Friday, 30 March 1984 Mr SPEAKER (Hon. Harry Jenkins) took the chair at 10 a.m., and read prayers. The Acting Clerk-Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: Chiropractic Services 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 Bilney,Mrs Child,Mr Cross,Mr Groom and Mr Hodgman. 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 Blanchard and Mr Cross. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: That the Sex Discrimination Bill 1983 contains provisions inconsistent with principles of justice and equality which could be used to: Undermine civil liberties and religious freedom; Entrench abortion funding and render liable to action hospitals, doctors and nurses, who conscientiously refuse to become involved in morally objectionable operations; Deny to parents their rights to insist that the school 'community' provide an environment conducive to the development, including moral development of their children. Deny to parents their rights to have their children enjoy single-sex sporting activities e.g., boys cricket team, boys football team, etc. Your petitioners humbly pray that the Parliament assembled: should amend the Bill so as to prevent the possibility of its use in the manner stated above and urge, because of the importance to society of all principles involved, that a conscience vote on the Bill be permitted to all Members of Parliament. And your petitioners as in duty bound will ever pray. by Mr Cohen,Mr Groom and Mr Ruddock. To the Honourable, The Speaker, and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth: That the Sex Discrimination Bill 1983 contains provisions inconsistent with principles of justice and equality which could be used to undermine civil liberties and religious freedom. It could also be a means of undermining the traditional family structure of our nation. Your petitioners humbly pray that the Members of the House of Representatives in Parliament assembled: should delay the Bill and ask: That the Government set up a Joint Parliamentary Committee to examine: (a) the implications of the U.N. Covenant for public policy, the extent of Australian commitments, responsibilities and accountability in terms of the Covenant; (b) the full effects of the Sex Discrimination Bill 1983 for public policy in giving effect to the U.N. Convention. The Terms of Reference of the Joint Parliamentary Committee to be widely publicised and oral and written submissions sought from the interested organisations and individuals. And your petitioners as in duty bound will ever pray. by Mr Groom. 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 we, the loyal citizens of Australia firmly express our strong opposition to any proposal to remove or undermine the importance of the place of God and/or the Queen in our national life, and democratic institutions. Your petitioners therefore humbly pray: That the Parliament assembled reaffirm our nation's total dependence on God the Creator in accordance with our Australian Constitution, which commences with the words 'humbly relying on the blessing of Almighty God', and the Standing Orders of both the Senate and the House of Representatives which prescribe that Parliament each day shall open with a special prayer to Almighty God and the Lord's prayer: We also call on the Parliament assembled to reaffirm our genuine loyalty to our head of State the Queen of Australia, Elizabeth II. 'God save the Queen'. And your petitioners as in duty bound will ever pray. by Mr Groom. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled, the petition of the undersigned citizens, teachers and parents working in and for the interests of the pupils in government schools and colleges throughout Australia, respectfully showeth that: 1. We fully support the Federal Government's actions in reducing funds for the wealthiest private schools, and in breaking the nexus between government and non -government school costs. 2. We endorse the Federal Government's principled opposition to the provision of 'base grants' to all non-government schools, as a positive step towards fulfilling their commitment of primary obligation to Australia's government schools. 3. We call upon the Federal Government, however, to recognise that its failure to create an adequate general recurrent resource base for government schools through providing increased recurrent grants, will undermine its own special programs and thus frustrate its own stated educational objectives of greater equity and participation. 4. We support the Federal Government's stated policy of entering into direct negotiations for joint agreements on these grants with State/Territory Governments, to ensure a planned program of improvements in government schools throughout the coming decade. And your petitioners as in duty bound will ever pray. by Mr Blunt,Mr Groom and Mr Lusher. 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 Bozlin Pty. Ltd. trading as John Bozic Automotive Services, have provided for many years good and reliable service to customers near Parliament House, and represent the only Automotive Service Station available in the Parliamentary Triangle, convenient to visitors and persons working at, or near, Parliament House. That the National Capital Development Commission has indicated its intention to close the access road between Coronation Drive and Kaye Place. That access has existed in one form or another between Kaye Place and Coronation Drive for most of the last fifty five years, and in the judgment of petitioners that access road is convenient, and represents no traffic hazard. Your petitioners therefore pray that the House of Representatives in Parliament assembled will ensure that the traffic link between Coronation Drive and Kaye Place is not closed. And your petitioners as in duty bound will ever pray. by Mrs Kelly. To the Honourable Speaker and members of the House of Representatives assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That in November 1978 more than sixty two per cent of the voters of the Australian Capital Territory in a Referendum rejected the introduction of Territorial Government or Local Government in the Australian Capital Territory. That until the findings of the Commonwealth Grants Commission inquiry into Australian Capital Territory finances have been made public and there has been a Referendum of the voters of the Australian Capital Territory as to their attitude to Territorial or Local Government. Your petitioners most humbly pray that the Government take no further action nor legislate in respect of Territorial or Local Government in the Australian Capital Territory. And your petitioners as in duty bound will ever pray. by Mr Ruddock. To the Speaker, House of Representatives, Parliament House, Canberra. We call on the Australian Government to reverse the decision to proceed with the development of uranium mining at Roxby Downs because of the destruction of Aboriginal sites the irreparable damage to the environment the threat to the health and safety of Australian citizens especially Aboriginals and mining workers and the undeniable link between uranium mining and nuclear weapons production and proliferation. We ask that all uranium mining and export cease. And your petitioners as in duty bound will ever pray. by Mr Tickner. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The petition of concerned people of the Electorate of Indi respectfully show their desire to stop the spread of Paterson's Curse. Your petitioners therefore humbly pray that your Honourable House (the Government) act to implement the biological control of Paterson's Curse. And your petitioners as in duty bound will ever pray. by Mr Ewen Cameron and Mr Lusher. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of certain citizens of Queensland, Australia, respectfully showeth that we are totally opposed to any change in the Australian National Flag as declared in the Flags Act (1953). Your petitioners humbly pray that Parliament in its wisdom will take no action to change the Australian National Flag. 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 elected representatives and officers of Local Governments in Australia shows that: General Revenue Grants to Local Government under Personal Income Tax Sharing entitlements have increased by 8.2 per cent in 1983-84 over 1982-83, The inflation rate over the same period was 11.2 per cent, The increase in grants to State Governments over the same period was 11.8 per cent, Increased demands are being made on Local Government Authorities to participate in Federal Government programs e.g. Community Employment Programs, The Labor Party made a pre-election commitment to allocate not less than the real value of the previous year's allocation in General Revenue Grants to Local Government. Your petitioners therefore pray that the Government will amend the Local Government (Personal Income Tax Sharing) Act of 1976, to provide a real term minimum guarantee to Local Government general revenue sharing arrangements in 1983-84, and in future years. And your petitioners as in duty bound will ever pray. by Mr Groom. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Tasmania shows: We are shocked and disappointed at the Federal Government's decision not to upgrade the Wynyard Airport. This decision will inevitably lead to downgrading and closure of the Wynyard Airport. Closure of Wynyard Airport will cause grave hardship and incovenience to the people of the North West and West Coast regions of Tasmania. We urge the Federal Government to immediately reverse this disastrous decision. And your petitioners as in duty bound will ever pray. by Mr Groom. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The humble petition of the citizens of Tasmania respectfully showeth. Last year, over 3,300 people died on Australian roads; Alcohol is a factor in 50 per cent of road deaths; Alcohol advertisements do not show the perils of driving after drinking alcohol ; Alcohol advertisments are glamourous and increase their effect on teenagers, indicating drinking alcohol as the social pastime; Your petitioners therefore humbly pray that the Parliament will legislate to ban the advertising of alcohol from commercial television and radio. And your petitioners as in duty bound will ever pray. by Mr Hodgman. Petitions received. Mr SINCLAIR(New England-Leader of the National Party of Australia) —I give notice that, on the next day of sitting, I shall move: That this House censures the Minister for Defence for his failure to maintain the confidence of the people of Australia in our defence security under his administration as reflected by- (1) his failure to answer a series of charges on military deficiency in the Australian Army revealed by the Honourable Members for Bass and McPherson in a discussion of a matter of public importance in the Parliament yesterday; (2) his acknowledgement that he was not aware of the exchange of note between the United States of America and Australia under which reciprocal repair rights for naval vessels are available between the two countries; (3) his decisions affecting the Fleet Air Arm; (4) his decisions affecting the training time for the three armed services; (5) his decisions affecting the reserve forces; (6) his decisions affecting the cadet corps; and (7) his failure to maintain the confidentiality of the strategic bases paper which sets new directions for Australian defence. Mr RONALD EDWARDS(Stirling) —I give notice that, on the next day of sitting, I shall move: That this House- (1) notes- (a) that gross domestic product rose by 6.1 per cent for the year to December 1983 and by 1.9 per cent for the December quarter; (b) the recovery in retail sales; (c) that private fixed capital investment showed encouraging signs of recovery in the December quarter; and (d) that the electorate is predominantly concerned with the economic issues of economic growth, jobs and economic recovery. Mr HUNT(Gwydir) —I give notice that, on the next day of sitting, I shall move: That this House notes that Mr Barry Virtue, former Press Secretary and Principal Private Secretary to the Rt Hon. J. D. Anthony, CH, and currently Senior Private Secretary to myself, will be retiring from the service of this Parliament after 20 years, expresses its appreciation for the co-operation and courtesies he has extended to honourable members on both sides of this Parliament and wishes him well in his new career. Motion (by Mr Young) agreed to: That Standing Orders be suspended in order that the Deputy Leader of the National Party of Australia may move his motion forthwith. Mr HUNT(Gwydir)(10.08) —I move: That this House notes that Mr Barry Virtue, former Press Secretary and Principal Private Secretary to the Rt. Hon. J.D. Anthony, CH, and currently Senior Private Secretary to myself, will be retiring from the service of this Parliament after 20 years, and expresses its appreciation for the co-operation and courtesies he has extended to honourable members on both sides of this Parliament and wishes him well in his new career. It gives me very great pleasure to take this opportunity that has been afforded me by honourable members on both sides of the House to pay a tribute to an officer who has served a long serving Minister, a Minister who has served as Deputy Prime Minister in this country for a record period. Barry Virtue has been one of those dedicated people who has given of his energies and effort to serving not only his Minister but also the interests of the Parliament. I know that people over the years have expressed to me their appreciation for the way in which he has assisted honourable members on both sides of the Parliament when they have sought information from Mr Anthony's office. Barry Virtue has, of course, also had a very distinguished career as a journalist, having served as a journalist on the Northern Star in Lismore before joining Mr Anthony's office, and for 16 years as the Press Secretary to the Rt Hon. J.D. Anthony. As a long serving member of the National Party of Australia, I know what assistance he has been to the former leader of my Party. He has also given tremendous service to the trade interests of this country. He kept a very close liaison with Mr Anthony's office and the Department of Trade. So it gives me very great pleasure to record in this Parliament the appreciation of both my Party and members of our coalition partner, the Liberal Party of Australia. I know that I speak for members of the Government and of the Australian Labor Party when I say to Barry Virtue: 'Well done, Barry. You have served your employer with great dedication. You have served this Parliament with great sincerity. You have been a great example to other staff members who will follow you'. I hope that in future we get this sort of service generally from those staffers who service Ministers and who play a very important and real role in making this Parliament function in the best interests of the people of this nation. Mr SPEAKER —Is the motion seconded? Mr SINCLAIR(New England-Leader of the National Party of Australia)(10.12) —Mr Speaker, I second the motion. I commend to this House the duty that has been performed for so long and so effectively by one of those who assist us. On both sides of the House there are many who serve behind the scenes whose names may not be known to everyone but whose places in this Parliament are as important as those of us who are elected to represent our constituencies. Barry Virtue has served Doug Anthony for many years. As my colleague has said, prior to that he was a journalist with the Northern Star, a newspaper in Lismore. Since Doug's retirement from the Parliament Barry has been working with my colleague Ralph Hunt. But 20 years is a long time for a member of a parliamentary staff to stay with any member of this place. I think those of us who know the trials and tribulations of political office have a great deal of respect for anybody who can bear with us for that period. To Barry Virtue I would like to say: 'Thanks for a job well done. I wish you well in your future career'. Question resolved in the affirmative. Mr TICKNER(Hughes) —I give notice, that on the next day of sitting, I shall move : That this House- (1) notes the statement by the Leader of the National Party in New South Wales, Mr Leon Punch, during the New South Wales election campaign that a future coalition Government in that State would repeal the New South Wales Aboriginal Land Rights Act 1983, and (2) condemns both the Liberal and National parties in New South Wales for adopting a policy which actively seeks to further discriminate against the most disadvantaged group of people in New South Wales. Notice of Motion Mr HOWARD(Bennelong) —I give notice that, on the next day of sitting, I shall move: That clause 5 of the Income Tax Assessment Amendment Bill (No. 5) 1983 which was removed by the Senate, be restored but without its retrospective impact by replacing the date 1 July 1977 wherever it appears in the clause with 7 December 1983, the date of introduction of the Bill into the Parliament. Mr GOODLUCK(Franklin) —I give notice that, on the next day of sitting, I shall move: That this House calls on the Government to set up a select committee of the House to inquire into the disgraceful disparity in the price of petrol throughout Australia. Mr Speaker, you might like to-- Mr SPEAKER —Order! The honourable member will not debate his motion. Mr PORTER(Barker) —I give notice that, on the next day of sitting, I shall move: That this House- (1) condemns the Minister for Health for providing only four country offices of Medicare in South Australia thereby disadvantaging country people in relation to access to Medicare; (2) notes- (a) that three of the four country offices are in a Labor Electorate with one in the electorate of Barker at Mount Gambier, and (b) requests from towns such as Millicent, Murray Bridge and Naracoorte for Medicare offices, and (3) calls upon the Minister for fulfil his commitment to provide a standard of service to country people at least equivalent to that which was provided by private funds prior to the introduction of Medicare. Mr RONALD EDWARDS(Stirling) —I give notice that, on the next day of sitting, I shall move: That this House notes- (1) that inquiries for the first home owners scheme reached 390,000 by 23 March 1984; (2) the continued increase in housing approvals; (3) that recovery is now evident in the building industry especially in the electorate of Stirling, and (4) with satisfaction that the Minister for Housing and Construction is to increase funds for public housing along the way towards reducing the problem of homelessness which developed under the previous Government. Mr CONNOLLY(Bradfield) —I give notice that, on the next day of sitting, I shall move: That this House (1) condemns- (a) the Minister for Administrative Services for his failure to explain why he has rejected all alternatives to demolishing the University and Schools Club in Sydney which was recently gazetted on the National Estate; (b) the Minister for Home Affairs and Environment for his weakness in once again refusing to assert both the spirit and intention of the Australian Heritage Act to protect sites and buildings which have been placed on the Register of the National Estate; and (c) the Federal Government for proceeding with the demolition of this historic site to make way for Commonwealth offices containing prime ministerial and Cabinet suites without at least saving the facade of the building which according to the Australian Heritage Commission demonstrates a masterful use of terracotta external cladding and among the finest faience work in Australia; and (2) reasserts the belief that in matters of Federal jurisdiction, as in this case, the Commonwealth Government must set a high standard of responsibility in protecting the National Estate. Mr HODGMAN(Denison) —I give notice that, on the next day of sitting, I shall move: That this House- (1) notes with concern the current situation on the border between Indonesia and Papua New Guinea, and in particular the movement across the border into Papua New Guinea of numbers of West Irian refugees; and (2) calls upon the Government to use its good offices to assist in discussions with Indonesia and Papua New Guinea and the United Nations High Commissioner for refugees to ensure that the West Irian refugees are assisted in a compassionate and humanitarian manner and are not subjected to political persecution or reprisal. Dr THEOPHANOUS(Burke) —I give notice that, on the next day of sitting, I shall move: That this House- (1) notes the systematic campaign being waged by the Australian Petroleum Exploration Association against the proposed resources rent tax on offshore oil; (2) rejects the misleading arguments presented in the advertisements; and (3) affirms its support for the principle of a resources rent tax, combined with tax concessions for genuine exploration. Mr CADMAN(Mitchell) —I give notice that, on the next day of sitting, I shall move: That this House deplores the practice of the Government in treating motions as frivolous by- (1) not accepting or rejecting censure motions when presented; (2) delaying important matters so that incompetent Ministers can prepare themselves for debate; (3) using the forms of the House to dispense with Question Time and matters of public importance; (4) failing to comply with the spirit of standing order 110; and (5) treating this House with contempt. Mr SHIPTON(Higgins) —I give notice that, on the next day of sitting, I shall move: That this House- (1) notes- (a) that the Minister for Tourism has stated that the new discount air fares are simple and have basically no burdens and restrictions; (b) that in reality the fares are extremely complicated and are riddled with restrictions; and (c) that they discriminate against all rural towns' services by regional airlines; and (2) calls on the Government to simplify the fares, reduce their cost and make them more readily available to Australians. Message from the Governor-General recommending appropriation for proposed expenditure announced. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS(Fremantle-Minister for Finance)(10.20) —I move: That the Bill be now read a second time. Appropriation Bill (No. 3) 1983-84, together with Appropriation Bill (No. 4) 1983-84 and the Appropriation (Parliamentary Departments) Bill (No. 2) 1983-84 which I shall introduce shortly, comprises the Additional Estimates for 1983-84. In these Bills, Parliament is asked to appropriate moneys to meet essential and unavoidable expenditures additional to the appropriations made under Appropriation Acts Nos 1 and 2 1983-84 and the Appropriation (Parliamentary Departments) Act 1983-84. These additional appropriations are required to meet commitments that have been approved by the Government since the Budget and additional requirements of an ongoing nature. The principal factors underlying the requirements are cost and price increases since the Budget was prepared. Although the Budget figuring contained allowances for prospective wage and salary increases, those amounts were not then appropriated, and funds are now required to meet the costs of awards and determinations made since that time. The national wage case decision in October 1983, in particular, provided for increases of 4.3 per cent. Expenditures relating to staffing increases have, for the most part, been met from the provision under Division 312 of Appropriation Act (No. 1) 1983-84, which provided special funds for the salaries and related administrative costs of Government initiatives approved late in the Budget context but in respect of which it was not then practicable to allocate amounts to specific departments' appropriations. Particulars of amounts issued under Division 312 were provided to the Parliament on 27 March. The additional appropriations in these three Additional Estimates Bills total $ 632.1m. Of this, $508.5m is sought in Appropriation Bill (No. 3), $121.9m in Appropriation Bill (No. 4) and $1.7m in Appropriation (Parliamentary Departments ) Bill (No. 2). These amounts are offset in part by savings in the appropriations made by Appropriation Acts (Nos 1 and 2) 1983-84 and Appropriation (Parliamentary Departments) Act 1983-84, reflecting the Government 's determined efforts to achieve savings in expenditure for ongoing programs wherever possible. These savings, amounting to $295.7m, are detailed under the relevant appropriation headings in the document, 'Statement of Savings Expected in Annual Appropriations', which has been distributed to honourable members. After allowing for prospective savings, the appropriations now sought represent a net increase of $336.4m in expenditures financed from annual appropriations. As a proportion of total outlays-encompassing both annual and standing appropriations-this increase amounts to 0.59 per cent. I note here that it is a testimony to the Government's more thorough and rational management of the budgetary process that this proportion has fallen markedly from 2.3 per cent in 1982-83 and 1.1 per cent in 1981-82. Details of the total outlays picture were published on 8 March following the Government's mid-year review of the Budget Estimates. I now outline some of the main areas in respect of which the Government has now found it necessary to seek additional provisions in Appropriation Bill (No. 3) 1983-84 to meet expenditure for the ordinary annual services of the Government. An estimated $157m is for wages and salaries, $78.2m being for non-defence and $ 78.7m for defence purposes, to meet increases in award rates and other wage and salary costs. The amounts include the wage and salary components of additional funds being provided to statutory authorities funded under one line appropriations. As I mentioned earlier, costs in respect of approved increases in staff numbers have been met from Division 312 of Appropriation Act (No. 1) 1983-84. The amount of $16.3m is included under the Department of Defence for additional payments on aircraft projects, mainly the FA18 fighter program. The increase has resulted from a rescheduling of payments. Total increases have been substantially offset by exchange rate savings. An amount of $14.7m is sought for the Department of Education and Youth Affairs for assistance for tertiary students and for Aboriginal study grants. The increase is due to a higher number of eligible students than estimated and, on average, higher payments per student . The increased requirement for Aboriginal study grants reflects the trend by Aboriginal students towards longer courses than previously. An amount of $59.1m is sought under the Department of Employment and Industrial Relations for labour force and training programs. The major part of the increase relates to the following areas: Assistance for work experience training for Aboriginals and the adult wage subsidy scheme. The increase is mainly attributable to continued high levels of approvals under the range of wage subsidy programs, increases in the provision made for special groups and, to a lesser extent, policy decisions taken to increase activity in particular areas, for example, with respect to trade apprentices and retrenched workers. An amount of $12.1m is sought under the Department of Health for expenditure under the Health Insurance Commission Act 1973 for administration of Medicare benefits payments. The increase reflects a reallocation of costs between the planning and establishment and the ongoing administrative phases of the Medicare benefits payments arrangements and cost and other unforeseen increases in expenditure. Once the reallocation of funds is taken into account the net increase in outlays is $5.54m. An additional $8m has been provided to the Department of Transport for the Tasmanian freight equalisation scheme, reflecting a higher incidence of freight subsidy payments to shippers of eligible goods between Tasmania and the mainland. I commend the Bill to the House. Debate (on motion by Mr Moore) adjourned. Message from the Governor-General recommending appropriation for proposed expenditure announced. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS(Fremantle-Minister for Finance)(10.28) —I move: That the Bill be now read a second time. I present Appropriation Bill (No. 4) 1983-84 in which appropriations totalling $ 121.9m-additional to those made by Appropriation Act (No. 2) 1983-84-are sought for capital works and services, payments to or for the States and the Northern Territory and for other services. The proposed appropriations are needed to meet essential and unavoidable expenditures for which provision was not made in that Act. Almost half of the additional appropriations sought is for natural disaster relief and restoration. The remainder mostly reflects cost and price increases which have occurred since the time of the Budget and requirements which the Government has considered appropriate to meet this financial year. Provision has been made under the Department of Finance for natural disaster relief and restoration amounting to $46.8m. This provision is based on the latest advice from the States and the Northern Territory of their requirements under the natural disaster relief arrangements. The main factors in the increase are: Underestimation by the relevant States of the continuing financial implications of the recent droughts in New South Wales and Queensland; Underestimation of the consequences of the April-May floods in Queensland; and The impact of new disasters not provided for in the original 1983-84 appropriation, including floods in New South Wales, Victoria and Queensland and developing drought conditions in Western Australia. An amount of $15m is sought for payments in lieu of benefits for prescribed diagnostic services in respect of private patients in recognised hospitals. This reflects the difficulties the Government has experienced with medical practitioners over agreements relating to private practice rights of medical practitioners in recognised hospitals. This amount will cover circumstances where the Health Insurance Act 1973, as it would be amended by the Bill recently introduced by the Minister for Health (Dr Blewett), would not fully authorise Medicare benefit payments for diagnostic services provided to private patients in recognised hospitals from 1 March 1984. This expenditure will be offset by lower than estimated payments against the standing appropriation for Medicare benefits. I commend the Bill to the House. Debate (on motion by Mr Moore) adjourned. Message from the Governor-General recommending appropriation for proposed expenditure announced. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS(Fremantle-Minister for Finance)(10.32) —I move: That the Bill be now read a second time. Pursuant to accepted arrangements relating to the Parliament's appropriations and staffing, I present the Appropriation (Parliamentary Departments) Bill (No. 2) 1983-84 which seeks appropriation of $1.7m in addition to the appropriation made in the Appropriation (Parliamentary Departments) Act 1983-84. The additional appropriation is sought mainly to provide for additional staffing, increases in salaries costs and the development of information retrieval systems . I commend the Bill to the House. Debate (on motion by Mr Moore) adjourned. Consideration resumed from 28 March. Senate's amendments- No. 1-Pages 3 to 5, clause 5, leave out the clause. No. 2-Page 5, clause 6, after proposed sub-section 26AH (1), insert the following new sub-section: '' '(1A) Where a paid-up policy of life assurance is issued to a taxpayer in lieu of an eligible policy- (a) the paid-up policy shall, for the purposes of this section, be deemed to be a continuation of the eligible policy; and (b) no amount shall be taken for the purposes of sub-section (3) to have been re-invested or otherwise dealt with on behalf of the taxpayer or as he directs in connection with the issue of the paid-up policy to the taxpayer in lieu of the eligible policy.''. No. 3-Page 6, clause 6, after proposed sub-section 26AH (6), insert the following new sub-section: '' '(6A) Where- (a) sub-section (5) would, but for this sub-section, apply to an amount (in this sub-section referred to as the ''relevant amount'') received by a taxpayer by reason of the forfeiture, surrender or other termination of the whole or a part of an eligible policy; and (b) the Commissioner, having regard to- (i) the total amount of premiums paid under the eligible policy; (ii) the total amounts received by the taxpayer or by any other person under the eligible policy and the total amounts of bonuses included in the amounts so received; (iii) the amount of the surrender value of the eligible policy at the time when the forfeiture, surrender or other termination occurred; and (iv) such other matters as the Commissioner considers relevant, is of the opinion that it would be unreasonable for sub-section (5) to apply to the relevant amount or to a part of the relevant amount, sub-section (5) does not apply to the relevant amount, or to that part of the relevant amount, as the case may be.''. No. 4-Page 46, clause 25, proposed section 160AAB, leave out the proposed section, insert the following section: Rebate in respect of amounts assessable under section 26AH ''160AAB. (1) In this section, ''eligible 26AH amount'', in relation to a year of income, means an amount included in assessable income under section 26AH in relation to an eligible policy within the meaning of that section issued by a life assurance company to which Division 8 applies in relation to the year of income, not being a life assurance company the whole of the income of which is exempt from tax. '(2) A taxpayer, not being a taxpayer in the capacity of trustee of a trust estate, is entitled in his assessment in respect of income of a year of income to a rebate of tax of an amount equal to 30 per cent of any eligible 26AH amount included in his assessable income of the year of income. '(3) Where- (a) an amount is included under section 97, 98A or 100 in the assessable income of a year of income of a taxpayer being a beneficiary of a trust estate otherwise than in the capacity of trustee of another trust estate; and (b) the whole or a part of the amount so included (which whole or part is in this sub-section referred to as the ''rebatable amount'') is attributable to an eligible 26AH amount included in the assessable income of the year of income of the trust estate or of another trust estate, the taxpayer is entitled in his assessment in respect of income of the year of income to a rebate of tax of an amount equal to 30% of the rebatable amount. '(4) Where- (a) a taxpayer being the trustee of a trust estate is liable to be assessed and to pay tax in pursuance of section 98 in respect of a share of the net income of the trust estate of a year of income; and (b) the whole or part of that share (which whole or part is in this sub-section referred to as the ''rebatable amount'') is attributable to an eligible 26AH amount included in the assessable income of the year of income of the trust estate or of another trust estate, the taxpayer is entitled in that assessment to a rebate of tax of an amount equal to 30% of the rebatable amount. '(5) Where- (a) a taxpayer being the trustee of a trust estate is liable to be assessed and to pay tax in pursuance of section 99 or 99A in respect of the whole or a part ( which whole or part is in this sub-section referred to as the ''relevant trust income'') of the net income of the trust estate of a year of income; and (b) the whole or a part of the relevant trust income (which whole or part is in the sub-section referred to as the ''rebatable amount'') is attributable to an eligible 26AH amount included in the assessable income of the year of income of the trust estate or of another trust estate, the taxpayer is entitled in that assessment to a rebate of tax of an amount equal to 30% of the rebatable amount. '(6) Where an eligible 26AH amount is included in the assessable income of a partnership of a year of income in the calculation of the net income or partnership loss of the partnership of the year of income, a partner in the partnership is entitled in his assessment in respect of income of the year of income to a rebate of tax of an amount equal to 30% of the amount by which the taxable income of the partner of the year of income exceeds the amount that could reasonably be expected to be that taxable income if the eligible 26AH amount had not been included in the assessable income of the partnership of the year of income. '(7) In the application of this section in relation to the year of income that commenced on 1 July 1982, references in this section to 30% shall be read as references to 30.67%.'.''. Mr HURFORD(Adelaide-Minister for Housing and Construction and Minister Assisting the Treasurer)(10.35) —I move: That the amendments be agreed to. As honourable members would be aware, on 27 March 1984 the Senate considered the Bill that was passed by this House as the Income Tax Assessment Amendment Bill ( No.5) 1983 and determined to request that this House agree to certain amendments . Three of those amendments are of a minor technical nature and were sponsored by the Government. The other amendment by which the Senate rejected clause 5 of the Bill represents a decision by the Opposition parties in the Senate to support tax avoidance practices of a blatant and contrived kind containing, as the Treasurer (Mr Keating) said when introducing the Bill in this House, 'clear elements of fraud against both the revenue and unsuspecting employees'. Clause 5 of the Bill, as passed by this House, contains a measure which would have imposed income tax on benefits received from an employer sponsored superannuation fund after 1 July 1977 where the fund was one established and maintained ostensibly to provide superannuation benefits for employees but where the proprietors, after getting the relevant tax concessions, wound up the fund and took the benefits for themselves. The Opposition has indicated that if the Government were to amend clause 5 to remove its retrospective effect the Opposition would support the clause. The Government does not accept that this measure to recover from the proprietors the tax gains ill-gotten-I repeat that, ill-gotten-by these devices should apply from a date later than 1 July 1977. The proposed prospective operation of the clause from that time would have accorded with the Government's publicly announced policy on anti-tax avoidance action. The Government, therefore, does not in principle agree to the removal of clause 5 from the Bill or to it being watered down. However, the Bill covers a range of other important taxation measures which must be in place in the law without further delay. For this reason alone, the Government intends to agree to the passage of the Bill without clause 5. Faced with the Opposition's attitude, it has no practical alternative but to do this. At the same time, on behalf of the Treasurer, I give notice that the Government is resolved to press the Senate to reconsider the measures contained in clause 5 . A further separate Bill for that purpose to apply with effect from 1 July 1977 is being prepared and will be introduced shortly. Mr HOWARD(Bennelong)(10.38) —I say on behalf of the Opposition that we will not oppose the formal terms of the motion moved by the Minister for Housing and Construction and Minister Assisting the Treasurer (Mr Hurford) because we believe that this particular measure directed against this practice which is described as a tax avoidance practice should have effect from the date of introduction of the legislation which was 7 December 1983. The bona fides of the Opposition in supporting that proposition was demonstrated this morning when I gave notice of a motion to the effect that the Opposition would support that course of action. I rise solely to deal with the misleading, specious and dishonest argument which has been advanced by the Government in relation to the action of the Opposition, certain Australian Democrats and Senator Harradine in another place on this particular issue. At no stage have any of those people opposed the prospective application of this particular measure. It surprises me that a Minister who normally enjoys a reputation of considerable respect and integrity so far as we on this side of the House are concerned would say that because we do not support the operation of this provision from 1 July 1977 we have made a decision to support tax avoidance. That is wrong, it is misleading and it is dishonest. The Minister is busy giving notice that the Government will move certain things in this area in the future. I will give notice to the Minister that we do not intend to let the Government get away with this manufactured outrage and these quite dishonest claims about the attitude of the Opposition towards tax avoidance matters. In recent days we have been made aware by courtesy of the Auditor-General that there is at present outstanding to the Commonwealth about $3,000m in relation to payments of tax. I will take a moment to analyse that figure because not only is it important to the Government and the people of Australia that that outstanding tax be collected but also the size of that amount and the circumstances in which it became due and owing are very relevant to the charge made by the Government and the Minister against the Opposition. It was their claim in opposition that we were dilatory and negligent on the question of tax avoidance. It is now their claim in government that in some way the Opposition is protecting the tax avoidance industry. The truth of the matter is that the tax avoidance industry was destroyed during the lifetime of the last Government. In order to justify the Government's present claim that it finds it necessary to take action against that industry and the claim that it is still a thriving industry, the Government has to manufacture circumstances in which it accuses the Opposition of supporting the tax avoidance industry. There is no currency or substance in the claim of the Government in regard to our opposition to the retrospective operation of this provision. Let me remind honourable members that in any event this retrospectivity would involve total revenue of $15m and that the Government, by its own post-Budget actions this financial year, has given away revenue almost 10 times that amount. That is how much budgetary impact this item has. That is how much in the way of personal income tax reductions is being denied to the people of Australia. That is with reference to the argument used by both the Treasurer (Mr Keating) and the Prime Minister (Mr Hawke). I return to that $3,000m. That $3,000m is not lost revenue. It is not revenue forgone. It is revenue the payment of which is in dispute between the Commissioner of Taxation and individual taxpayers. Virtually none of it relates to so-called bottom of the harbour tax avoidance arrangements and therefore none of it relates to the actions taken by the Opposition in the Senate on those matters. I take the opportunity of reminding the Committee that according to my understanding the collection of unpaid company tax in relation to bottom of the harbour legislation and to the tune of $500m or $600m is now proceeding under the former Government's legislation which was directed to recovering the unpaid company tax in relation to those arrangements. That collection is going very satisfactorily according to the advice provided by the Commissioner of Taxation. That $3,000m relates to other matters. What it relates to is action being taken by the Commissioner of Taxation to collect unpaid tax under tax avoidance arrangements entered into over a period of years and which have been challenged by the Commissioner of Taxation either under legislation passed by the former Liberal Government or in relation to general action taken by the Commissioner of Taxation under provisions of the law that have operated for many years. In other words, that $3,000m is being claimed for the revenue by the Taxation Commissioner as a result of action taken by the former Liberal Government. The very size of that figure demonstrates the zeal and diligence not only of the former Government but also of the Commissioner of Taxation during the period of office of the former Government. It is a very great pity that the Minister for Finance (Mr Dawkins) is not in the chamber because at the National Press Club a couple of days ago he was asked a question about this $3,000m. The Minister for Finance dishonestly, misleadingly and deceitfully claimed to the National Press Club that in some way the action of the Senate was responsible for that amount of $3,000m being outstanding. That is a dishonest and deceitful thing for the Minister for Finance to say. I use those words deliberately. This is a great example of the new idealism that the Minister for Finance is talking about! Mr Hurford —Mr Deputy Chairman, I take a point of order. The shadow Treasurer, the Deputy Leader of the Opposition, is clearly transgressing the rules of the Parliament in the sorts of adjectives he is using about my colleague the Minister for Finance. I ask you to insist that those words be withdrawn. Mr Howard —On the point of order, Mr Deputy Chairman, I submit that the use of the words 'dishonest' and 'deceitful', given the fact that the Prime Minister of this country was once allowed to use the word 'liar' in the Parliament and get away with it, is not unparliamentary. It sits ill with the Government to complain about words like that. Mr Holding —I take a point of order, Mr Deputy Chairman. Are you going to make him withdraw? He knows he is contrary to standing Orders. The DEPUTY CHAIRMAN(Mr Drummond) —I consider the words to be unparliamentary although I certainly take the point that the Deputy Leader of the Opposition raises. I ask him to withdraw. Mr HOWARD —Out of respect for you, Mr Deputy Chairman, and I have considerable-- Mr Holding —Unqualified. Mr HOWARD —I will not be browbeaten by the Minister; so he can just calm down. Out of respect to you, Mr Deputy Chairman-my respect for you is considerable-I will alter those words and I will say that the Minister for Finance blatantly misled-- Mr Hurford —Mr Deputy Chairman, I asked for those words to be withdrawn. It is the usual practice of this House that those in the chair insist that such words be withdrawn. Because this honourable member is transgressing the normal standards of the House I ask you to insist that he improve his action. The DEPUTY CHAIRMAN —The Deputy Leader of the Opposition, in deference to the Chair, was in the process of withdrawing. Mr Hurford —He was altering the words. The DEPUTY CHAIRMAN —Order! I think the Minister is being a little sensitive. Mr HOWARD —To satisfy my friend opposite-I regard him as a friend-I will withdraw the two words and I will substitute the words-- Mr Barry Jones —What about the rest of us? Mr HOWARD —I am a little more selective than that. I will substitute the words ' blatantly misleading the people and the National Press Club'. Mr Holding —Mr Deputy Chairman, I take a point of order. Mr HOWARD —I will not withdraw those words because they are not unparliamentary. Mr Holding —There are ample precedents to show that the imputation of motive which goes to the character of an honourable member is contrary to Standing Orders. To say that a member may have misled or innocently misled is within Standing Orders. To use the word 'blatant' invokes the concept of deliberately misleading. There are precedents to suggest that those words are unparliamentary . I ask that they be withdrawn. The DEPUTY CHAIRMAN —I think the Minister for Aboriginal Affairs is being very sensitive in comparison with other practices of the House, as was pointed out by the Deputy Leader of the Opposition. The Deputy Leader of the Opposition, I believe, has responded to the sensitivity that the Minister has demonstrated but I ask the Deputy Leader of the Opposition, in consideration of the Chair, to try to temper his words. Mr HOWARD —I think that has become academic as my time has expired. The DEPUTY CHAIRMAN —Yes, the honourable member's time has expired. Mr HOWARD(Bennelong)(10.49) —I will speak again. As I was saying earlier, while addressing the National Press Club the Minister for Finance (Mr Dawkins) quite blatantly, in my view, and falsely asserted that in some way the non-payment of that $3,000m was due to the obstructive conduct of the Senate. Not only was that statement blatantly misleading, but also it was totally illogical. If, in fact, the Senate had been obstructive about passing anti-tax avoidance legislation the Commissioner of Taxation would not have had the legislative authority to issue assessments. Not only has he got his facts completely wrong but also he is falsely impugning the motives of the Opposition on this issue. The fact is that the size of that amount, so far from it being an indictment of any of the actions of the last Government in pursuing the tax avoidance industry , demonstrates the zeal, diligence and application of the former Government. If it had not taken any action, if it had been negligent and dilatory, as the Minister for Finance and others have claimed, there would not have been any large amount in dispute at all. Assessments would never have been issued, the tax would not have been claimed by the Commissioner of Taxation and the community would have been ignorant of the fact that such a large amount of revenue was being allowed to slip through the fingers of the Commissioner of Taxation. The truth is that, when a calm and objective judgment is made on the activities and attitudes of different parties towards tax avoidance practices in this country over a period of 10 years, the record of the last Government in pursuing blatant tax avoidance arrangements is seen to be a very admirable one. As I pointed out to the Parliament when this Bill was being debated on 29 February this year, a few days before the change of government the Commissioner of Taxation sent to me, as the Treasurer in the former Government, a detailed assessment of how he saw the tax avoidance issue and the tax minimisation issue as at 3 March 1983. It is very interesting to look at that document. I do not mind the Government looking at it. I indicated to the now Treasurer at the time that the Commissioner of Taxation was quite at liberty to make it available to him. The document stated very interestingly and very relevantly: The evidence available to this office suggests that the introduction on 27 May 1981 of Part IVA with effect from that date effectively put a stop to the promotion of new tax avoidance schemes of a blatant, artificial or contrived nature. There could be no more telling judgment on the quality and effectiveness of the action taken by the last Government on that issue than that judgment of the Commissioner of Taxation. As I have said in the past, he is a person who is not frightened to speak his mind and a person who is willing to give fearless advice to a government of either political persuasion. That paragraph demonstrates the first-class job that the former Government had done. I take this opportunity of giving the lie to any suggestion of the Government that the outstanding amount of $3,000m is in some way due to inactivity on the part of the former Government. Indeed the reverse is the case. If we had not taken action, if the Commissioner had not known that under the last Government the order of the day was to take firm action against tax avoidance arrangements, there would never have been that very large amount in dispute. Everybody knows that taxpayers who enter into tax avoidance arrangements are, by definition, very reluctant to part with their money and they are likely to have disputes with taxation commissioners. If there have been tax avoidance practices and the Commissioner has been having a go at the people involved of course there would be a lot of money in dispute. The Senate did not obstruct the collection of it. I repeat that the Minister for Finance, in saying that the Opposition was in some way responsible for that amount being outstanding, is not only blatantly misleading but also totally illogical. If the Opposition had been obstructive the amount in question would never have been assessed and sought by the Commissioner of Taxation. We on this side of the House make it perfectly clear that we have no objection at all to the amendments inserted into the legislation in another place and which are now being accepted by the Government. We believe that this measure should operate from 7 December 1983, which was the date of its introduction. On two occasions in the lifetime of the last Government there were circumstances in which legislation having some retrospective operation was introduced. The circumstances of the legislation introduced in 1982 are well known and involve the collection of unpaid company taxation. The former Government did not believe-the Commissioner of Taxation did not believe while I was Treasurer-that retrospective legislation was justified in relation to these matters. The Commissioner of Taxation did not believe in 1980 that it was necessary, even then, to take prospective action against these tax avoidance arrangements because he thought that if we did it then we might interfere with some quite legitimate and proper business arrangements. Yet now, in 1984, in respect of a practice which the Commissioner in 1980 did not think it even worth while taking prospective action the Government, in some manufactured, confected indignation, asks the Australian people to believe that, because we are objecting to something being made retrospective which the Commissioner did not even want made prospective three years ago, in some way we are defending the tax avoidance industry. I am very surprised that the Minister for Housing and Construction (Mr Hurford) should get carried along with the blatantly misleading rhetoric which is used by the Minister for Finance. At the National Press Club he told us that he believed in the new personal politics of the new idealism, taking us back to the 1960s and all this love and ideology. It will take a lot of addresses by the Minister for Finance to the National Press Club for us to accept that he has turned over a new leaf. After all, he was the arch-McCarthyist of the tax avoidance debates of 1982. The Prime Minister (Mr Hawke) is talking about the new McCarthyism. He does not have to look at the Opposition to learn about new McCarthyism; he need only turn around to look at the Minister for Finance, who assassinated more characters and abused more people under parliamentary privilege than any other member of this Parliament I have seen in 10 years. Mr Hunt —Who has? Mr HOWARD —The Minister for Finance, the honourable member for Fremantle, who has been guilty in this Parliament of the worst character assassination that it has been my experience to hear in the 10 years that I have been a member of this Parliament. I say to the Minister for Housing and Construction, a Minister I respect and like very much, that he ought to distance himself a bit from the Minister for Finance. He ought not to get conned into making these wild accusations against the Opposition. He knows darn well that voting against the retrospective operation of this provision is not supporting the tax avoidance industry. He knows darn well, as an accountant, that artificial and blatant tax avoidance schemes are now dead. They are a thing of the past. They were rendered dead by the operation of Part IVA of the Crimes (Taxation Offences) Act. All the fulminating, all the bluster and all the misleading claims and accusations against the Opposition are not going to alter that fact. The Government claimed there was a vast untapped pot of money that would be collected and that the former Government had taken no action. It has discovered, upon coming to office, that that is not the case. It has discovered that all the blatant loopholes and excesses were, in fact, closed off by the former Government. The Government has had to cast around and manufacture some circumstances. It has gone around the nation trying to persuade the people that in some way by voting against the retrospective operation of this provision, involving a tenth of the money that the Government has thrown away in this financial year, the Opposition is supporting the tax avoidance industry. It is a dishonest campaign and it is one that we will fight on every occasion. Mr HURFORD(Adelaide-Minister for Housing and Construction and Minister Assisting the Treasurer)(10.59) —In closing the debate I thank the Deputy Leader of the Opposition (Mr Howard) for his kind personal remarks, but they are not going to stop me from telling the truth as it is. I have always been impressed by how the strength of the argument tends to be in inverse ratio to the length of time it takes to put that argument. It has taken the Deputy Leader 20 minutes to put a very, very weak case. It is not going to take me long to put a very, very strong case. If ever I have heard fulminating and blustering-which were a couple of the words he used-it is over the last 20 minutes when he was doing nothing more nor less than supporting not just tax avoiders but quasi tax evaders. All the huffing and puffing, in my view, about the amount of tax to be collected is merely seeking to justify the unjustifiable. Whatever the previous Government's good actions in the past-and the Opposition of the day, namely, the Australian Labor Party, supported a number of its actions in the tax avoidance field when the Deputy Leader of the Opposition was the Treasurer of this nation- they do not justify bad actions in the present. The Opposition is supporting tax avoiders, and I would go further and say that it is supporting tax evaders. Perhaps I have been a bit kind to even call them quasi tax evaders. Let me repeat to the House what I said in introducing this debate; that is, that by the removal of clause 5 from the Income Tax Assessment Amendment Bill ( No.5) 1983 tax avoidance practices of a blatant and contrived kind containing clear elements of fraud-I repeat the phrase 'elements of fraud'-against both the revenue and unsuspecting employees have been perpetuated. By the removal of clause 5, people are getting away with those clear elements of fraud which are perpetrated against not only the national revenue but also the employees who were inveigled into these schemes. Clause 5 of the Bill which was passed by this House contained a measure which would have imposed income tax on benefits received from an employer-sponsored superannuation fund after 1 July 1977. The Deputy Leader of the Opposition says: 'You can have it back if you like, but only prospectively'. The fact is that from 1 July 1977 until the date on which he would allow this measure to proceed, on the introduction of this Bill, people have got away with this fraud. I have been a tax practitioner, as the Deputy Leader of the Opposition mentioned during the course of his remarks. He, as a lawyer, has been a tax practitioner, and would realise that if section 260 had prevailed-and the Parliament's intention was that it should have prevailed-and if we were allowed by the courts to have given effect to section 260, all of these measures would have been ultra vires, because they were measures that were entered into in order to avoid tax. But in this case they have gone further. They have really imposed hardships on employees as well. I think that the Deputy Leader of the Opposition does not do himself or his party any credit whatsoever on an occasion like this. He is responsible for clause 5 being eliminated from a worthy Bill such as this, which the Parliament will pass, and then says 'Yes, we will let you have it, but prospectively', when so many people have got away with so much from 1 July 1977. Those people ought to be contributing to the revenue of this country and they ought to be punished for the sort of evil acts that they have perpetrated on their employees. At least the remainder of the Bill will be passed. We have given notice that we will bring back to the Parliament the intentions of clause 5. Certainly, Labor members in this chamber will support this measure when it is introduced, because we are anxious to see that those who have entered into these schemes should not be allowed to get away with it. I can only hope there will be some change of heart in the Senate when the new Bill reaches that chamber. Question resolved in the affirmative. Resolution reported; report adopted. [COGNATE BILLS: BASS STRAIT FREIGHT ADJUSTMENT LEVY BILL 1984 BASS STRAIT FREIGHT ADJUSTMENT LEVY COLLECTION BILL 1984] Debate resumed from 29 March, on motion by Mr Barry Jones: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Keogh) —Before the debate on this Bill is resumed, I remind the House it has been agreed that a general debate be allowed covering this Bill, the Bass Strait Freight Adjustment Levy Bill 1984 and the Bass Strait Freight Adjustment Levy Collection Bill 1984. Mr HUNT(Gwydir)(11.05) —Whilst members on this side of the House will not be opposing the passage of these Bills, we are concerned about a number of aspects to which I would like to draw the attention of the House. As a brief background to my comments, I would explain that the nearest refinery to the Bass Strait fields, Western Port in Victoria, does not have the capacity to refine all the crude from those fields. The then Government in 1970 introduced the crude oil absorption scheme which imposed a collective obligation on marketers of petroleum products in Australia to absorb indigenous crude oil and arrange for its refining within Australia. For each crude oil producing area around Australia except Bass Strait, all production can be absorbed at the nearest refinery. In the case of Bass Strait crude, shipments must first be made to either Western Port or to other Victorian refineries and then to New South Wales and Queensland refineries. Because the Bass Strait crude must be shipped to other refineries, an adjustment is made to the import parity price, resulting in a reduction of 36c a barrel as a 'freight allowance'. Until now, all refineries have received this allowance despite the fact that the acutal cost incurred in moving the crude varies from zero at Western Port to about $1 per barrel in Brisbane. The Opposition believes this legislation will provide a partial solution to the problems of the northern refiners. However, as the system it replaces has been in place for such a long period, this solution imposed by the Government will be totally satisfactory to none of the refiners. I add, however, that the legislation has been imposed only in light of the industry's inability to come up with its own resolution to the problem, as it has been perceived by the northern refiners. The Bills before the House today are closely tied to the crude oil allocation system which is itself currently under review. The existence of the freight equalisation scheme, it must be said, is totally dependent on the existence of the allocation system. But the Government has decided suddenly to change the freight adjustment scheme, even though a decision on the allocation system is expected within six months. The Government has not made it clear why the new legislation has been introduced, when this review is expected so soon. So whilst the Opposition does not intend to hold back the passage of these Bills, it suggests that the legislation would have been better timed had it been presented in conjunction with the findings of this current review. In the context of the 15 years in which the freight adjustment system has operated, a further six months would seem to be a minimal delay in order to present legislation to the industry based on a long term package. But this is not the impression which will be gained by the industry if there is a possibility of more changes to goverment regulations so soon after the passage of these Bills. It is also a matter of concern to the Opposition that the 20c levy fixed by this legislation will not adjust upwards or downwards in line with movements in oil prices. The inflexibility of the 20c levy raises major doubt over the equity of the scheme in coming years. Oil prices have not remained static in recent times, and it is unlikely that they will do so in the future. The freight allowance, linked to parity prices, currently stands at 36c a barrel, having already risen this year. If it were to rise again in line with changes to parity prices, the 16c allowance to all refineries would rise to 18c, 19c, 20c and so on, thus further reducing the advantage which it is intended to offer to the northern refiners through the series of three Bills which is before us today. If the Government believes that its new allowance scheme is equitable, then it will become less and less equitable in the future. Or is it admitting that the breakup of the allowance as provided for in this legislation is not, in fact, really equitable? Or does the Government intend this legislation to remain in force only for a relatively short period? I presume that that is its intention, but I would like an answer to that question. The better approach would surely be to adjust the legislation to ensure that the existing proportional split is maintained, regardless of any change in the total freight allowance. I again emphasise the Opposition's concern that even by adjusting the legislation, the Government is not introducing the best possible scheme to resolve this situation. The southern refineries have made a substantial capital investment in constructing pipeline facilities from the Bass Strait fields to Western Port, as the Minister for Science and Technology (Mr Barry Jones) conceded in his second reading speech. The legislation will take from them part of this small compensation as reward for their investment. This freight allowance no doubt formed a part of their budgetary expectations when they decided to embark upon this major capital investment. Northern refiners, on the other hand, are faced with costs of up to $1 a barrel and will no doubt see this change to the freight allowance as being of some benefit to them. They will, however, by no means be compensated for the additional costs they are incurring by freighting their product to the northern refineries. This will be a concern especially for the northern refiners when they find that the assessment of their shipping costs has been based on notional world costs rather than on the actual costs they face, given that these actual costs are much higher than the world formula would show. I know the historical reason for that, but at some stage I have no doubt that it will have to be reviewed, because it is obvious that the notional world costs are quite inappropriate at present because of the way in which costs of freighting in the world have fallen. This legislation, in short, cannot really achieve the ideals at which it is aimed. Mr Deputy Speaker, the Opposition will not obstruct the Bills but it cannot fully endorse them in view of the serious concerns which I have raised on its behalf. Mr CHYNOWETH(Flinders)(11.13) —I rise today to speak to the Bass Strait Freight Adjustment Trust Fund Bill 1984, the Bass Strait Freight Adjustment Levy Bill 1984 and the Bass Strait Freight Adjustment Levy Collection Bill 1984. This package of Bills imposes an additional levy of 20c a barrel on all oil produced from Bass Strait after rebates to the producers for exports and their producers' entitlement to crude oil. The proceeds of the levy will be redistributed to refineries in a way which reflects freight costs incurred in transporting Bass Strait crude oil from Western Port to each refinery. The actual costs incurred in moving oil from Western Port to the various refineries range from zero at British Petroleum's refinery at Hastings to around 96c a barrel at Brisbane. BP' s refinery is in the electorate of Flinders. We also have Esso's installation. All Bass Strait oil passes through to Western Port. On Thursday, 9 April 1983, BP announced that it would close the refinery at Western Port and the distribution facilities at Dandenong, putting 201 people out of work and creating concern in the lives of all those people whom those workers supported. I believe that this is typical of the multinational oil companies which control virtually all of Australia's oil production, processing, distribution and marketing. They use and abuse Australian workers and resources at will. Instead of processing oil at Western Port, where there is virtually no transport cost because of the pipeline direct to the field, we will all be subsidising BP to ship oil to the Amoco refinery in Brisbane and also to Kwinana . BP, in cahoots with the others in the oil cartel, is strengthening the monopoly which now virtually exists within the oil industry. The BP refinery at Hastings was built in 1966 and has the capacity to process 60,000 barrels per stream day. Only two other refineries have been built in Australia since then. They have a total capacity of only 5,200 barrels per stream day. BP intends to replace the Hastings refinery with the Amoco refinery at Bulwer Island, Queensland. BP has treated its employees with contempt and the people of Australia as apathetic colonials who do not have the will or conviction to take a stand against this huge monopoly. But there is one member in this Parliament who will speak out loud and clear. I represent all the people within the Flinders electorate. We will not meekly accept the lies that are being dished out to us by this oil cartel. The closer I look at the oil industry in this country the more concerned I become. Without a doubt the people of Australia are being hoodwinked. The total production of the Bass Strait field is controlled by Esso, an American multinational which could very easily buy and sell Australia. Our Bass Strait oilfield is fully integrated with Esso's distribution facilities at Western Port. I have been told that the computer system is serviced only by Esso technicians and that if for any reason Esso decided to withdraw from Australia it could, at the press of a button, cause the controlling computer to become inoperable. Production would cease and Australia would virtually grind to a halt . If this is correct, the implications are enormous and frightening. We as a nation have no control over a vital resource. I have spoken to the shipping unions at Western Port and also to the workers and management at the refinery and members of the local councils affected by the closure and dismantling of BP's refinery at Western Port. All are dismayed. The first page of a booklet put out by BP and called 'Celebrating Six Decades in Australia' states: As BP prepares itself for these new developments, we must constantly remind ourselves that despite new technology, capital and techniques, our greatest asset is our people. Obviously, this does not apply to Australians, only to those back in the British board rooms. Another gem from this booklet is: Communications, therefore, takes on a whole new meaning and BP realises the importance of keeping the community informed, letting them know of the plans and projects that lie ahead. Some of the workers employed at Hastings found out over the wireless that they were to be sacked. The community was also told in this way. I also was informed over the wireless. Is it any wonder that a finding of one of BP's own surveys was that at the top of the list of industries that Australians consider as doing a poor job for Australia come the petrol and oil companies. Australians not only believe this but also believe that the companies are getting worse. They are correct. BP's action reinforces these views. BP made a profit in the period 1977 to 1981 of approximately $106m. Last year it made losses due to its involvement in the mining industry. In the same period Esso made a profit of $650m. The others in the cartel no doubt had similar figures. The $300m which BP is spending to buy Amoco and to close many of its service stations and sack more people in the interests of rationalisation is money which could be better spent upgrading BP Western Port. However, on 8 February 1984 the Australian Financial Review quoted a BP spokesman as stating that there was no intention on the part of the company to phase Western Port out of its operations . What hypocrisy! Two months later it announced that it was to be shut down and dismantled. I have several questions for which I do not have answers at the moment. I trust that the answers to these questions are forthcoming from the petrol cartel. As the trend to larger tankers for the tranportation of liquids increases, will these tankers be able to discharge oil at the Amoco Bulwer Island refinery in Queensland? BP Western Port supplies the best bitumen in the State. Who will supply this when it closes? When BP closes its refinery how will it take up its share of crude oil? Is it correct that the pipeline to BP Western Port will be shut off and taxpayers will have to pay BP's crude oil freight costs? Where will the ships that use Western Port de-ballast? Will they drop it at sea as they used to? Will BP remove drums of residue which are believed to be illegally dumped at various sites on the peninsula? What are the social costs of removing this refinery which serves the southern and eastern parts of Victoria? Will more vehicle petrol tankers laden with thousands of gallons of petrol increase transportation risks on our roads? Why did BP spend $6m last year on a shut-down and overhaul of the plant at Hastings? Will this tax deducted overhauled plant be sold to other BP refineries at scrap prices? Why do BP and all other multinational oil companies refuse to supply small Australian-owned companies with product at fair prices? Will BP get the lucrative Queensland Government contract after it has closed down many Amoco service stations in Queensland and throughout Australia? Will the $300m which BP paid for Amoco and which will go to the United States be paid in Australian dollars or will it come from BP's overseas parent company? When BP closes there will be only two refineries in Victoria. Is it correct that the Petroleum Refineries (Australia) Pty Ltd catalytic cracker at Altona needs an overhaul? What would happen to petrol supplies if the PRA refinery went off-stream? Will BP and the oil cartel raise prices when they have eliminated one further competitor? The questions are just beginning. Early in March the Leader of the Opposition (Mr Peacock) visited the electorate of Flinders. He said that he would be looking closely at the impact of the closure of BP. I am certain that he will agree with what I now have to suggest. I have had many suggestions from individuals and organisations as to what we can do with BP. Some are: Use it for the coal to oil project. Use it for the liquefied petroleum gas to petrol project. Use the wharf as a general cargo project. Use the area for a heavy industries site. Nationalise it. Start our own Australian refinery. Incidentally, it was BP which in 1957 bought out Australia' s own refinery company, Commonwealth Oil Refineries, COR, and swallowed it up in its multinational company. However, I have had put to me one idea which undoubtedly will appeal to the Leader of the Opposition and all Opposition members. It will appeal to their spirit of free enterprise with healthy competition, their patriotism and their sense of fair play. There are Australian people willing to buy the BP refinery, the same one which BP says is not economical. They are willing to risk their money, efforts and time. Surely BP, wanting to wipe out all competition, will gratefully sell this old and uneconomical refinery, which it is going to pull down and destroy anyway, and watch these people go broke. This is one opportunity for BP and its friends to show that oil companies are not all that bad, that they do care for people and that they do believe in a free enterprise system, fair play and competition. I would like to see the Government pass legislation to make certain that this very vital refinery is not destroyed by foreign companies and that an Australian consortium willing to buy and operate it be given every opportunity. Knowing the lust for complete control of our market and resources by these foreign companies , I can but hope. BP is spending $300m to exchange one refinery for another and to control a company which last year made a profit of only $1m. Something stinks and it is not just diesel fuel. The oil cartel has us over the proverbial barrel . I believe Australia has had its turn in the barrel and it is about time we put some of these monopolistic oil companies in it. The Managing Director of BP said : As a responsible member of the community, we in BP believe that we have an obligation to explain some of our actions and attitudes. To tell the people what we are doing, what we have done and, indeed, who we are and where we come from. People of course will form their own opinions and make their own judgments about our company's actions and the part it plays in the community. He is spot on; we will form our own opinions about the part BP and other oil companies play in our community. That quotation came from a booklet on the front of which appeared the words 'The Quiet Achiever'. Around Western Port BP is known not as The Quiet Achiever but as The Quiet Deceiver. Mr GOODLUCK(Franklin)(11.27) —I am pleased to enter this debate. The oil industry is a web of intrigue which is very hard to unravel. It is very hard to understand all the different moves because it is changing all the time. Today one thinks one has an idea of what the oil industry is all about, and then tomorrow there are changes. Understandably change brings new ideas and innovations; and hopefully as the years progress we can be self-sufficient in Australia. These Bills are tied closely with, and in fact are dependent upon, the crude oil allocation system which is terribly important not only to the producers and explorers but also ultimately to the consumers, predominantly the users of petrol. I for one have argued on many occasions that there is a disparity in the price of petrol throughout Australia. We hear that oil companies in certain areas are running at extreme losses because of discounting but then one starts to analyse the situation. I cite the classic example. I saw it when coming to work this morning. In Canberra the price of super petrol is, I think, 46c a litre, yet in Hobart it is 53c a litre and it varies from State to State. I suggested in the House this morning that we set up a select committee of the House to inquire into the disparity in the price of petrol throughout Australia. We have had many royal commissions, but by the time they are completed and come down with their findings, the oil industry has changed. I cite the classic one, the Collins Royal Commission on Petroleum. When the findings were handed down I made my first speech in the House, I think in 1975. Mr Barry Jones —It was 1976. Mr GOODLUCK —I beg your pardon, 1976. I said then that the findings were out of date, that prices had changed and the ball game had changed completely and that the Parliament needed to have a really good look at the oil industry. My colleague the honourable member for Flinders (Mr Chynoweth), who spoke before me, feels very strongly about certain aspects of the oil industry, but we have to have explorers and we have to have large companies taking the financial risk to find more oil fields and more oil so that ultimately this country can be self-sufficient and not dependent on other countries in times of crisis. There are many problems attached to this matter. I have been reading an article published by the Australian Institute of Petroleum Ltd. I thought that it would be interesting to relate that Australia is a net energy exporter, but it is unable to meet its present need for crude oil from domestic sources and has little likelihood of doing so in the foreseeable future. Although oil and gas account for only 3 per cent of Australia's economic resources, they supply 56 per cent of primary energy consumption. The great bulk of oil consumed is used for transport, for which there is no practical alternative. We talk of liquefied petroleum gas as an alternative, and an interesting question arises every time. It was suggested that it would always remain at about 50 per cent of the price of super grade petrol. However, the price has moved up and down since that was first indicated. It did not give the transport companies the incentive to convert to LPG. For an example-I apologise for citing my own State, but one knows one's own State better than others-in Tasmania, LPG costs at present 32c per litre, and super grade petrol costs 54c. When we analyse the effect of that on the ultimate consumer, the person travelling to work, we argue the toss about $5 or $6 per week. The average motorist in Hobart, as compared with the average motorist in Melbourne, the ordinary working person, is paying in Tasmania about $5 or $6 per week more; and the person who converted his vehicle to run on LPG is paying about the same amount extra. So there are arguments as to that matter. However, the real problem that I foresee is the fact that we export about 80 per cent of our LPG to Japan and, I think, to other countries; I am not sure specifically. But it is sold far cheaper to people in those countries than it is sold to consumers in Australia. We need to do something about that. We need to be sure about these matters in this Parliament. I am no expert on the oil industry. All that I did for 15 years was to slave-- Mr John Brown —You tell us that you are. Mr GOODLUCK —I could have a go at the honourable gentleman about tourism, but I shall not do that-although I shall come to that subject. Anyway, for 15 years I was involved in the oil industry in a certain way. I worked dashed hard to make a living. I got to know a little about the oil industry. However, I have been appalled by the lack of understanding of the oil industry on the part of this House. We need to get more involved in it, because it is so terribly important to the people of Australia. I have mentioned that the great bulk of oil consumed is used for transport. Supplies are capable of meeting about 70 per cent of Australia's crude oil needs. Imports of oil and oil products are an important source of supply, costing some $3 billion per year. While the increase in consumption is not now expected to be as high as was anticipated only two or three years ago by international yardsticks, Australia's potential for finding new oil is not regarded as high, and consumption of domestic supplies each year consistently outweighs additions to reserves from commercially proven discoveries. Looking to the year 2000, some estimates place demand for crude oil then at more than 800,000 barrels per day. At present it is some 570,000 barrels per day, of which about 420,000 barrels per day can be met from domestic sources at peak production. So, we have a long way to go. We must give explorers the incentive. That is the reason for this Bill-because I suppose it is evening up the freight to a certain degree. As I have mentioned, the allocation system is inextricably bound up with this Bill. The exploration industry, therefore, has a target of finding new fields which will prevent domestic supplies from falling to some 20 per cent of needs. This will require the drilling, over the rest of this century, of more than 2,000 wildcat and appraisal wells. By comparison, the industry drilled 689 exploration wells in the 10-year period 1973 to 1982. The combination of new discoveries and continuing conservation successes is essential to the economy. Cars have changed . They are more economical. There was a move away from the V8s to the smaller cars. Everyone is conscious of the price of petrol. Everyone is conscious of conservation, and that is terribly important in a world that is dependent-it does not matter how one argues about it-on oil and, ultimately, on petrol. The challenge for Australia in oil, unlike that with the other energy sources, is not development but exploration. In the mid-1970s oil exploration activities dropped to low levels due to hostile and unpredictable government policies. However, more favoured policies have been adopted by successive governments since 1975, consisting of full import parity pricing. Many people argued against import parity pricing because we had cheap crude in Australia and the price of petrol in Australia was low. But we knew, after argument, that we needed to explore and to open up new fields. Most Australian people supported that view. The only thing that went wrong, as far as I can see, is that suddenly there was a realisation that when we went to import parity pricing the price of petrol rose and then we started to find discounting continuing, with one State saying to itself: 'We support this import parity because we know that in the future we shall need that petrol, and we do not want to be dependent on probably hostile countries in the future'. Unfortunately, however, we have the classic example again of the people in Melbourne paying 43c per litre and the people in Hobart paying 53c per litre. That is a difference of l0c per litre, when the people of Tasmania, for example, are supporting import parity pricing. I do not want to get stuck into the oil companies in this debate, as I normally do, because I understand that they have a part to play, and I have mentioned that. We need their money for exploration and to develop jobs. We need their money for this very important program of future dependency on our own exploration. Unfortunately, the oil companies get involved in this discounting and then start to tell the people: 'We are making a terrible loss because of discounting'. Let us face it: They create the discounting. It is not the poor service station proprietors who are sometimes blamed. It is not the consumers who say that they want cheaper petrol in the densely populated areas. It is the oil companies that dictate the terms. They do the marketing, and they know exactly what they are doing. It hinges on the allocation system, as it did in the past. When we had the cheaper crude, each oil company was dependent on an allocation, and the quicker it sold it, the better off it was, so it sold the petrol cheaper to get more allocation. It is the same principle today, to a degree, but it is getting completely lopsided because the price of petrol has gone up and up, and everyone has his eyes on it. Everyone is watching the price because we are so dependent on transportation and the use of petrol. We know that it is affecting transport costs and costs for the average worker. We know all these things. Mr Groom —Why are we paying more in Tasmania? Mr GOODLUCK —Tasmania is a small island of about 400,000 people. It is a small area in which to market, as compared with Melbourne, with a population of three million. The companies' argument is: 'We make more money there. We must sell the petrol cheaper; therefore, it must be cheaper over there'. We in Tasmania argue: 'Why? They are the same as us'. Then the companies start to develop their arguments. They say: 'You have a small market with only small service station proprietors'. Mr Hunt —But the people count, don't they? Mr GOODLUCK —Yes, and I am afraid we all need to realise that they are starting to ask questions about the oil industry. I have talked about petrol until I am blue in the face and I have found that people can be very vicious. Sometimes they turn against the person who tries, saying: 'You have tried but you have done nothing'. That is a problem that we must overcome. The Minister for Sport, Recreation and Tourism (Mr John Brown) talks about tourism. One of the fundamentals of tourism is the fact that a tourist can use his own car to drive around Australia, around beautiful Tasmania. Unfortunately, many people cannot afford to do that because of the price of petrol. Therefore, that hinges into tourism as well as into many other things. I support these Bills. I only hope that someone will take up the suggestion I have made today that we should create a select committee on this matter. I am sorry to get on to that subject again, but my colleagues the honourable members for Braddon (Mr Groom) and Denison (Mr Hodgman) are present, as are other good honourable members. We talk about saving the cats and the whales and about the anti-uranium lobby. Not all of us get interested in it but some do. We get passionately interested in the dam issue. We start to fight for those sorts of things but when it comes to poor old petrol and what it will cost the consumers we back away because the matter is too complicated and we do not have the fortitude to get really involved in this massive problem. Mr RONALD EDWARDS(Stirling)(11.40) —It is good to have heard the honourable member for Franklin (Mr Goodluck), along with the honourable member for Flinders (Mr Chynoweth), supporting this group of Bills. I think much of what the honourable member for Franklin said makes sense to this side of the House as well. We share his concern about the disparity in prices and we are aware of the fact that oil companies have many inbuilt economies that discriminate against consumers. Tasmania has a special case; that is, a much higher base price being charged by service stations. Western Australia has a special case in that it has very large distances and there are disparities between the city and the country. I suggest to the honourable member that in some senses Western Australia has a similar problem; that is, to ensure that we get some equity in pricing. I think the Prices Surveillance Authority promises some help in that respect. The honourable member mentioned the idea of a select committee. Looking further down the track, the Prices Surveillance Authority, when it is operating properly , will give some consideration to differentials in petroleum pricing throughout Australia. As the honourable member correctly says, it is a matter of concern to almost everyone in this country-the ordinary motorist, someone who is travelling or an operator in the transport business. One of the concerns we have collectively is that the base price for petrol has an enormous impact upon the costs for industry. Obviously, if substantial economies are being reaped by oil companies and those economies are not being passed on to the consumers and to the community, the whole community suffers a disadvantage. I think the Government's decision last year to index the excise was probably a sensible decision because it takes away that discretionary element and the movement is now much more predictable. We can only hope that the pattern for inflationary movement continues downwards so that those indexed excises will have less impact upon the community. In responding to the honourable member for Franklin I am really saying that I think there are many areas of common concern in the community and in this Parliament about petroleum pricing. Quite obviously, one of the issues that we are addressing concerning tourism is the appropriate rebates that might be gained by tourist operators in respect of the use of diesel fuel in some of their operations. We have looked at some of those operations, and certain disadvantages are suffered. I believe that we on the Government side of the House are well aware of the points that the honourable member has made. I am also aware of the points made earlier by my colleague the honourable member for Flinders. One of the community's difficulties in dealing with oil companies has been that they tend to be very large and very powerful and also very secretive in their operations. That makes it very difficult for the community to make intelligent decisions about whether an oil company should put off workers, whether it is entitled to investment allowances and so on. In effect, we have had a great deal of difficulty in this country in getting substantial information. We are not alone in that respect, of course. Similar difficulty is pointed to in the United States of America. The work of Anthony Sampson in the Seven Sisters points to the fact that there is a great deal of difficulty in dealing with large oil companies and understanding just the way they work and in governments making intelligent decisions about them. These Bills point to a substantial issue facing the Australian community; that is, that oil companies represent a very important part of the industrial structure and also have an enormous impact on the rest of the community in the decisions they make. The honourable member for Flinders pointed out earlier that in his electorate this has caused considerable difficulty from time to time in dealing just with the issues of employment, let alone the wider issues of pricing and exploration. These Bills are important. They are about petroleum pricing and the differentials in petroleum pricing involving Bass Strait, the refineries in Victoria and those on the east coast of Australia. The same cost considerations also impact upon the Kwinana refinery in Western Australia. As a member from that State, I am acutely aware of the importance of having a reasonable level of petroleum prices, particularly in country areas. It has an enormous impact. It does disadvantage people. The honourable member for Franklin is quite right in saying that unnecessarily high petroleum prices kill off tourism. There is no doubt about that. I believe that we in this Parliament have a joint involvement in trying to ensure that petroleum prices are reasonable and satisfactory. I now come to the issue of a resource rent tax. Obviously this is a matter that is high on the Government's agenda. There are arguments about resource rent taxes and those arguments will become quite coloured in the near future. The community generally may well ask why the Government has before it a proposal for a resource rent tax. In fact, as these Bills demonstrate, there are interesting economies with respect to oil exploration. The reality is that oil exploration is a very expensive process. It is not one that is entered into easily and it is not one that companies would take on without having some reasonable hope of return. However, once the wells are proved up and become commercial operations, the production of oil is a relatively cheap matter. So there is a large difference between the exploration activity of a company and the production activities of a company. In effect, once an oil well comes on stream the company 's operations become very economical indeed. Experience in the Middle East has shown that economies can become very rich on oil production. But businesses can become very poor on oil exploration. We need to arrive at a system of both taxes and royalties that represents both a reasonable return to the community and a reasonable level of charges against the company. I think all of us in this place need to understand that a community's oil resources are in fact its resources. They are not the private property of an oil company. Obviously, when an oil company undertakes certain exploration activities and it has leases over oil fields, it has rights to exploration and production. At this point we have certain national assets. Some of those assets are in this place; they are the members of Parliament. There are other assets out there, such as iron ore and the work force at large. One of the other assets , of course, is our oil reserves. In that sense, our oil reserves are assets of the entire nation. I believe that it is important to remind all honourable members and the community that the question of a resource rent tax is about a community resource. The Australian Labor Party has had a platform commitment to a resource rent tax since 1977. Considerable attention has been paid to it and the then Opposition spokesman on minerals and energy, the honourable member for Blaxland (Mr Keating ), who is now the Treasurer and, might I say, a very successful Treasurer, said: It would be the intention of the Labor Party in office to scrap the existing levy system and replace it with a resource rent tax. This would mean that all existing Bass Strait production would receive a uniform price and be subject to a resource rent tax . . . In the same speech the honourable member went on to say: A Labor government would price 'new' oil . . . at the full import parity price, but this oil would be subject to a resource rent tax. A resource rent tax therefore would operate on all Australian oil production, both 'old' and 'new'. That means substantially that in looking at a resource rent tax we are not just looking at the question of taking a tax from an oil company on production. We are also looking at the question of using subsidies to encourage production and certainly to encourage the production of wells that at present, under the current regime of levies and royalties, may be considered marginal. There is a view-I believe it is an important view to be considered-that many potential wells in Australia could be proved up to become commercial under an appropriate regime of a resource rent tax. However, because the tax structure at the moment tends to charge on production, those wells which would operate on a fairly small volume would pay proportionately a fairly high tax. The intention of a resource rent tax, however, would be to charge for the economic rent of that well and at the same time create a capacity for putting subsidies back into industry so that some of those marginal wells could be proved up. The honourable members for Franklin and Flinders have spoken about this issue and my good colleague the honourable member for Burke (Dr Theophanous) will be speaking about it as well. I think it is important to cover this debate in a fairly reasonable way. In that context, I believe that the Australian community needs to look seriously at the issue of a resource rent tax. On 29 April 1982 in the House of Representatives the Treasurer (Mr Keating) described the basic advantages of a resource rent tax arrangement compared with the existing levy system on crude oil production. He said: . . . the Opposition- this was the then Labor Opposition- has supported a resources rent tax which is a much fairer, more equitable and more stable form of taxation which does not discriminate against marginal production or from the draining of reservoirs and which would, of course, be non -distortionary and produce the right kinds of production decisions which we will not see produced from the existing levy system. Further, in an interview in Australian Business published on 21 January 1982, the Treasurer said: We introduced the policy in 1975 of implementing world parity pricing for 'new' oil discoveries. The only difference between the Fraser Government and us is we would give successful explorers a world price but also apply a resources rent tax to it. The important thing about the world parity price is that it has clearly been an issue which has been endorsed by honourable members on both sides of the Parliament. It has meant that it has tended to encourage exploration. It has meant that we have gained substantial potential resources of oil. But it would also tend, as a consequence, to encourage the more economical and efficient use of oil. We have been able to see a reflection of those oil price pressures that occurred in the 1970s and into the 1980s. It has obviously been tempting from time to time to try to reduce that import parity because in times of international price rises we could have insulated ourselves. But it would have been a very short-sighted view. Our view in this place is that we ought to retain import parity pricing but we should have a more effective system of resource rent taxes. The problem at the moment in Australia is that, in addition to normal corporate income taxes, petroleum production is taxed with excises on the production of old crude oil and liquefied petroleum gas levied by the Commonwealth and royalties on petroleum production levied by the Commonwealth and/or State governments. New oil and certain other petroleum products are not subject to Commonwealth levies under existing arrangements but are liable to traditional royalty payments. The definition of old oil is: Oil produced from fields discovered on or before 17 September 1975. I am suggesting that the current system of levies, royalties and corporate taxes does not have within it a specific direction towards an efficient exploration regime. The thing that has to be understood is that in arguing for resource rent tax we are saying that we believe oil resources are important. We believe that oil resources should be explored and developed. We also believe that there ought to be a tax system that enables us as a community to enjoy the benefits from having oil resources and not have those benefits syphoned off by companies such as Esso to its United States of America parent, Exxon. We should be getting a substantial return for those resources. As the honourable member for Flinders said earlier, the evidence is that we are not getting those benefits. Certainly in his case he has suffered a substantial disadvantage where that corporation took ruthless decisions to put constituents of his out of work without any consultation and proper discussion. Mr Chynoweth —Over 200. Mr RONALD EDWARDS —Over 200 people, as the honourable member for Flinders has said. Obviously there is something wrong if we are allowing those operations to continue. It is important to understand that, in dealing with oil companies, we are dealing with very important and large economic activities. But we are dealing also with activities that substantially are overseas owned and have little loyalty to Australia or for that matter to any country except to the conglomerate of ownership. That conglomerate may exist anywhere in the world. We , as members of parliament, have a far greater responsibility, not only to have a taxing system that is effective and results in an efficient exploration system , but also reaps a return for the community. It has to be re-emphasised that the oil resources are the communities' resources. They are not something that lies out there to which some company, such as Esso, has an exclusive right. That is not the case. Oil resources are an Australian natural resource. In addition, the people who work for the oil companies are an important resource to Australia. I do not believe it is good enough for us in this place to allow to exist the operations whereby large companies, without any consideration for either for employees or the wider community, can take decisions which do not act in the best interests of the Australian community. I am fully supportive of what the honourable member for Flinders has said about that. One of the reasons why we, on this side of the chamber, are speaking about a resources rent tax is that we believe it will be a more effective taxing system that will properly reflect both the capacity of companies to explore and then, as I indicated earlier, when those oil wells come up to production stage where the economy has become very efficient-there are very effective economies of scale in oil production but there are very high costs in the exploration phase- the aim of the resource rent tax will be to shift that tax on to that production phase and then, after generating those funds, to use some funds to encourage others to develop marginal production. What we want coming out of this is a system of a larger resource base in terms of oil, effective employment of Australian and a regime of pricing which reflects the needs of the community. In my earlier comments I took cognition of the fact that, in States such as Western Australia, there are differentials between city and country. That is an issue to which we have to pay serious attention. I have also taken account of what I believe is important. We, as a national government, have national responsibilities. Those national responsibilities-I am sure the honourable member for Burke will take this up-are to deal with industries such as the oil industry in a way unlike in the past where one very often felt that our leadership was more beholden to those companies than it was to the Australian community. In a sense the loyalty of Australian leaders was more directed towards the large companies and their interests, which largely lay outside Australia, than towards the welfare of the Australian community. That is a very serious situation. We are addressing it. We have been given a great responsibility in this place to build up the confidence of the Australian community in our economic decision-making. The evidence even this morning in the financial Press: The economy is performing exceptionally well. As a government we are going very well. But I am saying in this debate that we must continue. The idea of having an effective resource rent tax system is to ensure that we get appropriate returns for our natural resources. In summary, these Bills reflect what is important in the Australian community: We have to have a system of taxing and pricing which is equitable, which encourages exploration, which rewards that exploration, but also which taxes production in such a way that we can get a wider spread of oil resources being proved up. We also have to ensure as a government that, in terms of ownership and the decision-making of oil companies, that decision-making improves the welfare of the Australian community. I am pleased to commend these Bills to the House. Mr McGAURAN(Gippsland)(11.58) —Having listened to the speeches of the honourable member for Stirling (Mr Ronald Edwards) and the honourable member for Flinders (Mr Chynoweth)-I understand that the honourable member for Burke (Dr Theophanous) is to speak after me-I realise that we have heard the whipping boys of the Australian Labor Party. It is always of interest that the Labor Party focuses on a collective group of people or a profession on which to take out its frustrations and distract the country from the true errors of its administration . In recent days we have seen it to be the doctors and in the past we have seen it to be farmers and lawyers on different occasions. But, as I have said, today it is the oil producers. For honourable members to accuse the oil producers of having very little interest in the welfare of this country and being responsible to board rooms overseas is quite simply incorrect and misleading. It is a cynical view which does nothing to improve government administration with this very important and vital industry in Australia. That type of ideological nonsense is a hallmark of Labor administrations. As the honourable member for Gippsland, Bass Strait is of particular importance to me. Oil and gas produced in Bass Strait first enter my electorate at the Esso plant at Longford and are then dispersed to the refinery at Western Port. The oil industry may be of particular concern to me but it is of further concern to all Australians. Gippslanders join with other Australians in expressing a very real concern about the Government's proposal to introduce a resources rent tax. We are concerned that investment in industry and exploration incentives will be severely damaged by the Government's proposal, so far as we are able to understand it, because the resources rent tax is characterised by confusion, uncertainty and very poor definition. But when the Minister for Resources and Energy (Senator Walsh) finally does get his act together we will then be able to see the true implications of what his rhetoric has already foreshadowed. At the risk of stating the obvious-I do this for members of the Government- Australia needs to be as self-sufficient in oil as possible. Any government decisions which weaken our efforts to be self-sufficient are rightly condemned by all thinking Australians, Australians who are not blinkered by ideological crusades as so many of the members of the Government are. It is most important for all Australian people that our self-sufficiency be as high as possible. We have, to date, enjoyed a very high level of self-sufficiency which has, to a large extent, removed us from the dependency of other countries on imports from the Middle East. As one considers the tremendous upheaval in the Middle East at present-I refer specifically to the war between Iran and Iraq and the implications that has on supply of oil to the rest of the world-we should be grateful that we are in this privileged position and we should do everything possible to ensure that we remain highly self-sufficient. Japan, for instance, has an oil tanker every 20 miles coming from the Middle East. Thereby this very high dependence on imports from the Middle East colours its whole thinking in regard to trade and its foreign relations. I must warn the House that we cannot afford to be complacent and rest on our laurels. The Bass Strait oil fields have a fairly rapidly declining production relatively speaking and thereby we need to continue efforts to explore for oil so that we can obtain the satisfactory position we have been in up until now. It is of concern to me and my colleagues that the proposed resources rent tax will severely hinder, if not, to a large extent, take away any incentive for oil companies to seek new oil discoveries. The proposed resources rent tax is not only narrowly based but it is also discriminatory and will severely restrict exploration. The oil industry is unanimous in that view. It is unanimous in the view that the tax is theoretically and practically impossible to implement. The Government, with reckless disregard, has only one intention in regard to this matter; that is, to milk more taxes from the oil industry and, in particular, new oil which is not subject to the oil levy. Senator Walsh has failed to draft a workable tax and has succeeded in totally confusing the industry, to say nothing of the Australian people. It must be borne in mind that the industry has enormous costs involved in high risk exploration and it thereby depends to an unusual extent on certainty with its dealings in government. Senator Walsh has been totally successful in one field of his administration-I suggest this is the only field-and that is, totally confusing the oil industry. This confusion is reflected in several other areas of government administration which is known to all of us-the debacle of the pensioners assets test and the stupidity and confusion of Medicare. Perhaps the Minister for Sport, Recreation and Tourism (Mr John Brown) and the Minister for Science and Technology (Mr Barry Jones), who are in the chamber, while they are in this present mood of admitting mistakes in regard to the pensioners assets test may also wish to admit the Government's mistakes in regard to the resources rent tax and reconsider this vital matter. The implications for every Australian of a resources rent tax are obviously comparable to those for other major areas of government policy. The Minister for Science and Technology has indicated that he, for one, will not be reconsidering his support for this tax and that is to be expected. The Minister is a particularly confident man who certainly on the surface would never admit an error, unlike his Prime Minister (Mr Hawke). So perhaps the admission of error will have to come from the Prime Minister. The responsibility of this Government, indeed of any government, is to ensure that Australia can best maximise its self-sufficiency in energy. Instead, the Government is preparing to impose extra taxes on oil producers which will unquestionably reduce the incentive to search for oil. Indeed, the proposed resources rent tax will go further and act as a positive disincentive. It is not just a matter of its failing to provide an incentive to the oil industry; it has a positive disincentive effect. As it stands-this seems to have been ignored by the Government-the incentive to explore for oil in Australia, given the high cost, is already perilously slim even without a resources rent tax. The Government would find it very difficult, if not impossible, to argue against the fact that the drilling success ratio is only 5 per cent; that is, five times out of a hundred will there be some discovery. That is not the end of the matter because half of that 5 per cent is totally non-economic. A further quarter of that 5 per cent fails to recover the exploration cost and the final quarter will be profitable to the oil explorer. I will repeat that: The drilling success ratio is a mere 5 per cent. Of that 5 per cent, half will prove to be non- economic, another quarter of the exploration costs will not be recovered totally and, finally, one-quarter of that 5 per cent is profitable. Mr Goodluck —It is a high risk industry. Mr MCGAURAN —As the honourable member for Franklin so rightly says, it is a high risk industry and one which the Government ought to be encouraging. It should not be introducing taxes such as the proposed resources rent tax which will have the positive effect of hurting the prospects for Australia's further oil exploration. The Government is very short-sighted in this matter because less oil development, besides meaning less self-sufficiency in the future, will mean fewer jobs and fewer investment prospects and this will have a watered down effect, if you like, on several aspects of Australian business and community life. As I mentioned earlier, the production in Bass Strait-Bass Strait being discovered in the early 1960s and being steadily developed since then-is declining. We must make future discoveries or we will be forced to import from other areas of the world and most probably from the Middle East. That places Australia in an unusually unpredictable and insecure position. I therefore call on the Government to further consult with the industry. It is just not good enough for Government members to indulge in self-satisfying ideological rhetoric for their branch members who may be of leftish ideological leanings. I refer to the honourable member for Burke who will follow me in this debate and who will undoubtedly speak to the House in terms which will satisfy his Party and the left wing within Victoria. I ask the Government to look beyond the rhetoric, to consider carefully the problems ahead with this type of tax which has theoretical and practical implications for the future security and well being of our Government, our country and our people. Dr THEOPHANOUS(Burke)(12.10) —I suppose we could describe the speech which we have just heard from the honourable member for Gippsland (Mr McGauran) as a green speech. By 'green speech' I mean that only an honourable member who has recently arrived here and who is green about politics could have made a foolish speech such as that. Let me say that people who are in opposition and who are bound to be in opposition for a very long time can afford to make stupid statements such as: 'We don't need to have any taxes on new oil'. If this is the position of the Opposition- Mr McGauran —Mr Deputy Speaker, I raise a point of order-- Mr DEPUTY SPEAKER(Mr Drummond) —I warn the honourable member against taking a frivolous point of order. If something has occurred in the debate which needs a personal explanation at a later time, a later time is the time to do it. Mr McGauran —Thank you, Mr Deputy Speaker. In which case, as the honourable member for Burke is totally misrepresenting the Opposition's position, I will have to take advantage of that option which was presented to me. Mr DEPUTY SPEAKER —There is no point of order. Dr THEOPHANOUS —I challenge the Opposition to state that in fact it would have no tax on new oil. If that is the position of the Opposition it is a highly irresponsible position. Let me go back to the guts of this debate. What is the guts of the debate? The guts of the debate is that Australia's natural resources belong to the Australian people. That is the fundamental point. That is the point which seems to have been missed by many of the people who want to defend the interests of one, two or three very major oil companies. These companies do not represent the totality of the oil industry as the honourable member for Gippsland implied. Some one, two or three very major oil companies have total control of the Australian Petroleum Exploration Association Ltd which is running advertisements against the resources rent tax. Let me make it perfectly clear that the policy of world parity pricing allowed these companies to make spectacular profits over the last few years. Some of those profits were directed towards exploration. Therefore, exploration activity picked up but a large part of those profits was not directed towards exploration but directed overseas to overseas interests. Let us not forget that fundamental point about the exporting of profits by some of these corporations. The honourable member for Flinders (Mr Chynoweth) mentioned the disgraceful behaviour of the British Petroleum Co. of Australia in relation to the Western Port situation. A company such as BP which has made spectacular profits from Australia and has exported a large amount of those profits overseas ought to look at the public interest and the fact that it is benefiting from the exploitation of Australia's natural resources. It is time we got back to the national interest. The national interest is the most fundamental point here. The proposed new resources rent tax is not a tax which is intended to hit those persons who want genuinely to get into oil exploration. We have heard a lot of argument from Esso-BHP to the effect that the scenario for oil exploration in the future is dreadful. I do not see any particular rush on the part of Esso-BHP to give up the exploration licences which they have so that other people can get into exploration. I challenge them, if they are really fair dinkum in saying that exploration is so difficult, to give their licences to someone else who can get into the scene. The fact is that this is a hypocritical argument. We have a regime trying to say: 'We have been making spectacular profits, we are in a very good position and now we are not going to put up with any tax on new oil'. If that situation were allowed to continue indefinitely that would be a very serious matter indeed. Such companies have two choices, either a levy on new oil or the resources rent tax. It has been put to them, and it was put to them at the Caucus industry committee meeting yesterday, to choose between the two alternatives. Do honourable members know what they said? They said: 'No, we refuse to choose between those two alternatives because we do not want any tax at all'. That is the situation. The advertisements they are running are against any tax at all. Let us get the argument quite clear. Those companies have had the opportunity to present their argument publicly before Ministers and before the industry committee. The fact is that on each and every occasion it has been quite clear what they are on about. As I said before, if those companies are not interested in exploration, if they do not think that their licences are going to be profitable, there are others who might think differently. I assure honourable members that the Government will look at that situation at every opportunity that arises. We are not going to be blackmailed by this sort of publicity from these people. Let us look now at the misuse of statistics in the advertisements and arguments against the resources rent tax. I have here an interesting example in a booklet put out by Esso Australia Ltd called 'The case against a Resource Rent Tax for Australia'. It is a book from which the honourable member for Gippsland was taking his supposed facts uncritically. In other words, he was using Esso's own figures. I point out that in regard to the key figure in the booklet, which relates to the forecast for production, Esso's forecast and the forecast of the Bureau of Mineral Resources, an independent body, are completely and utterly different. We have in the booklet a spurious explanation from Esso as to why the Bureau of Mineral Resources predictions ought not to be accepted. That is the extent to which the company has gone in its attacks on the resources rent tax. I will come back to that in a moment. Let me now refer to a particular diagram which looks at the prospectivity for the finding of new oil in different regions of the world. If one looks at the diagram one sees the position for the Middle East and North Africa. There is no indication as to actual figures so we do not know what the elongations mean. There seem to be dramatic prospects for those regions. Each of the continents is listed and Australia just happens to be at the bottom. No figures are listed and there is no indication what this graph is supposed to represent. It is simply a misrepresentation of the argument. If anyone denies that the advertisements being run by the Australian Petroleum Exploration Association are the Esso-BHP line I point out that this diagram was reproduced in those advertisements. Therefore, it is the same group that is organising against the Government's resources rent tax. Let me indicate that the diagram is extremely misleading because it has no statistics. The other point of course is that it does not indicate the relationship between the total amount of oil resources available and the demand for them. The Middle East and North Africa are the world's oil pool. They are expected to provide oil not only for themselves but for large sections of the world. Obviously one would expect the prospects in those places in terms of total numbers of barrels of oil to be much greater than the prospects in Australia. But is that relevant? The relevant question for us is whether the prospects for Australia are substantial in terms of meeting Australia's domestic needs. That is the question. Nothing has been provided in these arguments to indicate that the prospects are dim or pessimistic in the way that has been argued by persons pushing against the resources rent tax and those Opposition members who refuse to declare their position in relation, as I mentioned, to the taxation regime. What has to be looked at is the proposed figures for production. The Bureau of Mineral Resources figures clearly indicate that the picture is relatively optimistic. I am not saying that it is completely and utterly optimistic; I am saying that it is relatively optimistic because of the discoveries in the Jabiru area. Therefore, Australia has some important potentials in terms of its prospects for oil exploration and production. It has been argued that the resources rent tax is a disincentive to exploration. I put it to you, Mr Deputy Speaker, that it is a disincentive to only a very small group that wants to extract from the Government a promise of no taxation whatsoever on new oil. Mr Hunt —Go out and tell the companies that. Dr THEOPHANOUS —I have told them. The honourable member should not worry. We deal with people face to face. This has become a public debate. I say to the Deputy Leader of the National Party (Mr Hunt) that we in the Government did not make it a public debate. The APEA made it a public debate by running full page advertisements, which must have cost hundreds of thousands of dollars, in every major newspaper in Australia every day for the last week. Members of that Association are the same people who say that they have not enough money for exploration but they are able to run advertisements costing hundreds of thousands of dollars against the resources rent tax. Let me outline once again for the clarity of everyone what the argument is for the resources rent tax as against a levy. The other argument that there be no tax is a non-argument. The reason why we have gone for the resources rent tax as against the levy is that the resources rent tax is based on profitability. In other words, until a company has actually found an oil field, produced oil and made profits out of it-substantial profits not low profits-it will not pay the tax. The tax applies only after a certain threshold. What does that mean? It means that marginal projects do not have to pay the tax. Let us remember that the tax is applied on a project by project basis. That is an enormous concession. We are saying that, if a company explores and drills for oil and produces it but, in the process of production, it does not make very much profit, it will not pay the tax. It will pay the tax only when it makes a very big profit. Surely there can be nothing fairer than that kind of tax regime . What is also clear is that the marginal producers who want to get into oil exploration will be advantaged because they will not have to pay the tax in the period in which their production is marginal. That surely is an incentive for production and not a disincentive as has been claimed. In other words, a company will pay tax only when it has the result. It will not have to pay on the basis of how much oil it produces. It will pay on the basis of the profits that it makes. Mr Hunt —How would you administer it? Dr THEOPHANOUS —The Deputy Leader of the National Party asks how we would administer it. The way he is speaking one would think that the resources rent tax was a novel idea in the world. Many countries have resources rent taxes. Mr Hunt —The Soviet Union? Dr THEOPHANOUS —Not the Soviet Union. I am sorry to disappoint the Deputy Leader of the National Party. However, many Western countries have resources rent taxes , including Papua New Guinea which has a tax on some mineral resources. Is a resources rent tax in Australia something entirely different, something revolutionary that will overthrow the prospects for exploration? The Esso company is part of the Exxon corporation. Esso knows that it is paying resources rent taxes in other places in the world. Let us be honest about it. What is the difference between that and paying it here in Australia? It could adjust to that regime quite quickly. Mr Barry Jones —They think we are a pushover. Dr THEOPHANOUS —As the Minister for Science and Technology said, they think they can take us for granted and do what they like with the national interest of Australia. It is time for the major oil companies to do two things. Firstly, it is time they recognised that more competition in this area is a probability if this sort of nonsense is to continue. Secondly, they should recognise that they have some responsibility to the national interest. The honourable member for Franklin (Mr Goodluck) mentioned an area in which the oil companies are not fulfilling their responsibilities. They have made spectacular profits in the last few years. What is the area in which they have not fulfilled their responsibilities? They have not fulfilled their responsibilities in regard to pricing in certain areas of Australia. Those responsibilities ought to be fulfilled. I conclude with some comments on the Bass Strait Freight Adjustment Trust Fund Bill and the Bills which are being debated cognately. The debate has ranged widely. In fact it has been a debate about the resources rent tax. Nevertheless, the Bill before us is important in that it provides for an equalising mechanism to ensure that refineries all over Australia are equalised in terms of the cost of refining oil. Although that does not entirely solve the pricing problem it goes a long way towards solving it. It means that, rather than having a situation where oil that is refined in one place will be cheaper than oil refined in another place, we have an equalising mechanism. I commend the Minister for Resources and Energy (Senator Walsh) for the mechanism he has put in place which I think is excellent. It establishes a trust fund which will have moneys paid into it by a levy on the oil producers. That trust fund will then be used to equalise the costs over the refineries so that the fact that a refinery in Brisbane and one in Victoria may both get Bass Strait oil will not work against the one in Brisbane. Those kinds of mechanisms should have been put into place a long time ago. Under the previous Government there were discussions after discussions with the industry in relation to this matter and nothing came out of them. It was only when this Government finally said 'Since you cannot agree amongst yourselves we will implement a scheme' that the scheme in the legislation came before us. I notice that no members of the Opposition are opposing it because it will, as I said, go some way towards ensuring the relative equalisation of petrol prices around Australia and their relative stability. However, that does not exonerate the oil companies which are trying to manipulate the situation in terms of prices. We want to make it clear that the Prices Surveillance Authority will be looking at petrol pricing as one of its references when it gets going. Petrol pricing is a matter of national concern and it affects everyone. The price of petrol is relevant not only in terms of tourism, as was mentioned earlier, but also to the every day lifestyle of most persons in Australia. In that regard it must be monitored by the Prices Surveillance Authority to ensure that unfair practices are not carried through. I conclude with these comments: The Government wants to work in a co-operative spirit with the major oil producers to ensure that new exploration takes place and that a positive policy is achieved for Australia. Mr O'KEEFE(Paterson)(12.30) —We are debating a very important subject because 48 per cent of the world's energy is obtained from petroleum products. Throughout the world last year there was an oversupply of crude oil and a fall in the demand for petroleum products. In Australia particularly these two factors have been shown up most publicly in heavy petrol discounting in key metropolitan markets to an extent which has not been seen in this country before . The widespread drought, its aftermath and the general economic downturn combined to destroy market growth in these areas. Australia produces 70 per cent of its petroleum requirements-from Bass Strait, Barrow Island and the Cooper Basin and a trickle from Moonie. Australian crudes are of the light variety. We have to import 30 per cent of our needs to provide specialised lubricants and bitumen. Unless heavier crudes are found in this country-this is very unlikely-we will be dependent upon overseas purchases to meet our requirements. At present demand for petroleum products in this country is on the decline. Great competition exists between our companies for their market share. Not all the petroleum companies in this country are making a profit as envisaged by the honourable member for Burke (Dr Theophanous) who has just spoken on this subject. Indeed quite a number of companies are showing huge losses and this is causing great concern about the overall situation in the petroleum industry in this country. Bass Strait crude oil is being shipped overseas to New Zealand and Hawaii. Some 4,000 barrels per day of refined products are being exported to New Zealand from the Australian Oil Refining Pty Ltd refinery at Kurnell. This can take place because of the downturn of the petroleum markets in this country. Rationalisation of the industry in Australia is taking place; there is no doubt about that. The Ampol company has taken over Total Australia Ltd and British Petroleum is in the process of taking over Amoco Australia Ltd. Prior to these two amalgamations Caltex Oil took over Golden Fleece Petroleum Ltd. So rationalisation is taking place in the marketing of petroleum products in Australia. There is an oversupply of crude oil and a fall in demand for petroleum products. Australian governments must legislate to attract companies with expertise to explore for oil and petroleum in this country. At present we have the Broken Hill Proprietary Co. Ltd and Esso in Bass Strait. What happened? How did that come about? It came about because a Dr Weeks, a geologist from America, found oil on behalf of BHP. As BHP did not have the expertise or know-how to produce the oil from Bass Strait it called world-wide tenders for a company with the necessary expertise and capital and Esso was the successful tenderer. If we are to find oil in this country we must provide the facilities for overseas capital and know-how to do the job. The choice for Australia is the opportunity of national self-sufficiency in oil or introducing a new tax that will certainly prejudice self-sufficiency by reducing exploration in Australia. We want to encourage exploration. We do not want to bring in any new taxes that will discourage oil exploration. Most speakers in this debate have talked about the resources rent tax. Why is the Australian Petroleum Exploration Association opposing it? It must be opposing the tax because it is not good for the industry and the companies that are operating in this field. The Bass Strait Freight Adjustment Trust Fund Bill gives some financial benefit to those refineries remote from Bass Strait crude oil as against the locally based refineries in Victoria which are supplied by pipelines. We have refineries on the eastern seaboard. In Sydney there is one at Kurnell operated by the Shell company and one on the Parramatta River. Of course we have two refineries in Brisbane-Amoco and Ampol. As I have mentioned, Amoco has been taken over by BP. Indeed at present BP is carrying out an investigation there. The crude oil allocation scheme, which has operated since 1970, allocates Australian crude oil to companies in proportion to their share of the Australian market. This has brought severe competition in both the retail and wholesale markets in this country. The companies that are operating are endeavouring to secure their market share of the crude oil which is produced in Bass Strait. Sometimes this brings jobbers into the field, which upsets the marketing of oil in this country. Refineries pay the import parity price for oil, which is the cost of landing Arabian light crude oil at the refinery port nearest to the producing field. The nearest port for Bass Strait oil is the refinery at Western Port, Victoria. This refinery cannot handle the entire production of Bass Strait crude oil and that is why Bass Strait crude is being shipped to the various refineries on the eastern seaboard. For some time refineries in New South Wales and Queensland have been arguing that compensation should be paid, above what is paid to their southern counterparts, for the cost of transporting Bass Strait crude to their refineries. We can imagine what this protection means to the refineries on the eastern seaboard. I compliment the Government on its policy in this regard. In December 1983 the Minister for Resources and Energy (Senator Walsh) announced that legislation would be introduced to overcome the transport cost disadvantage facing refineries remote from Western Port. This will be of benefit to those refiners on the eastern seaboard. The Bills which we are debating will impose a levy of $1.25 a kilolitre-that works out at 20c a barrel-on all crude oil from Bass Strait. The Bills contain the necessary collection machinery for this levy. The legislation also provides for funds equivalent to the proceeds of the levy to be appropriated from Consolidated Revenue to a trust account which will be administered by the Department of Resources and Energy. Rebates of the levy will be made according to transport costs and producers' entitlements to crude oil. The Bills will not change the price of Bass Strait crude to the Australian community. This is a protection which we acknowledge and which is of benefit to everyone in this country. Overall costs to the community will remain unchanged. The crude oil policy imposes an obligation on marketers of petroleum products in Australia to absorb indigenous crude oil and to arrange for refunds in Australia. Most of the crude oil that we import from overseas comes from Bahrain and from Iraq and Iran where, of course, there is a war at present. This is a serious situation about which we are concerned in this country, because if the Strait of Hormuz were closed we would be cut off from our supplies of heavy crudes which, as I mentioned earlier, provide our essential lubricants and bitumen. The share of indigenous crude is, of course, calculated on the percentage of certain petroleum products in Australia. That is why there is great competition among companies at present. They want to get their share of the market so that they can get their share of Bass Strait crude. While this policy is acknowledged by the marketers of petroleum products in Australia, it does at times cause the unsettling of the market by price cutting to see that the marketers maintain their percentage of the Bass Strait crude. It is very important that in this country we do all that we possibly can to attract companies with expertise and know-how to explore for oil in Australia. Prior to the Second World War we imported crudes from Indonesia. We won the war and lost the fuel from that source which, of course, was handy for us. Japan now purchases crude oil and fuel from Indonesia. This is a sad event for Australia because prior to the Second World War we depended very much on our local neighbours for our supplies. It is a great industry, an industry that provides opportunities for shareholders in this country. BHP and Esso have shareholders in Australia. Indeed, when we examine BHP's list of shareholders we see entries such as 'Mrs Jones-10 shares, Kathleen Maloney-15 shares'. The little people in this country have shares in BHP. Mr Chynoweth —I have shares in Australian oil companies. Mr O'KEEFE —The honourable member has shares in a good company then, because the Australian company is Ampol. It has indicated to this nation that it can compete with the overseas companies. It is a great industry but we must see that exploration in this country is continued. Only the companies with capital, expertise and know-how can do so. We do not want to knock them as do some members of the Government. We want to encourage them at all costs. While we on this side of the House do not oppose the legislation, we have indicated our opposition to certain clauses and parts of it. Dr HARRY EDWARDS(Berowra)(12.43) —I will begin by stressing again the note on which the honourable member for Paterson (Mr O'Keefe) concluded. The House will have noted that the Opposition spokesman has entered some important reservations about this legislation. However, there should be no doubt that the Opposition does not oppose it. It supports it as a compromise solution to a near intractable situation. Indeed, it is gratifying that in such a complex situation the Minister for Resources and Energy (Senator Walsh) in the other place has taken some action, as represented by this legislation. I will continue my remarks later. Mr DEPUTY SPEAKER(Mr Drummond) —It being 12.45 p.m., the debate is interrupted. In accordance with sessional order 101A, the debate may be resumed at a later hour. The honourable member will have leave to continue his speech when the debate is resumed. Sitting suspended from 12.45 to 2 p.m. Mr YOUNG(Port Adelaide-Special Minister of State) —Mr Speaker, I ask leave of the House to move a motion to enable the Leader of the National Party of Australia (Mr Sinclair) to move forthwith-- Mr Cadman —This is terrible. You should have taken Question Time. Mr SPEAKER —Order! The honourable member for Mitchell will resume his seat. Mr YOUNG —Mr Speaker, he has been in Parliament for 12 years and that is the closest he has got to the front bench. I ask leave of the House, Mr Speaker, to move a motion to enable the Leader of the National Party to move forthwith the motion of censure of the Minister for Defence (Mr Scholes) of which he gave notice earlier today for the next day of sitting. Leave granted. Mr YOUNG —I move: That so much of the Standing and Sessional Orders be suspended as would prevent the Leader of the National Party moving forthwith the motion of censure of the Minister for Defence of which he gave notice earlier today for the next day of sitting. Question resolved in the affirmative. Motion of Censure Mr SINCLAIR(New England-Leader of the National Party of Australia)(2.07) —I move: That this House censures the Minister for Defence for his failure to maintain the confidence of the people of Australia in our defence security under his administration as reflected by- (1) his failure to answer a series of charges on military deficiency in the Australian Army revealed by the Honourable Members for Bass and McPherson in a discussion of a matter of public importance in the House yesterday; (2) his acknowledgment that he was not aware of the exchange of note between the United States of America and Australia under which reciprocal repair rights for naval vessels are available between the 2 countries.; (3) his decisions affecting the Fleet Air Arm; (4) his decisions affecting the training time for the 3 armed services; (5) his decisions affecting the reserve forces; (6) his decisions affecting the cadet corps, and (7) his failure to maintain the confidentiality of the strategic bases paper which sets new directions for Australian defence. In a very excellent review of the Paul Kelly book, The Hawke Ascendancy, in this month's edition of Quadrant my colleague the Deputy Leader of the Opposition (Mr Howard) spoke of the phase of the book and the status of its recording of the events of the Hawke Labor Government as the end of the beginning. Sadly, for a guy I quite like and who I think is a good fellow but who is an abysmal Minister for Defence, this is the beginning of the end. Indeed, from the Opposition's point of view, we regard it as the end. Let me explain to the honourable gentlemen opposite and to the public of Australia that the basis of our censuring the honourable gentleman is not just that there has been a premature release of the paper entitled 'Strategic Basis of Australian Defence Policy'. Indeed, it is true that as recently as 2 December 1983, the Attorney-General (Senator Gareth Evans) said in the Senate that he endorsed the principle which he espoused in a debate in the Senate on 7 September 1982 to the effect that if a major blunder occurred in a department of real importance to Australia and if the Minister were unaware of it, that Minister should accept responsibility for the mistakes of his department and offer to resign. For all that that principle is one which the Attorney-General espouses, it is not because of the release of the strategic basis paper that we now censure the Minister for Defence (Mr Scholes). That indeed is the final straw. As far as the Opposition is concerned, sadly the Minister for Defence successively over a period has shown that Australian defence security is being allowed to run down and the capability of Australia to mount a defence in circumstances which could well arise is being weakened because of his inability to address the very serious problem of maintaining morale, maintaining training efficiency and maintaining defence capability and resisting any potential aggressor. Indeed, it is of interest that only this weekend it will be two years since the Falkland Islands take-over by the Argentine. Without canvassing the whole of the question of the Falklands affair, the circumstances of which honourable members of this place need to be aware are that that event arose unexpectedly. That event arose in spite of opinions to the contrary by the members of the foreign service of the United Kingdom and, indeed, by all those involved in giving advice to the Government. The sad thing about this Government's defence preparedness is that it has progressively blunted the sharp end of Australia's defence. It has reduced steaming time for naval vessels. It has reduced flying time for Royal Australian Air Force aircraft. It has failed to provide helicopters and transport aircraft for the Army. It has failed to provide, as my colleagues the honourable member for Bass (Mr Newman) and the honourable member for McPherson (Mr White) so vividly portrayed to this Parliament yesterday, either boots for soldiers to walk in, vehicles for them to be transported by or bullets for them to fight with. That of itself is a sad indictment of a Government which, having been in office now since 5 March 1983, has failed to provide in its assessment of the financial priorities for the Department of Defence enough of the sinews which enable an army to fight, a navy to sail, or an air force to fly. It is impossible for any of the three armed services of Australia to present an adequate deterrent capability to any potential aggressor unless it is not only progressively being re-equipped, for that we took care of, but equally is providing to those very dedicated men and women who serve in the armed forces of Australia the capability to develop the skills which they need to be able to utilise the highly sophisticated armaments and equipment with which they have been equipped or with which they are about to be provided. Over the last 12 months this Government has cut down the capabilities of the Department of Defence and of the three armed services to the point where the top to tail ratio is regrettably increasing. In other words, there are more administrators running the Defence Department here than there are soldiers and sailors able to go out and fight. The consequence of that is that this Minister has presided over a period of defence run-down which, for all that it is only 12 months, has seriously reduced the capability of the Australian Defence Force to meet its prime role. Its prime role, of course, has to be the deterrence of aggression. Its secondary role is to be able-both within Australia and abroad-to mount a resistance against anybody who seeks to intrude on Australia's interests , against Australia's personnel or against Australian territory. The third interest, of course, is to be there to assist the civilian community in so many ways. Of course the only assistance that this Government is prepared to provide is either to deny the availability of helicopters in times of flood such as recently occurred in New South Wales, or to send those disastrous spy flights, the F111 photographic aircraft reconnaissance flights over the activity of the Gordon below Franklin Dam against the provisions of the Defence Act and with the concurrence of, indeed the initiating of the whole exercise by, the Attorney- General and the concurrence of this Minister for Defence. Sadly, since this Minister for Defence has taken office, he has presided over a Defence Force which has been allowed to run down and which has seen a progressive reduction in capability which, as was regrettably shown only last week in a submission to the Joint Parliamentary Committee on Foreign Affairs and Defence, denies the capability of the Australian Defence Force meeting any aggressor. I know that this is of no interest to our colleagues in government. Indeed, one of the interesting facets of this debate is that they talk and they chatter. They seek to obfuscate the whole debate-- Mr SPEAKER —Order! The level of conversation is far too high. Mr SINCLAIR —Mr Speaker, I would not be concerned. The point of it all is that defence matters little to the Australian Labor Party. The point of the Government's tactic this afternoon is not to deter me but to ensure that the people of Australia recognise that Australia matters nought to the Hawke Labor Government. Indeed, it is that which sadly comes to light as a result of the contents of this document that was dropped from the back of a truck and published in this week's National Times. The first and most serious thing that the Prime Minister (Mr Hawke) should have done, had he any genuine concern for this country, was to have come into this House at the opening of proceedings at 10 o'clock this morning and acknowledged that there had been a serious leak from the Department of Defence and to have told us what steps he was taking to ensure that it would not occur again. Indeed , as was said on the National Today Show by Mr Robert Haupt: This is a very serious security breach and I think that nationally, in the political perception, when something like this happens it creates a lot of doubt in the public mind about the performance of a Government. Regardless of what the source of the leak was, it raises, as Sam said- that is, Sam Lipski who joined him in the interview- Can the Hawke Government keep secrets? Is there any doubt? Of course, it cannot. Let us look again at what Mr Haupt said. Honourable members will remember that the Prime Minister, when he was in Washington last year, assured the American Administration about Brian Toohey, the editor of the National Times and, of course, the source on this occasion of the leak of the strategic basis paper. Mr Brian Toohey's source of information, the Prime Minister said, had been identified and eliminated. Mr Haupt in that interview commented: That's right. That is my understanding. Now, the Americans will have to comprehend the fact that Brian Toohey seems to have another source. Of course, the point of all this is that under Labor the Americans cannot trust the Australian Administration. Under Labor there is no confidentiality within the higher echelons of administration. There is no security within the higher echelons of Foreign Affairs, for the Minister for Foreign Affairs (Mr Hayden) is as culpable as any. There is no security within the Department of the Prime Minister and Cabinet, for the Prime Minister is as culpable as any. There is no security within the Treasury, whose permanent head sits on this advisory committee. He is as culpable as any. Of course, there is no security in the Department of Defence, whose Minister is here before us. The condemnation arising from that is that the relationship between Australia and its ANZUS partner has deteriorated. We all remember the brave words late last year of the Minister for Foreign Affairs when he advised the House of his renegotiation, supposedly with his colleague the Minister for Defence, of the ANZUS Treaty. What did that mean? I will tell the House what it meant. It meant that this Government tried to develop a different attitude to and perspective of ANZUS from those adopted by the United States. If we look at the statement by the Minister for Foreign Affairs of 15 September last year on the review of ANZUS we will see that he said: What those qualifications- that is, the qualifications with the ANZUS agreement- do mean, however, is that we cannot assume military support from our Treaty partners in every contingency; and that we should therefore develop a self- defence capability in case in a particular contingency we need to rely on our own resources. Indeed, those very sentiments were echoed by the Minister at the table this morning in an interview he gave to the Australian Broadcasting Corporation's AM program when he said: That the Treaty- that is, the ANZUS Treaty- places an obligation on each of the Treaty partners to take some action in the case of any aggression against us, one of the partners. It does not specify the action and it does not automatically guarantee a military response. The important point is that honourable members will recall that, after the ANZUS review, the Americans had a different view of it. I draw attention to a report in the Australian Financial Review of 2 August 1983 from Glenda Korporaal in Washington when she reported not just a casual interview with the United States Secretary of State but a considered release from the State Department which said : There should be no doubt that any armed attack on an ally would require, and would receive from the other allies, full and prompt fulfillment of the ANZUS security commitment, including, if necessary, military support. The point of all this is that we need to recognise that Labor's own foreign platform says that Australia will: . . . pursue an independent foreign policy and develop reliable lines of communication with all great powers, thereby enabling Australia to achieve a closer association with the non-aligned movement and to engage in effective, collective action for the establishment of regional zones of peace and neutrality, notably in the Indian Ocean, South East Asia and the South Pacific. In other words, what Labor has done is to isolate Australia from its allies. The sad product of this document, apart from the indictment of Labor's security capability, is that it emphasises that Australia today is more alone than it has ever been. The product of our foreign policy, the cuddling of the Foreign Minister with the Foreign Minister of Vietnam, that endearment that he takes unto himself, is to take us away from the Association of South East Asian Nations, from our friends and from our neighbours and to alienate us from those whom we are told in some circumstances could be a threat to us. The consequence of that is that this Government has taken a stand which sadly is putting us more and more on our own at a time when our defence capability is being allowed to run down. This strategic basis paper highlights for the first time the fact that Australia may in some circumstances need to develop a nuclear deterrent because we can no longer rely on our nuclear ally. Why cannot we not rely on our nuclear ally? Because those gentlemen over there, and the occasional lady, have failed to maintain our relationship with our nuclear ally. We on this side of the House all know that there is within ANZUS and within the Treaty for the Non- Proliferation of Nuclear Weapons a capability for us to rely on our nuclear ally to deter any nuclear attack on Australia. Under a coalition government there would never be the necessity to develop a nuclear capability, but Labor's isolationism is forcing it on us. I am delighted to see the Foreign Minister, who has contributed to that position, now joining us in the chamber, for his actions and the actions of the Minister for Defence have led us to the position that his Party said yesterday, in answer to a question, that it will set up an institute for peace and today, we read, is going to develop a nuclear deterrent. How do those on the Left of the Labor Party reconcile their consciences with the actions of the men who sit on the front bench? Of course, what is happening is that the Left does not matter any longer in the Labor Party. We are being forced into a position of vulnerability, and I am afraid that the people within the Left of the Labor Party, who do not really count in Labor, according to the Prime Minister, are the people who are being thumbed at in general circumstances -the lunatic fringe, the ideological few. There is sadly now, as a result of the assessment in this paper, a guarantee that Australia will be on its own, a requirement that we develop self- sufficiency and a failure by this Minister to address that challenge. We all recall the statement in the submission to the Joint Committee on Foreign Affairs and Defence on 20 March: This lower level of readiness is manifest in constrained training activities, flying hours and steaming time and, consequently in lower expenditure on ammunition and maintenance spares. Our reserve stocks of ammunition, weapons and spare parts would not support any sustained combat involvement of our forces beyond low level operations. We have found it necessary to hold down these stock levels to meet only our more important training needs together with a modest operational commitment. Only in this way, within the resources available, can the investment in major capital equipment and infrastructure be held at the levels necessary to maintain our force structure and to introduce key new capabilities from time to time. What has this Minister done? He has said that he cannot give any guarantee of funds next year. He has said that we are so committed in forward capital that he cannot provide money for naval postings this year. He cannot provide money for boots or for bullets. Of course, that is all nonsense. The reason the Government cannot do it is because it is increasing the number of bureaucrats in Canberra. Mr Howard —Ten per cent a year. Mr SINCLAIR —Ten per cent a year, as my colleague says. The Labor Party in government is diverting resources away from defence. It is of no use its turning back to whatever happened in the period when the coalition was in government. There has been a rundown by this Minister over the last 12 months. We saw the sad indictment yesterday. We saw the sad record of the Invincible fiasco. We have seen the whole of the circumstances highlighted in the progressive rundown in morale as a result of the greater tax liability for those who receive Defence Force retirement and death benefits superannuation. I mention the introduction of tax for reservists, the cut in training hours for reservists, the elimination of voluntary service by reservists, and the reduction in the number of reservists by 1,572 last year and in the number of permanent servicemen by 732. I mention the cuts in forward spending estimates for capital procurement by $160m; the taking of school cadet corps out of schools and attachment to the reserves; the reduction of regular Army cadres in the reserves; the reduced steaming time for the Navy; the flying time for the Air Force; and the cuts in funds that mean that all naval postings are to be postponed for the remainder of the year. All these things are reducing the ability of the Defence Department to meet any threat that might arise. It is this Minister who has presided over that rundown. The last 12 months have seen a significant deterioration in the capability of the Australian Defence Force, reflected in that interview by the Chief of the Defence Force Staff and reported in the Defence Industry publication of 28 March 1984. If we take polls as a measure of popularity or of other things, it will be remembered that of a sample of 2,000 people, taken in July, 74 per cent of Australians are in favour of increased defence spending. This Government needs to give a commitment to provide for the defence of Australia. This Government needs to ensure that it has a Defence Minister who will not repeat that Invincible fiasco. This Government needs to have confidence that the United States will stand by us under the ANZUS relationship. None of those commitments has been provided. Sadly , it is this Minister who has presided over the rundown of the Department of Defence, and this Minister deserves to be censured by this House as a result. Mr SPEAKER —Is the motion seconded? Mr Newman —I second the motion, Mr Speaker, and I reserve my right to speak later in the debate. Mr SCHOLES(Corio-Minister for Defence)(2.22) —I do not think I have heard a more pathetic or dishonest presentation in this Parliament during the sixteen and a half years that I have been a member of it. One of the reasons why the honourable member is on the back bench is that he is not competent to get on the front bench. It was a pathetic performance from a former Minister who presided over the defence portfolio for one of the shorter periods in its history and who , during that period, did more talking and more promising than any other Minister in history and who actually performed less. We know that his credibility is not good, but he has the hide to come here and to say that I should resign because the strategic basis paper has been leaked. Mr Sinclair —I did not; it was the basis of it. Mr SCHOLES —It is a part of a number of issues. The right honourable member for New England (Mr Sinclair) also said that for the first time a strategic basis paper has referred to nuclear weapons and Australia's need to maintain knowledge of the state of the art. I shall not go to the trouble of reading the exact words which appear in the National Times today, although I have them in front of me. If the right honourable gentleman had been seeking to put to this House a case based on the truth and on facts, he would have known that published in the Bulletin in 1976-who were the Government then, and who stood up on that side of the House and asked the Minister to resign?-was 'Our Top Secrets Revealed', by Alan Reid. The article is on the strategic basis. The right honourable gentleman says that the nation's security is at risk because this document was leaked. I have a list as long as your arm of security documents and other documents which were leaked during the period when the right honourable gentleman was a Minister . Mr Cadman —They came from Barnard's office. Mr SCHOLES —The honourable member should not talk rubbish. Not one of those documents led to a resignation of a Minister on his side of the House. It is a case of: 'Don't do what we do when we are in opposition; do what we say we would have done, and what we are 'gunner' do if we get back into government. If the right honourable gentleman were a gunner, we would have no problems at all with our Defence Force, because he is always 'gunner' do something. When he was the Minister for Defence he went to Western Australia one day and told people there that he would build them a patrol boat base in the north-west, and in Canberra on the very next day he said that it was not a high priority and could not be expected to be undertaken. Yesterday the right honourable gentleman came into the House quoting some agreement in 1956 which he says constitutes a current policy. I do not intend to go into that matter now, but I do intend to table a legal opinion from the Department of Foreign Affairs with reference to that, which makes utter rubbish of what he said yesterday. Mr Sinclair —You mean it is not still in place? No wonder we are in trouble. You cancelled that agreement with the United States and didn't tell us about it. Mr SPEAKER —Order! The right honourable gentleman, the Leader of the National Party, was not interrupted by the Minister. I suggest that he give the Minister the same courtesy. Mr SCHOLES —I do not know how any government could be accused of running down Australia's Defence Force in 12 months at a time of severe economic hardship and when the government payroll was increasing. There is no question but that there was a massive increase in the government payroll in the latter part of the Opposition's period in government, which increase is now declining-most of the people concerned are on unemployment benefits because of the incompetence of members of the Opposition. It was a totally incompetent government which now, in opposition, is capable of doing anything. One of its former Ministers has referred to the angels. Members of the Opposition are capable now of doing anything, but in government they did not do it. They did nothing. I make the point that in 1982 the right honourable member for New England became Minister for Defence. Real spending on defence fell by 1.7 per cent that year. It did so because the Treasurer of the day refused, as had been the past practice, to accommodate within the Additional Estimates increases in salaries for the Defence Force which were granted by the Coldham Committee of Reference for Defence Force Pay, increases which had been delayed since the last review in 1973. There was a period of nine years between work value cases, and Opposition members talk about their support for conditions in the Services! God help us. When Barnard came into office there had been a similar delay. The government of the day had refused to allow a reference. In 1982 the defence budget was rearranged by these people in order to accommodate within that budget $300m worth of pay rises which the Government directed must be absorbed from within the defence vote. I draw the attention of the House to the sort of direction that members of the present Opposition, then in government, sent out to the troops. They never saw the honourable member for McPherson (Mr White) or the honourable member for Bass (Mr Newman), who was probably the assistant Minister then or was failing as the then Minister for Administrative Services. I never heard them in the House moving censure motions. Listen to this: Discretionary expenditures which might be flexible with regard to timing are to be deferred. No new commitments or expenditures are to be incurred. Contractual commitments in respect to major equipment assets or other project expenditures are not to be entered into. This was a direction from the Liberal-National Party Government and its Minister , the great defenders of defence. Again: Recent Defence Force pay increases are to be met from savings elsewhere in the defence budget. Some restrictions on expenditure will therefore continue even under the Additional Estimates. Nine hundred million dollars was scrapped from the defence program to pay for what should have been met in normal estimates. What have we had since honourable members opposite went into opposition? The shadow Minister has told the world of the Opposition's grandiose plans for additional spending and how much extra should have been spent, while the shadow Treasurer has told us we should have cut the deficit by a further $2 billion. They would have us do it both ways. The fact is that in government honourable members opposite were a total and utter failure. They performed in the defence area as, historically, they have always performed; they were great talkers but they were not doers. The right honourable member for New England now says that it is irresponsible for a government of Australia to plan for our defence from our own resources, to accept responsibility for our own defence preparations. He says that it is irresponsible not to rely on our allies. Previous conservative governments did that, very nearly to Australia's great cost. Mr Shipton —You have just thrown out all the agreements. Mr SCHOLES —Agreements are valuable assets to any country, but to depend on them is foolish and stupid. If the honourable gentleman likes to do a little reading about Australia's defence prior to 1941 he will see that a former conservative Prime Minister told this House that the construction of a naval base at Singapore guaranteed the security of Australia to the end of this century. The right honourable member told the House today that we should depend on guarantees of someone else defending us and should not plan for our own defence. Members of the Opposition are always telling the people of Australia what their defence plans are. Why does the right honourable member not tell us about the 1976 White Paper on defence-a document, incidentally, which was largely prepared by my colleague, the honourable member for St George (Mr Morrison)? Let us see what the previous Government promised and what it did. First of all, within four years it was $1.5 billion behind the announced expenditure targets. Not in one year did it meet those expenditure targets. Let us look at the equipment program: The tactical fighter, four years behind target; the mine counter measures catamarans, two years behind target; the frigate program, four years behind target; the under way replenishment ship, nine years behind target; the armour and anti-armour weapons program, which was mentioned by an honourable gentleman opposite yesterday, four years behind target; the 155mm artillery program, three years behind target; the electronic warfare simulator, eight years behind target. That is the record on which honourable members opposite seek to stand in this House. I wish to deal with two other matters. I do not really believe that the Opposition is serious-I believe that it is playing fairly cheap politics-when it suggests that the defence of Australia would be advantaged by increasing the size of the school cadet corps. That is now part of the Opposition's defence policy, as is the acquisition of nuclear powered submarines, the support of which would add an enormous cost to the infrastructure and which would not be capable of providing the best submarine defence in Australia. I refer the Opposition to the comments of Admiral Synnot on that matter last year. That is what the Opposition is putting forward. Its policy is to have a cadet-led Defence Force with nuclear submarines as a gimmick to tell the people that it is doing something that it knows has no relevance at all to Australian defence. Honourable members opposite have failed and they will continue to fail. Mr Sinclair —What about boots for the soldiers? Tell us about that. Mr SCHOLES —Yes, I will tell honourable members opposite about those, too. The former Minister made a shocking order of boots from Taiwan in a rush to increase the size of the Reserve forces. The boots were no damn good and boots had to be ordered again. That is what happened to the boots. The right honourable gentleman might get up and tell us whether he bought them for the Army. It is the sort of deal he would have done. He was the Minister and it was his Government which bought the damn things. I want finally to deal with the great rhetoric and the great importance of the carrier decision. This House ought to know exactly where the people opposite stand in relation to the carrier. In the White Paper on defence in 1976 the government of the day, a government of which the honourable gentleman was a member-although he obviously slept through Cabinet meetings because he does not know what went on there, or he does not want to tell the truth now-announced that the HMAS Melbourne's life would be extended until 1985. The Royal Australian Navy tied it up in January 1982 as a cost saving measure and the honourable gentleman went to Cabinet-- Mr Sinclair —Let us all hear about it. Mr SCHOLES —The right honourable gentleman should, for God's sake, tell the truth occasionally. He went to Cabinet with a submission in 1982 to discontinue Australia's carrier force and not to acquire a new carrier. He went to Cabinet with it and he is now telling the Navy, because he has no guts to stand up for his own decisions, that he was going to get a carrier. His problem is that he has no credibility whatsoever. He is easy with accusations and statements but does not have many facts to back them up. This Government is committed to defence. It is committed to the development of a credible Defence Force in Australia. It will take several years for us to catch up with the backlog caused by the incompetence led by the present shadow Minister for Defence who, deliberately and as an act of policy, reduced government expenditure in the first year in which he was Minister for Defence to below real growth. That was the only time that that has happened in recent years . And he is concerned that the truth ought to be noted! He was the only Minister who refused to refer a pay matter to the appropriate tribunal. Mr SPEAKER —Order! The Minister's time has expired. The Minister sought leave to table a paper. I did not interrupt him at the time. Is leave granted for the tabling of that paper? There being no objection, leave is granted. Mr NEWMAN(Bass)(2.37) —Yesterday I described this Minister for Defence (Mr Scholes) as a confused and incompetent Minister. I think all colleagues in this House will see that that was a very charitable description after what we have seen of his performance at the table today. I wonder whether the Prime Minister (Mr Hawke) would now stand by the statement that he made in December 1983 when he told colleagues that Mr Scholes and other Ministers had been 'outstanding' since Labor took office in March and that there would be no significant Cabinet reshuffle. I would say that the Prime Minister would be looking very hard at the Minister for Defence today. Yesterday we exposed the dangerous state to which this Minister has reduced the Army division, the critical force structure upon which the Army builds its whole capabilities and strength. He is guilty not only of running down the strength of the Army but also of attempting to cover up what he has been doing. The Minister , in his public speeches, has been preaching a commitment to maintaining an effective Army whilst in reality, by his restrictions on manning, training, equipment, ammunition and money, he is allowing it to become weak and decrepit. Let us look at some of the headlines which have appeared in the Press during the period of his custodianship-not during the term of the previous Government but during the time in which he has had responsibility for the defence needs of this country. They include the following: 'Ageing weapons point to catastrophe on battlefield', 'Armed forces wage war on shoe-string approach', 'Canberra must bite bullet to keep young soldiers', ' ''Cockleshell Fleet'' puts Navy under great strain', 'Investigators fire salvo at state of armed forces', 'Scholes trapped by falling image and the rising Beazley', 'Forces mount against battle- scarred Scholes', 'Policy control clash looms between Scholes and Howe'-I will have a little more to say about that in a moment-'Poor back-up clips our super fighter's wings', 'Failure at 'Roo HQ sparks call for restructure' and ' Bolstering a security system on shaky legs'. That is the record of the Minister for Defence as recorded in the Australian Press over the last year. As I charged yesterday: If he is not guilty of deliberately covering up the true state of the Army he is guilty of a massive ignorance and incompetence. But I think the situation is now much worse than yesterday. Yesterday in this House detailed charges and allegations were made by my colleague the honourable member for McPherson (Mr White) and me. At that time the Minister for Defence lounged back in his seat giggling and laughing. Instead of answering the charges then as he should have, he left it to two ill-informed backbenchers to try ineffectually to explain away the mess that was revealed. What of today? In his speech today, the Minister for Defence did not answer a single charge that was made. He did not address one of those detailed charges. He tried to rely on the old favourite of passing the buck. Today that will not wash. The criticisms I made yesterday, which I will summarise again in a few moments, can all be sheeted home to the actions, or the lack of them, on the part of this Minister. What were those charges? Let me summarise them. First of all, these are all issues and actions for which this Minister is responsible. They have all occurred in the last 12 months of this Minister's responsibility. Reductions in already inadequate peace time establishments have been made in a number of units in the division in the last year. Recruiting in the first half of 1984 has been reduced to the extent that recruitment will be down by about 15 per cent on the same period last year. Major restrictions have been placed on the training of the division with the brigades allowed to exercise only every several years and battalions only once a year. The tank cavalry regiment can train with tanks only every second year. Training is further limited by restrictions on ammunition for small arms, anti-tank guns and pyrotechnics. Availability of Royal Australian Air Force helicopters for training is almost non-existent. The Army Reserve is rapidly reaching a stage where it will be unable to reinforce and augment the division in order to meet a mid-level threat. Reservists have had their pay taxed, their petrol, transport and ammunition slashed, and training hours, even when it is voluntary, without pay training, severely restricted. Parachutes, boots and jungle greens are also restricted. I would not be surprised if we soon reached the stage where we have naked, bootless parachutists freefalling to do their training. Conditions of service are just as bad. Inadequate training and working conditions, a 30 per cent tax levy on retirement benefits, the Medicare penalty where members have working wives, all contribute to an assault on the morale of the men and women who are keeping our Army together. From the waffle and gabble coming from honourable members opposite, it is evident that they could not care less about it. These men and women are keeping the Army, the Royal Australian Navy and the Air Force together by buying their own ammunition and holding their boots together with elastoplast. Perhaps the way in which I can bring it home to the rabble opposite is to demonstrate what all this means in practical terms. If one were to stand beside a road today and watch a company of Australian infantry marching by, one would see an odd assortment of equipment displayed by those men because they have been 'fleshing out' their webbing at the disposal stores, buying items which this Minister either cannot deliver or does not give to them. Defence writer Peter Young reported recently on a major firepower demonstration at the Infantry Centre, the place where policy training and research is done for the whole Army. I wish to quote directly what he said about this demonstration: Some time ago during Exercise Kangaroo 81, the Australian Defence Forces laid on an Apocalypse Now style demonstration that was little more than a rerun of the weapons and tactics of the Vietnam era. Last week at the Hunter Valley-based School of Infantry they did even better. They used Vickers machine guns and support weapons twice the age of the men who used them in a firepower demonstration that was little more than a rerun of World War II. The individual infantrymen performed magnificently, but there was hardly a weapon that had not seen service in Vietnam or Korea. . . . the school had to raid the supply depots for old World War II .303 Vickers heavy machine guns to demonstrate the concept of indirect fire. Even then they had to use up old stocks of Pakistani-made ammunition while the 81mm mortarmen, though giving a classic demonstration of speed and accuracy, had to fire old 3-inch bombs out of their gun tubes. It was a combination of out-dated technology and limited range that one Armoured Corps officer said would give them a life of about 20 seconds against new technology tanks on a modern-day battlefield. . . . the Commandant, Colonel Tony Hammett . . . had to admit that the weapons we had seen were, to say the least . . . 'tired and outdated', and that it was ' a struggle to keep them effective'. But they were, he said, the best they had, and it was his task to make the most of them. That is the responsibility of the Minister for Defence, and it is the responsibility of the rabble opposite who are making a mockery of this debate now. They are responsible for that. They should go up to the Hunter Valley and tell the soldiers who are trying to cope with their inadequacies and the things that they are trying to impose on them. Honourable members opposite will not get very far. Yesterday I demonstrated the way in which the Government has savagely cut back on repair and maintenance funds. Soldiers now spend a lot of their time maintaining their barracks, cutting grass, painting, fixing windows, plumbing- you name it. These are all tasks which should be done by contractors or day labour. I suppose that is one way to keep them busy when they are only allowed to train so infrequently. The list could go on and on but it all adds up to one thing: The Hawke Government and this Minister for Defence are reducing the Army and its capability to a very dangerous level. I have already said that the Minister is confused and incompetent. The latter state is inexcusable and it is deserving of censure. That is what we are doing today. However, perhaps his confusion can be partly explained away. It would seem that the whole Hawke Ministry is confused. This mental state is having a disastrous impact on our defence and foreign policy. Let me give a few examples to illustrate that statement. In October 1978 six Ministers of the present Government signed an advertisement in the National Times expressing their opposition to 'Australia's military arrangements with the Association of South East Asian Nations countries'. Who were they? Who did they include? Messrs Gietzelt, Holding, Uren, Jones, West and Howe. They stated: . . . almost all ASEAN regimes are oppressive and undemocratic in character, while most of them are repressive military dictatorships. This kind of language is never used by Labor members-with the possible exception of the honourable member for Prospect (Dr Klugman)-about the brutal totalitarian regime in Vietnam. It is reserved for our allies, some of which are democracies. I seek leave to table that document. Leave granted. Mr NEWMAN —That table bears out the accusations I have just been making. In September 1976, in another National Times advertisement, there was a call for an independent and non-aligned Australia. The advertisement condemned military alliances, foreign military bases on Australian soil and the Australian-American alliance. Who signed this one? It was signed by such self-confessed moderates as Pat Clancy, Jim Cairns, Laurie Carmichael, Bill Hartley and none other than R. J . Hawke. I seek leave to table that advertisement. Leave granted. Mr NEWMAN —I presume that this was the same R. J. Hawke who, in his 1976 Evatt lecture, referred to President Reagan as one who 'would have us relive on the international stage his wild west celluloid fantasies in which, cast as the hero , he triumphed after quick-draw six-gun shoot-outs'. By June 1983, R. J. Hawke, the Prime Minister, was referring to his 'firm and warm personal relationship' with President Reagan. I suppose we can only hope for the security of this country and its important alliances that President Reagan does not read Evatt lectures. But perhaps the Minister for Defence does. Part of the Defence Minister's problem-I referred to it in one of the headlines I read out earlier-is that he has the Minister for Defence Support, the honourable member for Batman (Mr Howe), breathing down his neck. Given the ideological preferences of the honourable member for Batman, I suppose it would be rather unpleasant. Let us look at the honourable member. He must be the first self-proclaimed pacifist to hold a Defence ministry in any government. When asked by the Illawarra Mercury whether he would resign his portfolio if he found his role as Minister for Defence Support to be incompatible with his pacifist beliefs the Minister replied: 'No, certainly not'. Perhaps the Minister for Defence should advise his socialist Left colleague that Hitler's defeat in the Second World War was not brought about by pacifists. It is something that a Minister for Defence Support should know. Mr Speaker, to complete the record, I seek leave to table that particular document too. Leave granted. Mr NEWMAN —Certainly the Minister for Defence has difficulties. But whatever ideological garbage he has inherited from his Party's past, he still stands condemned for making matters even worse. In the last two days in this Parliament and in the newspapers of this country a detailed and comprehensive list has been made of the actions and policies that this Government has carried out in the last year. They have nothing to do with 1972, 1975 or 1980, they are all to do with 1983 and 1984; they are all to do with R.J. Hawke's Government and they are all to do with the Minister for Defence who is presiding over this debacle. At the core of the debate yesterday is this question: Can the Army fulfil its functions and responsibilities? Thanks to the inadequacies of the Government policies and this Minister, the answer has to be-I am sure it will be given an unqualified response from everybody-firmly, clearly, no. The Australian Army and Reserve have able and dedicated professionals but they could not deal effectively even with a low threat. If there were sustained land operations they would probably not be able to do it at all. Why? Because they have not been given the manning, the equipment or the training they need. As we have so clearly demonstrated, and as the Minister has equally clearly failed to answer, the Hawke Government is presiding over a defence policy which, if it is not stopped and reversed, can lead only to the destruction of the Army's capability to defend Australia and its territories. We are perilously close to that point now. The Minister must accept responsibility for this desperate situation. He should be sacked or he should resign. Mr BEAZLEY(Swan-Minister for Aviation and Minister Assisting the Minister for Defence)(2.53) —I suppose the Leader of the National Party of Australia (Mr Sinclair) feels some security in moving a motion of censure on defence matters because unlike virtually every other senior post he has held, including his present one, his tenure has not been accompanied by the usual judicial, senatorial and royal commission inquiries, casting doubt on his personal conduct and sense of propriety. He sits comfortably enough in it not to assume, as most National Party leaders do, the spokesmanship on trade policy. He remains as the shadow Minister for Defence. That, I am afraid, while being to the detriment of the defence of this country, is very much to the advantage of this Government. His disasters as Defence Minister reflected not on his character but his competence in public policy. Throughout his tenure he was incapable of clearly distinguishing between a strategy of forward defence and one of defence self- reliance, leaving a trail of confusion and sloppy thinking when it came to matters related to major equipment purchases where such vital strategic considerations were so important. Well do those of us who were in the last Parliament remember when he became Defence Minister. It was like the elevation of Good Soldier Schweik in political guise into the position of Defence Minister. He could not keep his mouth shut. He was the Minister for defence statements. One day Russia was the threat, the next day China; one day Russia was not a threat, the next day perhaps China might be but actually was not a threat at this particular moment. So one would have to look into the future and find some problems there. He represented a human version of a whoopee cushion. You could sit on him anywhere in Australia and what would come out would be unpleasant and ineffectual but nevertheless very loud. Nowhere was this more evident in his performance than in his attitude to the Fleet Air Arm. He could never live with his advice that it was too expensive and of low priority. That advice came not only from his Department but from a unanimous report on that matter by an all-party committee of this Parliament on which I had the privilege of serving. A number of members of the current Opposition were on that committee lending their weight to it. The backing and filling on the carrier purchase which is part of the censure motion here today was his creation. The Navy morale problem was his creation. The current Minister acted with a decisiveness with which the previous Minister was incapable and restored appropriate priorities to our own equipment program. He asked us for an Invincible replacement. We never had the Invincible; we never had it under his Government and we never had it under ours. What particular Invincible replacement is he talking about? If it is true-and I do not believe it is-that the Invincible or some equivalent of it, was absolutely vital to the defence of this nation, as is now being claimed by members of the Opposition in their defence program, then they stand condemned for failing to purchase an aircraft carrier that was available at that time at a price much cheaper than other aircraft carriers. If it were true, it was taking our friendship with Britain to an extent that ought not to be tolerated by this country, to an extent of imposing upon us an obligation in the capital equipment program of paying even more for what was going to be a vital piece of equipment. If it were true, members of the Opposition would stand condemned for that piece of neglect of Australian defence forces. Of course it was not true, it was not essential, and the fact that the British decided that they did not want to sell it was a very great relief not only to those on this side of the House but also to the right honourable member when he was the Defence Minister. All our problems are problems created by the Leader of the National Party and his predecessors. They start from a failure in strategic conception and conclude with irresponsible budgeting producing a glut in the forward purchasing of equipment. It will take us years to sort his Government's mess out, and we have only just begun. Not only is this Government continuing to increase, in real terms, the resources devoted to defence, and to increase them faster than the Opposition did in its disastrous years, but we are also doing this in the face of the problems we inherited from the final years of economic mismanagement of the Opposition when it was in power. This year we anticipate that the share of Budget outlays devoted to defence will be 9.3 per cent, and that from a Budget which itself is inflated by the requirements brought about by the current Opposition to meet massive payments in respect of the unemployed. Let us look at the record. The previous Government promised in a White Paper introduced in 1976 that resources devoted to defence by the present Opposition would grow by more than 5 per cent per annum. That was a very important document . That document was based on the restructuring of strategic thinking in this country under the previous Labor Government and was accepted by us in a bipartisan spirit when it was delivered by that Government. It never kept up the undertakings contained in that particular statement but not as a result of any opposition from us. This Government in its first Budget has increased the funds available to defence by more than 4 per cent in real terms at a time of obvious economic difficulty. That action speaks for itself and should be seen against the Opposition's disdainful reduction of real defence spending by 1.7 per cent in the year that the current Opposition spokesman became Defence Minister. This run-down of defence spending by the previous Government is only half the story. It must be linked to the big promises that were made before elections and then forgotten. Do we not remember the promises in Western Australia which were trotted out before every election? In 1977 we were told; 'You will have by the next election, two destroyers and two submarines'. In 1980: 'You will have by the next election, one destroyer and a submarine'. Finally, after the election of our Government, for the first time we have a permanently based major naval capital ship in Western Australia. If members opposite had been in government after that 1983 election, we could only speculate on past practice. We could guarantee that that would have been postponed for another 12 months to achieve the cost savings which the set of figures that I am now going to go through would have imposed upon them. At the end of 1979-80 the carry-over of funds for expenditures approved but not completely paid for was more than $1,700m. Most of this was for equipment projects. At the end of 1980-81 the carry-over to the next year was more than $2 ,200m. As a result of further decisions, notably the purchase of the FA18s and a failure to compensate with a higher Budget allocation, the carry-over figure skyrocketed to more than $5 billion at the end of 1981-82. That is the glut in forward equipment purchase that this Minister for Defence (Mr Scholes) has to deal with and it is entirely left by the Opposition. I would say that members of the Opposition have at least three or four years before they are entitled to stand up in this House and move a censure motion on anything related to defence. But they are pretty difficult to embarrass. So we are obliged in this place to offer the reminders. The point which remains crucial to understanding the situation at the end of the period of coalition Government is that by 1982 it had committed itself to equipment programs approaching the order of 10 times the amount it had been able to spend during 1981-82. Increasing the seriousness of the situation was the fact that estimation of the commitment was based on costs that were in some instances out of date and did not reflect the effects of inflation. Furthermore, there must have been a recognition that far too many of the program schedules were contemporaneous. Indeed, this resulted in the necessity to defer programs. This was seen in Sir James Killen's statement of 29 April 1982. This remained the state of affairs of his successor. He was unable to rectify it because of the strength of the mid- 1980s budgetary squeeze. The present Opposition defence spokesman admitted as much in a pre-election speech. We have the situation whereby the coalition, having run up a huge debt while in government, now tries to blame the present Minister for the financial stringency that debt has necessitated. Opposition members then have the nerve to demand even more huge exependitures, in the area of the Fleet Air Arm. They are the ones whom the Australian people showed a lack of confidence in at the last election. It is no wonder when we look at the record of that Government. Understandably, on the part of this Government, there would be, if it is going to meet its responsibilities under the forward equipment purchases, a need to take some of the cuts that have at different points of time have been indicated. Nevertheless, many of those cuts, suggested by honourable members who spoke yesterday and who are so proud of their speeches as having actually occurred, are in fact delays attributable to our predecessors. I will take one example, that of the honourable member for Bass (Mr Newman), who said that the efficient introduction of the 1.55 millimetre howitzer would be delayed. He did not say that the Fraser Government had originally planned to have this gun in service by 1980. Who is responsible for that three-year delay? I will depart from that matter briefly. Mr Newman —Madam Deputy Speaker, I raise a point of order. I said no such thing yesterday and the Minister knows that. I said the unit was so run down that it could not man the guns. The Government is responsible for it. Madam DEPUTY SPEAKER(Mrs Child) —There is no point of order. Mr BEAZLEY —The honourable gentleman and his colleagues on the opposite side of the House have, as Opposition honourable members have been wont to do in this place over the years, wrapped themselves in the flag and invited members of the community in Australia to address themselves to questions of patriotism or the competence on security matters of this Government. They have maintained that there has been as a result of the apparent or alleged recent leaking of information on the strategic basis a crisis in confidence imposed on our relationships with our allies. If that is the case, that crisis of confidence has existed for some considerable time. The same person who is now claiming to have seen a copy of the strategic basis also claims and claimed before the last election, along with other journalists, to have seen leaked during the present Opposition's term of office the 1975-76 strategic basis. I seek leave to table the reports of those occurrences. Leave granted. Mr BEAZLEY —I think I can do this House a service by going through some of the leaks in the period of the Fraser Government. These are leaks which the Opposition is now describing as matters of censure rather than concern. We have the strategic bases document allegedly leaked in the period when the coalition was in government. Early last year there was an absolute cornucopia of documents published in the same source, the National Times, again allegedly relating to the coalition's period in government. In June 1976 an official of Mr Fraser's touring party in China leaked a report that Fraser would propose a four-power defence pact between Japan, China, Australia and the United States. In July 1976 the sensitive cable from the Australian Ambassador in Jakarta, detailing policy options over East Timor, was made known almost the minute it was received. In October 1976 there was the leak of a confidential cable from the Australian Embassy in Jakarta giving an account of the discussions between the Australian and Indonesian foreign Ministers of Australia and Timor. In April 1978 there was a leak of secret Cabinet documents outlining the measures the Federal Government would take if Australia became involved in a nuclear accident. In November 1980 there was the leaking of a confidential despatch from the Australian High Commission in New Delhi critical of the Indian Prime Minister. In March 1981 there was the leaking of defence committee documents on the Sinai peacekeeping force. In March 1982 there was the leaking of Defence Department documents on the purchase of an aircraft carrier for the Royal Australian Navy which conflicted with the Fraser Government's public arguments on the need for a new carrier. This is the bunch which rocks on into this Parliament and decides that what we have to have in here is some sort of censure motion of the Defence Minister because they are the people best in command of the security requirements of this nation. What absolute rubbish! What a pathetic crew they are! They used to be described by Arthur Caldwell as a gibbering array of pathological exhibits. No more do they gibber than when they come to deal with the national security matters of this country. That has been the gibbering topic of members of the Opposition for years. Over the years they have sought consistently to use foreign affairs and defence matters in a way that is political in a domestic political context. They have paid lip service to the need for bipartisanship, yet when the opportunity has arisen, irrespective of the damage that it might do down the line, to rise up and kick heads on national security matters they will be right in there. They have a good reason to do that. When one actually moved a little aside from examining their verbiage to examining their practice what is presented is a raft of a ream of incompetence in forward budget planning and incompetence in strategic assessment of the requirements of the defence of this country. This motion is contemptible. This motion deserves the rejection that it is going to get from this House. It is a shame that this motion was spoken to by two persons who were serving officers and also by a person who was a Minister for Defence who knows that in the area of defence planning there is virtually nothing that a government can do in its first year of office except to run on the problems created by its predecessors or attempt to deal with those problems, as we are attempting to deal with those problems, with the increase in real money terms in the amount devoted to defence in this Budget. This is an increase that dwarfs anything that the Opposition was able to do in the seven years it incompetently managed the security of this country. Madam DEPUTY SPEAKER —Order! The Minister's time has expired. Mr WHITE(McPherson)(3.08) —The first thing that must be said is that it is pleasing to see the Minister for Defence (Mr Scholes) in this House talking about defence because that has been a pretty rare sight in the 12 months the Australian Labor Party has been in government. It was a fairly pathetic effort. The heir apparent to the Minister had a go. He will have to lift his game if he wants that job because he was pretty pathetic too. Of the two speakers on the Government side not one has addressed the issues and charges levelled at the Government in this motion. They talked about historical precepts and what we, as a government, should have done. They are the Government; they have been in power for 12 months and they have done nothing but run down the defence forces of this country at every opportunity. I again ask the question: What is the defence policy of this Government? It would appear that as a result of a leak that was published in the National Times this morning the Government has adopted a certain strategic basis. It would appear that that is so, because there has been no denial of it. We assume that the answer is yes. The Attorney-General (Senator Gareth Evans), I emphasise the Attorney-General on a defence matter, put out a statement this morning which said in part that the document was: endorsed by way of guidance for the purposes of review of defence planning and for the development of Australian defence policies. Is that not the defence policy that the Government has adopted? That was what the Attorney-General said. We now have a new secret defence policy as published by the National Times. It is very easy to see of course why it is secret. It is secret because it runs counter to every platform and philosophy adopted by the Australian Labor Party in recent years. The National Times stated, and that newspaper got it right: . . . the ALP platform is largely treated as irrelevant or is outright contradicted. That is what is stated in the National Times. That is what this new National Times-Government defence policy does. Madam Deputy Speaker, I wish to address a few of the more significant matters raised by the National Times today to see what, if anything, the Government is doing to meet its responsibilities in this newly released defence policy. Let us take the question of self-sufficiency. ' Look after ourselves', says the Minister repeatedly. 'Stand up for ourselves. Let us have a leaner and more independent defence posture'. What has the Government done in the last 12 months? It has taken every opportunity to run down defence capabilities in this country and kick the servicemen and women in the head at every opportunity. This is the new self-sufficiency that this Government has adopted. I will quote the Minister for Defence in his submission to the Joint Committee on Foreign Affairs and Defence. In a letter signed by him on 20 March he said: Our reserves of ammunition, weapons and spare parts would not support any sustained combat involvement of our forces beyond low level operations. That is what the Minister said. That is the self-sufficiency that he has adopted . What sort of self-sufficiency is that? In the same submission, he said: Essential supplies to be imported would be arms, ammunition and spare parts. That is because we do not have enough in this country. The submission continued: Australians could not be assured of the necessary military supplies, except for items in which we were self-reliant or had been able to stockpile. Where are those items? That is the new self-sufficiency. The Government can talk all it likes about self-sufficiency but let us look at the ammunition supply in this country. When will the Minister for Defence tell us what exactly is the ammunition position? What are our reserves of training and operational ammunition? All I know is, and I said it yesterday, that soldiers have told me that they go and buy their own ammunition so that they can get enough to become reasonably proficient in the use of their own rifles. For God's sake, it is 1984 . We have the biggest build up of Russians in Vietnam, a country to which this Government is trying to give aid. The Russians have bombers and submarines that can cover any part of Australia. We have Australian soldiers buying their own ammunition because the Government will not give them enough. Let us turn to the question of weapons-not the big, expensive weapons but the smaller machine guns and rifles. There would not be a machine gun or rifle in this country less than 20 years old. Many of them have been withdrawn as unserviceable. We cannot supply ammunition, which is probably a good thing because, in many cases, the weapons have been withdrawn as they are not serviceable. Let us look at dress and equipment. The honourable member for Bass (Mr Newman) has already covered much of this. There is a shortage of boots, greens and equipment. Let us just take the question of boots. The Army is predominantly infantry. It is dependent on its boots because there are no helicopters, trucks, or anything else. It has no ammunition and its weapons are outdated so let us take the basic question of boots. Soldiers from various units in the Australian Army are arriving on courses at training camps with their boots held together by elastoplast. That is what has happened on the question of dress. They arrive on courses with their boots bound up with elastoplast. It is a wonder that there is enough elastoplast in the Army. We all know that the next thing the Government will do will be to reduce medical supplies because the Army is using too many of them. Let us look at transport. The operational deployment force in Townsville has the support of four helicopters. In normal circumstances that would lift a platoon but because manpower has been allowed to run down so much those four helicopters could probably lift two platoons. There is not a unit in the Australian Army that is not short of men. Most are simply ineffective. They are skeleton forces. Very few are in a position to fight. Some units are so short of manpower that they have great difficulty in training. Let us look at the Army Reserve. On paper it has about 30,000 men. We would be lucky to have 15,000 effective reservists in this country. The unit called One Training Group based in Brisbane runs most of the Reserve courses for Queensland . This year 3,000 man hours of training have been cut from its program. In the last two months three Reserve recruit courses have been cancelled. All other courses planned this year are on 24 hours notice of cancellation. The training group in New South Wales, I am informed, has closed down completely and training has been given back to the units. A reserve unit with which I am quite familiar last year had 120 people on the books. This year it has about 80. Two weekends ago in one night 12 men fronted up with their gear and said: 'Hear you are, I have had it. If I am not allowed to train what the hell is the point of my coming here for two hours a night?' The Reserve is in a desperate position. That is the self-sufficiency that this Government is talking about. We talk about maintaining units in the field even at a low level of combat operation. I seriously doubt, and so do many other people in defence, whether we could maintain one batallion in the field for any length of time. Let us take a few other things mentioned in what is apparently the Government's new defence policy. Let us take the Russian build up in Vietnam. The Government is busily trying to give Vietnam aid. The biggest Russian build up in the world is based in Vietnam with bombers and submarines covering any part of Australia. What does the Government do? It tries to give Vietnam more aid. Let us take the question of the defence of the Cocos (Keeling) Islands. The conclusion in the Government's new defence policy is that those islands will have to be abandoned. The reason is that the forces have been allowed to run down to such an extent that there would be no hope in the world of going to their assistance. Because there is no carrier and the Government has disbanded the Fleet Air Arm it has effectively confined the Navy to the coast. It is a joke to talk about securing Australian territory. Let us talk about assistance to Papua New Guinea which was mentioned in the new Government defence policy. I doubt that anyone in this House would not believe that Papua New Guinea is essential to our defence. If it gets into trouble, or requests assistance I put it to the House: How will we get the troops there and what will they do when they get there? I ask honourable members to look at the condition of the Army, Navy and Air Force and ask themselves what possible effective help we could give to any of our allies. I look at the capacity to defend Australia, again raising the strategic basis. On the Minister's own admission we cannot sustain even a low level of operations in the field. The crunch is this: The Government adopts a secret policy on defence. It will not tell its Party, for obvious reasons, because it is opposed to most of the Party platform. It will not tell the Parliament because it is embarrassed that it cannot meet any of its responsibilities in its defence policy. It certainly will not tell the Australian people until it is flushed out by a leak. It has adopted this policy apparently because no one has denied it. It commits the Government, in many ways, to a realistic appraisal of our defence in this country. What does the Government do? It spends 12 months running down our defence forces so that in terms of modern warfare they are ineffective. Let me quickly run through some of the points again. In the last 12 months there has been a rundown in manpower, a rundown in basic equipment, a rundown in ammunition reserves, a rundown in training times, a lack of strategic and tactical mobility, no helicopters to speak of, the decimation of the reserves, the abandonment of the carrier concept and the disbandment of the Fleet Air Arm. I ask: Where are our anti-tank capacity, our airborne radar capacity, our helicopters, our parachute capacity and all the other things that go to make up an effective force? They are not there and one of the reasons apart from all the others, is this: In the Department of Defence in Canberra there are 7,000 people , including 60 brigadiers or their equivalent, 174 colonels, 525 lieutenant- colonels, 688 majors and 77 Second Division public servants. As if that is not bad enough, in the regional commands in Australia there are another 10,000 personnel. That is 17,000 personnel out of a total defence strength-civilian and military-of 110,000 who are either located in Canberra or in the capital cities. The list goes on and on. Those figures are taken from 1982-83. So what is the Government doing about this leaner Army that it keeps talking about? I refer to the maintenance of barracks. The other day a friend of mine in desperation moved out of his married quarters because when he was having a shower he fell through the floor. That is an example of the state of the defence married quarters in this country. The Government has increased ration and quarter charges, taxed superannuation payments and even abandoned the school cadets. Madam DEPUTY SPEAKER(Mrs Child) —Order! The honourable member's time has expired. Before I call the honourable member for St George, I call the honourable member for Bass who has sought the indulgence of the Chair to make a personal explanation. Mr NEWMAN(Bass) —Madam Deputy Speaker, I claim to have been misrepresented. Madam DEPUTY SPEAKER —The honourable member may proceed. Mr NEWMAN —In the debate the Minister for Aviation (Mr Beazley) said that I had alleged in my speech yesterday that the 8/12 Medium Regiment was not able to cope with the new medium guns because of the way they were being issued. I did not say that at all. What I said, to make the record absolutely clear, was that because the Army unit-that is, the 8/12 Medium Regiment-had been reduced by this Government by approximately 70 people, that is below its peacetime establishment , the gun will not be able to be efficiently issued because there will not be enough men to man it. Mr MORRISON(St George)(3.24) —If this debate is about the loss of confidence of the Australian people in defence security the guilty people are sitting in the Opposition. I accuse them of criminal neglect in the defence planning of Australia. For 30 out of the last 34 years the honourable gentlemen opposite have been in charge of the defence planning of this country. In the last seven years, despite the promises, they have failed to match the promises with performance. In 1976 they had a flying start. In 1976 they had a White Paper on defence that was developed under the Australian Labor Party Administration. In 1976 they said that they would maintain an increase in real expenditure on defence of 7 per cent. After seven years the result was not a real increase of 7 per cent but a real increase of only 2 1/2 per cent. The Leader of the National Party of Australia (Mr Sinclair), who is at the table, is the only Minister for Defence in the last 20 years who has presided over a decrease in defence expenditure. In the Budget for which he was responsible there was a 1.7 per cent reduction in defence expenditure-the first for over 20 years. In the first Budget of this Labor Party Government in 1983 the increase in defence expenditure in real terms was 4.1 per cent. There was a loss of 1.7 per cent in the Budget under that former Defence Minister and under the present Minister for Defence (Mr Scholes) there was an increase of 4.1 per cent. We have had before us today a list of deficiencies in the Department of Defence . I want to give this House a list of deficiencies that has one advantage over the list that has been produced by the Opposition; this list of deficiencies has the imprimatur of the Liberal party of Australia. It reads: The Government will not at this stage proceed with the acquisition of an additional five Fremantle class patrol boats and the second underway replenishment ship. . . . . The provision for expenditure over the next five years on follow-on destroyers will be reduced . . . Planned expenditure for additional anti-submarine warfare helicopters has been deferred and program expenditure on other RAN and RAAF helicopters has been reduced. There will be a reduction in the level of refurbishment of the Mirage. Many of the lower priority facilities and infrastructure developments have been slowed down or delayed. . . . . . . . further manpower savings will be achieved by holding Army strength for 1981-82 and 1982-83 at the June 1981 level of 32,850. I have quoted from a statement made by a Liberal Party Minister for Defence on 29 April 1982. It is because of the inheritance of that neglect that the Labor Government has to face up to enormous challenges in trying to get the defence planning of this country back on the tracks that were left by the Leader of the National Party, who presided over the only reduction in the defence budget. What did the then Minister for Defence say in 1982? He stated: The Government has recently found it necessary to contain the growth in post- Budget 1981-82 public expenditures. He went on to say: The effect in this year has been to divert investment expenditures provided for in the Budget away from real growth towards meeting higher wages and other costs . There will be flow-on effects in later years-- He was certainly right; there have been flow-on effects in later years. He continued: Consequently some planned objectives for the development of the Defence Force will not be achieved as early as originally intended. That is the litany of the criminal neglect of the honourable gentlemen who sit opposite on the subject of Australia's security. It is a matter that I take seriously. I very much regret the fact that the record of honourable members opposite does not live up to my hopes for the security of Australia. The former Government had a flying start but it was not able to lift its game to maintain the momentum that was established through 1972-75. But let us look at some of the other propositions. The proposition I want to quote, because it involves the very heart of the concept of defence planning, is a statement by a former Minister for Defence in the Liberal Party. He stated: Significant relief from Budget pressures in 1981-82 has been provided by reductions in planned payments on purchases under United States Department of Defense military sales arrangements. He went on to say that some rescheduling is unavoidable. I will quote what the gentleman at the table said in this House on 26 August 1982: Honourable members will recall that my predecessor on 29 April this year advised the House that in 1981-82 the defence budget received significant relief from reductions in planned payment on purchases under the United States Department of Defense foreign military sales arrangements. That has just one very simple meaning: It was a rescheduling, a deferment of payments. So the honourable gentlemen opposite irresponsibly rescheduled payments. They took off the immediate heat on their budget but they left an enormous pile of expenditures that had to be taken up in later budgets. This Government is now reaping that legacy, that treacherous irresponsibility, of the honourable gentlemen who sit opposite who sought to manipulate, for their own temporary purposes at the time, the defence budget of this country. The Leader of the National Party made some observations that this Government was responsible for the demise of the Fleet Air Arm. Again, I refer to an illustrious source-a statement in this House by the Hon. D. J. Killen on 29 April 1982. In regard to the HMS Invincible, he said: With Invincible, Australia is buying a ship essentially for its contribution to anti-submarine warfare, although it will also provide facilities for command and control . . . It is not being bought for its capacity to operate short take-off and landing aircraft. The ship will be used as a helicopter carrier and there should not be any expectation in present circumstances that we will be going beyond that. Just to make his point even more abundantly clear, the Minister for Defence under the Liberal Party Government said: The current commitments and the future of . . . Navy's existing fixed-wing aircraft are being examined by a defence working party as a consequence of a government decision that these aircraft are to be paid off as soon as practicable to provide early savings in expenditure. It is expected that there will also be consequent manpower savings. That is the record. The decision on the fixed-wing component of the Fleet Air Arm was made by the honourable gentlemen who sit opposite. I know the Leader of the National Party of Australia has a reputation for being a stranger to the truth. But let us be very clear that when he makes those statements, they will come back to him again, with the authority of one of the former Government's Ministers who presided over putting the last nails in the coffin of the Fleet Air Arm. Let us look at the Army, a matter of great interest to my good colleague the honourable member for McPherson (Mr White). The 1976 White Paper stated that the regular Army would increase from 31,500 to 34,000 by the end of the program period of 30 June 1981. Let us look at the performance rather than the promise. I refer again to the statement made by the Leader of the National Party when he tabled the 1981-82 defence report. That report revealed that the Army's strength at June 1981 was not the 34,000 that had been promised in the 1976 White Paper. It happened to be 32,898, an increase of 1,400 rather than the planned increase of 2,500. Again, promises made by honourable members opposite were never achieved. Let us talk about new equipment. Again, the 1976 White Paper envisaged that the proportion of total expenditure on new equipment would be raised to 22 per cent of total expenditure in 1980-81. That promise was also never fulfilled. One year later than planned, in 1981-82, new equipment accounted for only 16.9 per cent of total expenditure. Again, another loss of face, by honourable gentlemen who sit opposite. We have seen from them an assumed interest in the defence of this country. We can all remember that during every election campaign they have belted a military drum. I want this House and the people of Australia to look very closely at the record. I had the honour of being associated with the administration of defence in the period from 1972 to 1975. More was done in those three years to re-organise the Defence Department, to move defence planning along the track, to develop a new equipment base, than has been done before or since. I can remember, when a statement was made in this House in 1974 or 1975 when we introduced the restructuring of the Defence Department, when we wiped out the departments of the Army, the Navy and the Air force, the massive criticism from honourable gentlemen who now sit opposite. But in 1978 Mr Killen at least had the decency to say in this House that what had been done was a thing worth doing and that results had been achieved for Australia's defence security. I want the House and the Australian people to look at this abysmal record of criminal negligence in defence planning. We now have the task of trying to get it back on the tracks, and the Labor Party will pursue that path with vigour and sincerity. Question put: That the motion (Mr Sinclair's) be agreed to. The House divided. (Mr Speaker-Hon. Harry Jenkins) Ayes . . . . . . . . . . . 37 Noes . . . . . . . . . . . 65 —— Majority . . . . . . . . . 28 —— Aldred, K. J. Hodgman, W. M.Blunt, C. W. Howard, J. W.Burr, M. A. Hunt, R. J. D.Cadman, A. G. Lloyd, B.Cameron, Donald McArthur, F. S.Cameron, Ewen (Teller) MacKellar, M. J. R.Cameron, Ian McVeigh, D. T.Carlton, J. J. Macphee, I. M.Connolly, D. M. Millar, P. C.Cowan, D. B. Newman, K. E.Dobie, J. D. M. O'Keefe, F. L.Drummond, P. H. Porter, J. R.Edwards, Harry Rocher, A. C.Fife, W. C. Ruddock, P. M.Goodluck, B. J. Shipton, R. F.Groom, R. J. Sinclair, I. McC.Hall, Steele Spender, J. M.Hawker, D. P. M. White, P. N. D.Hicks, N. J. (Teller) Baldwin, P. J. Hurford, C. J.Beazley, K. C. Jones, BarryBilney, G. N. Keating, P. J.Blanchard, C. A. Kelly, R. J.Blewett, N. Kent, L.Bowen, Lionel Keogh, L. J.Brown, John Kerin, J. C.Brown, Robert Lindsay, E. J.Brumby, J. M. McHugh, J.Campbell, G. McLeay, LeoCharles, D. E. Maher, M. J.Charlesworth, R. I. Mayer, H.Child, J. Milton, P.Chynoweth, R. L. Morris, AllanCohen, B. Morris, PeterCross, M. D. Morrison, W. L.Darling, E. E. Mountford, J. G.Dawkins, J. S. Punch, G. F.Duffy, M. J. Saunderson, J.Edwards, Ronald Scholes, G. G. D.Fatin, W. F. Scott, J. L. (Teller)Free, R. V. Simmons, D. W.Fry, K. L. Snow, J. H.Gayler, J. Staples, P. R.Gear, G. Steedman, A. P.Gorman, R. N. J. Theophanous, A. C.Griffiths, A. G. Tickner, R. E.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.Humphreys, B. C. (Teller) Question so resolved in the negative Mr SPEAKER —I understand that the Leader of the National Party seeks my indulgence. Mr SINCLAIR(New England-Leader of the National Party of Australia) —Yes, Mr Speaker, I wish to make a personal explanation. Mr SPEAKER —The right honourable member may proceed. Mr SINCLAIR —During my contribution to the debate a moment ago I suggested that, at the instigation of the Department of Defence, helicopters had not been provided for flood relief in New South Wales. The Minister for Defence (Mr Scholes) assures me that in fact they were not provided because a request was not put in by the State Government and not because of any denial of the provision of helicopters by the Defence Department. I therefore seek to withdraw the inference that I made before. Mr CONNOLLY(Bradfield) —Mr Speaker, I wish to make a personal explanation. Mr SPEAKER —Does the honourable member claim to have been misrepresented? Mr CONNOLLY —I do. Mr SPEAKER —The honourable member may proceed. Mr CONNOLLY —During the debate last night on amendments to the Health Insurance Act 1973, the Minister for Health (Dr Blewett) quoted from the 212th report of the Joint Committee of Public Accounts. He suggested that a recommendation in the report met with the objectives of section 17 of the Health Insurance Act. As I was Chairman of that Committee, he implied, therefore, that I supported the objectives as enunciated in the Act. I emphasise for the benefit of the House that the recommendations in the report in relation to the decision taken by the Government only emphasise the fact that there should be freely negotiated contracts between doctors and the Federal Government for the payment of medical benefits and that this recommendation, therefore, is not consistent with the intentions of the Government in regard to section 17. Mr YOUNG(Port Adelaide-Special Minister of State) —by leave-Honourable members will be aware that the Government has been reviewing the whole structure of Australia's peacetime coastal surveillance. In April last year the Minister for Defence (Mr Scholes) and the Minister for Transport and Construction (Mr Hurford ) jointly requested the Minister for Aviation (Mr Beazley) in his capacity as Minister Assisting the Minister for Defence, to carry out the review of how our nation's surveillance needs are met. The Prime Minister (Mr Hawke) indicated that a report would be made to the Parliament on the findings and results of that review. I now table the report of the Minister for Aviation. As there are limited copies at present, a number will be made available through the Parliamentary Library. Arrangements are being made for it to be printed and circulated more widely. The central finding of the report is that although the existing system of coastal surveillance is sound, it could be made more effective. In particular, the review also found that greater efforts probably need to be made in northern Australia to counter drug smuggling. This would be done while maintaining effective levels of surveillance against breaches of quarantine, fisheries, environmental and immigration regulations. To understand the complex coastal surveillance question, it is necessary to look at the inter-relationship of government departments and agencies which have overlapping responsibility. At present the Department of Transport is responsible for managing the actual civil surveillance operations for all but Customs. The Department operates the Australian Coastal Surveillance Centre in Canberra which alerts relevant response authorities to suspected illegal activities or emergencies. But the question of response to breaches, or enforcement following breaches of the law is the responsbility of departments and agencies, other than Transport. The Minister for Aviation, in his review, considered this separation of responsibility for surveillance and enforcement to be undesirable. He recommended that the overall system should be the responsibility of one Minister , and one with an already existing protection function. The review urged greater co-ordination between the diverse elements involved in surveillance and coastal protection. Detailed options for creating a co-ordinated coastal surveillance and enforcement organisation were considered. The review examined a proposal that the Defence Force be given this responsibility, but decided that this would not lead to a system that would better counter the traffic in narcotics and sustain the kind of surveillance necessary for other purposes. There is a high cost in using defence equipment and manpower, which has been selected and trained for tasks that have little in common with civil coastal surveillance. The Defence Force has traditionally been divorced in Australia from regular responsibility for law enforcement against Australian citizens. The Beazley review concluded that in view of the responsibilities of the Australian Federal Police for the enforcement of Commonwealth law the co-ordinated surveillance and protection organisation should be based on the Australian Federal Police. Accordingly, the Government has decided that a coastal protection unit will be established within the Australian Federal Police with responsibility for directing and co-ordinating overall coastal surveillance response and enforcement. The unit will operate within the Australian Coastal Surveillance Centre and will be a joint user of that centre with the Department of Transport. The Department of Transport will continue to manage the functions of the centre and will retain responsibility for maritime safety, search and rescue and associated functions. The coastal protection unit will plan and set priorities for surveillance and implement response and enforcement action. It will direct officers of Customs, Defence and Transport, as appropriate. There will be much closer Customs involvement in the new arrangements with Customs officers being attached to the coastal protection unit and participating in appropriate response and enforcement actions. Commonwealth regional co-ordination centres under the management of the coastal protection unit will be established in northern Australia to direct and co-ordinate the Commonwealth field officer functions. One centre will be based in Darwin and the location of the other centres will be determined after consultation with Queensland and Western Australia. The Prime Minister has written to the Premiers and the Chief Minister informing them of the Government's decisions on the Beazley report. He has also sought their agreement on the proposed establishment of a standing advisory committee on coastal protection and surveillance which would comprise senior representatives from State and Commonwealth instrumentalities responsible for surveillance and enforcement. The Minister for Aviation judged that State and Commonwealth resources, effectively co-ordinated, should be largely adequate to meet the surveillance and interception need he identified. There is a wide range of matters which the Government requires the unit to examine once it has been established. These include an assessment of whether there is justification for introducing night surveillance capability; the civil requirement for air space surveillance with the development of over the horizon radar; whether in the light of its assessment of the adequacy of Commonwealth and State resources it may be necessary to equip the unit with additional in- shore patrol craft or aircraft for operations in particular areas. It is important to understand that aerial surveillance of our coastline is currently carried out by private firms on contract to the Government. The Department of Transport lays down strict requirements on the training of the company's crews, the fitting of their aircraft and the surveillance duties. The Beazley review, during its deliberations, took account of the surveillance needs expressed by Federal departments and State and Territory governments. The review found that visual aerial surveillance of the northern coastline offers continuing benefit for the detection of quarantine breaches and should continue to be done in accordance with requirements of user departments. However, the Department of Health maintains that current levels of aerial littoral surveillance are excessive. In line with this assessment contract aerial surveillance arrangements will be rationalised to provide significant cost savings and minimise the predictability of flights over the north Australia coastline and the Great Barrier Reef. Aircraft charter contracts with two companies which expire on 30 April will not be renewed. The Government appreciated the considerable contribution to the coastal surveillance effort that has been made by these companies and the efforts of their pilots and observers. Because of the lessened demand for visual detection of quarantine breaches in areas where the threat assessment is slight it will be possible to provide effective coverage of the coastline from Karratha to Cairns and of the Great Barrier Reef without increasing the number of aircraft or hours flown by the remaining contractor. The arrangements will significantly reduce costs. It is expected that subject to negotiation some of the aircraft currently used by the remaining contractor will be relocated to Darwin. The aircraft maintaining patrols of the Great Barrier Reef will be fitted with high definition sideways-looking airborne radar. The Government has also accepted the Minister's recommendation that the Royal Australian Navy Tracker aircraft not be retained for operations in support of civil coastal surveillance. The Defence Force will, however, continue to make an important contribution to civil coastal surveillance. Royal Australian Air Force P3 Orion aircraft will continue to undertake regular aerial surveillance of the Australian fishing zone and RAN patrol boats will continue to be made directly available for surveillance patrols, and response and enforcement tasks. As in the past, other defence resources will contribute to surveillance if circumstances require or, for units such as Norforce, as part of their normal activities. The review has emphasised the importance of a co-ordinated national approach, an approach the government endorses. We are seeking closer co- operation between the Commonwealth, States and the Northern Territory and the better co-ordination of the activities of the various surveillance and protection agencies. Coastal surveillance activities overlap a wide range of Commonwealth, State and Northern Territory interests and, given the fundamental nature of the changes being introduced, the implementation of the new arrangements will have to be undertaken progressively. A committee comprising the Ministers for Industry and Commerce, Defence and Transport, with myself in the chair, has been established to oversight and monitor the implementation of the new arrangements. I am certain the more efficient use of resources, improved command structure, new response arrangements, closer co-ordination at all levels of government with a more visible Commonwealth presence in the areas of high risk will be welcomed by this House and by the Australian public. The changes provide the blueprint for a more effective coastal surveillance and protection regime fully attuned to our national requirements. I conclude by saying that the report presented by the Minister for Aviation is a rather substantial report, and, in accordance with arrangements I have made with the Opposition, the matter will be brought back on for debate in the first sitting in May. I present the following paper. Coastal Surveillance-Ministerial Statement, 30 March 1984. Motion (by Mr Dawkins) proposed: That the House take note of the papers. Debate (on motion by Mr Steele Hall) adjourned. Mr SPEAKER —I have received a letter from the honourable member for Darling Downs (Mr McVeigh) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The Federal Government's failure to protect the legitimate interest of primary producers. 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 McVEIGH(Darling Downs)(3.55) —Mr Speaker- Motion (by Mr Young) agreed to: That the business of the day be called on. Motion (by Mr Young) proposed: That the House do now adjourn. Mr RUDDOCK(Dundas)(3.56) —I would like to take this opportunity to say that this week there was in the Parliament a very distinguished group of people from the Western Sydney Regional Organisation of Councils, a local government organisation which represents a large number of municipalities and shires of the western area of Sydney. I certainly had the opportunity of meeting with them and I know that they had the opportunity of meeting with a number of Ministers as well as with a number of representatives of the Opposition. The Western Sydney Regional Organisation of Councils is a voluntary association of nine local government bodies in the western area of Sydney, plus the Prospect County Council. Membership comprises Baulkham Hills, Blacktown, Blue Mountains, Fairfield, Hawkesbury, Holroyd, Liverpool, Parramatta and Penrith and is known as WSROC. It is an organisation that covers an area of 75 kilometres by 65 kilometres, totalling something like 3,500 square kilometres with over one million people living in the western area of Sydney. One out of 15 Australians live in that region. This is twice the population of Tasmania and, albeit that perhaps I should not make a comparison, of the order of 14 times that of Canberra. It is a very important organisation that has as its objectives: To consider the needs of local government areas and the people of the western region of Sydney and of making known those needs to the Commonwealth and New South Wales governments; to submit to such governments requests for financial assistance, policy changes, additional resources for the region or for member councils; to strengthen the role of local government in regional affairs particularly where the region may be affected by the Commonwealth or New South Wales governments; to assist councils of the region in working together and co-operating on problems and projects of joint interest; and to advance the interests of the region. The organisation has produced a large number of reports affecting the western region of Sydney on such topics as local government finance, population, the importance of Prospect County Council's request for special Commonwealth financial assistance, bus services, main roads in western Sydney, youth and employment prospects in western Sydney, children's services, unemployment levels , rail services in western Sydney, resources for job creation, models for job creation and unemployment levels in western Sydney. The organisation has run a number of very important projects designed to promote the region for investment and for commerce, and to promote it amongst the local community, the media and unions, both interstate and overseas. It has had special projects for youth employment and a project for the use of schools in the region. It has a publicity arm and a research information service in the form of WESTIR-the Western Sydney Regional Information and Research Service-and it has an important group apprenticeship program of some 52 young people employed in 16 different trades. This is a very important organisation. Western Sydney is an area with particular problems of a unique nature occasioned by the extraordinary amount of growth that has taken place in that area that has not been accompanied by the provision of adequate facilities. Recent studies have shown that, as a consequence, the general unemployment rate in that region has been well above the unemployment rate for New South Wales as a whole and that for Australia as a whole, the performance of New South Wales having been worse than that of the rest of Australia. It is an area with an extensive road system but very little in the way of a public transport system. This has led to a situation in which there is poor co-ordination, poor land use, and poor transport planning, and these matters need to be brought to public attention. I mention these matters because these councils were in Canberra this week to discuss with Ministers and with members of parliament interested in these matters the importance of urban development, the cost of urban development, urban roads, the problems of local government finance in the region, and problems in relation to the use of subscriber trunk dialling in the western region, and to talk about their regional plans for recreational facilities, tourism, child care and regional community development programs that might be undertaken by the Government that they support. This organisation is strongly supported in the western region of Sydney. It is important that a wider group of honourable members and the public be aware of the problems that exist in the western area of Sydney. I know that members of parliament from the area who met the aldermen while they were here and Ministers who met them here are very cognisant of these matters. However, it is important that the Parliament as a whole hears more of the difficulties with which the western region is faced, and that honourable members encourage the Government-no matter who is in government- to look to the needs and the aspirations of this community and to seek to overcome the deficiencies that exist. Mrs KELLY(Canberra)(4.02) —This afternoon I wish to bring the plight of the Smith Family to the attention of the House. Last Tuesday, the Smith Family's storage area at Downer was burnt down. The building contained its donated clothing, its food, its toys and its furnishings. These items were its winter resources. The demand for food and for warm clothing at this time of the year is enormous and continues to be so as we move in towards winter, especially with so many people in this Territory living in difficult and desperate conditions. A large open area in Watson School has been made temporarily available to the Smith Family, and for that we must thank the Australian Capital Territory Schools Authority and the Minister for Education and Youth Affairs, Senator Ryan . However, the Smith Family urgently needs a more permanent storage area. The community of Canberra has responded magnificently, I think, led by the initiative of various Ministers. I have already referred to the initiative of the Minister for Education and Youth Affairs. I know that in the House this afternoon we also have the Minister for Territories and Local Government, Mr Uren, who has similarly been very supportive in respect of the plight of the Smith Family, and the Minister for Administrative Services (Mr John Brown), who was very supportive yesterday. I went to the Minister and reported that the Smith Family was badly in need of equipment. It just needed desks, chairs, sorting shelves, and so on. Immediately I had contact with an officer of the Department of Administrative Services who gave me a commitment that the Department would go through all the storage and see whether it had any equipment that it could loan to the Smith Family on a temporary basis. That will be of great assistance to it at this difficult time. The Canberra community too, now, is being asked to respond. The Smith Family must do something to replenish its lost stock. My office is being made available to the community for people to drop in any equipment that they may have, and I hope that honourable members of this House will support such a project. Personally, I think that support by members of parliament for a project such as this will do much more to improve the image of politicians in our community than will the antics of one particular honourable member that we have seen this week. Honourable members will be aware of the existence of the Smith Family which was established in 1922 to cater for the needs of people in the community who, often through no fault of their own, are placed in very difficult circumstances. Help is provided on a 24-hour basis. I, as the member for Canberra, have used their facilities so frequently, being able to refer my constituents to them, people who have been unemployed, single parents, the elderly, often the over-committed, and the retrenched person. In the last seven months, the Smith Family has assisted 7,646 persons and has redistributed goods to the value of $138,000. In the 12 months to the end of June, it expects to see 12,000 people and to redistribute goods to the value of $200,000. Twelve thousand people represent 8 per cent of the adult population of Canberra, which shows the enormous job that the Smith Family has to do. On Sunday this weekend the Smith Family will be holding an appeal, and it is supported by all of the radio stations, by Channel 7 and the Canberra Times, and I believe it will be supported very generously by the people of Canberra. Mr BURR(Wilmot)(4.06) —I should like to pay tribute to the outstanding service by Mrs Iris Cameron that has been given over a great many years to the Liberal Party of Australia. As history will record, the Liberal Party itself was formed in November 1944. Mrs Cameron joined the Liberal Party in January 1945 as secretary of the Caveside/Mole Creek Branch. She has continued to serve the Liberal Party in various offices, and in a very energetic way, since joining it in 1945. Perhaps I may give the House some idea of the outstanding service that this lady has given to her political party. After joining the Liberal Party as secretary of the Caveside/Mole Creek Branch, she served in that capacity for a further 25 years. She was also elected as one of the first members of the State Executive of the Liberal Party in Tasmania. She retained her membership of the State Executive of the Liberal Party in Tasmania for 23 years. In all, she served a total of almost 36 years as a delegate to the State Council of the Liberal Party in Tasmania. I am sure that the House will agree that such dedicated and outstanding service by an individual to a political party deserves to be recognised. In addition to those services to the General Division of the Liberal Party, Mrs Cameron has also served as the State President of the Women's Division of the Liberal Party in Tasmania and has served on the Federal Executive of the Women's Division of the Liberal Party. Despite the many years of dedicated service that Mrs Cameron has given to the Liberal Party, she continues to be very active in her involvement in the Liberal Party in Tasmania. Over the years she has been a personal friend of a great many politicians. A great many Federal members of the Liberal Party, including my colleague the honourable member for Dundas (Mr Ruddock), know her on a personal basis, as do a great many other Liberal members of the Federal Parliament. She has been a personal friend of various Prime Ministers, from Sir Robert Gordon Menzies onward, and has shared many personal experiences with those Prime Ministers. I notice that my colleague from the Senate, Senator Peter Rae, has joined us in the chamber. Mr SPEAKER —I hope that he is in the gallery, not the chamber. Mr BURR —In the gallery, Mr Speaker. Senator Peter Rae would also like to join in this tribute to the dedicated work of Mrs Iris Cameron. As I was saying, Mrs Cameron has been a personal friend to all of the Federal Leaders of the Liberal Party and still today she enjoys a close personal relationship with the present Leader of the Federal Liberal Party, Mr Peacock. She has been confidante to many of these people, and I know that on numerous occasions they have contacted her for personal advice, which she is all too ready to give. Mrs Cameron has been a close personal friend of mine. Throughout my career in politics she has always been ready and willing to give me her very friendly advice, which I have always accepted with grateful thanks because I know that her advice is backed by her many years of experience in politics and within the Liberal Party. It is unfortunate that Mrs Cameron cannot be given greater recognition by the Liberal Party in Tasmania. I wish that that were possible because I feel sure that if any member of the Liberal Party in Tasmania deserves the recognition of life membership, Mrs Cameron must surely qualify for that great honour. Be that as it may, I record in the Federal Parliament my tribute to Mrs Cameron. I am sure that all members of the Liberal Party who know Mrs Cameron and are aware of her service to the party would share with me in paying that tribute. Mr MILTON(LaTrobe)(4.11) —As I have pointed out in this House on a number of occasions, no satisfactory method of disposal of radioactive wastes has yet been developed in either this country or overseas. The evidence in support of the terrible risks to future generations of unborn children which are constantly being perpetrated by the nuclear industry is growing at a rapidly accumulating rate. Despite this mounting evidence, people who should know better, both scientists and parliamentarians, keep insisting that the problem of radioactive waste has been solved. The problem has not been solved. Amid strong protests from many thousands of people all over the world governments continue to attempt to dump the accumulating tonnes of radioactive wastes at sea and on land. As a result of the protests both Britain and Japan have been forced to abandon plans to dump millions of litres of low level waste into the ocean and have accordingly had no choice but to attempt to find burial sites on land. With growing public opposition to land sites, governments have been forced to offer inducements, such as cheap electricity, to people living close to the burial sites. Radioactive waste arises in many forms, from the low level radioactive tailings arising from a uranium mine at the beginning of the nuclear cycle to the high level radioactive wastes from a nuclear power station which has reached the end of its 30-year life cycle. Of course, as we all know, not all nuclear power stations complete their life cycle. Major construction faults involving serious leaks of radioactive material have caused the shutdown of a number of nuclear power stations, the shutdown of the Three Mile Island power station, which almost became a nuclear holocaust, being the most dangerous and spectacular. Whenever uranium is mined huge piles of radioactive tailings build up. As Professor Robert Pohl, Professor of Physics at Cornell University, has pointed out, on top of an average tailings pile a person will be exposed to a whole body gamma ray dose rate of 12 rens per year, or more than twice the maximum permissable dose for occupational exposure. Radioactivity can be carried by wind or water from unprotected piles of tailings. An investigation by the Department of Energy in the United States of America has revealed that the rate of lung cancer within 1.5 kilometres of a tailings pile is likely to increase by 14 per cent. The vast weapons and civil nuclear power programs of the United States of America have made it the home of nuclear wastes. In some 19 sites all over the United States of America radioactive wastes have seriously leaked and the expenditure of many millions of dollars is required to clean up. For those Australians, particularly some misguided Aboriginal leaders, who advocate the opening of the Jabiluka mine adjacent to the Kakadu National Park wetlands in the Northern Territory, the following report should cause some concern. This report was given in May 1983 by Balu Mohan of the Bombay Bhabha Atomic Research Centre to the International Atomic Energy Agency in Seattle. It concerned the dangerous conditions at two radioactive waste dumps on the west coast of India at Tarapur and Bombay. He said that at the peak of the monsoon season the sub-surface water level may reach within a few centimetres of the surface. There were frequent floodings of the trenches because faulty seals let the monsoon rains in. The wetlands of the Northern Territory contain many hundreds of varieties of plants, animals and migratory birds which will be at risk if either the Jabiluka or the Koongarra uranium mine is allowed to open in future. I could say a lot more about the grave danger of radioactive wastes and will probably do so in later debates. However, before I conclude, I refer to one aspect of the radioactive waste buildup which particularly concerns me. This is the suggestion that one way to solve the problem is to reprocess the spent reactor fuel before burying it. The advocates of reprocessing neglect to point out that the process is most expensive and that at the end of the process there remains a corrosive liquid that is highly radioactive and gives off large quantities of heat. This liquid must rest in cooling lakes for some years before it can be located in a burial site, with all the dangers such cooling lakes will pose for nearby life forms, whether human, animal or plant. Worse still, however , the reprocessing provides a ready supply of uranium and plutonium. These elements can be fed into a nuclear reactor and used to make nuclear bombs or stored for fast breeder reactors which will provide even more plutonium for the production of nuclear weapons. The following question must be asked: Who is to pay for the disposal of radioactive wastes? Honourable members should make no mistake about the fact that it is the taxpayer who ultimately bears the financial burden of the disposal, whether it be the cost of the research, amounting to millions of dollars, on the Australian synthetic rock, Synroc, or the costs of the failure of the Three Mile Island nuclear reactor in Pennsylvannia. Mr KENT(Hotham)(4.15) —I use this opportunity to congratulate Mr Charles Perkins on his appointment as Secretary to the Department of Aboriginal Affairs. Mr Perkins has given distinguished service to his people and, through them, the Australian nation. This is an historic achievement. He is the first Aboriginal to be appointed head of a Commonwealth Government department. As a first generation Australian who came here as a migrant 30 years ago, I congratulate Mr Perkins, a one thousandth generation Australian whose ancestors came here 50,000 years ago. I congratulate also the Minister for Aboriginal Affairs (Mr Holding), who made the appointment. He certainly recognises the multicultural character of Australia, and by Mr Perkins's appointment he is ensuring the continuous multicultural development of our nation. However, unfortunately, I cannot say the same of the shadow Minister for Aboriginal Affairs. The honourable member for Barker (Mr Porter), instead of welcoming Mr Perkins's appointment, stood up in this chamber yesterday whinging and crying that the appointment was ill-timed. He did not dare to oppose Mr Perkins's appointment outright. One would have expected that the Opposition spokesman on Aboriginal affairs would have the courtesy to pay tribute to one of our best-known Aboriginal leaders. No one in this land amongst the Aboriginal people and, indeed, amongst the rest of the population, would not have heard about Charles Perkins. But who has heard about James Robert Porter, the honourable member for Barker? He is seldom on his feet to ask questions concerning his shadow portfolio and when he does open his mouth he does it only to utter irrelevancies. He is unknown to all of us. When I see him in the corridor I have to take out my little blue booklet of photographs, the parliamentary Who's Who, to look up who he is. It is inconceivable to me why such an unknown little shadow would not pay tribute to Mr Perkins. One could ask whether the honourable member for Barker has some latent racist views or feelings. Could it be that he is being influenced by the racist agitations of Bruce Ruxton and others? Could it be that such agitations are falling on fertile grounds with the honourable member for Barker? If so, I have only one piece of advice to give to the Leader of the Opposition (Mr Peacock); that is, that he should replace the honourable member for Barker with someone who is capable of grasping the portfolio and who is also free of racial prejudice. We on this side of the House congratulate Mr Perkins. We also congratulate our good Minister for Aboriginal Affairs, who appointed the first Aboriginal head of a Federal department. We congratulate him on appointing a person who tirelessly fought for his people. Mr Perkins for many years led the fight againt people who endorsed the racist views of Bruce Ruxton. He fought for Aboriginal land rights. As long ago as 20 years he led freedom riders through the New South Wales outback to fight against racial discrimination. There is no doubt in our minds that the Minister made an excellent choice. We congratulate him and wish Mr Charles Perkins a long and happy tenure. Mr UREN(Reid-Minister for Territories and Local Government)(4.20) —Earlier during the adjournment debate the honourable member for Dundas (Mr Ruddock) raised the question of the deputation in Canberra from the Western Sydney Region Organisation of Councils known as WESROC. That organisation certainly interviewed a great deal of honourable members on both sides of the House and also held interviews with Ministers. It was pleasing to hear the honourable member for Dundas praise the role of WESROC. It is an organisation of councils set up during the administration of the Whitlam Labor Government in 1972-75. At that time we generously funded the western region of Sydney as we did the western region of Melbourne. In fact, in the first year $8m was made available-$ 5m to the western region councils of Sydney and $3m to those in western Melbourne. Funding was continued until we were defeated in 1975. From 1975 until we were re-elected no funds were forthcoming from the Federal Government. Funds were not forthcoming from the former Government of which the honourable member for Dundas was a member. That Government had no real interest or involvement in the question of local government, particularly in those regional organisations that had been set up. I agree with the honourable member for Dundas that there are many serious social problems in the western region of Sydney. In my view it is probably one of the most difficult regions as such in the whole of the Commonwealth. More people are living in the area represented by WESROC than in the whole of South Australia or Western Australia. There are very limited cultural opportunities in that area. We have to exclude the one-arm bandits because, in my view, the clubs in which the one-arm bandits prevail in many cases are anti-social; I do not consider that they are suitable for improving culture. In my view the cultural facilities of the western region of Sydney have suffered for too long. In addition, job opportunities have been limited, particularly for white collar workers. During the period 1972-75 we purchased a site called Meggitts in Parramatta. It was our plan to develop a Commonwealth centre that would house something in the vicinity of 6,000 Commonwealth public servants. When the Fraser Government came to power it rejected that proposal and never proceeded with it. The honourable member for Parramatta, the Minister for Sport, Recreation and Tourism and Minister for Administrative Services (Mr John Brown), will announce very soon that this Government will proceed with that development. I believe that it is an important development. Also during our time, we set the base to quadruple the railway line between Penrith and Granville. That was proceeded with by the Wran Government, and it is now a fact of life. Those were some of the achievements created by the 1972-75 Labor Government in regard to the western region of Sydney. This Government is now working with the New South Wales Government. In the short time left to me I wish to say that this Government made available $1. 5m for studies in the western regions of Melbourne and Sydney. Mr SPEAKER —Order! The Minister's time has expired. Question resolved in the affirmative. House adjourned at 4.25 p.m. The following answers to questions were circulated: (Question No. 1079) Mr Ruddock asked the Minister for Administrative Services, upon notice, on 2 March 1984: How many (a) males and (b) females have been engaged in (i) the Minister's Department and (ii) any statutory authorities reporting to the Minister, as temporary employees under the community employment program, in each of the months December 1983 and January and February 1984. Mr John Brown —The answer to the honourable member's question is as follows: There have been no temporary employees engaged in my Department or in statutory authorities reporting to me under the community employment program during the period December 1983 to February 1984. However, my Department is currently developing a number of proposals to provide for temporary employment opportunities under the program. (Question No. 1083) Mr Ruddock asked the Minister for Home Affairs and Environment, upon notice, on 2 March 1984: How many (a) males and (b) females have been engaged in (i) the Minister's Department and (ii) any statutory authorities reporting to the Minister, as temporary employees under the community employment program, in each of the months December 1983 and January and February 1984. Mr Cohen —The answer to the honourable member's question is as follows: December January February m f m f m f Department of Home Affairs and Environment 1 2 1 2 1 2 Australian National Parks and Wildlife Service 11 . . 15 25 8 2 National Library of Australia . . . . . . 3 . . 3 Australian Film Commission . . . . . . 4 . . 4 Australian National Gallery . . 1 10 9 12 8 (Question No. 1085) Mr Ruddock asked the Minister representing the Minister for Veterans' Affairs, upon notice, on 2 March 1984: How many (a) males and (b) females have been engaged in (i) the Minister's Department and (ii) any statutory authorities reporting to the Minister, as temporary employees under the community employment program, in each of the months December 1983 and January and February 1984. Mr Holding —The Minister for Veterans' Affairs has provided the following answer to the honourable member's question: (i) The total number of temporary employees of the Department of Veterans' Affairs, including Office of Australian War Graves, engaged under the community employment program during each of the three months specified is as follows- (a) Males: Dec. 83-nil; Jan. 84-5; Feb. 84-5. (b) Females: Dec. 83-nil; Jan. 84-6; Feb. 84-147. (ii) No employees have been engaged under the community employment program by statutory authorities which report directly to the Minister for Veterans' Affairs.