Department of Communications to give people some engineering advice. There are not even sufficient funds available for these people to be able to take a financial decision. Mr Duffy —That is not right. Mr TUCKEY —The Minister tells me that that is not right. I thank him for that advice. I will contact him and if he can help me I will register my thanks in this place as I did a few minutes ago. The other great problem which I bring to the Minister's attention-I do not do so in any critical fashion; it has been around for a while-is the fact that under the present laws relating to television, a broadcasting licence is a licence regardless of whether it is granted in any country area or in a metropolitan area. I know there is a difference between those two licences, but in an electorate like O'Connor it is just not practical for a licence holder necessarily to make sufficient money to be able to give a service to his community. We have to be able to give a service to his community. We have such a service. Part of my electorate is covered by an excellent television program provided by Golden West Network Ltd. Another part receives very bad service. In fact, only recently, the Australian Broadcasting Tribunal renewed that station's licence, part of which does not relate to my electorate, for one year. I am not really totally against the licence holder. The facts are that he does not have sufficient viewers to make money. I do not think he can improve. I believe it would be much better if the laws relating to licensing of country stations took into account population density in some fashion rather than basically saying: 'You have two licences'. They could both be uneconomic; the licensee may be unable to expand and, of course, cannot give a good service. The other side of that argument is that translator licences are available. In my electorate the operation at Albany has almost a translator licence but there is a small degree of local content. The people of Albany are not too anxious to see that lost. Under the present law a translator must only translate a program emanating from a licensed station. In taking this opportunity, I ask the Minister to consider how a better service-perhaps by having new and different licensing means-could be provided in some rural areas. I am quite sure that it is rather difficult to compare the country licence for Newcastle with the country licence for Kalgoorlie. Considering that fact, quite obviously there should be some grades or, if licences are to be very small, a much larger number available to the licence holder. They are my thoughts on this matter. I am concerned about these things. We were asked by the honourable member for Isaacs: What is the Opposition alternative to taking money out of the new growth area-the telecommunications area? I do not think, unfortunately, that the Labor Party has a mortgage on trying to tax the new growth areas. But it is time we looked to the other side of the ledger. There were expenditures. I think the previous speaker suggested that maybe the same amount of money could have been saved by not spending in areas in which government enterprises are, in fact, losing large amounts of money. Of course, the Australian National Line not only loses taxpayers' money but also imposes huge burdens on the business community. I have mentioned in this place previously that Broken Hill Proprietary Co. Ltd suffers a burden of some $30m a year by being obliged to use Australian coastal shipping. That, by coincidence, is roughly half of the amount the Government proposes to give it. These costs have to be addressed. I suggest that rather than bringing in a discriminatory tax against certain sections of the community-in this case the television industry-which will pass on those costs, in turn resulting in higher prices on the grocery shelves, we would be much better off looking to the expenditure side and cutting back on expenditure that does nobody any good and, in fact, could add to the burden. I am opposed to this type of taxation. I shall continue to oppose it. I hope that in the future when the Government looks to taxing communications in particular it does not, as it has on this occasion, impose such a huge burden on the telecommunications area, which is the life- blood today of people residing in rural and remote areas. Mr SAUNDERSON(Deakin)(7.20) —It is quite interesting to rise to speak to the Broadcasting Stations Licence Fees Amendment Bill 1983 and the Television Stations Licence Fees Amendment Bill 1983 after having heard the two speeches from the Opposition benches. We have been accused of being perhaps sneaky and coming in round the back door. It seems surprising that those terms have been used when, as the Minister for Communications (Mr Duffy) pointed out in his opening address when he moved the second reading of the Bill, quite clearly it was the intention to raise the level of contribution of broadcasting and television stations to overall Commonwealth revenues. That was our intention. We made that clear from the beginning. As we clearly pointed out, it was a very modest increase in terms of asking those who can afford to pay to help to contribute to the resolution of the economic mess in which the Opposition had left us. The increase is only about 5 per cent, and it applies only to those stations that earn in excess of $9m in their gross earnings. We are talking about one radio station out of about 134. If one asked the other 133 stations whether they would like to be in a situation in which they were earning in excess of $9m a year, I am sure that one would find that they would like that and would not mind having to pay the tax if they were earning that much. The same applies to television stations. The honourable member for O' Connor (Mr Tucker) mentioned that we are applying the provisions to only 16 stations and that soon it would be 40. If one could identify those other 24 stations and let them know, I am sure that they would be extremely happy to know that they will be earning in excess of $9m and could be involved in paying this tax. Let us look at the situation. What are we talking about? Members of the previous Government seem to be indicating that we are putting on these stations some great impost. They are asking why are we imposing this tax. They did nothing when it was at 5 per cent, in terms of radio stations, and we have simply raised it to 5 1/2 per cent. They did nothing when it was 7 1/2 per cent for television stations. Even under the previous Government it applied to gross earnings, but they are not too concerned about that. We have simply raised it by 0.5 per cent to 8 per cent. They are talking about the great impost in terms of cost. For radio stations, we are simply talking about the impact of the 0.5 per cent, which is only $40,000. It is very little. For the television stations it is just under $2.4m, out of a total raising of $10.9m. All of these increases fall within the concepts that the Government has spelt out clearly. We have been faced with an enormous economic mess. We went through the National Economic Summit Conference, at which were represented all the various levels of the community. What was the decision made at that Summit? Was it: 'Yes, some people will have to help to share the burden of bringing about Australia's recovery'? It has already been carried out by the trade union movement. The trade union movement has been through some loss of income, due to having no salary increases over the previous 12 months; but that has not applied to the industries in which very large profits have been made. However, the trade union movement has accepted that. The employer groups attended the Summit. Other representatives from the media and the community were all saying: 'Yes, we should all share the burden'. What do we find when we apply a very small impost on one of those areas which can well afford to pay? We find a bleating from the Opposition, a crying about how we shall send the stations broke and drive out industry. Members of the Opposition claim that we have not examined the matter to see whether these people can afford to pay. What was the profit increase between the financial years 1980-81 and 1981-82 just for radio stations? Their annual gross earnings increased by 17.8 per cent over that period. Licence fees rose by only 16 per cent. But what were the declared profits of those radio companies? With an increase in annual gross earnings of only 17.8 per cent, what was the profit? It was an increase of 75 per cent over 12 months. Are members of the Opposition saying that these are the companies that cannot afford to pay this increase? It has certainly not applied to salary earners and wage earners. They were the people that the Opposition was saying could afford to carry the burden and pay the cost. They were the people who were carrying the effects of the previous Government's economic decisions. We are saying that there are plenty of people in the community, and the radio and television people are some of those, who have been making good profits. They are in the communications industry, which is one of the developing industries in which there are large profts to be made. There is no reason to suggest that they should simply miss out on carrying some of the extra burden which all of us are now carrying because of the economic disaster that was left to us by the mismanagement of the previous Government. It is interesting that the honourable member for Murray (Mr Lloyd) said that we had not looked at the question of ability to pay. He then criticised us because we have placed an additional cost of $100m to Telecom Australia, which he admitted was perhaps the most profitable and most efficient public enterprise. So, there we are. When we find an organisation that has the ability to pay and we ask it to pay a bit extra, the Opposition criticises us. It is the same here concerning the radio and television companies in private enterprise. They can afford to pay. As soon as we ask them to pay a bit, members of the Opposition want to get into us to persuade us not to. Who does the honourable member for O' Connor suggest ought to pay? He is going crook at the trade union movement. Mr Milton —He always does. Mr SAUNDERSON —That is right. He was telling us how the Telecom unions are so bad. Mr Milton —They want to stop the satellite. Mr SAUNDERSON —That is right. The honourable member for O'Connor talks about how the unions control all the power that they have, how they have this industrial dispute, and their strength. What we should really look at is what brought about those disputes. It was the previous Government. Because the previous Government was opposed to the trade union movement, it was not prepared to listen to reason , so it caused disputes that were much worse than they would otherwise have been . But eventually those disputes were resolved. They were resolved because the previous Government was removed from the scene. Those disputes were settled through arbitration. If people wish to chase up the records they will find that on the issues that the Telecom trade unions were taking up, the unions were vindicated in every case, and the previous Government was shown to be totally incorrect in its attitude and stance. The Australian Conciliation and Arbitration Commission and the other forums in which the disputes were resolved vindicated the trade unions and clearly showed that they had just cause. It is good to see that the Opposition has realised the error of its ways. It has become very concerned about Telecom. Both Opposition speakers this evening have told us about this $100m impost that we have put on Telecom, this additional tax. They seem to forget that it was their Government, not so long ago, that applied exactly the same charge-$100m. It was all right for that Government, but for us it is wrong. What else does the Opposition say about Telecom? Members opposite think that it is a wonderful organisation. The honourable member for O'Connor was saying how vital it is for the area in which he lives and how the people look to it. But what did his Government do? It had the Davidson inquiry, the Public Inquiry into Telecommunications Services in Australia. The previous Government was going to carve up Telecom. It was going to sell off profitable parts to its private industry mates, who are now bleating about having to pay a little extra for their television and radio licences. What was Davidson recommending for the country people that the honourable member for O'Connor claims to represent? He was recommending that their fees should rise by nine times the current charge-$1,800. That is how he was looking after the country people. That was the previous Governent's attitude towards Telecom. We heard concern about Australia Post. We had the Bradley inquiry, the Committee of Inquiry into the Monopoly Position of the Australian Postal Commission. What was the previous Government going to do with Australian Post? It was going to carve that up, too. Now we hear the bleating of the Opposition and how it is really concerned about this wonderful public enterprise and how it was really going to look after it. Debate interrupted. Hawke Government-Education-Fraser Island-Culburra Fire Brigade: Telecom Charges- Tasmania-Philippines-Queensland Mr DEPUTY SPEAKER(Hon. Les Johnson) —Order! It being 7.30 p.m., I propose the question: That the House do now adjourn. Mr HODGMAN(Denison)(7.30) —The latest Morgan gallup poll published in the Bulletin of 13 September proves beyond doubt that the people of Australia are now starting seriously to question the credibility and the veracity of the Prime Minister (Mr Hawke) and this socialist Government. A careful analysis of the statistics in the poll shows that the lengthy litany of broken and dishonoured promises of the Hawke Government is starting to take its toll, and that many tens of thousands of Australians are now realising-to their sorrow-that they were conned and hoodwinked by the super-slick theatrical performance of the Prime Minister at the Sydney Opera House. Mr Deputy Speaker, the fact is that it is now established beyond doubt that this socialist Government simply cannot be believed. The popularity rating of the Hawke Government peaked in the week of 9 April to 16 April at a very impressive 56 per cent. It has now slumped dramatically by nine percentage points to a discredited 47 per cent. By contrast the approval rating of the Opposition has moved strongly and steadily upward from 37 per cent in the week 9 April to 16 April to 45 per cent in the latest poll-an impressive upsurge in popularity and approval of eight percentage points. In simple terms, if a Federal election had been held last week the fate of the Hawke Government would have been determined on minor party preferences. Just imagine, after barely six months in office the Prime Minister is at serious risk of being turfed out of the Lodge, and replaced by the present Leader of the Opposition and, without doubt, the next Prime Minister of Australia, the honourable member for Kooyong, Andrew Peacock. As the Bulletin also pointed out, a telling aspect of the poll was that the number who felt that Mr Hawke would be the better Prime Minister fell by 4 per cent compared with the previous survey. Even more dramatic is the fact that the Prime Minister's approval rating has plummeted by a massive nine percentage points from the approval rating he enjoyed in the week of 9 April to 16 April. In addition, 18 per cent of the Australian electorate is now 'undecided' in their opinion of the present Prime Minister, and that figure is most significant when one recognises that a national swing of a mere 2.3 per cent is all that is required to defeat the present socialist Government at the next Federal election . Mr Deputy Speaker, chickens do come home to roost. Truth will out, and this present socialist Government which is now being seen to be a government of no credibility at all will find to its regret that promises broken and commitments dishonoured will cost it office at the next Federal election. The people of Australia are already starting to realise that this Government, under its egomaniac Prime Minister, broke more promises in seven weeks than Malcolm Fraser broke in seven years. In Tasmania, my home State, the latest gallup poll figures are dynamite for the Hawke Government. Federal voting intentions are: Australian Labor Party, 39 per cent; Liberal Party, 57 per cent. Somebody should tell the Prime Minister that anybody can kiss babies and butter up the gullible or smear the honourable member for Franklin (Mr Goodluck). What really matters is integrity, honesty and respect. On the basis of his performance alone-that is, the performance of the Prime Minister alone-the ALP is history in Tasmania. Rightfully, Tasmania will show the way and lead the nation by putting Andrew Peacock in the Lodge before Christmas 1984. Ms MAYER(Chisholm)(7.34) —Last night, the honourable member for Wentworth (Mr Coleman) drew a bow across his violin strings on behalf of the six group 1 non- government schools in his electorate which are to experience a 25 per cent cut in their per capita funding. To have six of those schools in his electorate says something to all of us about the nature of the electorate. Having done that, the honourable member then donned his armour, leapt on to his horse and galloped off to attack that fearful threat to the poverty-stricken people in his electorate, the Minister for Education (Senator Ryan). His attack consisted of a number of misstatements about the intentions of the Minister and of the Government and a knowing misquotation of a review of a book written by Shirley Williams. I shall quote from a letter from the Minister published in the Canberra Times. The letter states: On October 10, 1981, The Sydney Morning Herald published a review by me of Shirley Williams' book 'Politics is for People'. In the course of that review I referred to the following judgment made by Shirley Williams in her book: ''It is with reluctance that I for one conclude that the freedom to send one's children to an independent school is bought at too high a price for the rest of society.' ' Unfortunately, an editing error resulted in this comment being attributed to me . That letter was in the Canberra Times yesterday, and I believe the honourable member for Wentworth had his attention drawn to it last night. However, his attack continued. The honourable member for Wentworth said that the Government is penalising the people who can least afford the increased fees that must result from the funding cuts. Mr DEPUTY SPEAKER —Order! I remind the honourable member that under the Standing Orders it is not proper to refer to a previous debate. Ms MAYER —My apologies. If parents who are paying $3,000 and more a year in fees for each of their children cannot pay any more than that, the school needs to look for ways to cut its excess spending. Freedom of choice in education is confined now to those people who are able to pay high school fees. Parents whose income is too low to pay those enormous fees charged by no less than six non- government schools in the electorate of Wentworth do not have the freedom of choice which the Opposition apparently holds dear. This Government wants to extend the freedom of choice of a higher quality of education to all Australian parents. We are aware that many families have both parents working simply to give their children a home to live in and three meals a day. Their children deserve and need a good education. This Government has shown its commitment to real freedom of choice by the programs it is funding, by raising the level of per capita grants in all groups 2 and 3 non-government schools, and by maintaining the level of grant to the over 200 group 1 schools which do not have the large cash incomes of the 41 schools which will now have to make minor adjustments in their programs or ask the parents to pay more. If those schools raise their fees the parents have every right to complain to the school. The Government has a Minister for Education who knows about education-a refreshing change for all of us who for so long had to deal with people whose understanding of education is limited to their school days experience. The participation and equity program, the computer education program, and the re- funding of the Curriculum Development Centre, all say something about our commitment to education for all children. Non-government schools are not denied participation in any of those programs. They are not denied access to the Curriculum Development Centre. It is because we understand the necessity for a high level of education for every Australian child that we have made it perfectly clear that our intention is not to destroy the non-government schools or any part of that system but indeed to support it and to support a level of education in government schools that makes freedom of choice a reality and not what it is at the moment-something confined to a very small proportion of the population. Mr MILLAR(Wide Bay)(7.38) —I wish to speak this evening because of the keen apprehension being felt within the electorate of Wide Bay-more particularly in the Maryborough area-at the clear intention of the Fraser Island Defence Organisation, commonly known as FIDO, to involve the Federal Government in the pursuit of the objectives of FIDO to terminate the traditional logging of timber in the rain forests of Fraser Island. I would be the first to concede that my personal opinions as to the merits or demerits of such traditional logging would lack the status of an unimpeachable authority. I suggest to honourable members that if, in the brief time available to me, I read from a report by the commissioners of the Fraser Island inquiry which led to the termination of sand mining on Fraser Island, it should be accepted as authoritative and reliable advice in respect of rain forest logging on Fraser Island. I quote directly from the report and I earnestly invite honourable members to register these words in their minds: A great deal of evidence was given to the Inquiry about forestry and sustained- yield logging activities on Fraser Island. The Commission was impressed both by the responsible attitude to Fraser Island which has been adopted over the years by the Queensland Department of Forestry and the harmonious working relationship that seems to exist between it and the Maryborough sawmilling companies which process most of the timber shipped from the Island. For example, there appears to be no lack of understanding or support for the strict controls imposed by the Department on the activities of logging contractors. No tree in the Forest reserve can be touched by a logging contractor without the express permission of the Department, whose officers indicate the precise direction in which each tree is to be felled so as to cause the last damage to the forest nearby. A condition imposed on some mining leases on the Island . . . is that the lessee must inform the District Forest Officer in writing one year prior to commencing mining operations within any State Forest area upon the land demised whereupon arrangements may be made to salvage any merchantable timber there. Other than that, and the general condition that the lessee shall conduct his operations in a manner that will no cause 'unnecessary damage to shrubs, trees or other flora' , mining companies are free to clear trees and shrubs without the express permission of the Department of Forestry. I particularly draw honourable members' attention to this portion: After inspecting the Island, the commission has come to the view that, in general, the visual integrity of Fraser Island has not been adversely affected by the carefully controlled logging operations. It seems likely that most visitors to the Island-apart from experienced botanists, ecologists or foresters -would be unaware that its timber resources have in fact been exploited for over a hundred years. Selective felling has virtually no visual impact except briefly at the actual site of operations (which is, of course, constantly shifting). The logs are trucked along unformed roads, made and maintaned by the Department of Forestry, to barging points on the west coast; these sites are simple and relatively unobtrusive since the vessels carry their own loading gear. I suggest to honourable members that it would be a shocking miscarriage of justice if a community suffered the consequence of a decision by government based on a report, which simultaneously and virtually in glowing terms endorsed the practice of forestry log extraction over 100 years and envisages a continuation of that operation without detriment to the environment of Fraser Island. Mr HOLLIS(Macarthur)(7.43) —The south coast, particularly the area around Jervis Bay, is facing an extremely dry summer. This is especially so of the Culburra district. The local bushfire brigade has 15 men attached to it and all are volunteers. All costs are met by them; they pay their own way. They pay for their equipment by door- knocks, raffles and donations. The brigade covers a large area comprising small villages and large stands of eucalyptus. The local population comprises only a few hundred people, but during the summer months thousands visit the area. Although the Culburra Fire Brigade is magnificently supported by the small local population its immediate problem is raising enough funds to maintain and keep its telephone system in operation. An emergency telephone number is connected to the bushfire shed and to four private telephones. When this number is dialled the four telephones in the houses plus the one in the station ring. If one of the private house phones is not answered in 45 seconds the cut-out line or siren control line automatically activates a siren which rings until someone goes to the station and answers the phone. For this service the volunteer bushfire brigade pays rental on the emergency phone and on the phones in each of the private houses. This is despite the fact that the individuals already pay rent on the private phones. Telecom Australia is double dipping. It costs the Culburra volunteer bushfire brigade $220 for two private lines to the station and last year telephone rental to the houses amounted to $450, a total of $670. The actual connection consists of a small piece of flex which is connected to a button. For this connection Telecom charges the outrageous fee of $22. Members of the volunteer bushfire brigade already pay rental on their phones and they should not have to pay additional rental. Telecom should not charge it. Bushfires in Australia cost the comunity millions and State and Federal governments have to contribute to the cost. If Telecom is so enthused with the profit motive that it must charge I believe the Federal Government should pay the account. It is totally unacceptable that small volunteer groups, such as the Culburra Bushfire Brigade, should have to pay this impost. Members of the brigade give up their time and save the community and the Government millions. Indeed they save Telecom many hundreds of dollars, for without the brigade many telephone poles would be burnt down. Surely they should not have to pay double for providing this vital and valuable community service. We as a government should be encouraging this volunteer service, not permitting Telecom to add to its considerable profits by charging double. Mr GOODLUCK(Franklin)(7.46) —Tasmania is an island and the smallest State of Australia; 400,000 people live there. I am a Tasmanian; I was born and reared in Tasmania; I married a Tasmanian and all my children and family are Tasmanians. Today the Prime Minister (Mr Hawke) had the audacity to say to me three times in a row that I am ashamed to be a Tasmanian. Mr Cunningham —That is what you said. Mr GOODLUCK —I admit that I said it and I will tell honourable members the reason why I said it. It is good to see my colleagues in the chamber because they know that I am a Tasmanian through and through. The Prime Minister, our Dorian Gray, came to Tasmania with his circus. It was all pre-planned. At Strahan people kissed him, and at Queenstown people gave him gifts. The media were orchestrated to say exactly what the Prime Minister wanted them to say. The Prime Minister is not as popular in Tasmania as members of the Government would like to think he is. I am sorry to say that he is very unpopular. I challenge him to debate any platform with me at any time in any part of Tasmania . We shall find out whether the people of Tasmania think that I am ashamed to be a Tasmanian. I said it, but I said it in the context of the events at the time. They made me feel a little sick because it was a con job. I do not want to be nasty to the fellow. That would not be fair because he is not here. He can give it and I can take it. I can give it and I am afraid that he has to take it too. He thought that he would con everybody in Tasmania, but he did not con everybody in Tasmania. A lot of people were very upset. I did not want people to go into the streets and abuse the man, throw tomatoes and things like that. That was the furthest thing from my mind. I did want Tasmanains to put up a little fight and not be like the three women in Queenstown who kissed him or be like some of the greenies who gave him gifts in Strahan. That put a wrong complexion on the matter. The worse thing was that Hopalong Cassidy from the Australian Broadcasting Corporation kept sending back reports such as 'Mr Hawke has conquered everybody', 'He walks on water' or 'He is the Messiah'. Mr Uren —Gough used to do that. Mr GOODLUCK —It was like Gough. They were not the feelings of the Tasmanian people. Everybody in Australia said that the Prime Minister had conquered Tasmania. He has not conquered Tasmania at all. Mr McGauran —He never will. Mr GOODLUCK —He never will conquer Tasmania. He is getting more like Dorian Gray . An elderly gentleman said: 'Bruce, I did not study the classics like you did. What is the story of Dorian Gray?' I said: 'Dorian Gray sold his soul to the devil and each year the picture on the wall depicted the scars'. I am not saying the Prime Minister is a sinful man. Forgive me if I should say that. He sold his soul to the devil with the non-construction of the dam. He has suppressed the people of Tasmania. He has walked all over them and now he expects everybody to bow at this feet, but we do not intend to do that. I make no apology for what I said when he came down to Tasmania. I do not want to be seen as a malicious, nasty little man. I am not. But when I say something I mean it. He can give it, I can take it and by the powers he is going to take it every time I get on my feet. Mr MILTON(La Trobe)(7.51) —I would like to refer tonight to the background to the military investigation of Norma Pineda and Monica Gondo by the Philippines Constabulary. These two women, together with two others who are also officers of the union at the Judric Canning Co., a subsidiary of the Australian company Safcol in Manila, were invited to appear before a Constabulary Security Group in the interests of national security. This procedure is highly threatening and intimidatory to these women for the following reasons: Firstly, a union organiser at this factory, Mr Ricardo Nolasco, was arrested by plain clothed military personnel in December 1981, held in communicado for two days and tortured with electric shocks and physical beatings and threats were made to his life. Secondly, during an industrial dispute earlier in 1983, military guards were placed at the Safcol factory and workers were concerned that any union organisers going there would be arrested. Thirdly, armed men in civilian clothes have been loitering in front of the residence of Norma Pineda in the weeks before and since the military investigations. Other men have escorted Monica Gondo from the factory to her home after work on several occasions. Fourthly, many other union organisers or activists in Manila have been assassinated or have disappeared over the last few years. Reputable human rights organisations in the Philippines, such as Task Force Detainees, and international groups such as Amnesty International have reported that most or all of these disappearances and assassinations are the work of the military forces of the Marcos Government. Union organisers killed in or near Manila in the recent past include Ceferino Flores, an organiser at the Hotel Workers Union, who disappeared on 28 January 1983; Emiliano Pagino and Antonio Santa Anna, who were tortured and shot while in military custody on 5 July 1981-these two were union organisers in the Bataan export processing zone 80 kilometres from Manila; three union members of the National Association of Free Labour Unions employed at a Cosmos soft drink company at San Fernando, who disappeared in February 1983; and a union organiser for the Atlas Glove Co. at Cavite 50 kilometres from Manila, who was summarily executed in 1981. This company is Australian owned and managed by a Mr Henry Kornfield. In addition, 35 union officials and members are on trial for the spurious charges of subversion and rebellion; 25 of them are in gaol and the rest are under house arrest. It is clear that the Constabulary Security Group regard the Safcol union board members as prominent union activists or organisers and that they do so in large part because of their role in an industrial dispute with the Safcol management earlier this year. As Safcol provoked the industrial dispute by its gross exploitation and has taken no steps to request the military forces to cease harassing its workers, it must bear partial responsibility for what has happened and what may happen in the future to these women. The possible consequences of this attention from the Constabulary Security Group for the Safcol women workers are: Arrest, torture in a 'safe house' operated by the military and then summary execution; assassination by armed men outside their residences; arrest and a long period in prison on trumped-up charges of subversion; and arrest and detention for a short period as a further intimidation. International publicity may help to protect these women. Early this year a large number of Manila women journalists received similar invitations to assist the military in its investigations. These were highly publicised in the media and their effects rebounded on the military. I call on the Australian Government to ask the Australian embassy to make inquiries of Colonel Ishmael L. Rodrigo regarding the attentions that the security police have afforded to these two women. This may assist them in being released and prevent them from being murdered. Mr IAN CAMERON(Maranoa)(7.55) —Tonight I wish to refer to the Business Review Weekly and the excellent article in this week's edition by Andrew Stewart entitled 'Why Queensland is still in Front'. We all know the reason is the excellent government of the Bjelke-Petersen-led coalition over the last 26 years . I seek leave to have this article incorporated in Hansard. It is an excellent article on the growth of Queensland and the reason why it is growing so rapidly. Mr DEPUTY SPEAKER(Hon. Les Johnson) —In conformity with the determination made by the Speaker and the previous Speaker I am unable to expand the debate. The honourable member is required to speak his words into Hansard. Mr IAN CAMERON —Thank you, Mr Deputy Speaker. The economy and population, as we all know, are still growing in Queensland at twice the national average. Five new coal mines are opening up and there has been a population increase of 3.5 per cent. Queensland's underlying strength is its survival. The population and economy are growing faster than in any other State in Australia. At this juncture I would like to inform members of the Opposition and tell my friend the honourable member for Petrie (Mr Wells), who indicated last night that I was not able to shear, that I am prepared to knock a few dags off the wool blind members on that side of the House. I am sorry that my friend the honourable member for Casey (Mr Steedman) has left. I would be quite happy to ring and wig him because, no doubt, he needs it more than anyone else. Labor was previously in office for 50 years in Queensland. We were then the biggest socialist State in Australia. How any Queenslander could vote Labor back into office is beyond my thinking. The Australian Labor Party is trying to promote a soap suds Omo-type leader on television in Queensland. It is the same sort of promotion that the honourable member for Wills (Mr Hawke) received. This system will not work. The people of Queensland will not buy this person in his nice white Omo shirt. We in the north are not the sort of people to accept that kind of leader. Joh Bjelke-Petersen has given good leadership for the last 26 years. We believe that that leadership will continue and that the coalition will be re-elected. Mr Cunningham —What coalition? Mr IAN CAMERON —The Liberal-National Party coalition will be re-elected to government in Queensland in the coming elections. Southern firms are still migrating to Queensland in droves. A new industry, Enterprise Queensland, has been commenced. This is attracting all sorts of money from Malaysia, Singapore and Hong Kong. This is the sort of free enterprise money that is needed to get Queensland moving, the sort of money that will not go to the southern States which are governed by my friends the socialists on the opposite side of the House. None of that money will end up in Victoria, New South Wales, South Australia or Western Australia. Queensland was the first State to introduce a State housing scheme. Housing commencements have risen from 27,000 last year to 35,000 this year. In the south jobs are lost forever. In Queensland there is just a lull and we are off and running again. Why do honourable members think so many southerners are coming to Queensland? It is not just the sunshine and the friendly smiles. They will get jobs in that part of Australia. Queensland and the National Party Government are prepared to give them jobs. Queensland is a State with a long term population growth. Queensland can still manage a 2 per cent real growth with the economy, as it is, bottomed out and likely to go down even further. Ten years ago only one merchant bank was established in Queensland and now 32 are operating. It is a free enterprise system. People are prepared to put their money where their mouth is, create jobs and get the place going. Death duties have been abolished. What do my friends on the opposite side of the House want to do? They want to reintroduce death duties . They are not happy to tax us to death while we are living, they want to tax us when we are dead, for God's sake! The Bjelke-Petersen Government abolished death duties in 1977, and the money from the southern States has flowed to that part of Australia ever since and will continue to flow and create more jobs and new buildings. Mr DEPUTY SPEAKER(Hon. Les Johnson) —Order! The honourable member's time has expired. Question resolved in the affirmative. House adjourned at 8 p.m. The following notice was given: Mr Kerin to present a Bill for an Act relating to the inspection by the Commonwealth of meat that is intended for human consumption or for use as animal food. The following papers were deemed to have been presented on 7 September 1983: Public Service Act-Determination-1983-No. 17. Treaties-Text of- Which have been signed by Australia and which requires further treaty action by Australia before the treaty can enter into force for Australia- (1) Final Acts of the Plenipotentiary Conference of the International Telecommunication Union, done at Nairobi on 6 November 1982 Signed for Australia on that date. (2) Agreement between the Government of Australia and the Government of New Zealand to provide for the Termination of the Christmas Island Agreement 1958-81 , signed at Canberra on 22 November 1982 To which Australia has become a party by signature- (3) Agreement between the Government of Australia and the Government of the People's Republic of China on the Reciprocal Exchange of Sites for Contruction of Diplomatic Compounds, signed at Beijing on 5 August 1982. The Agreement entered into force on that date. (4) Exchange of Notes signed at Washington on 18 October 1982 and 21 October 1982 constituting an Agreement between the Government of Australia and the Government of the United States of America regarding the importation of meat into the United States of America during 1982. The Agreement entered into force on 21 October 1982. (5) Exchange of Notes signed at Jerusalem on 28 September 1982 and at Tel Aviv on 27 October 1982 constituting an Agreement between the Government of Australia and the Government of the State of Israel concerning the immunities of Australian Military Members of the Multinational Force and Observers while on leave in Israel. The Agreement entered into force on 27 October 1982. (6) Subsidiary Agreement between the Government of Australia and the Government of Japan concerning Japanese Tuna Long-line Fishing, signed in Caberra on 28 October 1982. The Agreement entered into force on 1 November 1982. (7) Exchange of Notes signed at Canberra on 24 November 1982 constituting an Agreement between the Government of Australia and the Government of the United States of America amending the Agreement relating to the establishment of a United States Naval Communication Station in Australia of 9 May 1963. The amending Agreement entered into force on 24 November 1982. (8) Exchange of notes signed at Canberra on 5 February 1982 and 13 January 1983 constituting and Agreement between the Government of Australia and the Government of the State of Israel regarding the taking of Evidence in one country for use in Criminal Proceedings in the other country. The Agreement entered into force on 13 January 1983. (9) Agreement between the Government of Australia and the Organisation for Economic Co-operation and Development on Privileges and Immunities of the Organisation in Australia signed at Paris on 14 January 1983. The agreement entered into force on 14 February 1983 in accordance with Article 10. (10) Agreement between the Government of Australia and the Government of the French Republic concerning the Establishment of a French-Australian School in Canberra, signed at Canberra on 4 July 1983. The Agreement entered into force upon signature. Which Australia has accepted or to which Australia has acceded- (11) Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, done at Geneva on 12 April 1979 accepted by Australia on 21 September 1982. The Agreement entered into force for Australia on 21 October 1982. (12) Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade and protocol to the Agreement done at Geneva on 12 April 1979, accepted by Australia on 22 November 1982. The agreement entered into force on 22 December 1982 for Australia. (13) Extension of the International Coffee Agreement 1976 until 30 September 1983, as resolved by the International Coffee Council in Resolution No. 318 of 25 September 1981 at London. Australia acceded to the International Coffee Agreement 1976, as extended, on 3 January 1983. (14) Amendment to paragraph 2 of Article 5 of the Convention relating to International Exhibitions, adopted by the General Assembly of the International Exhibitions Bureau at Paris on 24 June 1982, accepted by Australia on 20 June 1983. (15) 1983 Protocol for the Further Extension of the Wheat Trade Convention 1971 , done at London on 1 December 1982, acceded to by Australia on 30 June 1983. The Protocol entered into force for Australia on 1 July 1983. (16) 1983 Protocol for the Further Extension of the Food Aid Convention 1980, done at London on 1 December 1982, notification of provisional application by Australia deposited on 30 June 1983. The Protocol entered into force for Australia on 1 July 1983. The following answers to questions were circulated: Question No. 147 Dr Charlesworth asked the Minister representing the Minister for Education and Youth Affairs, upon notice, on 17 May 1983: (1) How does the Government determine what private schools fall into the 'needy ' category. (2) How many private schools are there in the Electoral Division of Perth and ( a) how many of these are Catholic Schools, (b) what level of federally funded assistance is afforded to these schools, (c) which of these schools are classified as 'needy' and (d) will these schools be eligible for funds under the School Computer Program. Mr Dawkins —The Minister for Education and Youth Affairs has provided the following answer to the honourable member's question: (1) The existing Commonwealth program of general recurrent funding for non- government schools was developed by the previous Government. Under this program, schools are classified into three funding groups on the basis of need. A school' s need is assessed by the Schools Commission on the basis of the Schools Recurrent Resource Index (SRRI) which provides a measure of recurrent resources provided from a school's private means in relation to average recurrent resources provided in government schools. In 1983 the SRRI mechanism is used in conjunction with an income test procedure to ensure that schools spend a reasonable proportion of their total disposable private income on improving recurrent resource standards. All schools are entitled to appeal against funding group decisions including those decisions based on the application of income test procedures. This arrangement is being maintained on an interim basis in 1984 pending the implementation in 1985 of a new scheme for non-government school general resources funding. In the Guidelines to the Schools Commission, the Government has asked the Commission to provide advice and options on: a more comprehensive approach to the definition of 'need'; the establishment of adequate general resource standards against which need may be measured; and, the categorisation of schools for Commonwealth funding purposes in a manner which provides for sufficient differentiation in relation to the varying needs and circumstances of schools. (2) There are seventeen non-government schools in the Electoral Division of Perth. (a) Nine (9). (b) and (c) For the purpose of Commonwealth General Recurrent Grants, the classification of the seventeen schools in the Electoral Division of Perth to subsidy groups in 1983 is as follows: Per cent Per pupil age of subsidy rate Subsidy standard group Schools cost Primary Secondary $ $ 1 3 20 338 537 2 5 30 508 806 3 *9 40 677 1 075 *Catholic Schools (d) I have asked the Commonwealth Schools Commission to provide me with advice on how the national Computer Education program might best be introduced. I expect that included in that advice will be recommendations on how funds made available should be distributed. I expect to receive advice from the Commission in September 1983. Non-government schools will be eligible for assistance and $1 .2m will be provided for them in 1984. Initially, the program will concentrate on secondary schools but for the period beyond 1984, the Commission will provide advice on future policy directions, including extension to primary schools. Question No. 198 Mr Blanchard asked the Minister representing the Minister for Education and Youth Affairs, upon notice, on 19 May 1983: (1) How does the Government determine what level of funding assistance will be given to private schools. (2) How many private schools are there on the Electoral Division of Moore, what level of funding assistance does each receive and which of these schools are Catholic schools. (3) Will all private schools within the Electoral Division of Moore be eligible for funding under the School Computer Program. Mr Dawkins —The Minister for Education and Youth Affairs has provided the following answer to the honourable member's question: (1) The existing Commonwealth program of general recurrent funding for non- government schools was developed by the previous Government. Under this program, schools are classified into three funding groups on the basis of need. A school' s need is assessed by the Schools Commission on the basis of the Schools Recurrent Resource Index (SRRI) which provides a measure of recurrent resources provided from a school's private means in relation to average recurrent resources provided in government schools. In 1983 the SRRI mechanism is used in conjunction with an income test procedure to ensure that schools spend a reasonable proportion of their total disposable private income on improving recurrent resource standards. All schools are entitled to appeal against funding group decisions including those decisions based on the application of income test procedures. This arrangement is being maintained on an interim basis in 1984 pending the implementation in 1985 of a new scheme for non-government school general resources funding. In the Guidelines to the Schools Commission, the Government has asked the Commission to provide advice and options on: a more comprehensive approach to the definition of 'need'; the establishment of adequate general resource standards against which need may be measured; and, the categorisation of schools for Commonwealth funding purposes in a manner which provides for sufficient differentiation in relation to the varying needs and circumstances of schools. (2) There are 15 non-government schools in the Federal Electoral Division of Moore, receiving Commonwealth general recurrent grants in 1983, distributed by Funding Group as shown in the following table. Schools in Groups 1 receive $338 per primary pupil and $537 per secondary pupil. The subsidy rates for Group 2 are $508 primary and $806 secondary and for Group 3, $677 and $1075, primary and secondary respectively. NUMBER OF NON-GOVERNMENT SCHOOLS BY FUNDING GROUP IN THE FEDERAL DIVISION OF MOORE (WA) 1983 Catholic Funding Non- group Systemic systemic Other Total Group 1 . . . . 3 3 Group 2 . . . . 1 1 Group 3 6 3 2 11 Totals 6 3 9 6 15 The level of funding assistance for each school is as given in the following list. Division of Moore, W.A. Individual Schools Funding Groups for Recurrent Grants, 1983. * Catholic Systemic ** Catholic Non-systemic Funding School group **Keaney College, Bindoon 3 * Whitford Catholic Primary, Craigie 3 Beenong School, Darlington 1 Helena School, Darlington 3 * Girrawheen Catholic Primary, Girrawheen 3 Emmanuel Christian, Girrawheen 2 Aboriginal Community College, Gnangara 3 * Liwara Catholic Primary, Greenwood 3 Montessori School, Kingsley 1 * Lockridge Catholic Primary, Lockridge 3 * Sacred Heart School, Mundaring 3 **Sacred Heart College, Sorrento 3 **La Salle College, Viveash 3 Yanchep Community School, Wangara Centre 1 * St Anthony's School, Wanneroo 3 (3) I have asked the Commonwealth Schools Commission to provide me with advice on how the national Computer Education program might best be introduced. I expect that included in that advice will be recommendations on how funds made available should be distributed. I expect to receive advice from the Commission in September 1983. Non-government schools will be eligible for assistance and $1 .2m will be provided for them in 1984. Initially, the program will concentrate on secondary schools but for the period beyond 1984, the Commission will provide advice on future policy directions, including extensions to primary schools.