Wednesday, 9 May 1984 Mr SPEAKER (Hon. Harry Jenkins) took the chair at 10 a.m., and read prayers. The Clerk-Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: 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 utilising 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 Beddall,Mr Cadman and Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned citizens of Australia respectfully showeth: That 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 or legislation in respect of Territorial or Local Government in the Australian Capital Territory. And your petitioners as in duty bound will ever pray. by Mr Cadman and Mr Dobie. 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 Regulations and an Ordinance before the Parliament amend the Customs ( Prohibited Imports) Regulation and the Customs (Cinematograph and Films) Regulations and supersedes the ACT Objectionable Publication Ordinance in such a manner as to be harmful to society by removing from existing Commonwealth Law- The power to prevent the importation and sale of hard core pornography (X-rated videos) and publications which consistently incite the use of hard drugs; The power to prevent the importation and sale of grossly obscene publications including those associated with blasphemy; The power to require videos for non-commercial use to be registered by the Films Censorship Board before release from Customs. Your Petitioners humbly pray that the House of Representatives in Parliament assembled should disallow the new Regulations and Ordinance and ensure: That the Attorney-General enforce existing laws; That the Censors more appropriately reflect reasonable and responsible community attitudes; That further measures be taken in association with the States to protect Australians, particularly women and children, from exploitation; That, because of the importance of this issue to the whole community a conscience vote be permitted to all Members of Parliament. And your petitioners as in duty bound will ever pray. by Mr Hunt and Mr Keating. 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 condusive to the development, including moral development of their children. Deny to parents their rights to have their children enjoy single-sex sporting activities for example, 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 Ruddock and Mr Sinclair. 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 Beddall. 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: 1. That an airport in the north-western region (commonly called Scheyville) imposes disastrous economic, environmental and social costs on our community. 2. An airport would destroy 2,000 households and impose upheaval, noise and pollution on one million people presently unaffected. 3. The cost of an airport in the north-western region is greater than the alternatives, whilst fog and close proximity to RAAF Base Richmond would make operations impractical. 4. It would destroy the historic village of Pitt Town, environmentally important wetlands, and their unique adherent wildlife. 5. Your petitioners reject these proposals and call for endorsement of the MANS Committee findings. And your petitioners as in duty bound will ever pray. by Mr Cadman. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled: The undersigned citizens of Australia respectfully show: That the potential noise hazard to residents of Sandgate, Shorncliffe, Brighton and Nudgee Beach (including 4,000 aged people), will become intolerable when the new Brisbane Airport is operative in 1987, if protective action is not taken. Your petitioners therefore pray that the Federal Government will, when the redevelopment of the Brisbane Airport becomes operative, ensure that:- (1) No jet aircraft use the 32'14' crosswind runway; (2) The Department maintain the curfew on the runway from 10.00 p.m. to 6.00 a. m. And your petitioners as in duty bound will ever pray. by Mrs Darling. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. We the undersigned citizens of the Commonwealth do humbly pray that the Commonwealth Government: 1. Uphold the principle that the seeds and cuttings of plants are a public resource and a common heritage to all and that accordingly seeds should be freely available to all, freely multipliable, able to be sold, exchanged, exported and imported by anyone who wishes. This is seen as a matter of national food security. 2. Recognise that plant breeding is a highly co-operative venture often involving private enterprise at the very last stages after basic seed collection , storage, and research has been publicly funded. 3. In view of the aforementioned paragraphs, recognise that any system giving ' property' or ownership rights over seeds to individuals, organisations or enterprises is inappropriate and unjust. 4. Recognise that legislation establishing plant patenting schemes overseas has had serious adverse effects namely: (i) a slowing-down of scientific information exchange and exchanges in basic plant breeding materials, that is, germ plasm, (ii) subordination and/or curtailment of public breeding programs, (iii) farmer unrest at seed prices, (iv) monopoly control of seed production and sales has passed into the hands of giant petrochemical and drug corporations also marketing crop chemicals, (v) increased uniformity of crop varieties leading to a vulnerability to pest and disease attack. 5. Reject any proposal to legislate for any system such as the drafted Plant Variety Rights Act, which gives exclusive ownership rights over seeds to individuals, organisations or enterprises. And your petitioners as in duty bound will ever pray. by Mr Milton. To the Honourable, the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens respectfully showeth that: 1. The Hawke Labor Government's retirement income policies are piecemeal, inconsistent and make no provision to encourage people to save towards their retirements, and 2. The Government's proposed assets test legislation, presently under re- examination, is iniquitous and, if enacted, its effects would be discriminatory. Your petitioners humbly pray that the House of Representatives in Parliament assembled urge the Government to: 1. Totally abandon its proposed assets test legislation. 2. Either institute a broad enquiry into Australia's retirement income and taxation system or wait the outcome of the Senate Standing Committee on Social Welfare's work on this matter, and 3. Following the report of such a wide enquiry, institute a retirement income policy which is fair and equitable, that encourages self-provision and which will be non-discriminatory. And your petitioners as in duty bound will ever pray. by Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of we, the undersigned citizens of Australia, respectfully showeth: That the introduction of Medicare has not resulted in a cheaper, fairer system of health care as promised by the Federal Government. Rather, it is an expensive, bureaucratic scheme, depersonalising medical services and conducive to medical mediocrity. While recognising the responsibility which exists to assist those in need, we humbly request the Government to review this system which moves towards the nationalisation of Australian medicine. And your petitioners as in duty bound will ever pray. by Mr Ruddock. 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 Mrs Darling and Mr Moore. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain residents of the Divisions of Fadden and Oxley shows that: Concern is felt at the proposal of Australia Post to cease using Kalbar Post Office as a sorting/delivery Office, and to transfer these services to Boonah Post Office. Your petitioners therefore pray that the Government will ensure that the current services offered by Kalbar Post Office be retained at Kalbar. And your petitioners as in duty bound will ever pray. by Mr Beddall. 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 Patersons Curse. Your petitioners therefore humbly pray that Your Honourable House (the Government) act to implement the biological control of Patersons Curse. And your petitioners as in duty bound will ever pray. by Mr Ewen Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the citizens of Queensland respectfully show: Last year, over 3,300 people died on Australian roads; Alcohol is a factor in 50 per cent of road deaths; Alcohol advertisements do not show the perils of driving after drinking alcohol ; Alcohol advertisements are glamorous and increase their effect on teenagers, indicating drinking alcohol as the social pastime; Your petitioners therefore humbly pray that the Parliament will legislate to ban the advertising of alcohol from commercial television and radio. And your petitioners as in duty bound will ever pray. by Mrs Darling. Petitions received. Mr HODGMAN(Denison) —I give notice that, on the next day of sitting, I shall move: That, in the spirit of the Prime Minster's speech in the immigration debate on 8 May 1984 the House now requests the Government to- (1) drop its plans to remove the Queen from the Oath of Allegiance, (2) restore assistance and support to the Big Brother Movement, and (3) with the support and assistance of the Shadow Minister for Immigration and Ethnic Affairs, bring to a satisfactory conclusion the East-Timorese family reunion program. Mr BALDWIN(Sydney) —I give notice that, on the next day of sitting, I shall move : That this House- (1) deplores the continuing deterioration in relations between the United States of Amercia and the Soviet Union, epitomised by the Soviet decision to withdraw from the 1984 Olympic Games; (2) notes with alarm the cessation of all substantial negoatiations for the limitation of nuclear arms, and the bleak prospects for their early resumption, and (3) affirms that these developments underline the importance of Government initiative in the arms control and disarmament area, and commends the Government 's pursuit of a comprehensive test ban treaty and a total ban on chemical weapons. Mr CADMAN(Mitchell) —I give notice that, on the next day of sitting, I shall move: That this House- (1) expresses its concern that the proposed assets test will be applied retrospectively to 24 August 1983; (2) warns all retirees that they should not change the form of their asset holdings without being aware of the likelihood of being taxed, and (3) deplores the dragging out of this Government decision. Mr CONNOLLY(Bradfield) —I give notice that, on the next day of sitting, I shall move: That this House- (1) condemns the Government for its failure to keep its election promise to develop a national coastal management policy; (2) asserts that such a policy must be developed in full consultation with the States, and (3) condemns the Government for its failure to respond to the recommendations of the report of the House of Representatives Standing Committee on Environment and Conservation ''Management of the Australian Coastal Zone'' 1980. Mr TUCKEY(O'Connor) —I give notice that, on the next day of sitting, I shall move: That this House calls on the Government to- (a) discontinue its weak and ineffective efforts to overcome the strike at the New Parliament House and stop the project, and (b) preserve the building and equipment in its exact present state for handing to the National Trust as a perpetual monument to industrial relations and the principle of the accord under the Hawke Labor Government. Debate resumed from 8 May, on motion by Mr Uren: That the Bill be now read a second time. Mr BRAITHWAITE(Dawson)(10.07) —When the debate was interrupted last night I was talking about the terms of reference for the membership of the committee that is to inquire into local government. Just to conclude the thoughts I have on that, I believe it is essential that that committee's terms of inquiry into local government should be widened to give the maximum possibility for a fuller inquiry in that regard. Proper constitutional recognition for local government will result only from such an inquiry and a determination by that committee that local government should be granted a percentage of Federal revenues appropriate to the responsibilities that it has assumed from the Federal government over a period. Having established that percentage, local government's participation would be on the basis of sharing in the government of the day's own economic and financial situation, raising or lowering according to the nation's own economic performance and ability to pay. The unfortunate feature of personal income tax sharing has been the manner in which all States have been prepared to reduce their own subsidies and grants to local government, stepping away from their responsibilities as the Federal government has stepped in, thus placing local government in a position of even greater dependency on Commonwealth funding and of having to increase its own rate revenue. Local government sees that as adding the greatest pressure on its finance it has experienced in the time it has been in existence in Australia. Local government has to bear cost increases brought about by increases in fuel costs, bank transaction tax, registrations and licences while suffering decreases in State grants and not being appropriately funded by the Commonwealth . As a result, the 838 local government authorities around Australia are actually in a crisis situation. In many instances local government itself has no further capacity to borrow in the light of the present crisis. Interest and redemptions are taking a greater and greater percentage of rate income at a time when there is no certainty in funding from either the Commonwealth or the States. Some State associations have examined this crisis situation of increasing Commonwealth and State costs and shrinking subsidy and grant revenue. I believe that many members of the Opposition who will be speaking in this debate will be able to give personal experience of how their States have withdrawn finances at a time when Commonwealth finances have been increasing. Examples of this can be given. I just want to give an example concerning my own State of Queensland and I believe the situation in Queensland probably is the same as that throughout all the States. The State local government association concerned compared revenue sources available to local government for the two years 1976-77 and 1980-81. In 1976-77, local government rates were 48.6 per cent of total revenue received by local government as compared with 51.4 per cent from the Commonwealth and State governments and their own licensing arrangements. By 1980-81, local government had to find 56.1 per cent of its revenue collections; the other revenue support fell to 43.9 per cent. In this period, the consumer price index rose approximately 43 per cent while all other indices affecting local government, such as the road cost index, rose by 56 per cent; average weekly earnings rose by 50 per cent; interest and redemption rose by 127 per cent; and local government rates and charges by 80 per cent-all well in excess of the CPI figure. The only index to increase at a rate less than the CPI was State government loans and subsidies, which rose by 26 per cent. That was a reflection as much on the high cost of interest that made borrowings uneconomical as it was on the decreased subsidy situation. It is a statistical record of shrinking government assistance from the States, at a time when local government is faced with the imposition of additional State and Federal charges. Again, I instance indexed fuel excises and bank transactions tax imposed by the Commonwealth Government and registration and licence charges by State governments, while State and Federal governments are themselves exempt from local government rates and charges. One of the obvious Commonwealth biases in this analogy is the way in which fuel costs have increased because of excise indexation when compared with the amount local Governments are getting back for their road needs. No direct offset has been allowed by the Commonwealth in this analogy. That is a result of its increase in excise costs of 2c per litre in the August Budget and the automatic indexation of this excise and Australian bicentennial road development program levies every six months. In fact, where the greatest need for funds is in local government- that is, roads-the indexed amount of the ABRD levy will be directed towards Consolidated Revenue and not to the ABRD Trust Fund. It was never the intention of the Government that introduced the ABRD program-that is, the Fraser Government-that excise or levies would be indexed. Bearing in mind that the special 2c levy was earmarked wholly for the roads and highways and transport in Australia, it appears to me, to the Opposition and to the road users of Australia that if the levy is indexed the increase in the levy should also go to the some road program as the original 2c per litre. It is to the Government's everlasting shame that when given the opportunity in this chamber by the shadow Minister for Transport, the honourable member for Hume (Mr Lusher), last week or the week before, and in the Senate, further to amend the ABRD Bill the Government-all members and senators of the Australian Labor Party-went to water and declined to have the indexed funds also appropriated to the road funds trust. Effectively, this has meant that approximately $500m will be denied the road and transport needs of Australia from now until 1988-89. Mr Lusher —How much? Mr BRAITHWAITE —An amount of $500m for the five-year period. But more importantly, local government will be denied $59m over that period. I submit the following table for incorporation in Hansard showing how this estimate is arrived at. Leave granted. The document read as follows- ESTIMATED SHORTFALL TO A.B.R.D. LEVY RESULTING FROM ALLOCATION OF INDEXED COMPONENT OF LEVY TO CONSOLIDATED REVENUE Estimated Estimated Estimated revenue revenue shortfall A.B.R.D. levy A.B.R.D. levy to local Year not indexed indexed Shortfall government $m $m $m $m 1983-84 385 411 26 3.12 1984-85 389 441 52 6.24 1985-86 395 474 79 9.48 1986-87 399 509 110 13.20 1987-88 404 547 143 17.16 1988-89 204 285 81 9.72 Total 491 58.92 Mr BRAITHWAITE —I thank the House. The chart illustrates the insincerity of this Labor Government when it comes to doing something constructive and positive for local government. It did not agree to the amendment moved by the honourable member for Hume and I will be very interested in the attitude of this House towards my own amendment. There is insincerity in the actions of the Government and its back bench members. The Labor Government has proved it is long on rhetoric but short on action so far as local government is concerned. I see this particular Bill, which is the subject of this debate, as being the appropriate vehicle to give local government the constitutional recognition it deserves and requires. The Act, in operation since 1976, will be subject to a partial review by the committee, the members and terms of reference yet to be announced. I have already said that I have concerns about the limitations in the terms of reference enabling the committee to come to grips with a complete review and update of the whole Act. When presented in 1976, the Act introduced a positive aspect of the Fraser federalism policy to allow the Commonwealth to distribute funds direct to local government under the supervision of the State grants commissions with the power for local government to surcharge or credit the percentages set. Since 1976 the Advisory Council for Inter-Government Relations has been established and has published the results of its many inquiries into local government areas, dealing with such matters as constitutionality, finance, boundaries and many other aspects. The research staff of the Advisory Council are efficient, effective and impartial. In view of the standard of its reports, I believe it is the appropriate authority to conduct the inquiry of the Minister for Territories and Local Government (Mr Uren) into PIT sharing arrangements, an inquiry not limited by the present restrictions but encompassing the whole ambit of how proper constitutionality might be best effected through this Act that we are debating. Unless the local government share of Federal revenues is properly determined and the funds therefore allocated unconditionally in each year, no amount of amendments to the State Acts and the Commonwealth Constitution to recognise local government in the form of more pious words will achieve the constitutional autonomy that local government needs and seeks. There are many problems existing between local government and the other spheres of government, that is State and Federal, where this Government has failed to act, as did so many other governments both Federal and State. There still exists too paternalistic an attitude by the other two spheres of government towards local government. There is the problem of adequate financial arrangements that has led to the growth of local government debt structure and the increasing call on rates revenue for interest and redemption. There is no recognition for loss of rates when State or Federal authorities occupy local government land. At the same time local government is expected to pay its share of State and Commonwealth charges, that is, the bank transaction taxes and fuel excises, and local government feels this is discriminatory and should be redressed. There is also the question of the Income Tax Assessment Act's capacity to allow tax deductibility for State and Federal politicians' election expenses under the various sections of that Act, but the same expenses for election of councillors to local government are denied. Again, this appears to local government to discriminate between spheres of government. There is the continuing fear that the Government, by fiddling with the consumer price index results, where the Medicare costs as a tax are omitted from the CPI, will not meet its commitment this year nor in the future to maintain the real value of the grant to local government. The real increase in costs as estimated by the Budget will be well above the discounted 7.5 per cent which the Budget predicts as the CPI for 1983-84 while PIT collections are estimated to increase by only 4.7 per cent. How will local government meet this gap when faced with a real increase in its costs exacerbated by government charges possibly close to 10 per cent when there is no guarantee of an increase in the grant beyond the 4. 7 per cent in PIT collections? At the same time local government is expected to alter its own priorities to pick up Commonwealth programs through tied grants and expected to contribute a portion of its own funds towards these programs, taking scarce funds away from its own programs, resources and services. I indicated earlier in my speech that I would move an amendment to put into context the basic things that have been mentioned in my speech at the second reading stage. I therefore move: That all words after 'That' be omitted with a view to substituting the following words: 'Whilst not declining to give the Bill a second reading, the House notes the Government's failure to honour its pre-election promise in regard to the level of funding of general grants to local government'. Mr SPEAKER —Is the amendment seconded? Mr Millar —I second the amendment and reserve my right to speak. Mr LEO McLEAY(Grayndler)(10.19) —The Local Government (Personal Income Tax Sharing) Amendment Bill 1984 that we are discussing this morning is a Bill to amend the Local Government (Personal Income Tax Sharing) Act of 1976. The purpose of the legislation is to widen the tax base for tax sharing for local government. Indeed, this is a very progressive proposal put forward by the Hawke Labor Government to increase the allocation of funds from the national Government to local government. It is expected that in the 1984-85 financial year this amending legislation we are dealing with today will increase the amount of money available to local government by $2m to $3m-a small but significant amount when one considers the effect that Commonwealth funds have in assisting local government to provide the services that it does. This Government plans to make local government a real partner in the Commonwealth-State-local government system. We intend to do something substantial to assist local government, unlike the Opposition, which offers platitudes without much real substance. The Opposition spokesman seems to be very interested in who will be on committee and matters such as that. This Government is interested in putting cash into the hands of local government so it can provide services. The present Local Government (Personal Income Tax Sharing) Act was introduced in 1977 and in the last financial year $454m was distributed by the Commonwealth Grants Commission to 839 local government authorities in Australia. A quite substantial amount of Commonwealth funds went to the five local government authorities in my electorate of Grayndler to allow them to provide services for the people living in my electorate. The Marrickville Municipal Council received $1.93m, the Canterbury Municipal Council received $2.46m, the Ashfield Municipal Council received $831,000, the Burwood Municipal Council received $518,000 and the Strathfield Municipal Council received $402,000. In the case of the Marrickville Municipal Council, for instance, that figure is equivalent to 10 per cent of its income-a substantial amount of money, being provided by the national Government to assist local government. This money is provided in recognition of the diversification of functions that local government has undertaken in recent years. Indeed, it is betterment money. It helps those who have shown that they are willing to help their constituents and it provides a capacity for them to afford to plan for the future, to provide better libraries, Meals on Wheels services, open space, social workers et cetera . It has helped to bring local government out of the roads and footpaths era. When members of the present Opposition were in government, they were concerned to try to reduce the amount of money that local government authorities received for road making. The Hawke Government intends to make local government a full partner in the system and to raise the status of the third tier in the Federal- State-local government sphere. In the Budget appropriations for this year local government received excellent support from the Government. There is money for roads schemes, with Commonwealth payments expected to be $994m in 1983-84-an increase of the order of $300m on the previous Government's proposals. General revenue assistance to local government was increased by $35m to $461m. Some $1.5m has been provided for the regional community development program a quarter of a million dollars has been provided for the Local Government Information Service. Assistance for local government scholarship schemes has been increased by 45 per cent to $35,000 in 1983-84, the annual borrowing limit for smaller authorities not requiring an Australian Loan Council program has been increased to $1.8m, and $250m has been allocated under the community employment program, which local government will share in. Total roads assistance, for construction and maintenance, will increase under this Government by $382m to $1,233m-a massive increase of 45 per cent. Funds for children's services have been increased by 70 per cent to $26m and assistance has been increased by the Hawke Government under the aerodrome local ownership plan by $15m-a 51 per cent increase. Under this program $44.7m will go to local government this year. The Opposition continues on its disinformation program. We have heard the carping of the Opposition spokesman today in his allegation that the excise revenues earmarked for local government road programs are being syphoned off to consolidated revenue as a result of a decision taken at the last Budget to index the price of fuel. Needless to say, members of the Opposition had a very poor record when they were in government. What did they do for roads and local government in the seven years that they were running this country? The former Government quadrupled the price of petrol including diesel over that seven-year period. Therefore I point out to the honourable member for Dawson (Mr Braithwaite) is the National Party spokesman on local government and transport- the National Party claims to represent the man on the land-that his Government even increased the price of dieseline. So much for separating the rhetoric from the fact. Indeed, under the previous Government there was a 23 per cent reduction in real terms in funding for roads. We heard this carping from the Opposition spokesman today about how the present Government is supposed to have deprived local government of $2.7m under the excise proposals. Under the former Government there was a reduction of 23 per cent in real terms in road funding for local government. The Opposition has the hide in this House today to carp about $2.7m. What are the facts? The facts are that an extra $70m is being made available by the Government this year to all councils in Australia under the jobs on local roads program in fulfilment of this Government's election promise. The Opposition complains that $2.7m has gone to Consolidated Revenue, but it does not mention that this Government has provided more money for road programs than any government in Australia's history. The extra $70m does not even get a ; mention by the Opposition. All it wants to do is carp about the $2.7m. What is the fact? The proposal that was adopted in 1982 by the then Federal Government, the Fraser Government, and supported by the States and local government, provided for an amount equivalent to 1c per litre on fuel excises to be paid from the Consolidated Revenue Fund to the Australian Bicentennial Road Development Trust Fund for expenditure on road works under the bicentenary road development program. The Trust Fund legislation which was introduced by the previous Government currently makes no provision to increase payments for the fund beyond the flat lc and later 2c equivalent originally decided on. The Opposition spokesman knows that. He knows that the Bicentennial Road Fund is not an open-ended fund. The Fund has a target of $2,500m. He knows, as do the other members of the Opposition, that the $2.7m that has been raised from excise was never meant to go to the Bicentennial Road Trust Fund. He knows that and it is terrible that in this House he should present other than the truth. It is terrible that the Opposition and the National Party spokesman on roads and local government have been running around Australia scaring local government authorities into believing that this Government was not doing anything for the provision of local roads. The fact is that this Government has provided $1,268m for roads, a 49 per cent increase. It is not a decrease; it is a 49 per cent increase on what the previous Government provided. The expenditure on national arterial and local roads under the previous Liberal -National Party Government in 1982-83 was a paltry $851m. The Roads Grants Act money that has been provided by this Government is $778m. In fact, we have provided nearly the same amount under the Roads Grants Act as the former Government provided for the whole road program for Australia. We have provided $ 420m under the bicentenary roads program. We have provided $70m for the jobs on local roads program, an initiative of the Hawke Labor Government to provide work for people in country areas and to provide roads for those people. That has been a 49 per cent increase in the amount provided for roads in this country. In my State of New South Wales the previous Government allocated $263.4m, a paltry amount when we consider the size of the road network in New South Wales. Under the present Government there has been a 25 per cent increase in the funds available to local government authorities for roads in New South Wales. There has been allocated $243.5m under the Roads Grants Act, $135.2m under the bicentenary roads program, and $23.4m under the jobs on local roads program, a total of $402.1m, a 52 per cent increase. What do members of the Opposition say to the country when they are asked where they really stand? At present members of the Opposition in the Senate are trying , by way of technicalities, to stop the payment of money to local government and State authorities to fund road programs. The same Opposition which stated in this House this morning that the Government will not provide the $2.7m from the indexation of excise is holding up, in the Senate, the payment of funds to local government authorities and State authorities for road programs. Mr Ian Robinson —What rubbish. Mr LEO McLEAY —The honourable member knows that it is true. He should not say that it is rubbish. Last week National Party senators voted to stop the payment of these funds. The honourable member knows that that is true. He should not come in here and try to deny it. What worries members of the Opposition is that the Hawke Government, as I said earlier, has developed a program for making local government a true partner in the government system of Australia. We provided support for local government at the Australian Constitutional Convention this year, at which I was proud to be a delegate from this Parliament . The previous Government wanted to keep local government the very poor relation in this program. The present Government provided representation for local government at the National Economic Summit Conference. That is something which the Opposition never thought of. The present Government has provided representation for local government on the Economic Planning Advisory Council which will give local government a very important say in the direction that the Australian economy takes in the future. This Government has appointed the first Commonwealth Minister with direct responsibility for local government. In winding up let me say that the Parliament and the Australian people should realise that the Hawke Government intends to see that local government takes its rightful place as a provider of services and that it has a voice in the affairs of Australia. We refute the Opposition's allegations about the excise revenue. I think that I have nailed the allegations for the mistruths they are. Under this Government we will see local government becoming stronger and more important, as it rightly should. I commend the legislation to the House. Mr IAN ROBINSON(Cowper)(10.32) —The Local Government (Personal Income Tax Sharing) Amendment Bill, which is before the House, very clearly indicates that its purpose is to ensure that local government will receive, through the tax sharing arrangement, the correct amount of the share as a consequence of alterations necessary because of the alteration to the taxing system involving payments in respect of income that might not have been taken into account. This involves, of course, a change being made to the tax legislation. That change has now been properly accounted for in respect of this legislation for tax sharing. The honourable member for Grayndler (Mr Leo McLeay) has just-- Mr Braithwaite —He is fleeing the chamber too. Mr IAN ROBINSON —That is no surprise. The honourable member for Grayndler has just engaged in the greatest piece of deception that one could imagine. First of all, he told the House that the Government was increasing the amount of tax sharing for local government in the coming financial year by an additional $2m to $3m. He knows that that is a deliberate misstatement of the facts. What this legislation does is ensure that the correct amount is paid, as it would have been paid if the tax law had not been altered. So it is totally misleading to say to this House and the people of Australia that the Government, under this legislation, will increase the amount of the allocation to local government. We find a similar deception in all that was said by the honourable member for Grayndler. Local government is fortunate that the Liberal and National parties have taken the stand that is evident in the legislation now in existence. They have given support to local government during the past 10 years, completely contrary to the kind of support that has come from the Australian Labor Party. The Labor Party hung back in the matter of support for local government during its previous occupancy of the Treasury benches. Then it came into office a short time ago with all sorts of promises to assist local government. There was no direct identification of the kind of assistance that would be in terms of tax sharing. It has completely refused to index tax sharing for local government while proceeding to provide indexation in just about every other direction. So local government finds itself very quickly falling behind. This piece of legislation does nothing to correct that situation. If we look at the figures we find that tax sharing commenced with local government getting 1.52 per cent. This was increased to 1.75 per cent in 1979-80 under the previous Government and then to 2 per cent in 1980-81, again under the previous Government. Since Labor came to office it has done nothing to increase the allocation to local government, yet the honourable member for Grayndler has the temerity to suggest otherwise in this House. Of course, there is similar deception in his statements about current assistance to local government in New South Wales. He gave figures to indicate an increase in the amount paid to New South Wales. Mr Leo McLeay —Fifty two per cent. Mr IAN ROBINSON —He knows very well that that 52 per cent is very largely made up by the bicentennial road funding provided by the previous Government. This Government has now refused to assist by passing on the increase in the excise charges which were indexed in the last Budget. All of this deception goes on by the honourable member for Grayndler and others like him because, as far as the Labor Party is concerned, local government is not a very important element. It does not constitute for Labor the means of centralisation and near socialisation of services. But it expects local government to provide local communities with the kind of services that State governments decide upon, irrespective of where the funds come from. When the truth is known it becomes a real issue for the ratepayers of each local government area in Australia. Those ratepayers are being hit to boot by the present Government, because there is no lift in the amount received under tax sharing arrangements and because there is total deception about where the funds for roads have come from. Undoubtedly, this Government has a great strategy to strangle local government if it can. Mr Leo McLeay —Strengthen it, not strangle it. Mr IAN ROBINSON —That is its history. Let the honourable member prove otherwise. His Party's legislative record of assistance to local government is non-existent . Mr Leo McLeay —You can't read. Mr IAN ROBINSON —Of course, the honourable member is the one who cannot read. He tried to tell us that this legislation will give local government extra money. All it does is make up the amount that would have been lost to local government unless the change was made to accord with changes to the taxation law, and he knows it. It relates specifically to the correction of what occurred when changes were made to the taxation law. Mr Leo McLeay —It provides for assistance they would not have got. Mr IAN ROBINSON —The honourable member for Grayndler is now squirming. He said that if we had not done this local government would not have got the assistance. He knows very well that it was his Government that brought in the changes. Mr Leo McLeay —Madam Deputy Speaker- Madam DEPUTY SPEAKER(Mrs Child) —Does the honourable member wish to raise a point of order? Mr Leo McLeay —Yes. Nothing that the present speaker could say would ever make me squirm, Madam Deputy Speaker. Madam DEPUTY SPEAKER —There is no point of order. Mr IAN ROBINSON —I want to devote a few moments of my time to some of the serious questions that arise in respect of local government assistance. I think it is very significant that, for example, New South Wales is now receiving a smaller percentage of assistance than it was at the commencement of this scheme. If we look at the figures we find that the amount is now down to 36.4977 per cent of the total allocation. That is a drop, from 36.634 per cent, from the original amount that that State received. It represents a substantial amount of dollars and cents for local government. If we look at the allocations made by the Commonwealth Grants Commission to each of the local government authorities in New South Wales we find that there is already a depletion of the effectiveness of the amount that is received under tax sharing. That depletion is to be seen when we look at figures that show that some of the metropolitan councils receive in excess of $1m, including figures as high as $1.2m, as quoted by the honourable member for Grayndler. Very few provincial councils or councils in rural areas of New South Wales get up to the $1m mark. On the north coast in my electorate in particular the amounts range from just under $1m down to as little as $350,000 to $400,000. The cost rises for local government compared to many other spheres are astronomical. They are the consequence of wage increases and high material cost increases and the like. I am sure that figure which local government has provided to this Government as well as to the State governments show that this cost escalation is placing local government in a very disadvantageous situation. Councils have substantial problems because of damage to large numbers of bridges , difficult terrain or where there are fast flowing streams subject to torrential rain in the summertime-such as the kind of weather experienced in the last few months on the north coast where damage has occurred-and are hard pressed to perform ordinary maintenance services, let alone replace bridges that have fallen into disrepair because of the difficulty of maintenance of a sort that will keep them going for ever. Many of these structures are now at a stage where, because of age, they must be replaced. If we look at the amount of revenue sharing that goes to the average council- something between $400,000 and $1m-and we look at the cost of a bridge structure , we see that very few of the modest bridge structures required today could be built for less than $200,000. If we count the number of bridges we can see very quickly that councils are in a parlous state to be able to maintain not only bridges but also the road systems. So tax sharing in that area alone is quite inadequate. We have heard the honourable member for Grayndler say, on behalf of the Government, that there have been increases. When we look at those and analyse them we find that that is a fictitious answer on the part of the Government in respect of its failure to make any increase at all in revenue sharing. It is not just roads and bridges that the local councils have to finance. They have the responsibility these days of meeting many other charges. I now refer in particular to this Government's tardiness in respect of its requirement that local government contribute towards the projects which are considered under the community employment program. Many councils in my electorate have been offered funds for specific projects under the community employment program. They have been unable to find their share of the funds that is necessary for them to qualify for the payment of the grants to enable those projects to be implemented. They have had to advise the Federal Government that they cannot find their share of the money to utilise the grants towards projects under the community employment program. The Government's attitude shows once again its lack of practical understanding of what is involved these days with local government in rural areas, in fast- growing areas, in areas outside the metropolitan area, where there is a great need for additional and new services, not only in respect of roads and bridges but also in respect of opening up new areas, where large expenditure is required to make available new residential subdivisions. Quite apart from what is contributed by developers, councils have to provide a wide range of services, such as water, sewerage and paving. This is costly. Local government can employ an adequate number of people to do this only if it has the funds to do so. There is a limit to loan raising by local government. It is all very well for the Australian Loan Council and the Premiers Conference, and ultimately the Federal Treasurer, to have consented to lifting restrictions on loan raising by local government. Where does that place local government? It can raise loans perhaps, but it then has the heavy burden of accounting for the repayment of such loans. There must be an equitable arrangement in respect of capital outlay and maintenance provisions, otherwise the rates imposed by local government will rise astronomically. Finally, in the State of New South Wales we have the ludicrous position of the Premier, scared of losing the last election just a few months ago, announcing that that State would place a ceiling on the annual increase of rates by local government in New South Wales. In placing that ceiling on the amount by which councils could increase their rates the Premier immediately limited what councils were able to do in providing services and employment. He made no move whatever to provide funds to bridge the gap. On top of that, at the time of the introduction of tax sharing by the previous Liberal-National Party Government, a decision was made by New South Wales that that State would withdraw completely from giving assistance to local government. Shortly afterwards the financial assistance grants that had been paid to local government by the State authorities were terminated. What was lost as a result of a decision of the Labor Administration in New South Wales has not been made up from other sources. It should be. Mr Cowan —About $70m. Mr IAN ROBINSON —My colleague the honourable member for Lyne indicates that the amount which had been taken away from local government in New South Wales by a State Labor government had been running at about $70m in a financial year. All these things must be considered despite what the honourable member for Grayndler said today in an attempt totally to mislead the House and the public in respect of the financing of local government and the interest of this Government in that important matter. Mr TICKNER(Hughes)(10.49) —The purpose of the Local Government (Personal Income Tax Sharing) Amendment Bill 1984 which is now before the House is to make arrangements consequential upon the introduction of the prescribed payments system of taxation. This Bill will allow payments made under that system to be taken into account by the Commissioner of Taxation in determining the amount of personal income tax collection, which in turn is used as the basis for local government tax sharing arrangements pursuant to the Local Government (Personal Income Tax Sharing) Act 1976. Regrettably that legislation, enacted by the Fraser Government, is one of the few constructive contributions made since Federation to local government by the conservative parties in this House. When that legislation was originally implemented it was intended to operate, in my view, as a conservative trick to cover up what were in fact reduced specific purpose grants to the States. Clearly the record of the conservative parties has historically been one of outright opposition to an expanded and increased voice for local government. In the course of this debate we have heard a great deal from the honourable member for Dawson (Mr Braithwaite) and the honourable member for Cowper (Mr Ian Robinson) about the Australian Labor Party purportedly being long on rhetoric and short on action when it comes to local government. Let me just examine the record of Labor in the national Parliament in regard to local government. Before the election of the Whitlam Labor Government relations between the Commonwealth Government and local government were virtually non-existent. When the Whitlam Government began to promote a better deal for local government and national action by this Parliament to secure a better deal for local government, the Government was blocked at every turn in this chamber by the Liberal-National Party Opposition. It opposed virtually every attempt to advance the cause of local government. It was the conservatives who opposed the Whitlam Government's proposal that local government be represented at the Australian Constitutional Convention. It was the conservatives who opposed the Whitlam Government's proposal that local government be represented on the Australian Loan Council and again, when the Whitlam Government put a referendum to the people proposing that local government receive funds direct from the Federal Government, it was the conservatives who went out into the community and campaigned against that constitutional change. Such is the record of the Liberal Party of Australia and the National Party of Australia when it comes to local government. The Hawke Labor Government has already established a proud record in the field of support for local government. As the honourable member for Grayndler (Mr Leo McLeay) indicated in his contribution to this debate, the Hawke Labor Government , for the first time, has appointed a Minister who is responsible for local government and a ministry which is getting on with the job of promoting local government reform and innovation throughout the country. It was the Hawke Labor Government that enabled local government to be represented at the National Economic Summit Conference and, following that, to be represented on the Economic Planning Advisory Council. I turn again to the record of the Fraser Government. Perhaps the most reprehensible action of the Fraser Government was to slash the direct and indirect tied grants to local government from the Whitlam Government level of $ 173m in 1975-76 to only $45m in the first full year of conservative government. All this was done in pursuance of the phoney federalism policy of the Liberal and National parties. Having had some experience of what conservatives are like at the local government level, what a feeling of deja vu I have when I come into this Parliament and find that the conservatives in this Parliament say that this national Parliament cannot do certain things because they are a State responsibility or because they are a local government responsibility. Of course, conservatives at the local level are saying that local government cannot undertake initiatives to advance community well-being because such initiatives are a State responsibility or a Federal responsibility. Time and again this hoary old argument is trotted out. This phoney States rights argument, this phoney division of responsibilities argument, is used by the conservatives to thwart social progress in this country. Time and again this argument is trotted out in this Parliament, as it is at the local level. I turn particularly to the Local Government (Personal Income Tax Sharing) Act 1976. In a spirit of bipartisan debate I give support to that legislation as a positive initiative taken by conservatives in support of local government. It is legislation which the Hawke Labor Government is pleased to continue. The effect of that legislation was, after a phasing-in period, to provide 2 per cent of personal income tax receipts as untied revenue assistance for local government. But I stress that it took six years of phasing in by the conservatives to confer that 2 per cent on local government. I agree with what was said by the honourable member for Cowper when he implied that the amendment before the House today is substantially a technical amendment to maintain the 2 per cent contribution. That is not what I see as the major issue. The members of this Parliament are aware that the Minister for Territories and Local Government (Mr Uren) has initiated a comprehensive review of the operations of the Local Government (Personal Income Tax Sharing) Act. No doubt this review will consider the need to ensure an alternative formula for funding local government should the area of personal income tax not be a substantial growth area in future years. This review, as I have previously indicated, is a welcome national initiative in the field of local government reform but falls far short of the needed total review of local government functions and powers. The Commonwealth Parliament is to be complimented on what I hope is bipartisan support for the concept of a guaranteed level of untied grands to local government. I stress that the commitment to the continuing grant to local government of 2 per cent of personal income tax is a bipartisan commitment. This commitment by the Parliament leads the world and is at odds with developments in this field in other federal jurisdictions in other parts of the world. In most federal systems, local government has a weak relationship with the federal or central government and, indeed, in countries with a unitary system of government the clear tendency is for local government to be funded through a system of tied subsidies and grants. While the Hawke Labor Government recognises the importance of tied grants and a potential for decentralised administration of Australian Government programs, we also recognise the importance of local democracy and of local government being substantially in control of its own destiny. Local authorities are ultimately accountable at the ballot box and they need guaranteed financial independence to be able to impelement programs of their own choosing. To that extent too, I think there is bipartisan support throughout much of this Parliament for the view that as much as possible local government ought to be the master of its own destiny and ought not to be artificially constrained in its own revenue raising efforts and exercise of powers by other levels of government. I must say, addressing my remarks to some of the earlier comments made in the course of the debate, that it is important that local government financing not be discussed just for the sake of political point scoring. I am rather disappointed that the amendment moved by the honourable member for Dawson is not one of substance which seeks to advance the position of local government and its dealings with the national Parliament. Rather it is simply a fairly generalised and unspecific attempt at political point scoring. Mr Braithwaite —I take a point of order. Under standing order 293 the Opposition is not allowed to amend a money Bill. Madam DEPUTY SPEAKER(Mrs Child) —The point of order is upheld. Mr TICKNER —If the honourable member for Dawson is not able to amend a money Bill I wonder what on earth the Opposition proposes to do as an alternative to advance the cause of local government. We have not seen anything specific or any constructive proposals from the Opposition that would advance in any specific way the cause of local government. What we have seen, as I have already indicated, are generalised attempts at political point scoring in an attempt further to divide the community rather like the debate that took place in this chamber yesterday in relation to the question of immigration. I stress that it is important to understand that questions of local government financing must not be dismissed as a remote academic debate. I believe that without continued guaranteed levels of local government funding and income, the very existence of local government democracy is at risk and this in turn, I believe, threatens the existence of national democracy itself. In the United Kingdom, for example, the Thatcher Conservative Government, elected in 1979, quickly introduced regulations in the United Kingdom Local Government Planning and Land Act to allow the Secretary of State to fix a level of expenditure for each individual local authority and expenditure beyond this level could lead to a reduction in grant. This means, of course, that it is more difficult for a local authority in the United Kingdom to adopt policies at variance with those of the British Government and this trend has worsened in that country in recent years. I give that example because I believe that Australia ought to resist those authoritarian trends which have so increasingly been evident in the Australian States. The bipartisan commitment of the Commonwealth in ensuring a guaranteed 2 per cent of personal income tax to local government is an important preliminary step in ensuring local autonomy. The Bill furthers that commitment and I commend it to the House. Mr COWAN(Lyne)(11.01) —I would like to join this important debate on the Local Government (Personal Income Tax Sharing) Amendment Bill 1984. One must appreciate the fact that this is basically a machinery Bill. Nevertheless, it is tremendously important so far as councils and people throughout Australia are concerned. I would like to point out in regard to the speech just made by the honourable member for Hughes (Mr Tickner) that we on this side of the House do not believe that money should go directly from the Commonwealth to local government. We respect the rights of the States and we believe it is important under our Constitution that payments to councils be made through the proper channels and this is the way in which the local government tax sharing arrangements operate. Mr Braithwaite —It is a States' grant. Mr COWAN —As the honourable member for Dawson points out, it is a States' grant. I think it is very important that we recognise the autonomy of local government generally. The Commonwealth actually assists councils in three ways-namely, by the petrol tax fund, the bicentennial road funding agreement and the tax sharing agreement. They are the only three avenues open to councils. However, it is up to the councils themselves to determine the way in which they are going to spend the money. This is a very important arrangement because councils can use this funding to offset rises in rates, the cost of roads or the general cost of services within the community. From my past experience I know that for many years councils have been very concerned about the tied grants that they are receiving from the States. They are very concerned about the impingement generally of State and Commonwealth powers upon local government. We have to understand the fact that councils are close to the people. We have to understand the general problems faced by local government in providing services that people need. If Australia is going to progress in the way we want it to, bearing in mind that we have such a large continent, it is essential that our three tiers of government are properly defined and that no particular government tries to supersede the constitutional rights of others. I want to point out that any attempt, such as we saw from 1972 to 1975 when the Whitlam Administration endeavoured to put money directly into the hands of regional councils, is doomed to complete failure. While the foundations of our system are good and while the three systems of government operate in the way that we believe they rightfully should, we have no fears about getting value for the dollar and about the development of our nation. Therefore, I make a plea that it is important that the autonomy of what we term our third tier of government is preserved and that councils should be interfered with less by State governments in particular. I blame all the States of Australia for this interference. We have seen the problems that arise with respect to tied grants. The honourable member for Cowper (Mr Ian Robinson) spoke this morning and the honourable member for Dawson (Mr Braithwaite) spoke last night about community employment program grants. These grants, which are creating work for 70,000 people throughout Australia, may be good in their place. The Commonwealth Government will receive approximately $146m in taxes from the people who will be employed under this program. Yet local government in this country is expected to contribute one-third of the cost of this program. Local governments are not actually compelled to join the scheme. I do not think that any more than two councils out of seven in my electorate of Lyne can become involved simply because they are not able to make an allocation in their estimates for this purpose. So this tax sharing scheme, as far as the CEP is concerned, virtually excludes the councils. We should look at councils' responsibilities. The Commonwealth gets the taxation directly from any mining operation or any other type of operation being carried out in a shire or municiplaity. Therefore it is so important that we should see that at least a fair proportion of these moneys goes back to the councils, particularly those councils which have obligations to carry out works which are beyond the normal meaning of things that they do. New South Wales received approximately $167m under this tax sharing arrangement . That figure is for the 1983-84 financial year. Within my electorate of Lyne, the Greater Taree City Council received approximately $1.34m. However, the lowest allocation is approximately $350,000. It is terribly important that, where we can, we extend this tax sharing arrangement. I, like the honourable member for Dawson, am extremely disappointed, particularly in view of the promises made by the Government before it came to power. It said that, in real money terms, it would maintain the value of the money under the tax sharing arrangement. We know that there was an 11.2 per cent increase in the consumer price index for last year. Yet, the increase under the tax sharing arrangement was 8.2 per cent. Is it any wonder that the honourable member for Dawson moved an amendment today to the legislation stressing concern about our feelings with respect to this matter? All States of Australia, particularly New South Wales, are putting greater responsibility on to the councils within their States. I mentioned a while ago when the honourable member for Cowper was speaking that New South Wales received $176m under the tax sharing agreements. However, it has been estimated by the Local Government and Shires Associations in that State that $70m was taken out of that total amount by the New South Wales Government. I will inform honourable members of the purposes for which it was taken out. In 1982 the New South Wales Government dropped to 50 per cent the subsidy on pensioner rebate which cost the councils of New South Wales an extra $30m for the year. The local government assistance fund was abolished which cost an extra $9.5m. The contribution to the Board of Fire Commissioners of New South Wales was also dropped. Those three issues assist to make up the $70m that I mentioned a while ago. Not only have those funds been taken away from the councils, but also those councils are expected to pick up the tab if they are to represent their people in a proper way with respect to health care within the community, social security generally, child care, aged care and sporting facilities. These are all matters that all councils today, particularly those in growing areas, find that they have responsibilities for. These responsibilities are virtually responsibilities of the Commonwealth and the States. However, councils have to accept those responsibilities if they are to represent their people properly and to provide services within the community. Council costs are going up just as costs are going up for industry and business within the community. Changes in industrial relations conditions have meant that working hours, particularly for workers employed by county councils, have been reduced to 35 hours a week and to 38 hours a week for workers employed by local government generally. In view of this I believe that today the ratepayer is not receiving value for the money that he and she are paying to councils. In balancing the situation a little, I believe that some of the councils have now reached the stage, as I mentioned earlier in relation to health care, social security and sporting fields, that they are being forced to neglect the vital responsibilities which they have towards the maintenance of their services such as sewerage, water supplies, roads, kerbing and guttering, footpaths and other matters within their areas. That will occur unless we, the Commonwealth Government, continue to build upon the funds that are available from the Commonwealth for the councils. Today we have a great responsiblity to primary producers to see that our roads are in a reasonable condition and to see that services are available within a community that will allow the industries to operate, to expand and to see that they get the goods to market so that we can compete with other countries. No matter how we talk about other issues, councils should be able to develop their areas and provide to the people services that they rightfully deserve. That is why I believe that the tax sharing arrangement should be expanded. It should be untied and the councils which are in the best position to gauge the areas in which the moneys should be expended should be able to expend the money themselves. Only a month ago, as the honourable member for Dawson said, we had a Bill before the House relating to the bicentennial road funding scheme. That was another initiative by the Fraser Government. We know that, today, the Minister for Transport (Mr Peter Morris) can turn around and say that the Government is spending an extra 40 per cent more on roads than the previous administration did . Of course he can because we initiated the bicentennial road funding program for Australia that has been so well received by all the councils throughout Australia. What a very necessary measure that was. It is pleasing today to see these extra moneys being allocated to all categories of roads in Australia. It was disappointing to the Opposition to realise that the amount derived from the six-monthly indexation was not added to the 2c which is available under the Australian bicentennial road development program. The contracting system was virtually abolished. We get very disturbed about those things and we want to draw the Government's attention to them. Irrespective of the funds involved, let us recognise the fact that local government is an independent group within the community. We must ensure, for the future of Australia, that it is allowed to operate freely. Mr McGAURAN(Gippsland)(11.13) —At the risk of stating the obvious, allow me to say that a great many changes have occurred to the role and functions of local government, particularly in Victoria, in the last few years. I am far from convinced that this Government is showing any inclination to assist local government in its expanded role and its increased number of duties-in fact, one could say in the welter of duties-that have been imposed in the last few years, not just by the Federal Government, but by State governments. More particularly, I am concerned that this Government has not yet addressed itself, in any meaningful fashion, to increasing the amount of funding to local government. As honourable members would be aware, at present 2 per cent of personal income taxation is given to local government pursuant to the tax sharing arrangement. Regrettably, the income received by the Government by way of personal income taxation is declining and will continue to decline in the future particularly if the Prime Minister (Mr Hawke), in his premature unnecessary election campaign later this year, offers reductions in personal income tax. Therefore, I suggest to the Government-and I have made representations to it- that it start considering other ways of ensuring that local government receives sufficient funding to properly fulfil its very great duties. The Government really has two alternatives at present, although if it were to suggest further alternatives I would be very glad to hear them. But regrettably at the moment the Government appears to be something of a desert for ideas on how to cope with the rapidly changing role of local government.The two alternatives are, firstly, to grant local government a percentage share of all government receipts, of all taxation, whether direct, indirect, consumption or by way of other indirect taxation. That is one way, although clearly, 2 per cent of all government receipts would be far too high an amount. But of course it would not be too difficult to work out a percentage that would be in line with local government requirements. The second alternative would be for this Government to index the tax sharing percentage of 2 per cent in real terms. As the Opposition has pointed out a number of times, the increase in the consumer price index last year was 11.2 per cent yet increases under the tax sharing arrangements to local government amounted to only 8.2 per cent, which is a very serious and significant drop in percentage share. Therefore, it rests on this Government to address itself to this problem and to do whatever is possible to assist local government. It goes without saying that the functions performed by local government have increased significantly in recent times. Now local government must concern itself to a greater extent than previously in areas such as care for children and for the aged and matters such as the environment, which is of particular concern to the Minister for Home Affairs and Environment (Mr Cohen), who is at the table. Local governments also must concern themselves with the arts and with cultural and sporting facilities. Mr Braithwaite —There are more community and people care services now. Mr McGAURAN —As the excellent shadow Minister for local government has just said , local governments concern themselves in a way which affects people's daily lives, their recreation and their leisure time habits. Of course, this is in addition to their traditional functions dealing with roads, sewerage, planning, parks and gardens and the multitude of other day to day functions that local governments must perform. Why then is this Government slowly but surely cutting off the flow of funds to local government? Some shires within my electorate of Gippsland have other concerns, in particular in regard to the bicentennial roads program. That was a major achievement of the Fraser Government and it is of great benefit to local government. All shires in my electorate are concerned that this Government has automatically indexed excise on fuel. Every six months there will be an increase in cost. Leaving aside the effect on inflation, the effect on local government is very serious because none of that indexed excise will be fed into the bicentennial trust fund which is then distributed to local government. At the moment it is only 2c per litre of fuel which is of benefit to the bicentennial roads program. I think that is somewhat dishonest of this Government. It is short sighted and very foolhardy. The Government is ignoring the very clear benefits of the bicentennial road program in assisting local government throughout Australia. A second aspect of the bicentennial program which is causing some concern to the Shire of Rosedale as well as the Shire of Traralgon in my electorate, in particular to Peter Tatterson, the shire secretary of Rosedale and to Russell Wallace, the shire engineer of Traralgon Shire, is that there appears to be no flexibility in changing what funding for particular projects within the shire can take place. By that I mean that after the shires first put in their requests for funding for particular roads or projects, some of the requirements change with the passage of time, so a shire-those two shires in particular-will give a higher priority to a different area or, as in these cases, the shires may require the money not over a three-year period but immediately. I have contacted and made representations to the Minister for Transport (Mr Peter Morris) on behalf of these shires and have been informed that the Minister does not see it as his role to change the actual funding for specific projects. Instead, he takes advice from the State Minister in Victoria, who in turn no doubt takes advice from the road construction authority. It appears to me to be a fairly hazardous course for a shire to negotiate to finally get what is required. Shires know what their road priorities and requirements are. I believe it is necesssary for the Federal Minister for Transport to concern himself more directly with the changing requirements and needs of shires under the bicentennial roads program. Other matters of concern in my electorate with regard to local government include front end finance. In particular, Gippsland, as is known to all honourable members, is a rapidly developing area which produces over 90 per cent of Victoria's power needs and provides 70 per cent of Australia's oil requirements and 78 per cent of Australia's natural gas requirements. The Shire of Traralgon, the city of Traralgon, the city of Sale and the town and Shire of Bairnsdale, and a number of other shires-the Shire of Yarram is another one that immediately comes to mind-- Mr Cowan —A very rich farming community. Mr McGAURAN —South Gippsland is a very rich farming community, as the honourable member for Lyne interjects. He has visited that area and he knows that the shires of South Gippsland, Woorayl and Korrumburra in that south line of Gippsland are very important to the agricultural needs of Australia. But the matter at hand is that the more central parts of Gippsland have a problem providing the infrastructure for rapidly developing industrial projects. Whilst Australia, not to put too fine a point on it, milks the natural resources and wealth of Gippsland, shires receive very little or nothing to assist them to provide the necessary roads, housing and structural requirements to complement those rapidly developing projects. I turn to tourism in east Gippsland. As all honourable members would know-I notice the honourable member for Richmond (Mr Blunt), who has a tourist rich electorate, nodding in agreement-the Shire and town of Bairnsdale and the shires of Orbost, Omeo and Tambo all have very popular tourist areas but, yet again, there is very little or nothing done to assist these shires to provide access to the very popular and eagerly sought after tourist areas. That is a problem and the acceptance of a front end finance concept would provide a fund from which councils could draw to assist them in the short term to meet rapidly developing and changing areas and supply hastily needed facilities. If this front end finance were available, the city of Traralgon for one, and I am certain the city of Sale for another, would more easily and more speedily be able to adapt to the changes occurring within their jurisdictions. In summary, I have highlighted only some of the concerns of local government. In Victoria there is real concern by councils and local government that the Victorian Minister for Local Government, the Hon. Frank Wilkes, is showing scant respect for the standing or requirements of local government. Without proper consultation he has introduced measures such as the requirement for disclosure of the financial status of individual councillors. He proposes to introduce triennial elections, if possible. He has made alterations to voting qualifications and he has sought to introduce and foster party politics in local government in Victoria. For that reason, I am concerned, as are other members of the Opposition, that at the Federal level this Government is not providing sufficient finance, and at the State level the Labor Government is actively attempting to interfere in the jurisdiction of local government. Mr BLUNT(Richmond)(11.25) —Madam Deputy Speaker, I am pleased to be able to speak, if only briefly, in this debate on the Local Government (Personal Income Tax Sharing) Amendment Bill. I am pleased that the Government has agreed to permit a separate debate on this Bill when it originally intended to have a cognate debate. I believe that the income tax sharing arrangements for local government are of sufficient importance to warrant a separate debate. We often forget in this place that local government is that level of government which is closest to the community. In fact, it is government of the community by the community. There are approximately 10,500 elected representatives to some 838 local government authorities throughout Australia. These representatives are voluntary; they are almost unpaid and give immense amounts of their own time for the service of their community, with very little recognition. I believe that we in this place have a responsibility to in some way ease the load on their shoulders by making the financing of local government more equitable and thus making it easier for them to balance their books. It is often forgotten that local government is concerned with more than roads and bridges. That may have been the case at the beginning of this century but as our society has developed, as the needs of our community have become more complex, local government has become involved with the provision of services which can only be described as of a social welfare nature. I believe it is inequitable, unfair and unrealistic to expect local government to finance the provision of these services from what was its original income base-that is, rates levied on property owners. The only equitable way to finance the vast range of local government activity these days is to provide a share of income tax revenue. This means that all members of the community, not only the property owners, contribute to the cost of providing local government and local government services in that community. I support the Bill and support the concept of income tax sharing arrangements because I believe it is fair and equitable. I also take the opportunity to note that this scheme was introduced by a previous Liberal-National Party government. I also support the extension of this scheme to provide a greater share of income tax revenue to local government, and it is my personal objective to work to ensure that this percentage of income tax increases to a level which is acceptable to local government and enables it to provide the level of services that it hopes to achieve for the community. It is also of regret that this Government has not really learned what the true needs of local government are. Local government needs unconditional, untied grants. I sometimes believe that the Australian Labor Party's only concern with local government is political. It concerns me that the Labor Party has led the charge of party political politics into local government elections. I regret this; I believe that local government should remain non-party political and should be concerned with local issues. It should not be affected by the issues which are the concern of the major political parties. It concerns me that the New South Wales Labor Government has used local government as a political point- scoring mechanism. I am sure honourable members of this House are aware that the New South Wales Labor Government in fact pegged rate increases. I believe this is typical of Labor Party economics. Members of the Labor Party feel that they can peg incomes but not do anything about the other side of the equation. I do not believe that the Premier of New South Wales took any action to control the price and cost structures of local government in his State. I am also concerned that the New South Wales Government sought to eliminate local government assistance grants. That cost local governments throughout New South Wales some $9.5m. It also eliminated the pensioner rebate, the total cost of which throughout New South Wales was some $30m. The elimination of that pensioner rebate was a particularly severe blow to local government on the north coast of New South Wales because of the large number of senior citizens in that community. It is also of concern to me that the Federal Government does not recognise the significance to local government of the Australian bicentennial road development program. That scheme, introduced by the previous coalition Government, provided for a 2c per litre levy. This Government has recently acted to index the amount of that levy but, as the House is aware, it has not provided that the increased revenue arising from the indexation of the levy be available for road construction. One of the major costs facing local government today is road construction and maintenance. The cost increase in this area is a consequence of what is known as the oil shock which occurred in the mid-1970s. However, the price structure for the acquisition of materials for road construction, the cost of wages and the cost of the machinery to build and maintain roads have not been reduced with the lessening of the oil crisis. It is a concern of mine that additional funds will not be available to be allocated under the bicentennial road development program to ensure that some of the pressure on local government for road construction is alleviated. In my electorate of Richmond one local government area is facing significant problems with the construction and maintenance of roads. The Shire of Kyogle has what could be described as a unique geography. There are in excess of 400 bridges in the Kyogle Shire which need immediate attention and, in some cases, reconstruction. Because of the climate, the structure of the soils and the topography of the shire, roads need regular maintenance, maintenance which is extremely expensive. Because of the nature of the industries of that shire, which are predominantly timber and dairying, the roads are under considerable pressures, pressures which result in those roads needing perhaps greater maintenance than is necessary on similar roads throughout Australia. It concerns me that because of the Government's attitude to the provision of untied grants, to the provision of additional finance under the bicentennial road development program, Kyogle Shire is struggling to maintain its roads and is still, after many years, seeking financial assistance from the Federal Government for the construction of the Summerland Way. I am sure that those honourable members who live in the south of this great nation and who have travelled by road to Queensland for holidays are aware that there are only two ways to travel north-the Pacific Highway and the New England Highway. The Pacific Highway is really a tourist access road for the far north coast. We really need to take the heavy transport traffic and the through traffic off the Pacific Highway and give it an alternative route to Brisbane. The Summerland Way is an ideal way of achieving this. We need from this Government a commitment under the bicentennial road development program or the provision of additional untied grants to Kyogle Shire to allow the commencement of construction of this road. The Summerland Way is not the only road of immense concern to the residents of the far north coast. There is no sealed road from Kyogle, and those centres to the west of Kyogle, to Murwillumbah, which is the service centre of the Tweed Valley, and thence on to access the Gold Coast. It is regrettable that untied grants, or finance under the bicentennial road development program, have not been made available to permit the sealing of the Kyogle-Murwillumbah road. I guess the attitude to these two roads is similar to the attitude concerning the provision of a by-pass between Coolangatta and Tweed Heads. These three major road construction projects would be of immense benefit not only to the residents of the far north coast but also to those many people who have cause for various reasons, business and pleasure, to travel through this glorious region. I ask that this Government give consideration in the future to providing sufficient finance for the construction of these roads. Question put: That the words proposed to be omitted (Mr Braithwaite's amendment) stand part of the question. The House divided. (Madam Deputy Speaker-Mrs J. Child) Ayes . . . . . . . . . . . 69 Noes . . . . . . . . . . . 44 —— Majority . . . . . . . . . 25 —— Baldwin, P. J. Keating, P. J.Beazley, K. C. Kelly, R. J.Beddall, D. P. Kent, L.Bilney, G. N. Keogh, L. J.Blanchard, C. A. Kerin, J. C.Brown, Robert Klugman, R. E.Brumby, J. M. Lindsay, E. J.Campbell, G. McHugh, J.Charles, D. E. McLeay, LeoCharlesworth, R. I. Maher, M. J.Chynoweth, R. L. Mayer, H.Cohen, B. Mildren, J. B.Cross, M. D. Milton, P.Cunningham, B. T. (Teller) Morris, AllanDarling, E. E. Morris, PeterDawkins, J. S. Morrison, W. L.Duffy, M. J. Mountford, J. G.Edwards, Ronald O'Neil, L. R. T.Everingham, D. N. Punch, G. F.Fatin, W. F. Reeves, J. E.Free, R. V. Saunderson, J.Fry, K. L. Scholes, G. G. D.Gayler, J. Scott, J. L.Gear, G. Simmons, D. W.Gorman, R. N. J. Snow, J. H.Griffiths, A. G. Staples, P. R.Hand, G. L. Steedman, A. P.Hayden, W. G. Theophanous, A. C.Holding, A. C. Tickner, R. E.Hollis, C. Uren, T.Howe, B. L. Wells, D. McM.Humphreys, B. C. (Teller) West, S. J.Hurford, C. J. Willis, R.Jacobi, R. Young, M. J.Jones, Barry Adermann, A. E. Howard, J. W.Aldred, K. J. Hunt, R. J. D.Andrew, J. N. Katter, R. C.Blunt, C. W. Lusher, S. A.Braithwaite, R. A. McArthur, F. S.Burr, M. A. McGauran, P. J.Cadman, A. G. MacKellar, M. J. R.Cameron, Donald McVeigh, D. T.Cameron, Ewen (Teller) Macphee, I. M.Cameron, Ian Millar, P. C.Carlton, J. J. Moore, J. C.Coleman, W. P. Newman, K. E.Connolly, D. M. O'Keefe, F. L.Cowan, D. B. Porter, J. R.Drummond, P. H. Robinson, IanFife, W. C. Rocher, A. C.Goodluck, B. J. Ruddock, P. M.Groom, R. J. Sinclair, I. McC.Hall, Steele Spender, J. M.Hawker, D. P. M. Tuckey, C. W.Hicks, N. J. (Teller) White, P. N. D.Hodgman, W. M. Wilson, I. B. C. Bowen, Lionel Dobie, J. D. M.Blewett, N. Fisher, P. S. Question so resolved in the affirmative. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Hurford) read a third time. [COGNATE BILL: INCOME TAX ASSESSMENT AMENDMENT (INCOME EQUALIZATION DEPOSITS) BILL 1984] Debate resumed from 2 May, on motion by Mr Hurford: That the Bill be now read a second time. Mr HURFORD(Adelaide-Acting Treasurer) —Madam Deputy Speaker, may I have your indulgence to suggest that the House has a general debate covering this Bill and the Income Tax Assessment Amendment (Income Equalization Deposits) Bill 1984 as they are related matters. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. Madam DEPUTY SPEAKER(Mrs Child) — Is it the wish of the House to have a general debate covering both measures? There being no objection, I will allow that course to be followed. Mr HOWARD(Bennelong)(11.43) —The Loan (Income Equalization Deposits) Amendment Bill 1984 and the Income Tax Assessment Amendment (Income Equalization Deposits) Bill 1984 are of very great importance to Australia's primary producers. The income equalisation deposits scheme, which was introduced by the former Government, proved to be of remarkable assistance to many Australian primary producers in allowing them the very needed facility of averaging or equalising their incomes over a period. Our concern is that the changes that have been made by the Government and which are proposed to be implemented by this legislation have the effect of virtually destroying the income equalisation deposits scheme as a useful aid to Australia's primary producers. In summary, we believe that the Government has made a mess of the income equalisation deposits scheme. We believe that had the Government really intended to destroy it as a vehicle for providing assistance to Australia's primary producers it could not have done a better job than it has with the proposals it wishes to put into law with this legislation. If ever one could find in the policies of the present Government an example of its continuing bias against rural people in Australia it is the provisions in the Bill before us. I know that in reply my colleague the Acting Treasurer (Mr Hurford) will undoubtedly argue that these changes were needed to prevent the possibility of some abuses in the interaction between the averaging provisions of the existing taxation legislation as far as they affect farmers and the operation of the income equalisation deposits scheme. Let me say that to the extent that there was any scope for abuse in that area we would totally support measures taken by the Government to prevent that occurring. We believe that objective has been achieved by the changes that have been made in relation to the averaging provisions. There is absolutely no need to go the step further, as the Government has done, in making the changes that have been made to the income equalisation deposit scheme, because what the Government has done is convert a very valuable income equalisation deposit scheme into nothing more than an alternative form of holding government paper. The deposits now are nothing more than glorified savings bank deposits. They do not provide any incentive. The uselessness of the new IED scheme is illustrated by the fact that now only $3m is deposited in it compared with a sum of about $ 160m which was the situation when the changes were announced in May. The Opposition proposes that the present proposals of the Government be changed in three respects. The first would restore the income equalisation deposit facility as a vehicle for helping farmers to equalise their incomes in circumstances where that is justified but, at the same time, would prevent such arrangements from being in any way abused. I make it perfectly clear that we do not believe the IED scheme and its interaction with the averaging provisions of the tax legislation should be allowed to produce any abuses. Our first proposal would be that, unlike the Government's proposal, any deposit into IEDs be deductible in full from the income of the person in question in the year in which the deposit is made. That is not provided for under the Government's proposals. In those circumstances one of the great appeals of this scheme is taken away from the existing arrangements. So first of all we would propose that the deposits be deductible in full. Our second proposal would be that interest be payable only on the investment componment. If a person paying a marginal tax rate of, say, 46c in the dollar deposits $96,000 the interest would be payable on only $50,000 of that $96,000 component. In other words, interest is payable only on the investment component. We concede that if one is to get the benefit of full deduction in the year of income in which the deposit is made it is a bit rich on top of that to go the step further and obtain the interest rate at a reasonable rate of interest-I stress the words 'reasonable rate of interest'-on the total amount of the deposit. That is the second change that we propose. The third change that we propose would be to continue paying interest at the rate that was applicable at the time of the Government's announcement in May last year. That component of the amendment does not go as far as some people have urged upon the Opposition and undoubtedly upon the Government. This is an area in which, undoubtedly, the Government has received quite a number of representations from farmer and rural organisations. Some of those recommendations, in fact a great number of them, were found by the Opposition to be compelling, sensible and responsible, particularly the arguments that were advanced by the National Farmers Federation, but equally we think that the suggestion that the interest rate be 2 to 3 per cent above the long term bond rate is perhaps going a little further than is required. We have fixed the rate of interest as that which was payable at the time of the Government's announcement last May. That may well be open to some objection and some amendment. It may well be that a case can be made for a slightly higher rate of interest or a slightly lower rate-we are not totally dogmatic about that-but for the purposes of demonstrating our position on this we suggest that the interest rate should be about what it was in May last year. What does the Opposition believe should be done? For starters there should not be a scheme that allows for abuse. We accept that and we will support any changes that achieve that goal. Secondly, we believe the income equalisation deposit instrument has lost its attraction to primary producers. A fall from $ 160m to $3m in just on a year is a pretty graphic illustration of how unpopular these deposits have become with primary producers. Undoubtedly, the Government will, and can, advance some explanations that this is related to the fluctuating fortunes of primary producers. I would be prepared to accept that some of the change has been due to that, but the Government cannot explain away a drop of $ 157m in the space of only one year. I believe that needs to be kept in mind. We have kept that in mind in the proposals which we have made. We will not divide on the second reading of the legislation, but we will be moving an amendment to the motion that the Bill be read a second time. The motion will be in the following terms: That all words after ''That'' be omitted with a view to substituting the following words: ''the Bill be withdrawn and redrafted to provide for- (1) deposits to be deductible in full; (2) interest to be payable on the investment component only of deposits where the investment component is equal to the balance of the deposit as if tax had been payable in the year of deposit at the rate applicable to a producer's average income, and (3) interest to be payable at the rate of 9.5 per cent per annum''. We in the Opposition believe that if the income equalisation deposit scheme were changed along those lines it would regain its attractiveness to primary producers but, at the same time, it would not provide avenues for unfair exploitation and avenues that confer unfair advantages on primary producers. I know that in debates of this kind it is the habit of some honourable members to take the opportunity of having a go at our farmers and primary producers. I know that it is a fashionable sport among some members of the Australian Labor Party-I stress the words 'some members'; not all of them are so insensitive-to have a go at Australia's farmers. Somehow or other they think it is clever to have a go at them. If ever there were a time that it was not fashionable, clever or smart to have a go at Australia's farmers it is now. If it had not been for the rural recovery we would not have the spectacle of the Australian Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) in this House day after day saying how much the economy had improved. The reality is that the improvement that has taken place in the Australian economy over the last year is due almost entirely to the revival of the farm sector which reminds us, once again, of the colossal dependence of the Australian economy on the health of the farm sector. When we think that perhaps there were some pieces of legislation which for a short period conferred special treatment on farmers, it does all of us well to remember what the drought of more than a year ago did to the Australian community and the dramatic effect that it had on not only the livelihood of those people in the farm sector and those who depend on the farm sector but also the total Australian economy. I do not think that the damage that was done by that drought will ever be fully calculated. The best illustration of that is the way in which, in the space of six or nine months, there has been this colossal turn-around. If one looks at the growth figure of 10 per cent about which the Prime Minister is so fond of talking one sees what is left of that 10 per cent when the farm sector is taken out of it. Not a great deal of that 10 per cent is left when the farm sector is taken out of it. Mr Cunningham —Give us the figures. Mr HOWARD —It does all of us a great deal of good, including the honourable member for McMillan, to consider that. The honourable member represents quite a number of farmers. He knows what I am talking about. Mr Cohen —More than you do. Mr HOWARD —Yes, he does. Mr Cohen —So do I. Mr HOWARD —The Minister represents more people who occupy the farms which they own than I do. I am very pleased that he is in the House because it really does all of us well to remember that enormous contribution. I think it can be fairly said that such improvement that has occurred in the Australian economy over the last year would not have occurred had it not been for the colossal contribution made by the revival of the farm sector as a result of the breaking of the drought. I think it is relevant not only to the sectoral balance between the different parts of the Australian community but also to the political debate that takes place from time to time in Australia as to who is responsible for certain things occurring. A debate on income equalisation deposits provides an opportunity of reminding the House not only of the central importance of the farm sector and its enormous contribution to our export earnings and to the overall wealth of the country, as we were reminded by that very excellent maiden speech by the honourable member for Corangamite (Mr McArthur) this week, but also, in the context of the current political debate, that if we leave aside the breaking of the drought the Prime Minister would not have a great deal to crow about. That is really what it all boils down to. It is something which, if I may borrow a few phrases from the Prime Minister, we will be reminding him about a fair bit over the next few months, because it lies at the very heart of political debate. Income equalisation deposits for several years until last May were a very valuable and legitimate method of assistance to the primary producers of Australia. We believe that the changes made to the IED scheme virtually destroy it as a useful aid to Australia's primary producers. I would like to believe that that is not the Government's intention, but, I fear, whether it is the intention or not, that is certainly the result. We are putting forward a proposal which in no way opens the gate for abuse. I want immediately to meet that possible argument from some members of the Australian Labor Party that anything we propose in the primary producer area represents the opening of some abuse. It is certainly not designed to do that. We are proposing something that will restore the attractiveness of IEDs. It will turn around the flight from IEDs and convert what the Government wants an IED to be-another form of Government paper, a glorified savings bank deposit-into an attractive instrument . We are proposing an amendment with three components. It will achieve that objective. It deserves the support of the House. I hope that the Government in the course of this debate will give consideration to the proposals that have been put forward. It really ought to understand that when the National Farmers Federation complains about the effect of the Government's proposals it is not just beating a sectional drum. It is also drawing attention to what has occurred as a result of the Government's changes to the IED scheme. I think the Government ought to take account of that. If it really wishes to offer a scheme that provides legitimate help to Australian primary producers to even out incomes without abuses, it will accept the amendments that have been put forward for these and other reasons that will be developed by my colleagues in the course of this debate. I urge the Government quite seriously to consider the amendment put forward by the Opposition. It is a reasonable one. We are not proposing any rorts. We are proposing a change that would make IEDs attractive once again. Surely, given the continuing dependence of this country on wealth generation from the primary producer sector that is a legitimate goal and one that a government interested in primary producers would want to embrace. I move: That all words after 'That' be omitted with a view to substituting the following words: 'the Bill be withdrawn and redrafted to provide for- (1) deposits to be deductible in full; (2) interest to be payable on the investment component only of deposits where the investment component is equal to the balance of the deposit as if tax had been payable in the year of deposit at the rate applicable to a producer's average income, and (3) interest to be payable at the rate of 9.5 per cent per annum'. Mr DEPUTY SPEAKER(Mr Mountford) — Is the amendment moved by the Deputy Leader of the Opposition seconded? Mr McVeigh —Yes, I second the amendment. Mr BRUMBY(Bendigo)(12.00) —I propose to keep my comments on the Loan (Income Equalization Deposits) Amendment Bill and the Income Tax Assessment Amendment ( Income Equalization Deposits) Bill reasonably short. But I think it is pertinent to respond to some of the issues that have been raised by the honourable member for Bennelong (Mr Howard). He referred particularly to the contribution of the rural sector to our overall economic performance and growth. I could not agree more with the honourable member for Bennelong that the contribution of our rural sector to the overall economy in Australia is indeed a very significant one. It is a magnificent contribution and a particuarly important one in terms of our export growth, which has such a high multiplier effect through our local economy . The honourable member for Bennelong suggested that virtually the sole reason for our economic recovery and our projected 10 per cent growth in real gross domestic product throughout 1984 could be attributed to the breaking of the drought. Whilst I certainly agree that the breaking of the drought provided a significant stimulus throughout the economy because of the support that it gave to the farm sector after such a significant time, I certainly could not agree that it has been responsible for the 10 per cent predicted growth in the GDP during 1984. I am sure that the honourable member for Bennelong would not really suggest that the total improvement in the economy has been due to the breaking of the drought. I have in front of me some recent figures on the economy. They show that, for instance, in the December quarter of 1983 there was a growth in GDP of 1.9 per cent. I just mention that because there was a real growth despite a fall in the farm sector. I think that is an important statistic. I have said that real GDP growth throughout 1983-84 could reach 10 per cent. I think that the rural sector 's contribution to that would be about one-quarter. I think it is also important to say to the honourable member for Bennelong that there have been real improvements in the economy in other areas. Retail sales in the three months to the end of February 1984 were 2.1 per cent up in real terms on the previous three months and 8.2 per cent higher than in the three months to the end of February 1983. Production figures for the March quarter of 1984 show a rise in all of the 31 Australian Bureau of Statistics figures, with the exception of beer, over the March quarter of 1983. The best results, of course, have been in consumer durables, motor vehicles, house building materials and the steel industry. So there is some sustained recovery throughout the economy. Of course, the farm sector's contribution to that is crucial but it is not the sole responsible factor. I wish to make some comments about the old income equalisation deposits scheme and then to address the question raised by the honourable member for Bennelong about the participation of farmers in the amended scheme proposed in this legislation. Income equalisation deposits were introduced in 1976 by the previous Government to assist eligible primary producers to minimise the fluctuations that occur in their taxable incomes due to seasonal factors and changes in commodity prices. The scheme was a form of forward tax averaging and was designed to enable primary producers to even out the effects of fluctuating income on their tax liabilities over a period of years. In effect, income was transferred from the good years in which the primary producer's marginal tax rate was high to the poor years in which the marginal tax rate was lower. In 1977 the former Government introduced what was known as the 'in-out' provisions of the tax averaging system under which primary producers paid tax at the average rate only when taxable income exceeded average income. They did that for obvious reasons. When taxable income was less than average income, tax was paid at ordinary rates. I do not think there is any question that the introduction of that provision changed demonstrably and significantly the relationship between IEDs and tax averaging. I am sure that the honourable member for Bennelong acknowledges that it led to significant criticism throughout the community, particularly on the grounds of equity of the IED scheme. I note that the honourable member in his amendment, has made it quite clear that the proposals he has put would, in his view, ensure that there was no possibility for abuse of this scheme. I think he was implying by those comments that there had been some abuse or misuse of the old IED scheme, particularly as it related to the automatic in-out provisions of tax averaging. Mr Hawker —Are you supporting the amendment? Mr BRUMBY —No, I am certainly not supporting the amendment. I have just made it clear that the existing arrangements for the IEDs and tax averaging have led to abuse in the past and it has been necessary for this Government to make changes in that area. As I have said, there has been a great deal of public criticism, particularly on the combination of those two factors. I want to make some more points about the old IED scheme. Both in my view and in the Government's view those old arrangements did have a significant degree of inequity in that the producers at the highest marginal rate of tax-that is, those with the highest incomes-benefited most, proportionately. The small 4 per cent to 5 per cent of farmers whose marginal tax rates approached 60c in the dollar received proportionately greater taxation benefits than did the majority of full time farmers, whose marginal tax rate is 20 per cent or less. It is interesting that if one looks at statistics which break up farm incomes according to marginal tax rates one finds that more than 50 per cent of farmers have a marginal tax rate of 20 per cent to 22 per cent or lower. The benefits they received from the IED scheme were considerably less than those received by the very small percentage of farmers whose marginal tax rates were much higher. In addition to those inherent tax inequities of the previous scheme, it has been suggested that the scheme was not being used in a manner which was consistent with the original objective of that scheme, which was to be a buffer against hard years and against years of low income. I think it was being misused to some degree. The honourable member for Bennelong mentioned the contributions under the previous scheme as being $160m. Only a small proportion, somewhere between 4 per cent and 7 per cent, of farmers were using the scheme. Allegations were made, not just from us when we were in Opposition, that that scheme was being used purely for the purpose of taxation strategy and tax avoidance or tax minimisation. They were the accusations that were made and, of course, it was necessary for the Government to look at them and to respond to those criticisms. I want to make some brief comments on the suggestions that the Opposition has made that the changes that the Government has made to the IED scheme have effectively emasculated or destroyed the scheme to such an extent that it has just become another form of saving. He raised the whole question of farmers' participation in the new IED arrangements. I want to make a few points. I refer firstly to the relative attractiveness of the IED scheme. The return on income equalisation deposits is one factor and one factor alone which influences the level of participation in the scheme. The range of investments available for farmers includes a number of financial investments and on and off farm equity investments. I do not think there is any doubt that following the breaking of the drought in 1983-that very disastrous drought for so many farmers-farmers are likely to have invested very heavily in on-farm investments to overcome a backlog of deferred expenditure. The honourable member for Bennelong suggested that that may be a reason why the present contributions to IEDs are somewhat lower than what they were 12 months ago. I think he could have gone a bit further and suggested that that was a very powerful reason why the level of contribution may have dropped. I have some figures here that would tend to confirm that farmers have put money back into on-farm investments. For example, tractor sales have increased by 20 per cent in the five months to February 1984 over the corresponding period of 1982-83. In other words, farmers have put money into on-farm investment. They have also put money into trucks, utilities, fencing and other capital improvements on farm. Opportunities for off-farm financial investments include the repayment of debt and the investment in building society accounts, cash and other types of management trusts and government securities. They are all available as well as IEDs. We do not have data on the take-up by farmers of government securities such as Aussie Bonds or investment in building society accounts. It is unavailable. But if we look at the rate of interest paid by the IEDs it does seem that they are more than competitive or, at the very worst, comparable with alternative forms of investment for farmers. So there is still a financial incentive in terms of off-farm financial investment for farmers to put their money into IEDs. There has always been a marked degree of seasonality in terms of contributions in the previous IED scheme, and the obvious reasons for that are the tax requirements. Under the new arrangements those tax benefits will not exist so we will not get the degree of seasonality that we would have expected under the previous scheme. To compare-as the honourable member for Bennelong attempted to- contributions that are supposedly in IEDs at the moment against something of 12 months or more ago is a rather tenuous argument. It cannot really be done. The extent to which the new IEDs will be used as an investment medium will depend on their attractiveness compared with private sector financial investments. The main determinant will be factors such as the level of interest rates and the relative liquidity of deposits. The interest paid is 2 per cent above the most recent two-year government bond tender. Since March of this year the rate paid on IEDs has I think been about 15.4 per cent. That is considerably higher than the nominal 9.5 per cent paid under the old scheme. However-and this is just stating the obvious-because of the tax deductibility of deposits made under the old scheme, the effective rate of return was higher than the nominal rate. Immediately prior to the termination of the old scheme the effective rate of return varied from 13.57 per cent for primary producers with a marginal tax rate of about 30 per cent, to 17.59 per cent for those with a marginal rate of 46 per cent, to 23.75 per cent for those with the highest marginal tax rate of 60 per cent. We have to conclude from those figures, and they are accurate figures, that for those farmers on moderate, low or average incomes, those with marginal tax rates of 30 or 46 per cent or below, which is the vast majority of farmers-in fact we are talking about between 80 and 90 per cent of farmers having marginal tax rates below 46c in the dollar-the current interest rate under the new scheme is better than competitive with the effective returns previously earned under the old scheme. If one wants to say that the rate of return for someone who has a marginal and average tax rate of 60c in the dollar is not as high, I would probably agree with that, but for the vast majority of farmers, the 90 per cent of farmers, the return they are getting at the moment through IEDs is better than the effective rate of return, not just the nominal rate of return, they got from the old IED scheme. I repeat that only 4 per cent to 7 per cent of farmers participated in the old IED scheme. I am sure we will see a greater percentage of farmers participating in the new scheme. Mr McVEIGH(Darling Downs)(12.13) —I support the amendment moved by the shadow Treasurer, the honourable member for Bennelong (Mr Howard). The income equalisation deposits scheme was introduced by legislation in December 1976. The then Treasurer, Sir Phillip Lynch, in introducing the legislation, said that IEDs would 'provide valuable assistance to companies and individuals who carry on business as primary producers and whose incomes can, because of seasonal and market conditions, vary considerably from one year to the next'. Whilst IEDs do not fully achieve perfect equity for those farmers with unstable incomes facing a progressive tax schedule, at least they go part of the way. The intent of the IED legislation is as relevant today as it was when it was introduced. The aim is simply to allow primary producers to make deposits in years when their incomes are high so that they have funds on which to draw when their incomes fall. In effect we are looking for tax equity and tax justice for people with variable incomes. Clearly, allowance has to be made to encourage farmers to make use of a scheme such as this. That allowance was provided by the previous Government by way of a taxation incentive. The shadow Treasurer indicated the decline in investments following the changes by the Australian Labor Party. This Labor Government, in its so-called wisdom, has decided that such an incentive is not required and has removed it. The Labor Government has turned the income equalisation deposits scheme into nothing more than a glorified savings bank account. It is too early yet to tell just how the change that Labor has come up with is affecting those who would normally use the scheme. It is too early because the normal time for deposits to be made is the July-August period. So the next couple of months could be very interesting, unless the Government takes heed of the proposition that we have put forward. However, there is no questioning the fact that IEDs as they were originally introduced were being accepted by the rural community. For example, in 1979-80, a relatively good year for agriculture, deposits totalled nearly $56m as against withdrawals of just over $9m. In 1980-81, with seasonal conditions worsening, deposits were nearly $32m while withdrawals exceeded $24m. In 1981-82 the ratio was $37m in deposits as against $23.2m in withdrawals. That just indicates that the scheme was practical and was workable. With the return of good seasonal conditions this year, it will be most interesting to see how farmers have reacted to this Government's crucifiction of this scheme. Let me reiterate the Opposition's policies on IEDs. We will reinstate the tax incentive which was previously contained in the scheme to make it worth while and beneficial to this nation's farmers and graziers. I repeat: There will be a taxation component. In farming areas we cannot take one year in isolation. Widely fluctuating incomes mean that farmers pay more over the years than does a person on an annual income who earns the same amount each year. That is what IEDs are all about. In a few weeks' time when I release the Opposition's rural policy I will be reiterating and reinforcing the statement I have just made that we will reintroduce the tax component as part of our policy on the IED scheme. The cynicism of this Government in its handling of IEDs is almost unbelievable. The Australian Labor Party, in its document on policies for agriculture, issued prior to the last election, promised to maintain the income equalisation deposits scheme and to pay a realistic interest rate on deposits. There was no hint that the tax incentive element would be scrapped; neither was there any indication in the policy document that the automatic in and out opting provisions of tax averaging would be abolished. The real problem with this Government's messing around with IEDs has been caused by the Minister for Primary Industry (Mr Kerin), who simply does not understand them. He does not know what income equalisation is all about. I have grave doubts as to whether the Treasurer (Mr Keating) knows either. Mr Snow —That is rubbish. Mr McVEIGH —A member of the Government indicated that what I was saying was rubbish. I will quote from a telex sent by Mr Des Crowe, President of the Victorian Farmers and Graziers Association. The telex is addressed to the Prime Minister (Mr Hawke), the Minister for Primary Industry, the Acting Treasurer, ( Mr Hurford) and to Senator P.A. Walsh. The telex states: Following incomplete and unsatisfactory consultation with Primary Industry Minister Kerin the VFGA is most surprised and disappointed to note your intention to proceed with emasculation of income equalisation deposit legislation. Mr Hurford's second reading speech states that the decision to ''remove the scheme from the tax system (is) to prevent the possibility of its use for tax avoidance''. This possibility was effectively removed by the decision to abolish the ability to opt in and out of the income tax averaging provisions. Further action is of no consequence. Mr Hurford also said the decision to remove the scheme from the tax system was designed to ''make the benefits accruing from the scheme more evenly available to all primary producers.'' The VFGA and NFF proposal to pay interest on the investment component only of the IED would achieve your objective without needing to emasculate the whole scheme. Your Government, particularly Senator Walsh, identified some problem areas in the IED scheme. I urge you not to throw away the whole scheme for the sake of solving two problems one of which no longer exists and one that can be readily solved by minor amendment to the existing scheme. Quite obviously, the statement made by the previous speaker, the honourable member for Bendigo (Mr Brumby), that what I was saying was rubbish is not borne out by primary industry leaders in Australia. Mr Brumby —Mr Deputy Speaker, I take a point of order. At no time did I suggest that what the Opposition has said was rubbish. In fact, the honourable member had not even spoken when I spoke. He is totally incorrect. Mr DEPUTY SPEAKER(Mr Mountford) —Order! There is no point of order. Mr McVEIGH —I wish to quote from a letter from the Victorian Farmers and Graziers Association sent in April this year to the Minister for Primary Industry. In this letter the VFGA said: I trust that during the time that has elapsed since I last wrote to you on the subject of income equalisation deposits you have had the chance to more fully acquaint yourself with the basic purpose of the scheme. What greater indictment of ministerial buffoonery could we possibly ask for? The VFGA has clearly had difficulty for a very long time in trying to get the Minister for Primary Industry to understand IEDs. On 13 September of last year, in another letter to the Minister, the Association pointed out that the role of tax averaging and IEDs had either been 'misunderstood or not comprehended'. This Government understands nothing about the taxation system and incomes as they affect farmers. I have quoted from documents written by rural leaders. Unfortunately, there has been-and this is widely held in the rural community- duplicity and lying on the part of the Government in regard to the way in which it has gone about changing this scheme. It is worth while going back to the mini -Budget of 19 May 1983 and comparing what was said then with what is actually happening. In the mini-Budget, the Treasurer tabled a separate statement outlining details of what he said would be the new IED scheme. That statement said: The new scheme will allow a tax credit on the deposit at the standard rate of tax, rather than a deduction, and will apply a surtax at the standard rate on the withdrawal. In other words, the Treasurer said in May that a tax credit would still be available, and therefore it would provide an incentive to invest in IEDs. The Acting Treasurer (Mr Hurford), in a statement providing additional detail of how the new scheme would work, completely contradicted the Treasurer's statement. On 16 June 1983 the Acting Treasurer said: . . . it has been decided to simplify the arrangements by dispensing with the tax credit and surtax. The Treasurer said the Government would allow a tax credit. The Acting Treasurer said no. He continued: Deposits lodged with the Commissioner for Taxation on or after September 1, 1983, will have no tax consequences. That was a complete reversal of what the Treasurer had outlined. Obviously, one can understand the concern of the people in the National Farmers Federation and the Victorian Farmers and Graziers Association when we have such rapid changes of policy. These people went to the Minister. He quite obviously did not understand the scheme, and that is disappointing. So what we are trying to do is to get some sense into the system to allow tax equity and justice to apply once again. According to the Bureau of Agricultural Economics the average incomes of beef producers fluctuated from $11,200 in 1981-82 to $8,360 in the last financial year, and an estimated $16,280 in 1983-84. By comparison sugar producers in 1981 -82 earned on average over $24,200, which nose-dived to less than $4,200 in 1982 -83 and will only be an estimated $5,600 this year. Individuals within these parameters would have had marked variations in income. They could be made bankrupt, although they have had a good year, because of the lack of a mechanism to spread their tax liability. It is not, as the shadow Treasurer said, a matter of tax avoidance; it is a matter of tax justice and equity. These matters were borne out by the Industries Assistance Commission report in 1975 and also by the report of the Balderstone Working Group to Provide a Policy Discussion Paper on Agriculture. Clause 5.1.84 of the Balderstone report stated: Government assistance measures designed to reduce income instability for producers include price underwriting schemes, natural disaster assistance and IEDs. IEDs were introduced in 1976 with the aim of encouraging primary producers to stabilise their incomes. They provide producers with a 'self-help' means of handling income instability. That is what we are about. We want to encourage people to look after themselves free of Government dependence by allowing these IEDs to continue as a taxation rationalisation. Incomes in rural industries fluctuate drastically and because of that farmers need a facility whereby they can stabilise their money supply. Furthermore, it is not as though the rural industries are overtly assisted by other means. Indeed, the National Farmers Federation in its submission for the forthcoming Budget has pointed this out most graphically to the Government. The NFF stated: Over the past 12 months the lightly assisted rural sector has been asked to accept more than its fair share of adjustment responsibilities as a result of the removal of accelerated depreciation allowances: Removal, in part, of the LP gas subsidy: Imposition of sales tax on selected inputs and increased fuel excise charges: Imposition of tariffs on selected machinery (e.g. grain harvesters); imposition of anti-dumping duties in imported phosphatic fertilisers; imposition of dumping duties on PVC and steel pipe: Increased export inspection charges: Removal of some tax averaging benefits: and other general cost increasing measures. The willingness, however, of the rural sector to participate in the necessary burden of restraint will diminish significantly unless cost cutting and revenue raising changes are made consistent with the concept of 'real equality of sacrifice' and the desirable objective of increasing the efficiency of resource use. This brings me to some of the broader issues about this Labor Government that are causing serious concern to our rural sector and the wider community. We have the Prime Minister refusing to come clean on many issues which are of vital concern to everyone. He will not give us the details of his proposed assets test on pensioners, the increased tax on lump sum superannuation or the capital gains tax and death duties. These are matters of great importance to rural producers. They need to know about them so that they can arrange their affairs. This all leads to an onslaught on their privacy and their ability to compete as equal Australians. He is trying to keep these iniquitous decisions under wraps in the hope that he will be able to introduce them after an early election at the end of the year. Leaving aside those issues that he will not tell us about, let us look at some of his so-called achievements. The Prime Minister single handedly has all but wrecked Australia's beef trade with Japan and other countries in the Asian region. Australia's share of the Japanese market has been put on the line because of the Prime Minister's egotistical grandstanding. The Labor Party has a policy which states a preference for carcass trade over live exports, yet it dogmatically tries to pursue massive increases in export inspection charges. The two objectives are totally incompatible. Mr DEPUTY SPEAKER(Mr Mountford) —Order! I draw the honourable member's attention to the subject of the debate. I think he is departing from it. Mr McVEIGH —Mr Deputy Speaker, I take on board the point that you have made. I am trying to make the point that there is a need for farmers to have a mechanism which allows them to spread their tax liability over many years because of decisions that are made that affect their yearly incomes. At the individual farmer level this Government has made life infinitely more difficult. Apart from the ruination of the income equalisation deposits scheme, farmers are having to bear drastically increasing costs for a whole range of products, such as petrol and diesel, because of increased and indexed excise. I am developing the point that farmers, to produce income, unlike the public servant who just has to come along in a new suit and with a biro, have to spend money. I am drawing attention to the relevance of income. I am not talking about income equalisation deposits at this stage of my speech. I am developing a case around the word 'income', bearing in mind that the Bill is a wide-ranging piece of legislation. I am addressing myself to the total Bill. With respect, in accordance with the ruling given by Deputy Speaker Johnson, I am totally in order in using the wide-ranging title of the Bill. If the Minister did not seek to do the same that is his business; however, under the Standing Orders I have every right to pursue that. Mr DEPUTY SPEAKER —I think the honourable member is drawing the long bow, but I will listen very carefully to what he has to say. Mr McVEIGH —A whole host of adverse decisions, broken promises and promises not yet implemented are directly hitting our farming and fishing industries. These add to the burdens which are being placed on our export industries by the Government's continuing support for full wage indexation and its refusal to give serious consideration to the need for a drastically reduced Budget deficit. I have drawn together a list of specific areas in which this Government has failed Australia's farmers. On what I consider to be a conservative count, 53 broken promises and other adverse decisions by this Labor Government are harming our primary industries. I cannot obtain leave to have this document incorporated in Hansard. If I could, the Australian people could see for themselves just what this Government is not doing to help the sector of our community which provides nearly half of our total export income. In conclusion, I reiterate that I totally support having a scheme which embodies enabling farmers, without tax avoidance, having a scheme which embodies the ability of farmers without tax avoidance to equalise their tax over a period of years, just as the ordinary worker has the ability to spread his tax because his income is stable. A strong plank in the platform that we will introduce in a few weeks' time will be the reintroduction of IEDs as a meaningful way of ensuring tax equity and tax justice for Australian primary producers. Mr SNOW(Eden-Monaro)(12.31) —Farming looks very easy when one is in a car driving past a farm. It can also seem easy in this Parliament when one's plough is a pen and one is preparing a speech 20 kilometres from the nearest farm. It seems to have been very easy for the honourable member for Darling Downs (Mr McVeigh), who thinks it is easy for farmers to come up with income equalisation deposits. He has not considered the problems in the sugar industry or the problems in the dairy industry. He has not considered the problems in the fishing industry where incomes are low. Mr McGauran —Do they grow sugar in the Eden-Monaro electorate? Mr SNOW —No, but they grow sugar in the electorates of Leichhardt and Capricornia in North Queensland and the people of those areas matter to this Parliament, as do the people engaged in the dairy and fishing industries in Eden -Monaro. These people do not have money to put into income equalisation deposits . The way the honourable member for Darling Downs was talking one would have thought that there was plenty of money in farming and that Government policy was stopping farmers from putting money into income equalisation deposits. The Government's changes are not responsible for that. In fact the Government reforms will make it easier, especially for poorer farmers and fishermen, to take advantage of IEDs. Farming is not easy, nor is fishing. One of the hardest aspects of these activities is not the hard manual work but the unpredictability of income. Someone said that farming is not really business-it is an occupation. One of the challenges to the farmer and the fisherman is to turn his or her enterprise into a viable business. Income equalisation deposits allow primary producers to set aside income in high income years for use in lower income years. Under the existing legislation tax can be deferred from high income years. The measure before the House proposes to change that arrangement and in future interest will apply to deposits. Put simply, if a primary producer had an income of $25,000 in one year and decided to transfer $5,000 of that to a later year, taxable income would have been the difference-that is, $20,000-and tax saved in that year would have been $2,300. However, that $5,000 would have to be taxed in the year declared. If the income dropped to, say, $11,500 in the next year and the deposit was redeemed then, the net tax saved over the two years would be $766.50 . Under the proposal in the Bill the primary producer would still transfer an amount of, say, $5,000 from the total income in one year to another year. Interest will be paid at 2 per cent above the two-year bond rate and, in the case of a primary producer with an income of $25,000 who transferred $5,000 to the $11,500 income the next year, interest would be $769.50 compared with the $ 766.50 tax saving under the old system-just a few dollars more. That assumes the present two-year bond rate will continue. It needs to be made clear that fewer than 8 per cent of farmers have used income equalisation deposits. I believe this scheme should assist more small farmers than the old scheme did although I must say that IEDs so far have, like the banks, been of best assistance to those who have evidence that they do not really need them. The Opposition has talked about less usage by farmers in the last few months. However, the incomes of quite a few of our industries have been relatively low and the producers have not had money to put into the income equalisation deposits. I mentioned the sugar, dairying and fishing industries. In fact, only the wheat industry is making good use of the deposits at the moment. However, the return is still as good or better than the return under the old scheme. In summary, deposits are lodged for 12 months and can be withdrawn either in part or in full after 12 months. In certain circumstances of identified hardship , an application can be made to withdraw within the 12 months. The rate will then drop. Deposits, including the interest, can be withdrawn after 12 months. For eligible primary producers interest is 2 per cent above the two-year bond rate. At the moment that is 15.39 per cent. If it is withdrawn early the rate is 10.39 per cent. John F. Kennedy said that the primary producer is the only person who buys everything bought at retail, sells everything sold at wholesale and pays freight both ways. Both farmers and fishermen who derive their income entirely from primary production can easily become the victims of the market- place and government decisions as well as the traditional unpredictability of weather, access and advice. The recent economic recovery may well be dependent-the Bureau of Agricultural Economics says to the extent of 25 per cent-on the drought. Add to this the world economic recovery and responsible economic management emanating from unprecedented consultation between government, unions, farmers and others and we still find that a great deal of responsibility for economic recovery lies with primary production. The introduction of these new arrangements for income equalisation deposits is fairer to farmers and fishermen overall and will better serve to encourage them to make due provision for adverse seasons. I support the Bill. Mr HAWKER(Wannon)(12.38) —I see the amendment to the Loan (Income Equalization Deposits) Act and the Income Tax Assessment Amendment (Income Equalization Deposits) Act, proposed by the Minister for Housing and Construction (Mr Hurford ) as yet another attack on primary producers. I feel that it should be put into perspective. I will start by giving a little background. I think the first thing to remember is the speech by the Minister for Primary Industry (Mr Kerin) at the launch of the rural policy for the Labor Party. He said, in part: Farmers can rest assured that they will lose nothing under Labor and stand to gain much. Those are famous words. Since then we have seen quite a few changes. We have seen a reduction in the general depreciation allowances. That was announced in the 1983 mini-Budget. We saw a 2c a litre increase in excise on aviation fuel. We saw abolition of the special depreciation allowance for petroleum storage. We saw the cancellation of the bicentennial water resources program. We saw a decrease, at a cost to farmers of $10m in the 1983-84 financial year, in the subsidy paid under the petroleum products freight subsidy scheme. We have seen an increase in interest payments by Telecom Australia and by Australia Post which has resulted in higher postal charges and higher telephone bills. In the August 1983 Budget we saw a massive increase of 200 per cent in the export inspection charges for the meat industry. We then saw the promise about the soil conservation program chopped from $4m to $1m-25 per cent of the big promise. Then we saw probably one of the more vindictive imposts, an excise on fortified wine. As the honourable member for Wakefield (Mr Andrew) has pointed out to this House many times, this has been a most iniquitous tax. Mr Andrew —And still not removed. Mr HAWKER —And still not removed. Mr Ruddock —But what did they say in their policy? Mr HAWKER —They said, quite categorically, that there would be no sales tax or excise on wine. That was their policy. Then we saw an increase of 1.5c a litre in the excise on petrol and on diesel and this is to be indexed to the consumer price index. We have seen the rebate on diesel fuel for off-road users not being indexed. In other words, users of off-farm vehicles will pay road tax as the excise goes up. Turning to the income equalisation deposits, under the old scheme, the important thing about it all was that it gave primary producers an opportunity to smooth out their incomes. We all know that primary producers have highly fluctuating incomes, often due to effects beyond their control. I am referring, of course, to things like drought, flood, fire and the effects of often wild variations of overseas and local markets. Mr Ruddock —And an impost of charges by government. Mr HAWKER —They just go up; they do not vary. I do not think under the IED scheme there was any question about giving advantages to primary producers. The whole problem was that, before IEDs, primary producers, with fluctuating incomes , would, on average, pay more tax than those on steady incomes because of the graduated income tax scale. What this scheme is really all about is trying to help farmers help themselves. Mr Andrew —To help the prudent. Mr HAWKER —That is right, to help the prudent, as the honourable member for Wakefield said. What do we have now? The Minister said in his second reading speech: The Government decided to remove the scheme from the tax system to prevent the possibility - I emphasise those words 'to prevent the possibility'- of its use for tax avoidance and so as to make the benefits accruing from the scheme more evenly available to all primary producers. I suggest that there is no evidence that I know of that it was ever used for tax avoidance. In that case, we may be chasing a rabbit down a burrow that never existed. In any case, there was some academic exercise done at one stage which showed it was possible. I do not know of anyone who actually used it. For the benefit of the honourable member for Bendigo (Mr Brumby), the changes to the opting in-out provisions of the averaging scheme have removed all chances of that little academic exercise ever being put into practice. I think the Deputy Leader of the Opposition (Mr Howard) spelt that out in some detail as well. The Government has introduced amendments to the two Acts. They are still called income equalisation deposits Bills. I suggest if the Government is serious about this matter it should amend the names too because they are no longer relevant. I think a far better name would be something along the lines of high interest Commonwealth bonds. There is no income equalisation about them at all. It is another form of deposit which has fairly doubtful value anyway. I think most farmers will soon realise that there are many other more attractive forms of off -farm investment. Many of these offer higher interest rates, still offer reasonable security and, more importantly, give greater flexibility. Mr Brumby —Like what? Mr HAWKER —They will be able to withdraw them whenever they want to. The Minister said that the impact is hard to forecast. I notice that, in Budget Paper No.1, it seems it is too hard to forecast because there is no forecast. I agree with him. However, there is one forecast I can make and that is that support will be very low, because not many primary producers will be interested in supporting this sort of scheme. The alternative which has been proposed by the Opposition and is supported by the National Farmers Federation and the Victorian Farmers and Graziers Association has much more merit. It covers all the so-called problems that the Government sees in the old scheme but still maintains some nexus with the income tax. Mr McArthur —Supported by the VFGA? Mr HAWKER —Yes, it is supported by the VFGA. In fact, as the honourable member for Darling Downs (Mr McVeigh) has already read to the House, a telex was sent to the Prime Minister (Mr Hawke), the Minister for Primary Industry, the Minister for Housing and Construction and Senator Walsh pointing out what one of the farm leaders in Australia really thinks of this proposal as put forward by the Government. Debate interrupted. Mr DEPUTY SPEAKER(Mr Mountford) —Order! 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 PEACOCK —My question is directed to the Minister for Immigration and Ethnic Affairs. Will the Minister today confirm that European and United Kingdom applications-I repeat, applications-to migrate to Australia under the family reunion program, contrary to what he has told the House before, have increased overall since he became Minister? Will the Minister now confirm that approvals have not kept pace with this increase in applications? Will the Minister now confirm that this has led to an imbalance in the long-standing balanced migrant intake which has enjoyed bipartisan support? Will the Minister advise the House when he will restore the previous balance? Mr WEST —I preface my answer to the honourable member's question by pointing to the figures for United Kingdom migration. There has been a very long-standing trend of settler arrivals from the United Kingdom and Ireland reducing as a percentage of the total settler intake. For instance, in the decade ending 1972, settlers from the United Kingdom and Ireland represented 46.1 per cent of the total intake. In the next decade ending in 1982 the figure was 38.6 per cent, in 1981-82 it was 32.5 per cent and in 1982-83, the last year of the previous Government's migration program, it was only 29.7 per cent of total settler arrivals. So the long term trend has been down for a long time, not just under Labor administrations. That is the first point to make. The second point is that I am informed that the figures that the Leader of the Opposition is relying on are figures supplied to the honourable member for Mitchell, I think, which he used the other night in the adjournment debate and which relate to applications for family migration by category, by country, for 1982-83. What the honourable member for Mitchell did-this was a great method of extrapolating statistics, I must say-was to take the figures, country by country , of applications for one year and compare them with the figures for the first half of 1983-84, after he had multiplied by two. That was a very scientific analysis! Mr Cadman —I made that clear at the time. I explained it in the House. Mr WEST —Well, the point is that that is what the Leader of the Opposition is relying upon. I do not want to be provocative today, but I am telling Opposition members that I am destroying the basis of their analysis. They cannot just use one year, 1982-83-- Mr Peacock —Are you saying applications have diminished? Mr WEST —I am going to give the House the full story over many years, right now. The figures that Opposition members used were for one year. Let us be clear: They used applications for family migration by category and by country. They then compared that year against 1983-84, getting the figures for 1983-84 by multiplying by two the figures for the first six months. That is what they did. These are the figures. I refer to total applications. In 1980-81, from total migration applications across the whole range of family reunion, business migration and independent migration, but excluding refugees, the figures for the United Kingdom and Ireland were 137,112 or 39.6 per cent of total applications. The number of visas issued, which means entry granted if the people wanted to take it up, was 35,602 or 43.6 per cent of total visas issued. I will not repeat all these figures year by year but will simply give the trend to be compared against Asia. I will give the figure for total applications to show that they have gone down. The next year the figure was 105,011. In 1982-83 it went down to 53,057 or 18.1 per cent of total applications. These are the figures I have just received from my Department. In 1983-84, to 31 March this year, there have been only 13,000 applications or 10.7 per cent of total applications. But we issued 8 ,794 visas or 25.6 per cent of the total visas issued. Have Opposition members got the implication of that? This year, for nine months-- Mr Tuckey —They hear the message not to apply. Mr SPEAKER —Order! In view of recent events in the House during Question Time I give a general warning that the behaviour and disorder cannot continue. I have tried to be reasonable and tolerant. I must warn that I will have to take rapid action if it occurs again. Mr Tuckey —I raise a point of order, Mr Speaker. The Minister posed a question to the Opposition. If he chooses to do that, he will get answers. Mr SPEAKER —Order! The honourable member for O'Connor knows that he has no right to answer, even if the Minister asks a question in that way. The Minister will complete the answer. Mr WEST —I repeat that, of the total applications for migration, those from the United Kingdom and Ireland accounted for 10.7 per cent and of the visas issued the figure was 25.6 per cent. So not only is the trend of total applications down from 137,000 in 1980-81 to 53,000 last year and 13,000 up to March this year, but also those countries account for a high percentage of the visas issued . For Europe the trend is somewhat dissimilar to that but the applications are down. The figure was 93,500 in 1981, which is down to 35,631 for the first nine months of this year. I turn now to the applications from Asia. The figure was 54 ,000 in 1980-81, which went up to 67,827 last year, and so far this year it is 35,301, which is 28.5 per cent of the total applications. Applications from Asia received 32 per cent of the visas issued. I have a lot more information here. I intend to put it together and circulate it to all honourable members to prove the point I am making. I could give more figures on family migration but it is perhaps not appropriate that I take up further time of the House. I just make this point in concluding my answer: Yesterday both the honourable member for Balaclava and the Leader of the Opposition said that they would seek to restore balance in the migration program . I hope I have gone some way towards showing them that the balance is not too bad as it is. However, they say that they want to restore balance, not by reducing the number of Asian people who come in as refugees, through family reunion and business migration and so on, but by somehow getting more Europeans. I want to know-they can take this up with me in correspondence or in whichever way they like-- Opposition members interjecting- Mr WEST —I want Opposition members to tell me how they would increase the number of Europeans. If they wish to do it through family migration, they will have to reduce the standard and take more elderly unskilled people who may not get jobs in Australia. They may try to tell us that they would do it by lifting the number of skilled applicants under the skilled labour category. If they do that there is no guarantee, unless they impose quotas especially for people from Europe and the United Kingdom, that they will get any more of those people than they will Asians. To think otherwise is highly uncomplimentary of the skill level in the Asian nations today. For instance, if we said we would take more computer experts, would it not be reasonable to expect that we would get many people from Japan and Singapore? I leave Opposition members with that thought. Mr JACOBI —I address my question to the Minister for Science and Technology. Is it a fact that this country faces dramatic structural problems and that the impact of rapid technological change is placing enormous pressure on our labour force, affecting expectations for future employment and time use? Does the Government accept that the time has come to focus public attention on the implications for labour force planning, education, recreation, leisure and tourism? Following the successful National Technology Conference, will the Minister convene a national conference with his ministerial colleagues so that these important issues can be discussed and addressed? Mr BARRY JONES —The suggestion of the honourable member for Hawker is a very valuable one. We need to stimulate public interest in and understanding of the value of time use outside work. Work is central to nearly everybody-economically and psychologically-and is one of life's major purposes. The withdrawal of work can have absolutely crippling psychological effects. For people with a traditional working class experience, work accounts for up to 14 per cent of a lifetime. In the case of a person who lives for 75 years and works a standard working year from the age of 15 years to 65 years-a 50 year stretch-the figure is 13.8 per cent of the lifetime. We spend one-seventh of all our lives at work. We have not given enough emphasis to the value of time use both in and out of work. We need to recognise the possibility-it is by no means a certainty-that the proportion of time devoted to work may well fall below 14 per cent and we should face up to useful ways to employ the other 86 per cent. Human society has always been fascinated by the question of life after death, and we ought to pay some attention to life before death too. I have discussed the matter with my colleagues the Ministers for Employment and Industrial Relations, Education and Youth Affairs, and Sport, Recreation and Tourism. That sounds like more than three Ministers, but it is only three. We agree in principle that such a conference on employment, education, leisure and technology should take place and the details of the time, place, specific agenda and invitation list will be worked out between us. I will advise the House when we have further details. Following his dazzling success in opening the National Technology Conference, I have no doubt who will be invited to open the batting. Mr MACPHEE —I address my question to the Minister for Immigration and Ethnic Affairs. I preface it by saying that at no time in yesterday's debate did I call for a balancing of the migration program by increasing the number of Europeans. I called for a return to bipartisanship. Mr West —Why don't you make a personal explanation? Mr MACPHEE —Yes, I will make one if I am misrepresented again. Is it not a fact that under the skilled and business migration program, the people eligible under the selection criteria at the moment happen to be, largely, Caucasian? Is it not a fact that the trade union movement has stipulated qualifications for skills which are met by people more probably coming from the United Kingdom as at this moment? Is it not a fact also that the trade union movement asked the Minister to cut back on skilled migration, and is it not a fact that as a consequence of that some 40,000 fewer people came into Australia, and those 40,000 happen to be Caucasian? Mr WEST —I do not have on me the figures for the breakdown on national or race grounds of the Government's former skilled and business migration program. I do know that what the honourable member for Balaclava says is correct: The Australian Council of Trade Unions asked this Government to reduce the intake of skilled workers. I expect that it would have put the same request to the Opposition when it was in government. The union movement debates the wisdom of a policy of importing large numbers of so-called skilled workers during a time of economic downturn. The honourable member will remember that he brought in about 40,000 people in those skilled and business categories in 1982-83, which made up by far the largest component of the migration program. We turned that down to about 11,000 because we could see that it was a basically backward-looking policy. It was based upon a list of occupations allegedly in demand provided by the Department of Employment and Industrial Relations. We reduced substantially that intake of skilled labour. As the honourable member well knows, we are looking at a new system which will be forward-looking and based upon predictions of expected demand in a number of key areas of occupation. I do expect that there will be some upturn in those areas. I do not expect that simply bringing in a few more thousand skilled migrants in categories which have yet to be determined will automatically lift dramatically the percentage of Europeans inside the total migration program. Dr THEOPHANOUS —My question is directed to the Prime Minister. In view of the visit of the Chinese Minister of Metallurgical Industry, Mr Li Dongye, to Australia this week, can the Prime Minister indicate, firstly, what progress has been made in negotiations with Beijing on steel industry exports and, secondly, what further progress on this matter the Government hopes will be achieved as a consquence of the Chinese Minister's visit? Mr HAWKE —I thank the honourable member for Burke for his question. I remind the House that as recently as 9 February I had discussions in Beijing with the Chinese Premier. On that occasion we had an immediately favourable response from the Chinese Premier in regard to these areas of possible co-operation and, indeed, a degree of integration between the industries of our two countries. That response related to the increased sale of raw materials from Australia to China; the possible sale of pig iron or raw steel from Australia to China; mutual investment between our two industries-that is, investment by China in Australia, particular interest having been shown by China in iron ore, and investment by Australian industry in China's steel industry-and, finally, the mutual interchange of technology. As I said, there were positive responses in each of those matters by the Chinese Premier. These things have happened since 9 February: Firstly, as soon as I returned to Australia I had very useful discussions with the industry and the trade unions, and got a very positive response from them. I pay tribute to the representatives of both business and the trade unions for their positive response. Then we had the very early return by some of our officials to China and just a few weeks ago , the joint working party met in China. The next stage in this process-I repeat that it started on 9 February-will occur tomorrow when, as the honourable member has indicated, the Chinese Minister of Metallurgical Industry, Mr Li, arrives here. He will be in this country for several days, during which he will have discussions with, again, relevant representatives of industry and the trade unions, and he will be visiting relevant sections of the industry. I hope that there will be a positive approach from all sides to the presence of Mr Li in this country. I say just two other things in regard to this important matter: We have at all times said that what develops will depend very much upon commercial decisions made by people in our country. In that respect I want to say that the CRA group, under Sir Roderick Carnegie, has already discussed a range of concrete proposals for co-operation in iron and steel and, more recently, one delegation from the minerals division of the Broken Hill Proprietary Co. Ltd and one from its steel division visited China and they were invited to discuss a number of substantial proposals. In respect of what I may have been able to do to further the possibilities, which I believe are very substantial, I am pleased to note that recently the BHP has said of that matter: The undertakings reached by the Prime Minister have been very helpful in that they have meant a significantly increased interest by the Chinese in co- operating with the Australian industry. I think it behoves all of us now-those in industry, in the trade unions, in the Government and, I would hope, in the Opposition-to do constructively what we can to advance the interests of Australian industry and our co-operation with the industry in China. Mr PEACOCK —My question is directed to the Minister for Immigration and Ethnic Affairs. Bearing in mind that the Minister would consult with the Australian Council of Trade Unions, is it not a fact that the Minister has failed to call together the Australian Council on Population and Ethnic Affairs, an important advisory body? Is it not a fact that the Minister failed to consult the Big Brother Movement prior-I repeat, prior-to his unilateral decision on the future of this organisation? Will the Minister now undertake to consult in the handling of his portfolio so that changes about which the Opposition has expressed concern can be reviewed? Mr WEST —I do a lot of consulting with the ethnic communities. I regularly consult with the Federation of Ethnic Communities Councils of Australia and I have conducted two Federal-State ministerial conferences. I certainly make no apologies for consultations with the ACTU. I will certainly consult with business organisations if and when they make the request. Mr Peacock —What about the Australian Council on Population and Ethnic Affairs, not just Big Brother. Mr WEST —I will return to Big Brother in a moment, if you want me to. As for the Australian Council on Population and Ethnic Affairs, the fact is that we were elected with a mandate to set up a National Population Council. After deliberation we decided that that Council should replace the old Australian Council of Population and Ethnic Affairs, so we did not reappoint the members of ACPEA when their terms expired in the middle of last year. Mr Peacock —Did you tell anybody? Mr SPEAKER —I warn the Leader of the Opposition. Mr Young —I raise a point of order, Mr Speaker. It is absolutely impossible for Ministers in trying to give their answers to be able to hear what is going on in the chamber. If the Opposition is interested in getting the answers to the questions one would have thought it would have listened, for a while anyhow. But members of the Opposition have yelled non-stop at every Minister who has got up to answer any question during this parliamentary session. Mr Sinclair —Mr Speaker-- Mr SPEAKER —Is the right honourable member speaking to the same point of order? Mr Sinclair —I think it is very important that in the proceedings before this place where a major policy announcement is made that this Parliament be given an opportunity to query why it has not been given before. The point of our question was to find out why a body which was constituted has been terminated without the advice of the Parliament. Mr SPEAKER —Order! That is not a point of order. The Leader of the National Party will resume his seat. The Leader of the House has referred to the question of behaviour in the House during Question Time, a matter I have taken up previously. The Leader of the House knows that a tolerance is allowed to the Leader of the Opposition and to the leaders of the Opposition parties, but I indicate that that tolerance has really been pushed to its limit and I trust that the Minister will be allowed to answer his question. I call the Minister. Mr Young —Mr Speaker, further to that point of order, I say that we are in no way challenging the point raised by the Opposition. Mr SPEAKER —Order! I ask the Leader of the House to come to his point of order. I do not think this is the place to debate the matter. Mr Young —I think that people on this side of the House will have to stop speaking when the Opposition keeps yelling. Mr SPEAKER —I agree with you. Mr Sinclair —You are abusing the whole process of this House. Mr SPEAKER —Order! If anyone is abusing the process of this House it is those who are interjecting. Mr Sinclair —That is a false point of order. Mr SPEAKER —I warn the Leader of the National Party. The Leader of the House will come to his point of order. Debate cannot be allowed. Mr Young —I in no way challenge the point made by the Leader of the National Party and the right of those members opposite to ask questions. All we want is the right to be able to answer them. Mr SPEAKER —Order! That is not a point of order. I call the Minister. Mr WEST —When I was rudely interrupted by the Leader of the Opposition I was saying that the Government expects that the new National Population Council will be in a position soon to replace the old ACPEA organisation. It will be a broader based organisation taking into account not only matters of ethnic affairs, population and refugee advice, but also economic matters. The Government has looked at the organisational structure of the new Council and we are considering what the appointments ought to be. I hope I have disposed of that matter. Before I conclude, I mention an issue which I did not want to raise again, but it was part of the previous question, namely, the Big Brother Movement. The fundamental point for this House to understand about this Movement is that it did a reasonable job over the years in the great years of immigration , but at a time when we have cut back substantially on the numbers in the total program there is not room in the program for an organisation outside government policy to make decisions about who should come into Australia. The former Minister, the honourable member for Balaclava, well knows that he took a decision to tighten up on its activities. That decision was reversed by the next Minister, the former member for Petrie. To the disgrace of the former Government, and as it wants to take this attitude, I will read again the directions which the former Minister forced the Department, against its strong advice, to send to the London office. Those directions said that the Big Brother Movement should be allowed to interview and process its own nominees and that the standards and criteria to be applied were to be decided by the Movement itself. I put it to the House that no government can accept those sorts of criteria being given to an outside organisation. Mr Cadman —Mr Speaker, I raise a point of order. In answer to the last two questions the Minister quoted extensively from documents. One contained figures which were incomprehensible in the way they were presented. I ask the Minister to table the documents. Mr SPEAKER —I have to ask the question: Was the Minister reading from a document on public affairs? Mr West —No. I was not reading from a document on public affairs. I was reading from my own notes. Mr SPEAKER —That closes the matter. Mr Peacock —Mr Speaker, I raise a point of order. The Minister said he was quoting from a ministerial directive. If that is not a public document, I do not know what is. I ask that that document be tabled. Mr SPEAKER —Order! I remind the Leader of the Opposition that in dealing with this matter it is the practice that two questions be asked under the relevant standing order. The first is to ask whether the Minister was reading from a document on public affairs. If he answers no, that closes the matter. If he answers yes, the next question is: Is it confidential? The Chair has carried out that process. Mr MacKellar —I raise a point of order, Mr Speaker. Because this is a confusing situation, can you define what is a document on public affairs so that we will know? Mr SPEAKER —The Standing Orders use that term. I am required to ask the question and I have done so. Mr Tuckey —On the point of order, Mr Speaker, quite clearly, the Minister can hand you that document and you can take a decision as to what it is. I do not believe the Minister. I do not believe a lot of the other-- Mr SPEAKER —Order! The honourable member will resume his seat. Mr Steedman —The Oswald Mosley there. Mr SPEAKER —The honourable member for Casey will cease interjecting. Mr Howard —Mr Speaker, in the spirit of the request which you delivered on Monday for moderation of language, would you please require the honourable member for Casey to withdraw the remark he has just made against the honourable member for O'Connor? Mr SPEAKER —The honourable member for Casey will withdraw. Mr Steedman —Mr Speaker, I was wondering-- Mr SPEAKER —Order! The honourable member for Casey will withdraw. All he has to say is 'I withdraw'. Mr Steedman —I withdraw. He is wearing a white shirt. Mr BALDWIN —Has the attention of the Minister for Foreign Affairs been drawn to a report in today's Sydney Morning Herald, reprinted from the Guardian, describing South African support for terrorist activities in neighbouring Zimbabwe designed to bring about civil chaos and to undermine the economy of that country? How does the continuation of such activities, despite the negotiation of pacts with Angola and Mozambique, affect the Government's evaluation of the South African regime? Mr HAYDEN —There does seem to be some evidence that South Africa has been involved in activities which are aimed at destabilising the Government in Zimbabwe. I have been informed that while the article which no doubt caught the attention of the honourable member in the Sydney Morning Herald this morning is not an article that we can substantiate, nonetheless a number of facts have been established. Teams of dissidents have been infiltrated into Matabeleland, Zimbabwe, from South Africa, possibly via Botswana. The Zimbabwe Government has labelled the South African supported dissidents 'super-ZAPU' and believes there is a link to Joshua Nkomo, the Zimbabwe African People's Union leader. South Africa probably supported a number of sabotage attacks within Zimbabwe since independence, including the destruction of Air Force planes at Thornhill in 1982 . South Africa maintains a special military intelligence unit concerned with Zimbabwe. A radio which broadcasts propaganda to Zimbabwe, Radio Truth, operates from within South African territory. South African involvement in attacks on Zimbabwe's oil pipeline from Beira, Mozambique, and storage facilities at Beira is almost certain. South Africa has delayed the transit of petroleum products to Zimbabwe, and immediately after independence withdrew essential South African- owned rolling stock from Zimbabwe's railways. Zimbabwe is, of course, aware of its vulnerability and it has, in consequence, one expects, prevented the African National Congress from using Zimbabwean territory to operate against South Africa. In respect of Mozambique, South African supported guerilla activity was directed against Mozambique and was responsible for the disruption and destabilisation of the Government there. On 16 March President Machel and Prime Minister Botha signed the Nkomati Accord, a non-aggression pact, whereby South Africa and Mozambique agreed that neither would allow its territory to be used as a base for acts of aggression or violence against the other. This was followed by talks on economic co-operation. What this does boil down to, however , is that South Africa is utilising policies of destablisation, disruptive policies, on a fairly wide scale in southern Africa and through these is creating marked degrees of instability for a number of the governments in that region. At the same time, it is taking no steps itself to reduce the abhorrent racism and intolerance of the policy of apartheid in its own country. Mr Coleman —I ask the Minister to table the document from which he was reading. Mr SPEAKER —Was the Minister reading from a document? Mr Hayden —Mr Speaker, the document is classified confidential. However, I am happy to make available, on a confidential basis, access to it by appropriate people from the Opposition. Mr SPEAKER —As the Minister says the document is confidential it is not required to be tabled. Mr PEACOCK —My question is addressed to the Minister for Immigration and Ethnic Affairs. I understand that the Minister indicated that he intended to replace the Australian Council on Population and Ethnic Affairs and that the terms of membership of that Council had expired. I ask the Minister: What consultations were held by him with the members of that consultative body before replacing it and when will the replacement body come into existence as, as far as I am aware, today is the first time this policy has been announced? Mr WEST —As the former Australian Council on Population and Ethnic Affairs was a council set up by the former Government to replace three other advisory bodies as a result of the operations of the razor gang, I felt under no obligation to carry on with an advisory body which was set up not by legislation but just by ministerial direction after the change of government. Mr Peacock —You didn't even consult with them? Mr WEST —The terms of the members of that Council had expired. The Leader of the Opposition does not seem to be able to understand that. By the simple act of not replacing the members of the Council and by considering replacing the body with another council in accordance with the policy that we were given a mandate for at the last election, I proceeded on that course. Mr Peacock —When is it coming into being? Mr WEST —The Government is considering both the guidelines of operation and the personnel for the new council. This is well known throughout the migrant communities and organisations of Australia. Mr FREE —Has the Acting Minister for Health seen the recently released report on the drug use habits of New South Wales school children which indicates that 25 per cent of those students surveyed had tried marihuana, that the number of 16 and 17-year-olds drinking alcohol had increased and that more than half the children in the survey had tried sniffing solvents? If the Minister has seen the report, will he advise the House of any action which the Commonwealth is taking or planning to take in response to these alarming findings? Mr BARRY JONES —The Commonwealth is very concerned at the result of the survey which covered 4,165 students in New South Wales between year 7 and year 11. A number of other disturbing things came out of the report, indicating that more girls than boys are now smoking regularly, that over half the girls and boys using alcohol are using it on a regular basis and that analgesic usage is high and increasing. As a result of these concerns, the Drug Education Sub-committee and the Health Committee on Drugs of Dependence established a working group to develop a range of educational materials for students, teachers, parents, health educators and community groups to address the solvent abuse problem. Recommended action, which was endorsed by health Ministers, was that additional funds for drug education programs be made available at Commonwealth and State level for International Youth Year. Also we have sought reports from New South Wales as to the action being taken in New South Wales schools to address the problem. But, of course, to state the obvious, it is unlikely that this situation is peculiar to New South Wales. One would certainly expect it to be the case in the other heavy urban concentrations. At the national level, the assessment team of the Drug Education Sub-committee has produced its final report on the national drug education program and has made a number of recommendations and findings which will have national implications for drug abuse prevention strategy. These recommendations are currently being considered by State health authorities before referral to all State and territorial health Ministers. The Commonwealth will continue to give an emphasis through the NDEP to projects directed towards youth in its funding of State and Territory drug education programs in 1984-85. It is a national problem. It is a critical problem and we have to face up to it individually. It is not just something to be left to government. It has to be done at a community level, at a family level. There has to be individual responsibility. Mr HOWARD —My question is addressed to the Treasurer. I refer to today's Press speculation, following the announced resignation of the Secretary to the Department of Foreign Affairs, that the Government contemplates widespread changes in the senior ranks of the Public Service. Does the Government propose, as a sop to its left wing, to remove Mr Stone from his position as Secretary to the Treasury? Will the Treasurer assure the House that Mr Stone continues to enjoy the full confidence of the Government? If not, does the Government propose to remove Mr Stone before its premature election or will this be yet another of those very hard decisions which the Government seeks to defer until after the election? Mr KEATING —Obviously the honourable member for Bennelong feels that the economy must be running along very nicely. We have had no questions on the economy and I note that this question is not on the economy either. The answer is: No, yes, no . Mr CAMPBELL —Is the Minister for Primary Industry aware of the suggestions that the pre-emergent herbicide simozine is in short supply? Is he aware of the importance of this chemical in the propagation of lupins? Will the Minister investigate the claimed shortages and take whatever measures are necessary to alleviate the shortage or to get access to suitable substitutes? Mr KERIN —The honourable member for Kalgoorlie and I recently went through quite a bit of the Western Australian wheat belt, into the electorate of O'Connor, where the honourable member for O'Connor also was present, to study some of the problems in the wheat and other crop growing areas in that State. I congratulate the honourable member for O'Connor and the Primary Industry Association in that State for arranging that study tour. Mr Beazley —Kalgoorlie or O'Connor? Mr KERIN —Kalgoorlie. Mr Tuckey —I nearly got the kiss of death. Mr SPEAKER —Order! I realise that the banter is good-natured but I do not feel very good-natured today. I ask for it to cease. Mr KERIN —I assure the House that there is no way that I congratulate the honourable member for O'Connor. As the honourable member for Kalgoorlie has said , simozine is a pre-emergent spray. Unfortunately, I have to inform the House that there is little hope of getting additional quantities of this herbicide this season. It is really a problem only in Western Australia because it is mainly used as a pre-emergent spray with respect to the growing of lupins. The reason for the shortage is basically that there is additional demand due to early weed growth and an increased demand due to a larger planting of lupins this year. The manufacturer has simply made an inaccurate forecast of the demand . There has been a drought in many areas in Western Australia but fortunately there is a good break in the season. So one can see why there has been such an increased demand for this spray. Unfortunately, there is trouble in getting the raw materials for this spray and the manufacturer is not keen to hold stocks due to its short shelf life. The only recommendation I can give to the honourable gentleman and the people he represents is that they consult the Department of Agriculture and the Primary Industry Association in Western Australia with respect to alternatives. I guess the most logical one is that the growers consider cultivation for a weed kill instead of direct drilling. Apart from that I cannot help the honourable member. Mr ANDREW —I ask the Minister representing the Minister for Social Security: As the Prime Minister has confirmed that an assets test will be introduced, why must it be made retrospective to August 1983? Mr BARRY JONES —I cannot understand in the circumstances why the honourable gentleman has not addressed the question to the Prime Minister. Mr Hawke —In the circumstance that I am absolutely terrified at the prospect of a question from the honourable member for Wakefield, I ask that further questions be placed on the Notice Paper. Mr SPEAKER —The Leader of the National Party wishes to speak on a point of procedure. Mr SINCLAIR(New England-Leader of the National Party of Australia) —Mr Speaker, you will recall that standing order 321 states: A document relating to public affairs quoted from by a Minister . . . unless stated to be of a confidential nature or such as should more properly be obtained by address, shall, if required by any Member, be laid on the table. In accordance with that standing order, a question was put through you to the Minister for Immigration and Ethnic Affairs (Mr West) today following an answer given in this House. You will recall that the Minister said that he would quote from a directive from a former Minister regarding matters pertaining to that question. The Minister then, in answer to your question, said that he did not read from a document. The point of clarification I seek to pursue is as follows: Should we move dissent from your ruling to seek to clarify the fact that the Minister said that he read and then that he did not read, or is it possible for you to put the question to the Minister again so that honourable members on this side of the House can understand whether the Minister was quoting from a ministerial directive or whether he was reading from the paper that he had in front of him? Mr SPEAKER —Let us clarify this question of standing order 321. As the Leader of the National Party realises, it has to be read in conjunction with page 531 of House of Representatives Practice, which describes the procedure that the Chair must follow. The Chair, of course, must accept the statement of the Minister. It is not a matter of dissenting from the Speaker's ruling. If any action is to be taken it must be taken against the Minister. The Minister wishes to respond. Mr WEST(Cunningham-Minister for Immigration and Ethnic Affairs) —During the answer today I was looking at my copious notes of the document. After rereading the actual document that I had at the back of my file, I have no objection to incorporating the whole thing in Hansard. Mr SPEAKER —Order! There will be no question of incorporation. Mr WEST —In that case I table the document. Mr Peacock —We will give you leave to incorporate it. Mr SPEAKER —Order! There is no question of leave to incorporate it. Hansard is a record of the spoken word and incorporation is restricted to tables, except on special occasions. The Minister may table the document, consistent with the original request. Mr Peacock —If it is a record of the spoken word how are we going to get it accurately from this Minister? Mr SPEAKER —Order! There is no point of order. The Minister has tabled the document in question. Mr Cadman —Mr Speaker, I raised a point of order at that time and the Minister did quote from figures which he said he was going to make available. I suggest that he can table those as well if he has not done so. Mr SPEAKER —Order! I do not intend to allow this to go on as a debate. I believe the Minister indicated that he was going to circulate appropriate figures to all honourable members. Would the Minister confirm that that was his statement? Mr WEST —Yes. Mr SPEAKER —Yes, the Minister has indicated that that will be circulated to honourable members. Opposition members interjecting- Mr SPEAKER —Order! I remind the honourable members on the front bench of the Opposition that one of their colleagues is seeking my permission to make a personal explanation. I call the honourable member for Curtin. Mr ROCHER(Curtin) —Mr Speaker, I claim to have been misrepresented. Mr SPEAKER —The honourable member for Curtin may proceed. Mr ROCHER —In an article that appeared on page 2 of the Australian this morning the question of recent developments in relation to death duties was mentioned. Towards the end of that article the author went on to say: The death duty proposal did receive support from the Liberal Member for Curtin . . . who said it should not be rejected out of hand. I did issue a Press statement which had nothing to do with death duties. From reading any one of the other paragraphs in my short statement-had it been published-it would have been apparent to any reader of that article that my statement had nothing to do with death duties. I said in the Press statement: Today's reports, that the Assets Test Review Panel is considering enabling pensioners to convert some of the capital value of their assets into income without having to liquidate them altogether, should not be rejected out of hand . . . It is the second paragraph, which was published, which was interpreted to mean that I approved of death duties. It stated: In some circumstances, there is a great deal in favour of such schemes, although they should not be presented as a substitute for a pension. I went on to say in the statement: They are already in operation in some countries: in Canada, for example, as ' reverse annuity mortgages', and in France as 'vente en viage'. The idea is that pensioners should be able to augment their income by surrendering some or all of the equity in their real estate, while retaining possession of the property until their death if they wish. The proposals as reported, however, appear to envisage a Commonwealth government monopoly of any such arrangements- Mr SPEAKER —Order! I ask the honourable member to be very quick. He realises the time restraints. Mr ROCHER —Yes, Mr Speaker. The Press release continued: . . . and perhaps their integration into a pension means test. Both these aspects should be resisted. I think on any fair reading it will be seen by all honourable members of the House that what I said had nothing to do with death duties and certainly gave no imprimatur of mine. Mr CADMAN(Mitchell) —Mr Speaker, I claim to have been misrepresented. Mr SPEAKER —The honourable member may proceed with his personal explanation. Mr CADMAN —During Question Time the Minister for Immigration and Ethnic Affairs (Mr West) referred to figures that I had prepared and figures that I had received from the Department of Immigration and Ethnic Affairs. On 7 March, following the Minister's statement indicating that there was a lessening interest in immigration from some areas, I sought information from all nations from his Department. In April I received a reply with attached tables from an officer of the Department. I have taken those tables and indeed, as the Minister said, the figures were available for the 1982-83 year in full, but for the 1983- 84 year they were available only until the December half year. In all of my documents and in my speech in the House the other night I indicated that I had extrapolated the figures for the full year based on the half-yearly figures. I believe the Minister in this regard tended to indicate that I had in some way sought to misrepresent the figures and mislead the House. I made it clear in my speech during the adjournment debate and even in the document. I said they were estimated figures. Mr SPEAKER —Order! I think the honourable member for Mitchell is quite clear. I ask him to round off his personal explanation. Mr CADMAN —Thank you, Mr Speaker. I conclude by saying that I believe this is the most secretive and incompetent Minister that we have seen-- Mr SPEAKER —Order! The honourable member for Mitchell knows that that is not part of correcting a misrepresentation. Dr Theophanous —Mr Speaker, I raise a point of order. I seek the withdrawal of those comments from the honourable member. Mr SPEAKER —There is no point of order. Mr CADMAN —Mr Speaker, I ask for leave to table these documents that I received. Leave granted. Mr DAWKINS(Fremantle-Minister for Finance) —For the information of the House I present two reports by the Commonwealth Schools Commission on funding policies for Australian schools and standards for Australian schools, together with the text of a statement by the Minister for Education and Youth Affairs (Senator Ryan) relating to the reports. Motion (by Mr Young) proposed: That the House take note of the papers. Debate (on motion by Mr Sinclair) adjourned. Mr DUFFY(Holt-Minister for Communications) —For the information of the House I present the Australian Security Intelligence Organisation report to the Parliament for the year 1982-83, together with the text of a statement by the Attorney-General (Senator Gareth Evans) relating to the report. Mr DUFFY(Holt-Minister for Communications) —For the information of honourable members I present the report of the inquiry into the Legal Aid Office (ACT) together with the text of a statement by the Attorney-General (Senator Gareth Evans) relating to the report. Mr DUFFY(Holt-Minister for Communications) —Pursuant to section 37 of the Law Reform Commission Act 1973, I present papers relating to community law reform in the Australian Capital Territory, together with the text of a statement by the Attorney-General (Senator Gareth Evans) relating to the papers. Mr SPEAKER —I have received letters from the Leader of the Opposition (Mr Peacock) and the honourable member for Burke (Dr Theophanous) proposing that definite matters of public importance be submitted to the House for discussion today. As required by standing order 107 I have selected the matter which, in my opinion, is the most urgent and important and that is that proposed by the Leader of the Opposition namely: The continuing alarm and confusion created by the Government's latest blunders on retirement incomes. I call upon those members who approve of the proposed discussion to rise in their places. More than the number of members required by the Standing Orders having risen in their places- Mr PEACOCK(Kooyong-Leader of the Opposition)(2.58) —It is now 355 days since the Hawke Government began breaking its promises to the elderly in our community and to those nearing retirement. We are approaching the anniversary of the May mini-Budget which featured an attack on Australian superannuation conditions. The super slug and the income test on the over-70-year-olds were just the opening shot in a thoughtless and cold-blooded campaign which has caused unprecedented concern among our senior citizens. It is now 260 days since this Government again stood the elderly against the wall by announcing out of the blue the assets test on pensions. Since then we have witnessed a government paying the price for singling out one sector of the community for treatment as second class citizens. It thought that because they were elderly and not given to political activism that it could throw them on to the scrap heap. This is the hallmark, regrettably, of the Government these days. It is not a government of consultation, it is not a government of consensus and that has been confirmed again today at Question Time. Notions such as consultation and consensus are merely empty slogans. It is a government of unconscionable conceit and unconscionable arrogance. As I pointed out earlier this week in respect of the Prime Minister's beef and steel fiascos in Japan and China, the only consultation which this Government knows is retrospective consultation. That is what the Government has done in regard to Broken Hill Proprietary Co. Ltd and the Government's steel sand castles, and that is what it has imposed on Australia's elderly. It is indeed a very curious method of consultation. First, the Government makes up its mind, by looking at the figures, that it needs more money so that it can continue to spend on a growing public sector. A likely way of feeding Labor's bloated financial appetite is then seized upon. The Government has decided that the pensioners can carry the cost for a new round of public sector growth. Yet it does not bother to see pensioners as anything but figures on a balance sheet. It does not tell them what it is thinking. When the Government's plans come out into the open and begin to become unstuck from day one the Government starts casting about for a quick way out. Over the past year Australians have witnessed an endless progression of twists and turns by the Hawke Government on the issues of superannuation and the assets test. We have seen open confrontation on this matter between the Government and the Australian Council of Trade Unions. The trade union movement made it quite clear that it had not been consulted about the changes relating to superannuation. So that was round one of the Government's retrospective consultation. It has done the same with regard to the assets test. What was announced in the August Budget was shown overnight to be anomalies and full of inequities. It was shown to be unfair and discriminatory. Mr Hunt —It was a disgrace. Mr PEACOCK —It was an absolute disgrace. No wonder we abolished the assets test in 1976. Labor's proposed test went against the grain of the great majority of Australians. This test put at risk the legitimate aspirations of the people of this nation to work, to get ahead and to provide for a secure retirement. That is not something which I am prepared to see just swept away. As we told the Government last year, there were very sound reasons for our abolishing the assets test in existence in 1976. We warned the Government that the sort of assets test it was going to introduce was both costly and complicated to administer, that it would lead to an invasion of privacy and that of its own nature it would be inequitable in operation. In fact, there is evidence that the Government knew the problems before it jumped in. It was none other than the present Minister for Social Security (Senator Grimes), the man charged with imposing Labor's assets test, who called it into question last year . Writing in the 1983 edition of Labor Essays, Senator Grimes said: . . . reimposition of an assets test would fall far short of an ideal solution to problems in this area. In his essay he pointed to the anomalies, as he also did at the National Economic Summit Conference. But he did not have the numbers in Cabinet so he had to face the music. What followed was another unseemly display of backsliding. The so-called leisure package was announced. It was shown to be discriminatory by the Labor Premier of New South Wales, the Federal President of the Australian Labor Party. Then a variety of other add-ons were floated, but the shilly- shallying had two negative effects. First, the Government's ineptitude only added to the uncertainty and anxiety of the elderly and, second, not surprisingly, it resulted in the emergence of what has been known as 'grey power ' in Australia. The emergence of this group was a direct response to attacks by this Government on the elderly. When the penny dropped that the elderly were preparing to campaign against Labor should it have a premature election, the Prime Minister-not the Minister for Social Security-announced an alleged backdown. Mr Howard —Without consultation; not even with his colleagues. Mr PEACOCK —There was no consultation whatsoever. Mr Howard —He heard it on the radio. Mr PEACOCK —Just back from overseas, fresh from his beef and steel fiascos, the Prime Minister used the forum of the National Press Club to announce that the issue would be put in the melting pot again. As the Deputy Leader of the Opposition (Mr Howard) said, the Minister for Social Security first heard this announcement on the radio. That was another bit of retrospective consultation. The Prime Minister emphasised that there would be an assets test regardless, but that Labor would go back to the drawing boards and look at the issue again. What has happened? After months of uncertainty and controversy the Prime Minister's extraordinary announcement served only to guarantee more uncertainty. How would honourable members opposite like to cop that uncertainty? They will be beyond 65 years of age at some given date. They will then be least able to rearrange their affairs. Month after month the elderly have had this uncertainty hanging over their heads, and after 260 days of the Government's incredible and callous ineptitude they are none the wiser and they have no certainty as to whether they will be allowed a pension from this Government. I ask honourable members: Is this fair? Is this the way to treat those least able to rearrange their affairs? Is this indeed the way to govern? I turn to the Assets Test Review panel led by Professor Gruen and its recommendations. The terms of reference of this assets test panel appointed as the outcome of the Prime Minister's backdown are both restrictive and representative of Labor's approach to the elderly. Instead of taking a comprehensive approach to retirement and the elderly, this Government, despite all the public facade and charade, has treated this growing sector of the community in a grossly ad hoc and piecemeal fashion. It is a classic example of not seeing the wood for the trees. In yet another step along this path, the Gruen panel of review has been hamstrung by its terms of reference. This has occurred because it cannot look at the overall situation of the elderly. It has been given a fragment of the issue to treat in a vacuum. I wish to make it clear that this is through no fault of the members of the panel. They are doing a task set for them by the Hawke Government. But what will result? Another attempt to piece together a retirement program which is the child of Labor expediency. The latest developments on the assets test demonstrate that this Government is in total disarray on this issue and that it shows no concern for the feeling and anxiety of the older members of our community. Yesterday we learnt that the panel is considering yet another variation. It is a form of death duty by stealth. We learned that the pension will now be offered as a loan or, as one newspaper reported in a grizzly manner, as a 'pay-as-you- die plan'. I will spell out what that could mean to a man or a women opting for this plan. I will take a person of 65-years of age. I ask honourable members to listen to the consequences of the latest action. Assuming the current long term bond rate of 14 per cent would apply, after just five years under this plan this pensioner would owe the Hawke Government, if it were still in power, over $35, 000. At age 75 years, not an unreasonable age to look forward to living to, that figure would jump to more than $102,000. Should the person reach age 80, which is quite common, under this latest scheme he or she would owe over $232,000. This is outrageous. We pointed out the consequences. And it is still being considered. The figures speak for themselves. The longer a pensioner lives, the more he would owe the Government. I chose the example of a 65-year-old. What about the case of a 35-year-old invalid pensioner? Would the Government cut off the pension when the money owed exceeded the pensioner's assets? The whole thing is a frightening concept and the discriminatory nature of such a scheme is already evident. Yesterday I asked the Prime Minister to put this scheme down immediately, but he would not. So the concerns and anxiety amongst an extraordinarily significant group of this community are only heightened as a consequence of the dispassionate approach that the Government takes to them, and the Government ought to be condemned for its heartless treatment. I have mentioned the discriminatory nature of the scheme and how evident this discrimination already is. Once again we would see the elderly in New South Wales, where property values are high, being penalised for living where they do. The pensioners of the capital cities cannot control the forces of the real estate market. They cannot help it that a three-bedroom cottage in Sydney is worth more on the market than one in a country town. Yet, under a scheme such as this they would be the victims and that property differential could result in a loss of pension benefits. It will be recalled that yesterday I asked the Prime Minister about this very matter. My question went beyond the actual cost to the pensioner's estate itself to the concerns of pensioners and their children over the effects of such a scheme. He acknowledged, honourable members will recall, that the concerns would be there. He acknowledged the concerns it would cause. Yet, he has done nothing to rule it out and the panel is continuing its investigation of a pay-as-you-die plan. If he can see the concerns and the inequities which pensioner groups have and which the Opposition has outlined, why does he not tell the panel that this is not on? What about the example of a person aged 80 owing $232,000? What happens to the family farm? What happens to the small business? What happens to the jobs? The consequences are evident to anyone on this side of the House and the most objective person in the community. But the Prime Minister will not tell the panel to forget such a scheme because the Government is, as he said yesterday, going to consider that scheme. I challenge honourable members opposite to deny it. Why do they not face the reality of the hardship that others in the community are now going to have to face as a consequence of what the Government has constructed? The Government started out with a totally unfair assets test and out of ineptitude and expediency it will seize another. The Government is now stuck in a quagmire of its own making and in its desperately casting around for a way out it will seize upon anything, irrespective of the consequences to men and women and their families and the children of those families. Obsessed with calling a premature election, the Prime Minister wanted to win back some support . But his credibility with the elderly is in as many pieces as Labor's policies on the elderly are. Madam DEPUTY SPEAKER(Mrs Child) —Order! The honourable member's time has expired. Mr BARRY JONES(Lalor-Minister for Science and Technology)(3.14) —Madam Deputy Speaker, this matter of public importance- Mr Newman —Madam Deputy Speaker, I raise a point of order and seek a ruling from you on the question of ministerial responsibility to this House in respect of providing information. The honourable member for Wakefield asked an important question on the assets test. He wanted to know whether this test would be backdated to last year. He pointed out that this matter had not been made clear. He also pointed out the effects this would have on aged people. I hope that the Minister, recognising his responsibilities, will answer the question in this debate. Madam DEPUTY SPEAKER —There is no point of order. I call the Minister. Mr Hodgman —Where are the other Labor members? Mr BARRY JONES —They know they do not need to come in. Madam Deputy Speaker, this matter of public importance is about the so called 'alarm and confusion created by Government blunders'-which is the wording in the motion-on retirement incomes leading, it is said, 'to the destruction of security in retirement for Australians'. The Leader of the Opposition (Mr Peacock) described Government policy as thoughtless and cold blooded. I would have thought that if those words had any applicability it would be to the cynicism with which this matter has been brought into the House. The appeal to fear and self-interest is a base element of Liberal political rhetoric as was shown up so appallingly in the House yesterday in the debate on immigration. Let us start by examining the claim that the Government has created uncertainty among pensioners over the assets test. Ever since we announced the introduction of the new test it has been the Opposition that has been flitting around the country spreading alarm and confusion as to its impact. As we said, if the Government's original proposals were implemented some 85 per cent of pensioners would be unaffected financially or would gain increased pension entitlement as a result of that test. That is hardly a rational description of the destruction of security in retirement. It needs to be remembered that age pensions were introduced in Australia as far back as 1908 and there was a test for income and property right until 1976. After certain groups-those over 75 and, later, those over 70-were removed from those means tested, the property test was abolished as from 25 November 1976. In the 1983-84 Budget the Treasurer (Mr Keating) announced the Government's intention to reintroduce a means test that takes account of both income and assets for assessing entitlements for pensions. The current asset test proposed in the legislation-the Social Security and Repatriation (Pensions Income and Assets Test) Bill 1983-took account only of income, including some income from assets. When we introduced the legislation last December, the Opposition, which had the numbers in the Senate, indicated that it would defer its passage until this session. More recently, the Opposition and the Australian Democrats in the Senate have stated that they would defer such legislation again if we attempted to pass it in this session. Our aim, of course, is to provide a system which is fair, equitable and certain. Let us examine the reasons for the Opposition's actions. In a recent article in the Sydney Morning Herald the true reasons for these actions became apparent. It has nothing to do with genuine concern for pensioners. It is all about attempting, for short sighted political ends, to maintain the alarm and confusion among pensioners for as long as possible for its own political purposes just as it tried to do yesterday and I would have thought it learnt its lesson then. The Sydney Morning Herald said: The proposal by the Opposition spokesman on social security, Senator Messner, is aimed at maximising the political backlash against the assets test in any early Federal election. Liberal Party tacticians believe that community opposition to the test could quickly dissipate once it was introduced because it is not as draconian as many people believe. The Opposition is both callous and hypocritical. It has totally failed to produce credible or even intellectually respectable policies and it has to resort to frightening pensioners and old people. It knows full well that the test will have no adverse impact on 85 per cent of pensioners. From their blusterings, members of the Opposition give the impression that all will be. By contrast, let us have a look at the Government's actions since Budget night in relation to the assets test. On Budget night, 23 August-which, of course, was the date when we announced our intention to consult with pensioners on the test and thus, of course, would lie a logical period for beginning any backdating-and following the first round of consultation, we announced the incorporation of a ' leisure package' into the test on 29 November 1983. That inclusion was a direct result of representations by pensioner organisations. Yet, the Leader of the Opposition coins the phrase 'retrospective consultation'. Following that we financed a further round of consultations in January and February of this year. These were organised by the Australian Council of Social Service-ACOSS-and included nearly all pensioner groups in the country. Notwithstanding this, there was grave doubt as to whether the form of the assets test proposed gave effect to the principle of directing assistance to the needy in the fairest and most equitable way. For example, it is evident that the leisure package introduced at the behest of the pensioner groups themselves does not now have their support or, if it does have, only highly qualified. This came out of the second round of consultations. It could save some pensioners from having to dispose of property though it will not assist others with assets in shares or banks. Given the Opposition's stated attitude to defer the legislation again and, in view of this Government's preparedness to consult, we decided to use the additional time available to establish the broadly based panel of community representatives to examine how the Government's principles in this area can best be achieved. Believe it or not-one would not believe it from what the Leader of the Opposition said-this has been supported by the Opposition. Senator Messner told the Senate on 1 March: The Government has announced that it will refer the whole matter of an assets test to a panel of community based organisations in order to get some better understanding of what it intends. I can only applaud the move at this stage. What humbug by the Leader of the Opposition! It was completely inconsistent with what his shadow Minister said in the Senate. The panel has been appointed and is undertaking its task. As the Prime Minister (Mr Hawke) and Senator Ryan said in response to questions last week, the Government will be making no decision on the assets test until it has received the panel's report. As was indicated earlier, the Chairman of the panel is Professor Fred Gruen, head of the Economics Department, Research School of Social Sciences at the Australian National University. Other members of the panel-they are not exactly unrepentant socialists to the last man-are: Mark Johnson, Managing Director, the Australian Bank Ltd; Sir William Keys, that notorious far left Trotskyist, National President of the Returned Services League of Australia; Bruce McKenzie, President of the Australian Council of Social Service; Jim Priest, National Secretary of the Australian Pensioners Federation; Philippa Smith, Chairperson of the National Advisory Council on Social Welfare; Dr George Smolicz, Reader in Education at the Adelaide University and a commissioner of the South Australian Ethnic Affairs Commission; Joyce Thurgood, National President of the Association of Civilian Widows; and Ms B. Thyer of the Australian Council of Trade Unions. The consultant to the panel is Bruce Paul, Manager of the Actuarial Division, AMP. That does not sound a terribly radical group. A complaint was made by the now absent Leader of the Opposition about the terms of reference. It seems to me that the Leader of the Opposition cannot have it both ways with the terms of reference. He said the terms of reference were far too limited. Then, when the panel decided to propose alternatives, unacceptable to him, he said that the Prime Minister should intervene to cut down the range of options. The Opposition cannot have it both ways. It cannot say, simultaneously, that the panel has terms of reference which are too narrow and that we have to call them back because they are offering too wide a range of alternatives. The absurdity of that must be apparent even to the honourable member for Denison (Mr Hodgman). The terms of reference read: Having regard to the principle that the requirements of equity and the demographic fact of the aging of the Australian population require that expenditure on pensions be directed to those most in need, the Review Panel is to consider: (a) the draft legislation setting out the proposed income and assets test in order to: (i) identify significant omissions, advantages and disadvantages, anomalies, and/or situations of potential hardship; (ii) recommend appropriate changes which take account of these problems, bearing in mind the relevant financial implications and the need to minimise the administrative cost and effort to the Government and pensioners; and- this is the second leg which covers everything else- (b) alternative mechanisms, bearing in mind the relevant financial implications and the need both to minimise the administrative cost and effort to the Government and pensioners, and to avoid any uncertainty or confusion among pensioners. In other words, the panel will have to consider the legislation and any alternative mechanisms. It cannot have a broader range of alternatives than that , but the Leader of the Opposition complains about it. Honourable members will be aware that the panel has been given those wide terms of reference. The Government has the strongest commitment to improving the standard of living of those pensioners without access to private income or assets. Let me illustrate the kind of unfairness that comes into the situation we are trying to deal with in our legislation. I do not understate the difficulties. Honourable members opposite, particularly those who have been in government as Ministers, must be aware, if they remember their oath as Ministers, of the extraordinary difficulties of trying to be fair to the pensioners and also to be equitable to taxpayers. It is essential that we take action, not only after death, against those types of schemes that convert income to capital and enable those smart enough and with enough money to circumvent the existing income test. The Opposition has claimed that the assets test is inequitable, but there is no doubt that the greatest inequities of all lie in the current income test. Take the case of two people who are neighbours. One is in a public service superannuation scheme and receives his or her benefit as weekly payments and therefore loses fringe benefits and part or all or his or her pension. Next door is a person who contributed the same amount in superannuation and received the same taxation benefits but who receives a lump sum payment and is able to be taxed only on 5 per cent of it. Mr Hodgman —Grave robber. Madam DEPUTY SPEAKER(Mrs Child) —I warn the honourable member for Denison. Mr BARRY JONES —Through some device, and many of them have blossomed in the community since the assets test was removed, such a person is able to receive, as well as the benefit of the lump sum payment, the full pension and fringe benefits. Mr Gear —Double dipping. Mr BARRY JONES —Yes, double dipping. Is anyone in the Opposition going to say that that is equitable? Will anyone say that it is just? Is it defensible, even by this spavined Opposition? There are two ways out of it. The first is to provide everyone with a full pension and full fringe benefits. The second it to overcome the situation by encouraging superannuation schemes through lump sum taxation or, however else, to provide weekly superannuation payments. Of course, if we provide people with full fringe benefits and full pensions we can do it in only two ways. The first way is by increasing taxation, because the pensions of today are paid for by the taxpayer of today. The second way leads to what inevitably happens in a scheme such as ours when we try to provide pensions to everyone, regardless of need. The pensions are set at inadequate levels, particularly for the low income people who need them most. In the period that we have been in office the maximum rate of pension has increased, whereas in the period of the Liberal Government, between December 1975 and December 1982, pensions declined from 24.4 per cent to 22.6 per cent of average weekly earnings. So let us not have any more humbug about what the Opposition did for the pensioners which tries to give the impression that we have let pensioners' positions decline. There are no welfare policies from honourable members on the other side. Are they prepared to increase pensions to 25 per cent of average weekly earnings? If they are not, they deserve the censure of the House. But there is nothing to indicate what their views are either way. Are they prepared to reverse their callous policy towards all the disadvantaged other than by exploiting them? Are they prepared to do anything for the disadvantaged? I see no evidence of that. What hypocrisy and what a disservice they are doing to the pensioners of this country by now engendering alarm and confusion among a group which deserves sympathy and our support, a group which, history shows, the Opposition does not care about and treats with contempt regarding pensioners as mere election fodder. Madam DEPUTY SPEAKER(Mrs Child) —Order! The Minister's time has expired. Mr WILSON(Sturt)(3.28) —It is the Labor Government, not the Opposition, that is causing the pensioners of this country great worry and concern. That concern has been placed upon them since August, when the Government announced that it would introduce an assets test, for in making that announcement the Government did not spell out the details. When it gave the details there was a huge public uproar, including protests from its own supporters. Now it has sent the assets test off to a committee and it appears that it will be coming back with a totally different proposal from that which it put forward back in August last year. Mr Barry Jones —That is in the terms of reference. Mr WILSON —It may be in the terms of reference. But the Government is saying that whatever test it introduces will be applied retrospectively to August last year. How then does a widow, feeling that she wants to leave her home and move to live with a relative, know whether she should sell her house and, if she sells it, what she should do with the proceeds? There are hundreds and thousands of Australian pensioners, men and women, who are desperately worried because they cannot plan their affairs and behave in the normal and rational way. Why? Because the Labor Government has put Damocles sword over them and they do not know how that sword will fall, whether it will affect them or their neighbour or not at all. Yet the Minister for Science and Technology (Mr Barry Jones), in making his speech, has said that it is we who have expressed the concern. Why is it that hundreds and thousands of pensioners are tripping into our offices, asking why and how the assets test will operate? It is not often that I agree with the Minister for Foreign Affairs (Mr Hayden) but he said that the determination to end means test-free pensions and to introduce means tests on assets and the savings of the rest of the 1.8 million pensioners is another kick in the teeth for the aged and retired citizens. Mr Howard —I'll bet he hasn't said that since the Labor Government has been in office. Mr WILSON —No, not at all. He said that when in opposition. But, having said one thing, having misled every pensioner in this country, he now supports the Government, which is doing the very reverse. The Minister for Social Security ( Senator Grimes), when in opposition, said: If people plan for their retirement they should be able to do so in the expectation that policies will be continued and be consistent. Mr Barry Jones —And fair. Mr WILSON —But he said that policies should be continued and consistent. The Government announced an assets test in August. It made the details vague. It is now implied by reports in the Press that a totally different form of assets test will apply. It is quite clear, as was reported in the Sydney Morning Herald this morning, that the recommendations of the committee apparently include proposals for a tougher test than that proposed. Now the Government want to impose a tougher test and make it retrospective. It wants to introduce this crazy scheme whereby people are taxed at death on the pensions they have received. How can every person who has received a pension be sure that a Labor government will not then say on death: 'You have received a pension, though you received it subject to an assets and means test and got the pension as a grant, not as a loan. We have retrospectively reviewed the situation and determined that you or your estate must pay for the pension you received over your lifetime'. That prospect is quite scandalous and the Government has not indicated in any way that that will not happen. Even if it did, no Australian pensioner could trust it and be sure that its promise would be honoured. The Minister, in his speech, made some comment about the terms of reference given to the committee. The Leader of the Opposition (Mr Peacock) drew attention to the fact that the terms of reference were very narrow. Indeed, they were very narrow because they point out and require the committee to advise how best to achieve the objectives of ensuring that expenditure on pensions is directed to those most in need. I happen to believe that the most effective way to direct resources to those people in the age bracket most in need is to pay universal pensions and have a sensible and equitable taxation system. It is very interesting to note that in the submissions from the Australian Council of Social Service relating to this whole review of the Government's proposal for the assets test, ACOSS-a body that usually puts great emphasis on needs based assistance-reached the conclusion that there be a total review of the income tax and social security system. The submission stated: The strong sentiment, virtually unanimous among pensioner groups, was that the Government might better institute a review of the income security system in conjunction with its review of the taxation system. That path of change should yield fewer anomalies than the one chosen. It is quite clear that the one chosen will yield massive anomalies, a whole succession of anomalies, and at the same time, while those anomalies keep coming out, it means more uncertainty for Australia's elderly citizens. At the end of the terms of reference there was a paragraph which stated that the review panel should consider: (b) alternative mechanisms, bearing in mind the relevant financial implications and the need both to minimise the administrative cost and effort to the Government and pensioners, and to avoid any uncertainty or confusion among pensioners. One would think from reading that that it would be possible for the committee to come out in the spirit of what ACOSS said and say: 'Let us look at the whole tax and social security systems'. It may be possible for the committee to look at the situation and say that it would be much more sensible to pay universal benefits to everyone and as a result have people behaving rationally and making sensible investment decisions and having made sensible investment decisions, receive the income and pay tax upon that income, together with their pension income and, in that way, have the whole community behave in retirement as we expect it to behave, as sensible human beings, during the years of participation in the work force. But no, there was once an Acting Minister for Social Security, the Minister for Health (Dr Blewett). It is quite clear that he, under the line, has given directions to that committee to prevent its reaching that sort of sensible conclusion of paying universal benefits that would tie in with the Labor Government's proposal for a national superannuation scheme. If we paid universal benefits, that would be a threshold and a base upon which to build a national superannuation scheme. What the Minister said to a group campaigning for senior citizens' rights was this: You are also aware that the Government has proposed to introduce an income and assets test on pensions. Although a panel of community representatives has been established to advise the Government on how this may best be framed, the Government is no less committed to its introduction. In the social security field the Government is determined to concentrate the resources available on those who are most in need. To do this the Government will proceed with its reforms and will not be deterred by past decisions. What were they? The past decisions not to go ahead with the originally announced assets test? The Government will not be deterred from those past decisions. So every pensioner in the land should know that there will be an assets test and it may well be tougher than the assets test originally announced. It will be backdated. Mr Barry Jones —But the benefits will be equitable. Mr WILSON —The benefits will not be equitable because what the Government will do is rob those people who have endeavoured to make provision for their retirement, those people who have endeavoured to be self-reliant, and penalise them. As a result they will adjust their affairs and the Government will become a government of pawnbrokers. It will seek from pensioners mortgages and other security over their assets. Will it take bills of sale over their watches, jewellery, furniture and refrigerators to pay back the pensions that each Australian, having contributed to the taxation system throughout his life, should be entitled to as a right? What we need is a rational retirement scheme for all Australians, not one that penalises those who happen to save in an asset form while at the same time, this Government allows people in other sectors of the community to receive publicly funded pensions paid for by taxpayers who are very often the very people who give it the advice that such an iniquitous assets test should be introduced. Madam DEPUTY SPEAKER(Mrs Child) —Order! The honourable member's time has expired. Ms MAYER(Chisholm)(3.40) —Madam Deputy Speaker, may I say once again, very slowly so that those people on the other side can understand the fact: The Gruen Assets Test Review Panel has not finished its deliberations. It has not reported to the Government. The Government cannot respond to a report which it has not received and therefore all the nonsense that has been going on is simply about reports in newspapers on what the panel may or may not do. That is precisely what this matter of public importance is about-the confusion being caused by the Opposition to every single elderly person in this country. I think that the alarm is about the fact that the boys have been found out. In my electorate, after the assets test decision was announced, it was interesting that most of the people I talked to came from one of my neighbouring electorates, an electorate which has been represented by a member who has sat in this Parliament for many years and who in February 1982 opened an office in his electorate for the first time. That is the measure of his concern and heartfelt interest in his electorate, including his older constituents. Because it was left to me to do the explaining, we had lots of Press releases about the confusion being caused to the elderly but we saw not one responsible deed by the representative of that electorate to explain to the members of his electorate precisely what the assets test was about. Mr Peacock —Thank God you are doing some work. Ms MAYER —I did not mind doing it because at least I was accurate. Let us talk about what it is that these honourable members opposite, who are so concerned for the elderly and so outraged about all of this, actually did. The Minister for Science and Technology (Mr Barry Jones) has pointed out that the value of the pension dropped during the Liberal-National Party's time in office. The Minister did not point out but if he will allow me I will point out that inflation rose in that time, further taking away the value of the pension. Did we get anything in return? Certainly we did not. Who suffered during that time? It was the needy who were totally dependent on their pensions, dropping all the time in value and being able to provide fewer of the things needed by pensioners . All kinds of things were going on. We had the Greek conspiracy case, too, which was $8m worth of nonsense. That took away from the pensioners. What else took away from the pensioners? The economic recession took away from them because more money had to go out in the unemployment benefit. More unemployment benefit had to be paid as a result of a conscious economic decision of the previous Government. That took away money from that available to increase old age pensions to the level at which they should have been kept, at the level we will take them to. We have the amoeba theory of pension adjustments-if one is spineless or flaccid enough, if one hides far enough behind a murky flow of words, then one can talk about pensions as if one really means something insensible. I believe the Opposition has demonstrated its capacity to do nothing but cause confusion. It has no intention of doing anything about the situation and its record so far is abysmal. We have all this fake outrage, fake concern and fake policies. But the record is not fake; the record shows very plainly that people really understand what the previous Government was doing. That is why it is now the Opposition. The assets test was referred to a committee because this Government is committed to the process of consultation. When somebody says a proposition is not what they want, we are quite prepared to talk about it at length. What a contrast to the previous Government. When did it ever consult with anybody but its own friends? Members of that Government were like sheep following Bo Peep, but they lost their Bo Peep and now they do not know where to go. They have totally laughable policies about this, that and the other thing, and none at all about those things that are important. The Opposition calls for a reduction in the deficit but it certainly has no intention of saying where that reduction will take place. Will it come from the outlays that it would make on pensions, one of the biggest outlays in the land? Security for the aged will cost $9.1 billion this year. That amount is bigger than the deficit. Will members of the Opposition cure the deficit by making aged incomes the target to get Budget outlays down? Mr Cadman —So you are going to tax the elderly? Ms MAYER —Not us; the Opposition wants us to reduce the deficit. Members of the Opposition are very opposed to outlays in growing areas of expenditure. Expenditure on the aged is one of the fastest growing areas because they are a growing section of the population. Blind Freddie could do his sums better than members of the Opposition, and I daresay has in the past. They want to spend more, collect less, reduce the deficit and they want to give it to the pensioners as well. What on earth does this Opposition want to do? The argument is political; that is all it is. There is politics in this argument; there is no purpose in it. The Opposition did the same with immigration. Honourable members opposite deliberately set up questions implying racism. They know that consultation is a lengthy process, but they seize opportunities with nasty glee to make divisions in our community. They cannot stand the notion that this Government is in power because it offered consensus, because the public voted for consensus and it wants consultation. They behave like a lot of disruptive, hating, nasty little boys. I say that with some passion. I am tired of sitting here and looking at some of the grade 6 behaviour we get. The Opposition does not care who gets hurt in the process of their nasty little political opportunistic operations or who was offended by the nonsense they went on with yesterday. All they want to do is see whether they can find a vote from anyone at all, no matter what they have to do to get it. The former Treasurer believes in the assets test-he is on record about that-but the previous Goverment stepped back from the test in place and left a vacuum because the problem was put into the too hard basket. As to superannuation, the superannuation tax cost $2.5m for coverage of 45 per cent of the work force. The benefits are being wasted, as everybody knows. The bigger the scheme and the richer you are, the more you get. Is that equity; is that fair; is that looking after the needy? It is regressive in its operation and we have to do something to make it more sensible. The matter of public importance refers also to blunders. Let us have a look at a few blunders. During the time of the previous Government pensions dropped from 24 per cent of average weekly earnings to 22 per cent of average weekly earnings . Was that a blunder or was it intentional? Inflation rose, severely cutting into the value of the pension. Was that intentional or was it a blunder? The health insurance confusion upset absolutely everybody in the community, including aged people. Was that intentional or was it a blunder? Members of that Government sent the economy into deep recession. Was that intentional or just a blunder? They created the highest level of unemployment in this country since the 1930s, depriving age pensioners of the opportunity to have a better pension. Was that intentional or was it a blunder? What are we talking about here? Are we talking about a Government that has to correct anomalies which were created by the spinelessness of the present Opposition and which, in doing so, will consult the people involved however long that consultation takes, or are we talking about an Opposition which is a pack of political opportunists who will hurt anybody at all in their mad ambition to get back to where they were, where they can sit back doing nothing, hoping that somebody will lead them. I do not believe that nine-tenths of the elderly people in this country believe that they were better off under the previous Government. I will say one thing: The previous Government certainly treated age pensioners fairly badly. I was in an elderly citizens centre when a Liberal candidate for one of the local seats marched in with a handful of material to be letterboxed. He dumped it in that centre with the understanding, without even asking, that those people would go and letterbox it for him because, after all, people over 65 years of age are naturally Liberal voters. That is not quite right, as he found out in 1983 and as he will find out again whenever it is that he has to try it again. Bill presented by Mr Young, and read a first time. Mr YOUNG(Port Adelaide-Special Minister of State)(3.50) —I move: That the Bill be now read a second time. The passage of the Commonwealth Electoral Legislation Amendment Act 1983 heralded the most significant changes to our electoral legislation for fifty years. As part of the Government's continuing commitment to electoral reform, it now undertakes to bring referendum legislation into line with the new Electoral Act, to make provision for voting at referendums for electors in the Territories , and to incorporate certain other necessary modifications to current procedures . The changes are largely of a machinery nature, and will simplify the administration of referendums, particularly when they are held concurrently with elections. The most appropriate approach, is to repeal the Referendum ( Constitution Alteration) Act 1906 and subsequent amending Acts and to replace them with a new Act. The new Electoral Act has removed or brought up to date many outmoded provisions; it has removed certain anomalies; it has extended the right, and in the case of Aboriginals the obligation to enrol and to vote; it has made it easier for electors to get on the rolls and stay on the rolls; and it has altered polling procedures to make voting more accessible to previously disadvantaged groups. Hence overseas electors, itinerant workers and Antarctic electors may now register a vote. Electors may vote as ordinary voters at any polling booth within their division instead of only within their subdivision. Mobile polling facilities will be provided in the outback and for patients in hospitals and similar institutions. A register of postal voters will be established so that people in remote areas or people unable to attend polling booths can be sent an application for a postal vote immediately an election is announced. This Bill ensures that the worthwhile reforms enshrined in the new Electoral Act will also streamline voting procedures at future referendums. In addition this Bill makes other changes to our referendum legislation. The current Act provides that 'Yes' and 'No' cases be submitted within four weeks after the passage through the Parliament of the proposed law. Then, within two months of the four weeks and not later than two weeks after the issue of the writ, pamphlets must be printed and posted to each elector. These provisions can mean that the pamphlets may reach electors months in advance of voting day for the referendum. They should be replaced by a requirement that the Electoral Commissioner simply despatch the yes/no pamphlets not later than 14 days before voting day. The requirement should also be extended to cases where a Bill is passed by one House only. At present, the Electoral Commissioner is not under legal duty under the Act to print and distribute the yes/no pamphlets where the Government postpones or cancels a referendum. It is highly desirable that it be expressly stated in the new Act that this is the case. The new provisions in the Commonwealth Electoral Act relating to disclosure of electoral expenditure apply to parties, candidates and groups of candidates; persons acting without the written authority of parties, candidates and groups; and publishers, broadcasters and printers. The Government is of the view that for referendums there should be a provision requiring that returns of expenditure be lodged only by publishers, broadcasters and printers. These returns will indicate the major sources of referendum expenditure. It would be consistent with the electoral provisions for the referendum period for which returns must be lodged to be from the date of issue of the writ to voting day for the referendum. In addition, the electoral provisions relating to the disclosure of donations to political parties and candidates are not readily translatable to referendums. Referendum donations do not give rise to potential corruption in the way that undisclosed election donations might. Therefore there is little point in requiring their disclosure. Members will be aware that in the last 12 months the Government has demonstrated its concern for and interest in electoral matters. The legislation which I am now putting before honourable members should be considered against this background of concern. The Government believes that the changes proposed to the machinery for conducting referendums are timely and sensible, following the passage of the new electoral legislation, yet at the same time preserving the basic elements and broad principles which are already at the heart of the current system. I commend the Bill to the House. Debate (on motion by Mr Steele Hall) adjourned. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS(Fremantle-Minister for Finance)(3.55) —I move: That the Bill be now read a second time. The main purpose of this Bill is to adjust 1984 grants to government and non- government schools in the States and Northern Territory for cost increases, in line with the Government's very important decision to reintroduce retrospective cost supplementation arrangements for Commonwealth Schools Commission programs. These arrangements represent a considerable step forward for school systems and authorities and mean that they are now able to plan ahead in the confidence that grants will be maintained in real terms. This will involve a further appropriation of $9.7m. This Bill also includes a number of minor amendments including clarifying some aspects of building and equipment grants for schools serving predominantly Aboriginal communities. In the second reading debate on the States Grants (Schools Assistance) Bill 1983, the Minister for Education and Youth Affairs (Senator Ryan) undertook to establish an independent appeals tribunal by non-government schools against their classification for recurrent funding purposes. The Minister has had the matter under consideration and the Schools Commission has been asked to consult with non-government school authorities and organisations on the form of a suitable appeals mechanism before the ncessary legislation is introduced in the Budget session. I commend the Bill to the House. Debate (on motion by Mr Steele Hall) adjourned. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS(Fremantle-Minister for Finance)(3.58) —I move: That the Bill be now read a second time. The primary purpose of this Bill is to adjust grants to universities, colleges of advanced education and technical and further education institutions for cost increases, in line with the Government's decision to reintroduce retrospective cost supplementation arrangements for Commonwealth Tertiary Education Commission programs. Under these arrangements, all wage and salary increases during the program year will be met, while increases in non-salary and capital costs will continue to be met up to the beginning of each program year. These arrangements make an important contribution to rational and stable planning by tertiary institutions. The total amount of supplementation to be provided under this Bill is $62.2m. I commend the Bill to the House. Debate (on motion by Mr Fife) adjourned. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS(Fremantle-Minister for Finance)(4.00) —I move: That the Bill be now read a second time. The primary purpose of this Bill is to supplement for cost increases the grants available to government and non-government education authorities in the States and the Northern Territory to conduct projects and programs under the new participation and equity program which the Government introduced this year. This adjustment is in accord with the Government's undertaking to provide retrospective cost supplementation for this program. The adjustments are consistent with those being made to the States Grants (Schools Assistance) and States Grants (Tertiary Education Assistance) Amendment Bills which are also before the House today. This supplementation will involve a further appropriation of $1,074m. I commend the Bill to the House. Debate (on motion by Mr Fife) adjourned. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS —(Fremantle-Minister for Finance) (4.01)-I move: That the Bill be now read a second time. The main purpose of this Bill is to amend the Australian National University Act 1946 in order to remove provisions inserted in the Act in 1979 and 1981 which restrict the activities of student organisations in the university. In addition to this primary purpose, the Bill provides for a number of minor amendments to the Act, most of which have been requested by the university. The amendments made to the Australian National University Act in 1979 and 1981 by the Fraser Government were directed at restricting the ways in which fees levied on students for the provision of amenities and services could be used. An objective was to prevent these fees being used for so-called socio-political purposes, including affiliation by a student association with a national association of students. These restrictions involve an unwarranted intrusion into the internal affairs of the university. Students should be free to make decisions about how they run their organisations subject to their accountability to the governing body of the university. A wide range of student activities should be a normal feature of campus life. It is for the Council of the Australian National University to decide, not the Government, what are appropriate uses for funds levied to provide amenities and services. To impose restrictions of this nature represents an unacceptable limitation on the proper autonomy of the Council as the governing body of the university. It is the Government's intention to repeal the restrictions brought into the Act in 1979 and 1981 so that the Act in the area of funding amenities and services for students will return to the situation existing prior to the 1979 amendments. The Council of the University has been consulted and has indicated that it welcomes the action the Government is taking. It will again be the responsibility of the Council to supervise the use of these funds as an aspect of its general responsibility for the governance of the university. The Bill also provides for a number of minor amendments to the Australian National University Act. The Bill removes from the Act the provision for an annual appropriation of $650,000 for the university. This provision goes back to the establishment of the university in 1946 but has been overtaken by time. As the annual appropriation for the university for running expenses is now of the order of $121m, it is sensible to remove this anachronism from the Act and to add this amount to the funds appropriated each year for the university. A number of amendments requested by the university are included in the Bill. These include the removal of sex-discriminatory language from the Act, the addition of student representation to the Board of the Institute of Advanced Studies, the establishment of the position of Treasurer as an office of the university, and the up-dating of penalties for traffic offences on university land. The Bill gives the university power to make statutes authorising the disposal of vehicles abandoned on university land after reasonable efforts have been made to trace their owners. The opportunity is also being taken to make some formal amendments to the Australian National University Act and to bring this Act into line with current legislative practice in several matters. These are the provision for disclosure of interests by members of the University Council and for disqualification of a member of Council. The Bill has no implications for Commonwealth funding of the ANU. Fees for amenities and services are levied from students by the University Council at rates approved by the Council and do not involve Commonwealth expenditure. This Bill gives effect to a principle of considerable importance in defining the respective roles of government and university governing bodies in the management of institutions. It embraces a broad concept of the nature and value of a university education. I commend the Bill to the House. Debate (on motion by Mr Fife) adjourned. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS(Fremantle-Minister for Finance)(4.06) —I move: That the Bill be now read a second time. The Bill is a companion measure to the Bill to amend the Australian National University Act. It is similarly directed at removing the provisions inserted in the Canberra College of Advanced Education Act in 1979 which restrict the activities of student organisations in the college. In addition to this primary purpose, the Bill also provides for a number of minor amendments to the Act. The Bill gives effect to the same principles in removing the restrictions imposed on the activities of student organisations in the college as does the Australian National University Amendment Bill. It is similarly based on the view that the 1979 amendments involved an unwarranted intrusion into the internal affairs of the college. The removal of these restrictions will mean that it will again be the responsibility of the College Council to supervise the use of funds levied for the provision of amenities and services as an aspect of its general responsibility for the governance of the college. The College Council has been consulted and has indicated that it welcomes the Government's initiative in this matter. While the Government's general intention is to return to the pre-1979 statutory situation, the Bill also brings the college into line with the Australia National University in terms of the categories of fees that may be covered by a determination of the College Council . This has been done in order to clarify the powers of the College Council in respect of the funding of the activities of student organisations in the college . The Bill also provides for a number of minor amendments to the Canberra College of Advanced Education Act. These include the removal of sex-discriminatory language from the Act, enlarging the Council of the College by adding representatives of non-teaching staff and college alumni, and empowering the college to confer honorary degrees at levels approved by the Minister. In the case of the conferring of honorary degrees, the Government's intention is that the college should be able to confer honorary degrees at levels equivalent to the normal awards of the college. The Bill provides an opportunity to make some formal amendments to the Act and to bring this Act into line with current practice. The Bill does this in respect of disclosure of interests by members of the College Council. This Bill has no implications for Commonwealth funding of the Canberra College of Advanced Education. Fees for amenities and services are levied from students by the College Council at rates approved by the Council and do not involve Commonwealth expenditure. Like the companion Bill, this Bill gives effect to a principle pertinent to the definition of the respective roles of government and college governing bodies. It similarly derives from a broad concept of the nature and value of a college education. I commend the Bill to the House. Debate (on motion by Mr Fife) adjourned. Bill presented by Mr Beazley, and read a first time. Mr BEAZLEY(Swan-Minister for Aviation)(4.10) —I move: That the Bill be now read a second time. I have very much pleasure in introducing this Bill. The purpose of the Australian National Airlines Commission Retention Bill 1984 is to repeal the previous Government's legislation providing for the establishment of a public company and to remove any doubt that Trans Australia Airlines will remain a statutory authority of the Commonwealth. Honourable members will be aware that TAA has been operating at a significant disadvantage to its competitors for many years because of the outdated provisions of its legislation and the cavalier treatment it received from the previous Government. The previous Government, from the mid-seventies, made numerous announcements about what it was going to do to allow TAA the freedom to compete more effectively. Initially, TAA was to be retained as a statutory authority, with its enabling legislation revised to put it on a more commercial basis. In fact, in 1980 the previous Government introduced legislation into the Parliament to achieve that aim. The then Minister for Transport made numerous statements that the Government would not sell TAA to private interests. But that legislation was never passed and within less than 12 months the previous Government had done a complete about turn. Legislation was introduced in 1981 to repeal the Australian National Airlines Act with the specific purpose of setting up TAA as a public company. It was clear that the aim of the whole strategy of transforming TAA into a public company was to sell it off to private interests. Indeed, consultants were engaged to specifically address this question. This legislation , the Australian National Airlines Repeal Act 1981, was passed by the Parliament , and received royal assent, but was never proclaimed. Having made the decision to transform TAA into a public company, the previous Government set about trying to implement it. Undoubtedly it found that it was not as easy as it had thought. In fact, there are some complex difficulties associated with the proposed transformation and many significant costs involved. Some of the difficulties include: the transfer of matters from Commonwealth to State jurisdiction, for example, long service leave, workers compensation, transfer of titles of land, eligibility for State taxation; TAA's overseas loans would require renegotiation which would likely result in further requirements for government guarantees and increased interest rates on those loans involving increased costs to TAA; the requirement for specific legislation to allow TAA to operate certain of its intrastate services; the requirement to pay State stamp duty on the transfer of property and assets from the Commission to the company involving likely expenditure of $3m to $5m likely; the industrial implications over the potential changes in employment conditions and uncertainty over the future ownership of the airline. It was not possible for our predecessors to resolve these problems. What they left behind was an airline in the grip of uncertainty. I cannot over-emphasise the effect of this uncertainty on the management and staff of TAA. It has had a significant impact on its performance and morale. The outdated provisions of the Act and the downturn in activity in the airline industry over the last two years have also taken their toll on TAA's competitiveness. Unfortunately the downturn in activity also coincided with TAA's decision to purchase wide-bodied aircraft. With the benefit of hindsight it is easy to criticise TAA for this decision, but in different circumstances it may have proved to be a successful and innovative move on the part of the airline. Since coming to office, the Government has looked very hard at the difficulties faced by TAA and at the options for its future. The first major initiative on TAA taken by this government was the injection of capital funds to reduce TAA's debt-equity ratio to a level more appropriate for a commercial business concern engaged in airline activity. Even the previous Government was well aware of the handicap imposed on TAA by inadequate capitalisation. Its own consultants believed that TAA was starved of capital and would require a large capital injection before any sale option could be entertained. For over 20 years TAA has struggled with a capital of $15m. This has meant that its investment in equipment has had to be financed solely by loan funds. The injection of a further $25m in December 1982 by the previous Government helped, but at most it was a token gesture. The injection last June of a further $90m in capital by the present Government brought TAA's capital to $130m and gave the airline the flexibility to plan and finance its operations on a more commercial basis. The effect of this move is now becoming apparent. In 1981-82 and 1982-83 TAA's operating losses were $6.6m and $16.9m respectively. For 1983-84, TAA is budgeting for an operating profit-evidence of a significant turnaround in its financial performance. We will also treat TAA in a more commercial way on the matter of dividends. Decisions will no longer be made on the exclusive basis of what contribution TAA can make to government revenue, but will take into full consideration the future of TAA as a viable commercial enterprise. It is the Government's view that there is nothing to be gained in setting up TAA as a public company. It is the stated policy of this Government that TAA will remain wholly owned by the Commonwealth. We see no reason to subject TAA to the turmoil and dislocation of transforming the Commission into a company when it can operate just as efficiently and with full accountability to the Government and the Parliament in its present form. Nor can we justify to the taxpayer the very significant costs that would be incurred in such a transformation. This Government will retain TAA in full public ownership as a statutory authority. In this it can remain an arm of Government policy to ensure that the best interests of consumers are served. Imagine the ludicrous situation which would have resulted from the previous government's intention to sell off TAA. The unlucky new owners would have found themselves with a neglected and depleted airline, facing an imminent re- equipment program. In the unlikely event that this Opposition is returned to government and implements its policy of selling TAA it will find it in better shape but still facing a major re-equipment program. Just to make TAA particularly attractive to potential new owners in the event of its being sold off, the thrust of the Opposition's policy-we have not heard it yet-is to deregulate the aviation industry at what would be the most vulnerable point in TAAs new ownership. That point, when the two airlines agreement runs out, is 1990. I have news for them. If ever the Opposition is in a position to sell TAA, the first visit of the new owners will be conducted at knee height, with the unfortunates begging for an extension of the agreement. With those handicaps they will be rubbed out by the competition. The consequences of the policy will be chaos in the interim and monopoly in the ultimate. Indeed, had the previous Government succeeded in implementing its intentions to sell TAA and then deregulated the industry, there was the very real possibility that the Australian domestic airline industry would have degenerated into a privately owned monopoly, unless preventive legislation was enacted. The consultants report clearly identified that the existing legislative and contractual arrangements which support the two-airline policy could not preserve the independence and separate management of the major trunk operators if TAA were sold. The consultants recommended: That industry wide limitations on the size of shareholdings in any trunk route operator be limited to 10 per cent, with a proviso that a person not holding shares in any other trunk route airline operator may acquire or continue to hold an unlimited number of shares in one trunk route airline operator. In defending the Australian consumer our first plank is a strong, competitive TAA, not one with its organisation under constant attack. From that base a sensible approach can be adopted to a change in the regulatory environment of the Australian aviation industry. When we were in opposition we did not believe that the 1981 airlines legislation should bind us to the two-airline policy for a further eight-year period. On coming into office we could do no other than proceed on the basis that such a major arrangement should run its course. There is a need to review the current arrangements, and I plan to initiate a review later in the year. This review will need to consider the total framework of regulation which best suits our unique national requirements. It will be an orderly review and will place us in an informed position for determining the arrangements to apply in the 1990's. The review will need to look at previously neglected aspects of the industry which this Government is concerned should be covered in any future arrangements. In this category I include the protection of consumer interests. In other words, the balance will move away from what the airlines want to what the consumers want. As a government concerned with the social implications of our actions, we are committed to examining the impact of deregulation in overseas countries, particularly in the United States of America, and of assessing the lessons for Australian aviation. There are significant differences between the situations applying in Australia and the United States which are often overlooked. For example, Australia has a population of 15 million, widely separated around the edges of a big, empty land of 7 3/4 million square kilometres. Three-quarters of our population are, in fact, concentrated in only nine major cities. The United States is only 20 per cent larger than Australia, but has 15 times our population and many more cities and towns of reasonable size. Similarly Europe, while 35 per cent smaller than Australia, has 35 times our population, distributed even more uniformly than in the United States. In 1982 the United States domestic airlines handled at least 300 billion revenue passenger- kilometres of traffic, as against Australia's 10 billion. At least 15 domestic United States airlines carry more traffic than either TAA or Ansett Airlines of Australia, and 11 of these are more than double the size of either major Australian airline. The largest United States airline carries more than seven times the total Australian traffic and each of the five largest carries more than five times the traffic of either TAA or Ansett. These few comparative facts demonstrate that it is facile to argue that what is an appropriate policy for domestic aviation in the United States will necessarily be an appropriate policy in Australia. Australia must develop domestic aviation regulatory arrangements which take account of unique requirements: Our geography, our population distribution and our prevailing constitutional arrangements which leave the regulation of intra-State air services to the individual States. There are some advocates of immediate deregulation who assume that problems of frequency and costs of services would rise in country areas. However, impact on these areas may well be minimised. Most rural services are regulated by the States, and with some exceptions in Queensland and the Northern Territory, are conducted by regional airlines. It might well be that under deregulation the immediate problem of level of service and cost would be experienced in the distant major centres of Darwin, Perth, Adelaide, North Queensland and Tasmania. When one examines the experience of deregulation in the United States, one will see that direct air services over comparable distances connecting cities of comparable size, have been very significantly reduced. Would deregulation reduce initially the cost of fares on heavily trafficked trunk routes but increase fares on less popular and more remote services? If monopoly arose that short term gain on the heavy routes would also disappear. We should recognise that the two airlines enjoy advantages other than those in the legislation. The existing infrastructure at our airports is a direct development of the two airlines policy. What inhibitions would it place on prospective new airlines in a deregulated environment, and what demands would this place on the Commonwealth to expand facilities? I raise these questions not to provide answers at this time, but to emphasise the importance of conducting an orderly review of domestic regulatory arrangements which can fully examine such questions and provide advice to government. If the Opposition goes the whole way with its enthusiasm for the British Government's version of privitisation TAA would be sold, airports would be privatised and while the aviation industry was adjusting to these fundamental changes, deregulation would be thrown in for good measure. All of these fundamental changes would be taken as an act of faith that economic policies which are fashionable in other parts of the world should also be applied in Australia. It would embark on this course without any examination of the impact that these changes would have on the airlines, the communities they serve, their employees or for that matter, the Government which provides the infrastructure to enable the airlines to operate. If the Opposition follows this scenario there is every chance that Australia's aviation system would slide into chaos. I know the Opposition spokesman on aviation matters is a responsible man and I hope that he will ensure that these proposals that have been advanced in recent days by other spokesmen, not himself, will be reconsidered. I look forward to the Opposition's announcement of its aviation policy with great interest to see whether it does pursue this simplistic policy. In contrast to the Opposition, the Government wishes to pursue a logical and structured approach to the future of the Australian domestic aviation industry. We will not pursue change for change's sake. As I said, we will conduct a comprehensive review to recommend on appropriate domestic aviation regulatory arrangements, and we will make the necessary changes in a measured and deliberate manner. Our aims are to ensure that the interest of consumers are properly protected and that the aviation industry is provided with the stability necessary for its future development. The retention of TAA in full public ownership and as a statutory authority is an essential precondition to the achievement of these aims. A strong and vital TAA will be a major asset to all Australians, whatever regulatory arrangements apply to Australian aviation in the future. I commend the Bill to the House. Debate (on motion by Mr Spender) adjourned. Bill presented by Mr Beazley, and read a first time. Mr BEAZLEY(Swan-Minister for Aviation)(4.25) —I move: That the Bill be now read a second time. Mr Speaker, I now introduce the second Bill in this package of legislation. Honourable members will be aware that Trans Australia Airlines has been operating at a significant disadvantage to its competitors for many years. The principal difficulties faced by TAA in recent years have been threefold: Firstly , it was severely under-capitalised. Secondly, it has had to carry a superannuation burden considerably higher than its principal competitor, Ansett Airlines of Australia. Thirdly, outdated provisions in its legislation have unduly hampered the management of TAA. The first of these difficulties, the under-capitalisation of TAA, was quickly addressed by this Government when we assumed office. In June 1983 we increased the capital base of TAA from $40m to $130m. This has provided TAA with the working capital base needed to ensure that it can operate effectively, and has been a major factor in enabling the airline to improve significantly its financial performance during this financial year. The Bill which is now before the House will address the two remaining areas of difficulty to which I have referred. Trans Australia Airlines has suffered significant disadvantage through the level of contribution the Australian National Airlines Commission has been required to make to the Commonwealth Superannuation Scheme. Let me deal with the superannuation problem first. The effect of the arrangement whereby the ground staff of TAA were eligible to join the Commonwealth superannuation scheme has meant that the Commission has been required to make employer contributions to the Scheme at a level significantly greater than for schemes provided for similar employees in Ansett and other private organisations. In fact, the level of contribution by TAA has been around two and a half times greater than the equivalent industry rate. As a result, the Commission, in consultation with its various industrial organisations, has set up private superannuation schemes for new employees and existing staff who took up the option of transferring from the Commonwealth scheme. The level of contribution by the Commission to these schemes is commercially negotiated and is generally equivalent to Ansett's schemes. However, many TAA employees exercised their right to remain with the Commonwealth scheme. This is one area where even the previous Government realised TAA was facing an unfair burden. The Government has decided to remove this disadvantage and embody in legislation the provision that TAA pay employer contributions to the Commonwealth superannuation scheme at the same rate as it contributes to its equivalent private scheme. Outdated provisions in its legislation have required the Commission continually to obtain the approval of various arms of government in matters which, in comparison with its competitors, were of a relatively minor, day to day nature. This has imposed unnecessary management constraints on the Commission. The Government has therefore undertaken a close examination of the relationship between TAA and the Government. In carrying out this review, the Government has had the benefit of the Commission's views on the best way of improving the commerciality of TAA. Against this background the main objective of the Australian National Airlines Amendment Bill 1984 is to give TAA greater flexibility of management and greater responsibility in its commercial airline operations while providing an appropriate level of ministerial control and oversight. This Bill achieves this purpose. Under the arrangements proposed by the Government, TAA will be able, on strictly commercial grounds, to request additional capital; have more freedom in relation to staffing, purchase and disposal of assets; and more freedom in borrowing arrangements, application of profits after dividend, and insurance arrangements. These provisions will allow TAA to take the decisions in line with commercial reality. In addition, TAA will be required to set profit and dividend targets based on commercial criteria. However, to ensure an appropriate level of accountability, the Government will retain the right, under the proposed legislation, to approve or revise these targets. I turn now to the specific provisions of the Bill. Under clause 4, the Commission has been increased from seven members to a minimum of seven and a maximum of nine. This has been done to increase the level of representation on the Commission and to provide greater management efficiency in giving TAA the ability to draw on expertise when needed. Clauses 5 to 7 update arrangements for the appointment of commissioners and acting arrangements and procedures to be adopted where a member may have a pecuniary interest. Clause 8 increases the quorum for Commission meetings from three to four to cover the increased membership to make the arrangements similar to those of the Australian Shipping Commission-the Australian National Line-and the Australian National Railway Commission. Clause 10 allows the Commission to exercise its discretion in determining employment and employment conditions of its staff. Salary and allowances of the General Manager will continue to be subject to determination by the Remuneration Tribunal. Although clause 11 repeals this reference in the Australian National Airlines Act 1945, the arrangement is presently covered by the provisions of the Remuneration Tribunals Act 1973. This will allow any future revisions to the arrangements for the determination of the remuneration of chief executives of Commonwealth statutory authorities to be implemented without further amendment to TAA's Act. In regard to the operation of intrastate services, clause 12 provides that the consent of the State Premier is no longer required before TAA can provide intrastate services in Queensland and Tasmania. This is replaced with the requirement that TAA operate these services in accordance with State law and puts TAA on the same basis as any other operator wishing to engage in these services. In passing, I should point out that this amendment was proposed by the previous Government in its 1980 legislation. Clause 13 revises arrangements that require the Commission to obtain the approval of the Minister before establishing or before buying shares in another body corporate, in circumstances where TAA would have effective control of that organisation. While the present Act does not contain the requirement for ministerial approval, its inclusion has been considered necessary to ensure that is proper ministerial accountability over the actions of the Commission in this area. For a very long time the Commission has been hamstrung by the requirement to seek ministerial approval before acquiring or disposing of any property, right or privilege, or entering into a contract for the construction of a building where such arrangements exceed $250,000 in value. Ministerial approval has also been required for the lease of land where the period of the lease exceeds ten years. Clearly these limits are now well out of date and clause 14 provides for an increase in the monetary limits to $5m for land and buildings and $2m in respect of other contracts. Ministerial approval is also required to cover circumstances where TAA guarantees the borrowings of a subsidiary or another organisation and thus may become liable for the repayment of the loan if the potential liability exceeds $2m. Arrangements similar to those applying to ANR and ANL are to be included under clause 15 to ensure that TAA is reimbursed for any losses incurred in operating services where it has been directed to do so by the Minister. Similarly, the Minister is to table the details of those directions in the Parliament. TAA will be able to seek the injection of additional capital from the Commonwealth in circumstances where the Commission considers it is commercially justified. Clause 17 removes the existing arrangements for the payment of dividends. These are replaced by clause 18, whereby the Commission makes a recommendation on commercial grounds to the Minister on the level of dividend for each financial year. The Minister can approve or direct the Commission to pay a different dividend but in making a determination, the Minister not only has to take into account commercial criteria but also is required to table in Parliament a notice with reasons. The effect of the amendment is to remove the ability used effectively by the previous Government to limit TAA's access to funds-funds which could have been used to finance re-equipment programs or invested elsewhere to reduce TAA's heavy dependence on borrowings. Let us be quite clear as to the impact of the policies of the previous Government. Over the seven year period from 1975-76 to 1981-82 TAA earned almost $20m in post-tax profits but was required to pay back almost $18m in dividends. This represents repayments of about 90 per cent of its profits. Under the new arrangements the dividend payment will be more attuned to commercial realities rather than to the revenue requirements of governments. Clause 18 also provides for revised arrangements in respect of borrowings, superannuation and financial policy. In regard to borrowings, TAA will be given additional freedom to raise monies by dealing in securities. Similar provisions were included in the changes made to ANR and ANL last year. The provisions covering Commonwealth guarantees on loans have been extended to cover the guarantee of penalty interest and to loans taken out by wholly owned subsidiaries of the Commission set up to own and operate aircraft. This provision is to put TAA on a similar footing as its major competitor, Ansett. This Government has recognised the particular disadvantage TAA has faced in the arrangements applying to those of its staff who are members of the Commonwealth superannuation scheme. Unlike Ansett, TAA has had to make employer contributions in respect of the Commonwealth superannuation scheme at a level more than double the equivalent industry rate. TAA has established its own superannuation plan for new staff, and existing staff have been given the option to transfer from the Commonwealth scheme. Under the new arrangements to be embodied in the legislation, TAA will be required to make contributions only in respect of employees who remain in the Commonwealth scheme at the same rate as it contributes to its own plan. In line with the previous Government's decision the Commonwealth will fund the shortfall. However, the impact of this liability will be gradual and will not affect the Commonwealth's Budget in any substantial way for some time to come. In regard to the financial policy of the Commission the Bill, as mentioned earlier, enables the Commission to set profit targets on a commercial basis. These targets will be subject to the approval of the Minister, who may direct that a different target be set. I should emphasise that in setting the profit target, both the Commission and the Minister must take account of the need to maintain the net worth of TAA and to consider the profit on the basis of the need to ensure a reasonable return on capital. The net worth of the Commission is the equivalent of a company's shareholder funds and is defined as the sum of capital, reserves and retained profits. As is the case with respect to dividends the Minister will be required to table in the Parliament the notice of direction and the associated reasons, where a different profit target has been determined. During the currency of each financial year the Commission will be required to review periodically its performance as it relates to the profit target. To maintain an overall view of TAA's performance, the Commission will be required to draw up annually a three- year rolling corporate plan. This plan will contain TAA's financial and operational targets, its policies and strategies and, because the commercial information in these plans would be of obvious benefit to TAA's competitors, it will remain confidential to the Government. Under clause 20, the Commission will be given authority over the operation of its insurance accounts. This authority will be subject to a disallowance provision which the Minister must exercise within 30 days. I should emphasise that the new provision does not remove the requirement for TAA to insure against major risks, nor does it alter the basic function of the insurance accounts. What it does do is to require the Minister to take positive action if he considers the proposed arrangements by the Commission inappropriate. Clause 21 allows the Commission the freedom to determine how the balance of profits after the dividend has been paid can be applied. This gives the Commission the unrestricted choice in regard to commercial investment decisions. The reporting requirements of the Commission have remained basically unchanged. The only revision has been to place a time period of 21 days for the Minister for Finance to approve or make a direction altering the form of TAA's financial statements. Clause 23 provides for an update in the reference to the current airlines agreement, while clause 24 extends the provision for compensation for damage to property to that owned by wholly owned subsidiaries owning and operating aircraft. At the request of the Commission the Act is being amended by clause 25 to repeal the provision relating to the arrest of offenders. The Bill also contains a number of machinery amendments to provide for the legislation to be in accord with modern drafting practice. I am sure honourable members will agree that the Government is adopting the best arrangements not only for TAA but also for the Australian travelling public. TAA has responded well to the injection of $90m in capital funds last financial year. This Bill, by further enhancing TAA's competitiveness, will enable the airline to take further initiatives which would not have been possible under the previous Government. They will make TAA a truly competitive force in Australia's airline industry well into the 1990s. I commend the Bill to the House. Debate (on motion by Mr Spender) adjourned. Bill presented by Mr Beazley, and read a first time. Mr BEAZLEY(Swan-Minister for Aviation)(4.40) —I move: That the Bill be now read a second time. The purpose of this Bill is to provide protection to aircraft crew members against the use of cockpit voice recorders for purposes not related to air safety. The Bill will place restrictions on the access that interested parties may have to information obtained through cockpit voice recorders (CVRs) in civil aircraft, and on the uses that may be made of such information in Australia. Cockpit voice recorders have been in use in Australian civil aircraft since 1964. They were installed for air safety purposes, as a means of obtaining information about the causes of accidents involving aircraft. Australia was among the first countries in the world to work on the development of cockpit voice recorders, and then to require their use in certain classes of civil aircraft for air safety purposes. However, Australia has lagged behind other countries in clarifying the uses to which information from CVRs may be put. CVRs record voice communications, announcements and other audible sounds in the cockpit of an aircraft, including crew conversations that may not be relevant to operation of the aircraft. The decision to require installation of CVRs in certain classes of civil aircraft operated in Australia was announced by the then Minister for Civil Aviation in March 1961. This decision was in response to the report of a board of accident inquiry into the loss of a Fokker Friendship aircraft at Mackay in 1960. The board had been unable to reach any firm conclusion as to the causes of the accident because there had been no survivors and no means of determining what had happened. The board of accident inquiry referred to the desirability of having a record of crew conversation and the readings of flight instruments up to the moment of impact. The board recommended that the search for suitable equipment should be pursued. Flight crews in Australia and elsewhere accepted the use of cockpit voice recorders for air safety purposes, but from the outset expressed strong reservations about the possible future use of information from such equipment for purposes other than were originally intended. Flight crews saw CVRs as an invasion of privacy in the work place. They were prepared to accept this in the interests of maintaining and enhancing air safety, but sought safeguards that the information not be used for other purposes to their possible detriment. Concern on the part of air crews has been heightened in recent years with the introduction by various countries of freedom of information legislation. The International Civil Aviation Organisation, an agency of the United Nations, has recommended that information from CVRs be used only for air safety purposes, and some countries have legislated to remove uncertainty about uses that may be made of such information. CVRs are used in Australian civil aircraft under agreements reached between the Department of Aviation, and its predecessors, and the Australian Federation of Air Pilots, AFAP, which date back to 1964. However, the present arrangements are not satisfactory to either party. The most recent agreement between the Department and the AFAP was negotiated in 1975 and provides that use of CVR information in air accident investigations will be restricted to accidents which result in death of the pilots, or their incapacity to the point where they are unable to give evidence as to events leading to the accident. From the viewpoint of air safety investigators, the full potential of CVRs to contribute to the enhancement of air safety is not being realised. At the same time, the AFAP continues to be concerned that the agreement now in force might not withstand legal challenge and CVR information may be used for purposes that were not originally envisaged and to which the Federation had not agreed. Under the Bill I have now placed before the House, a cockpit voice recording or the information it contains cannot be used for disciplinary purposes or criminal proceedings against a crew member. The definition of crew member will exclude someone who is also the operator of the aircraft. A party to civil proceedings may seek that the court admit CVR information in evidence. The court may, on the grounds of public interest and the need for the information to establish a material question of fact, order that the information be admitted. However, the use for evidentiary purposes is limited by proposed sub-section 27A (6). It will be possible to use information obtained from a CVR to establish damages liability against an employer of a crew member or against someone else who is not a crew member. Misuse of information obtained from CVRs by Commonweath officers is an offence against the Crimes Act. Under this Bill misuse of such information by persons not subject to that Act will also be an offence. The protection offered under this Bill has been sought by air crew members for 20 years. It is therefore proper that officers of my Department and the Attorney -General's Department should feel a sense of achievement in developing a Bill which strikes a balance between the legitimate concerns of air crews on the one hand, and the public interest in the proper administration of justice on the other. Might I also say that the pilots have shown considerable forbearance on this matter. I appreciate very much the spirit in which their representatives have conducted negotiations with us. They have been constructive as befits people concerned with the safety of air operations as well as the requirements of their members. This is a measure which materially advances the safety of our aviation industry. I commend the Bill to the House. Debate (on motion by Mr Spender) adjourned. Bill presented by Mr Barry Jones, and read a first time. Mr BARRY JONES(Lalor-Minister for Science and Technology)(4.46) —I move: That the Bill be now read a second time. The main purpose of this Bill is to amend the Excise Tariff Act 1921 to allow for changes in excise duty rates beyond the number of decimal places in the excise duty rates that existed prior to 23 November 1983. The Excise Tariff Amendment Bill (No. 2) 1983 introduced new provisions into the Excise Tariff Act which have the effect of automatically indexing certain traditional excise duty rates in February and August of each financial year. These provisions had effect from 23 November 1983. They do not permit, however, a variation in the number of decimal places in the excise duty rates that are subject to indexation. The amendments as proposed by clause 4 of this Bill will enable the Government from time to time to introduce a tariff proposal which intentionally changes the number of decimal places in an excise duty rate and which, at the next application of indexation, will not be automatically rounded to the number of decimal places that existed prior to 23 November 1983. I predict that there will be vast public interest in this! The Government considers it necessary that the flexibility in the excise duty rates as proposed by this Bill be in place prior to the next indexation alteration which is to occur in August this year. The opportunity has been taken to incorporate in this Bill two other amendments to the Excise Tariff Act and thus avoid the need for additional amending legislation. One is to incorporate Excise Tariff Proposals No. 1 (1984) which increased, on and from 1 January 1984, the excise duty on naturally occurring liquefied petroleum gas from $48.57 per kilolitre to $49.23 per kilolitre. This alteration followed the determination of a new average price for LPG by the Minister for Resources and Energy (Senator Walsh) in accordance with Government policy. The other amendment is of a technical nature and inserts a standing provision into the principal Act which covers the imposition and application provisions usually included in Bills amending the schedule to the Act. This will avoid repeating the provisions in each future Bill proposing to amend the schedule to the Act. Financial Impact Statement The measures contained in clauses 3 and 4 of the Bill have no direct financial impact. The increase in the excise duty on naturally occurring liquefied petroleum gas will result in an estimated increase to Government revenue of $600 ,000 for the remainder of the 1983-84 financial year and $1.2m in a full year. I commend the Bill to the House. Debate (on motion by Mr Ruddock) adjourned. Bill presented by Mr Holding, and read a first time. Mr HOLDING(Melbourne Ports-Minister for Aboriginal Affairs)(4.50) —I move: That the Bill be now read a second time. This Bill has two main purposes: To preserve and protect areas in Australia and Australian waters which are of particular significance to Aboriginals or Islanders in accordance with their traditions; and to preserve and protect objects, including Aboriginal and Islander human remains, which are of particular significance to Aboriginals or Islanders in accordance with their traditions. It will fill a gap in the law of Australia which can allow sites of significance to be damaged, destroyed or desecrated, and can allow objects of significance, including Aboriginal human remains, to be traded, displayed and otherwise used in ways which are anathema to Aboriginals and their traditions. The need for legislation to enable direct, immediate action by the Commonwealth has been highlighted by such events as Noonkanbah and a number of situations which have arisen during the life of this Government. Time and again the Commonwealth has been powerless to take legal action where State or Territory laws were inadequate, not enforced or non-existent, despite its clear constitutional responsibility. Occasionally there has been enough good will to deter people from proceedings in ways inconsistent with Aboriginal traditions and wishes. But good will is not always sufficient. The time for legislative action by the Commonwealth has come. In the eyes of Aboriginals such action is long overdue. They have stressed to me the need for priority to be given to enacting legislation which can counter the real, and at times sudden, threats which are made to significant sites and objects. They have asked the Government to provide a means for arriving at solutions to important and often emotionally charged problems. This Bill is an answer to those requests. It will give the Minister for Aboriginal Affairs power to protect and preserve areas and objects from injury or desecration. Such injury or desecration encompasses a range of activity. For example, the construction of a road through or near a significant Aboriginal area, entry by tourists to such an area in a way inconsistent with the entry restrictions of local Aboriginal tradition, or the construction of a dam near to such an area which will result in the inundation of that area, may each constitute injury or desecration of a particular significant Aboriginal area. In the case of a significant Aboriginal object, physical mutilation as well as public display of or commercial dealing with the object may constitute injury or desecration. This Bill is the first part of a legislative scheme which this Government intends to enact to ensure the preservation and protection of the cultural heritage of Aboriginal and Torres Strait Islander Australians. That scheme will give the Commonwealth Government a legislative framework in which to exercise the constitutional power and responsibility clearly to the Commonwealth by the overwhelming majority of Australians in the 1967 referendum. This Government has shown itself willing to take on that responsibility and to act seriously in exercising it. The Bill before the House is further evidence of the Government's acceptance of that responsibility. As I have mentioned previously in this House, model land rights legislation is being prepared in consultation with Aboriginals throughout Australia. In the same way, the Bill before the House today has been prepared in response to requests from Aboriginal people and following consultation with them. State Governments and the mining and pastoral industries have also been given an opportunity to comment on the Bill. Whilst I acknowledge that there has been some criticism of the time period in which comments were sought, it did nevertheless provide an opportunity which certain states have not been prepared to give the Commonwealth in relation to legislation prepared by those States impinging on matters for which the Commonwealth has a clear responsibility. It is an interim measure which will be replaced by more comprehensive legislation dealing with Aboriginal land rights and heritage protection. As evidence of the Government's intention to legislate more comprehensively, the Bill before the House is expressed to have effect for no more than two years from the date of its commencement. I must make it clear from the outset that this is not interim land rights legislation nor is it intended to be an alternative to land claim procedures. I will not be making declarations with respect to vast areas of land in de facto recognition of a claim which Aboriginals may wish to make later under another law. The Bill speaks of significant Aboriginal areas, and defines 'area' to include a site. The use of the word 'area' rather than site will allow flexibility in recognising what Aboriginals believe to be significant. It will save a narrow and artificial approach being taken to sites, for example, to discrete geological formations. Where a site is particularly secret and sacred there may be an area immediately adjacent to it where people ought not to go. Transgression of that space may be as offensive as entry to the site. It may also be thought to place people going there in physical danger. This Bill is worded to enable those situations to be accommodated. It is not meant to close off huge areas. It will not be administered in that way. Scheme of protection The scheme of the Bill is a simple one, aimed at granting effective protection to areas and objects under threat of injury or desecration. Its key features are as follows: 1. Action will be taken only when the Minister has received an application by or on behalf of Aboriginals or Torres Strait Islander people. 2. The Minister will need to be satisfied that the area or object for which protection is sought is significant in accordance with Aboriginal tradition. 3. When deciding whether to make a declaration in respect of an area or object the Minister will take into account such other matters as he considers relevant. This will allow the weighing of competing interests in each case. 4. Where a declaration may be made in respect of an area for a period of more than 30 days, the Minister will be obliged to receive and consider a report prepared by an independent person dealing with the range of issues that such an application may raise. These include the type and extent of any protection which should be granted and the effects which the making of a declaration may have on the proprietary interests of persons other than the Aboriginal applicants. 5. Declarations will set out particulars of the area or object to be protected. They will also contain provisions for and in relation to the protection or preservation of the area or object from injury or desecration. The Bill recognises that because areas vary in physical form and significance and size, different conditions may need to be applied to each. Because the types of activities which may be permitted on such areas will vary in accordance with local Aboriginal traditions, the activities governed by the declarations may also vary. For example, entry to an area may be unrestricted in one case and closely prescribed in another, depending on traditional rules governing access. Similar comments can be made with respect to siginficant Aboriginal objects. As I mentioned earlier, while physical mutilation will clearly constitute injury or desecration of an object, the public display of or an attempt to sell such an object may be equally offensive in some cases. The provisions of declarations will be drafted bearing these things in mind. 6. Where Aboriginal human remains are involved, the Minister will be empowered to order the delivery of those remains to himself or to Aboriginal people entitled to them, and willing to accept responsibility for them, in accordance with Aboriginal tradition. This provision will enable the satisfactory disposal of remains held contrary to expressed Aboriginal wishes. Consistent with the requirements of the Constitution, where this, or any other action under the Act, involves the acquisition of property, compensation will be payable to the person whose property is acquired. 7. Before making a declaration, the Minister for Aboriginal Affairs will be obliged to consult his State or Territory counterpart to ascertain whether the law of that State or Territory offers effective protection. If it does, a declaration will not be necessary. I will refer to the relationship between this legislation and State and Territory laws in more detail later in this speech. 8. A declaration will be published in the Commonwealth of Australia Gazette and in local newspapers. It will take effect from the date of publication in the Gazette or a later date specified in the declaration. Reasonable steps will be taken to give written notice of a declaration to persons likely to be substantially affected by it. This will include advice to the relevant State or Territory government. 9. Declarations will be treated in many respects like regulations. For example, a declaration will be laid before each House of this Parliament within 15 sitting days after it has been made. Either House may disallow the declaration within the statutory period. Review by the Houses of Parliament will, in effect, be the only review of the merits of a Minister's decision to make a declaration. Of course, other administrative law remedies will still be available to people affected by the declaration. 10. In some emergency situations, where the Minister is unavailable to make a declaration according to the formal requirements of the Bill, an authorised officer will be able to make an urgent declaration which will remain in effect for no more than 48 hours. State and Territory Laws As I have already said, this Bill provides the legal basis upon which the Commonwealth can act where the law of a State or Territory does not provide the necessary protection. The lack of protection may arise from either an absence of effective legislation or an unwillingness to enforce the provisions of legislation capable of meeting the goals of this Bill. The Commonwealth is not attempting to cover the legislative field in this area of heritage protection. The Bill expresses an intention not to exclude or limit the operation of a law of a State or Territory that is capable of operating concurrently with it. In practice the Commonwealth sees this as legislation to be used as a last resort. The processes for the making and continuation of declarations will ensure that full recognition will be given to relevant State and Territory laws, and co- operation will be sought from State and Territory governments. Where the Minister is considering whether to make a declaration in relation to an area, an object or a class of objects, he will be obliged to consult the relevant State or Territory to ascertain whether there is effective protection of the area, object or objects. In the case of Norfolk Island he will consult the relevant Executive member. By reference to long-standing convention, he will consult the Minister for Territories and Local Government (Mr Uren) where the Australian Capital Territory or an external Territory, other than Norfolk Island , is concerned. Although the Minister will be obliged to consult in this way, the mere failure to consult will not invalidate any declaration he may make. Let me assure the House that all reasonable attempts will be made to consult State and Territory colleagues. On occasions the relevant Minister may be unavailable to discuss the matter, and the urgency of the threat to the area or object may be such that the Minister for Aboriginal Affairs must take a decision without the benefit of such consultation. There may be occasions when a State or Territory Minister will refuse to consult. This Bill is framed to ensure that such refusal will not frustrate its proper operation. Where a State or Territory has no law capable of providing effective protection , or no action is being taken to give effect to that law, the Commonwealth will act in appropriate cases. It is open to the States to ensure that effective heritage protection is offered by their legislation. It is possible that State or Territory law may be capable of providing protection, but not with the same speed as Commonwealth law. The Bill provides that, in such a case, the Minister may make a declaration. Where, in that or other circumstances, the Minister is later satisfied that a State or Territory law does effectively provide protection to the subject matter of a declaration, he must revoke that declaration. The rights of individuals under concurrently operating laws will also be preserved. Where a person may be prosecuted and convicted under this Act or a law of a State or Territory, nothing in this Act will render that person liable to be punished more than once in respect of the same act or omission. Nothing in this Bill will derogate from rights which a person may have to any remedy apart from this Act. It will be clear from this summary that the Commonwealth wants to encourage States and Territories to use such legislation as they have in the interests of the Aboriginal and Islander people for whose benefit it was passed. Where that legislation is inadequate the Commonwealth will, through this legislation, encourage changes to be made. The Bill before the House is intended to meet those situations where, for whatever reason, local law is inadequate. The Commonwealth has a clear constitutional responsibility to act. This Bill will give it a legislative base on which to act. Enforcement and Penalties The major offences which this Bill creates are breaches of the provisions of declarations. For example, it will not be an offence under this legislation to desecrate a significant Aboriginal area unless there has been a declaration in respect of it and the activity complained of is in breach of that declaration. Thus, where the Minister has made a declaration containing provisions for the protection of an area from injury or desecration, and an individual person or a corporation knowingly contravenes a provision, that person or corporation will be guilty of an offence. A similar scheme will have effect in respect of significant Aboriginal objects. The high penalties which this Bill sets out for breaches of declarations are an indication of the seriousness with which this Government views the need for heritage protection. The desecration of a site or object can strike at the very roots of Aboriginal beliefs and observances. We hope that, as declarations are made, those whose activities may be impeded or whose interests may be affected will respect the interests of the relevant Aboriginals or Islanders and observe the terms of the declarations. At the very least, the possibility of substantial financial penalties and imprisonment should act as a deterrent to those contemplating acting contrary to a declaration. No longer will it be a cheap option to destroy a site or sell an object. Where people are willing to proceed in defiance of a provision or a declaration , injunctions and interim injunctions can be sought from the Federal Court of Australia by the Minister. The range of conduct which may be subject to an injunction is widely drawn, as is the power of the Court to restrain a person from engaging in certain conduct or to require him to do something. Company directors and employees will need to look closely at their position under this Bill. The intention of a member of the governing body, a director, servant or agent of a body corporate, or the knowledge of that person, will be deemed to be the intention or knowledge of the body corporate. Conduct engaged in by any individual on behalf of a body corporate shall be deemed to have been engaged in also by the body corporate. I reiterate the hope that this legislation will promote genuine attempts to resolve conflicts which may occur in this area. The Bill recognises that, in judicial proceedings arising under it, there may be occasions when it will be necessary for evidence to be given concerning a secret or sacred aspect of Aboriginal tradition. Where this is the case, people may be reluctant to give such evidence in proceedings which are open to the public and which may be reported. Experience in Aboriginal land claim hearings in the Northern Territory has shown the benefit to the Aboriginal Land Commissioner and parties appearing before him of enabling Aboriginal people to give some evidence on a restricted basis. This Bill will enable courts to adopt a similar approach. It is a further measure to ensure that the secrecy attaching to matters of particular significance to Aboriginals and Islanders is respected. Conciliation To encourage attempts at the resolution of conflict, the Bill provides that, where the Minister has received an application for a declaration, he may request such people as he considers appropriate to consult, to consult either him or his nominee. This consultation could precede or follow the making of a declaration. Where a declaration has been made, the resolution of the matter to the satisfaction of the applicant and the Minister may result in the revocation or variation of the declaration. Where there is resolution of the matter before the Minister has made a declaration there may be no need for a declaration, or a declaration may contain different provisions from those it might otherwise have contained. Furthermore, the Bill provides for the Attorney-General (Senator Gareth Evans) to authorise grants of legal or financial assistance to people who wish to apply for a declaration, whose proprietary interests have been or may be adversely affected by a declaration, or against whom legal proceedings have been instituted. In considering an application, the Attorney-General, or an officer authorised by him, will need to be satisfied that it would involve hardship to the person to refuse the application, and that all the circumstances make it reasonable for a grant to be made. Conclusion This will be beneficial legislation, as other legislation remedying social disadvantage has been. Aboriginals and Islanders will be secure in the knowledge that areas and objects of particular significance to them can be preserved and protected. Where the remains of ancestors were stolen from graves and shamefully abused, this Bill will allow those remains to be returned to them. Mr Justice Murphy recently observed as part of the High Court's judgment in the Tasmanian dams case: The history of the Aboriginal people of Australia since European settlement, is that they have been the subject of unprovoked aggression, conquest, pillage, rape, brutalization, attempted genocide and systematic and unsystematic destruction of their culture. This Bill is an exercise of a Commonwealth constitutional power aimed at preserving what has survived that process. It falls within the kind of benefit which such laws may properly confer. But the benefit will not be confined to those local Aboriginals and Islanders whose areas and objects receive the direct protection of the law. In a wider and very real sense, the benefit will be felt by the whole community. The preservation and protection of this ancient and significant culture from the destructive processes which have been operating at different rates across this country can only enrich the heritage of all Australians. I commend the Bill to the House. Debate (on motion by Mr Porter) adjourned. [COGNATE BILL: INCOME TAX ASSESSMENT AMENDMENT (INCOME EQUALIZATION DEPOSITS) BILL 1984] Debate resumed. Mr DEPUTY SPEAKER(Mr Mountford) —Before the debate on this Bill is resumed, I remind the House that it has been agreed that a general debate be allowed covering this Bill and the Income Tax Assessment Amendment (Income Equalization Deposits) Bill 1984. Mr HAWKER(Wannon)(5.13) —Mr Speaker, before the suspension of the sitting for lunch I began speaking on the Loan (Income Equalization Deposits) Amendment Bill and cognate Bill by quoting from a policy speech made by the Minister for Primary Industry (Mr Kerin). To remind honourable members of that short quote, I will repeat it. In Griffith early last year, Mr Kerin said: Farmers can rest assured that they will lose nothing under Labor and stand to gain much. Following that, I pointed out to the House that farmers have lost many things and have not gained much, unless the Government intends to claim credit for the breaking of the drought. As I mentioned, the proposal before the House to amend the Loan (Income Equalization Deposits) Act ignores completely the fluctuating nature of primary producers' incomes. It may be hard for some honourable members who have not had experience of this to realise that it is nothing for a primary producer to find that one year he has a negative income and the next year he may have quite a good income. Without measures such as the income equalisation deposits scheme, many primary producers can find themselves in a position of paying more tax than a person on a steady income. This proposal amounts to an emasculation of the whole IED scheme and is just another example of the Australian Labor Party's attack on primary producers. Furthermore, this proposal does not have the support of farmers or farm leaders. Both the National Farmers Federation and the Victorian Farmers and Graziers Association have spoken very strongly against this and, as the honourable member for Darling Downs (Mr McVeigh) mentioned, the Prime Minister (Mr Hawke) has had it drawn to his attention. The amendment moved by the Opposition does take into account the problems of primary producers' fluctuating incomes and it also removes any of the inequities about which the Government seems to be very concerned. The point to be remembered about this proposed scheme is that when a farmer does have a good year, which is certainly not every year, by the time he has paid his income tax and his provisional tax, and probably has tried to catch up on a bit of deferred maintenance, he will not have any money left to use this so -called income equalisation deposits scheme, as proposed by the Government, whereas the Opposition's amendment proposes that any deductions for the purposes of deposit under the income equalisation deposit scheme would be fully tax deductible in the year of deposit. Furthermore, interest would be paid on the investment component of that deduction. In other words, the equivalent of the tax payable would not earn any income. Interest would be paid at a rate of 9.5 per cent and of course when the primary producer withdrew the deposit it would be counted as fully taxable income. I suggest that the government's proposal will not have the support of primary producers as individuals, and certainly not of their organisations. Mr Andrew —It is the Government's proposal. Mr HAWKER —That is correct, the Government's proposal. As I have said before, I doubt that it will get sufficient support even to pay for the administration costs. I think the whole thing will be quietly forgotten in the years to come. The problem with the proposed scheme is that it removes any flexibility that a primary producer might have if he tends to use the scheme. It does not have any regard for the primary producer's fluctuating income. It will have little support and I suggest it is fairly useless. Furthermore, I think the name ' income equalisation deposit' is certainly no longer relevant because it is not that at all; it is just some form of high yielding government bond. We might even call it the inflexible useless deposits scheme. So I suggest that the Government would do well to accept the Opposition's amendment in good faith because I believe it is a fair and sound proposal and it would be very well supported by all primary producers. Mr RONALD EDWARDS(Stirling)(5.18) —In pursuing this debate and supporting the Loan (Income Equalization Deposits) Amendment Bill, let me say that the honourable member for Wannon (Mr Hawker) made some remarks about the general context within which primary producers fall. I am pleased that he has because it is important in the conduct of a debate of this nature to look at the framework within which an income equalisation deposits scheme would fall. The economic framework at this stage is reasonably promising and certainly in terms of the figures we have before us it is reasonably promising. Talking in specific terms about the current arrangements, as previous speakers have said, this Bill is designed to enable bona fide primary producers to engage in depositing their money in years when their incomes are high to provide funds which can be drawn when incomes are lower. It is important to spell out at this point that there is an incentive for primary producers to make these deposits. These deposits will obtain an interest rate set quarterly at 2 percentage points above the short term Commonwealth Treasury bond rate. That is a fairly attractive interest rate. In terms of the general earnings on the funds that are being deposited, I do not believe that that is an unattractive rate of interest. I suggest to the honourable member for Wannon that if we are looking at it in terms of an interest rate, that is a reasonable return on funds. Mr Hawker —But you can get a better rate elsewhere. Mr RONALD EDWARDS —The honourable member for Wannon says that one can get better interest rates elsewhere. Of course, if one wants to deal in the prime market that is always possible, but if we are to deal quite specifically, it is not the intention of primary producers to go into speculative market activity with respect to short term money market operations; it is the intention of primary producers, I would think, to produce a substantial product from which they earn an attractive income. We are pleased that they do. We are offering them a scheme which, when they do earn an attractive income, one which may be substantially high, they can deposit that at an attractive interest rate. That interest rate is set on a quarterly basis two percentage points above the Commonwealth bond rate. That clearly is not the peak rate of interest. The honourable member for Wannon is really asking us to offer to primary producers the peak rate of interest for engaging in a non-speculative activity when in fact the peak rate of interest applies only to those engaged in speculative activity. The honourable member for Wannon cannot have it both ways. A bona fide primary producer cannot at the same time be somebody who is engaging in short term money market operations. If we are to engage in the possibility of some income adjustment activity it is not at the same time possible to say: 'Well, now, I want to go out and become a short term money market operator and earn the highest rate of interest'. I think the Opposition has to face up to that in view of the fact that we are talking about a situation of equity and fairness in government policy. The Opposition cannot ask for both. I will talk about that in just a moment because some statistics suggest the degree of inequity. In all fairness to the honourable member for Wannon I say that if he is engaging in a desire to get peak interest rates, by all means he should go into the speculative money market, but he should not call himself a primary producer and expect to engage in income equalisation deposit arrangements and get that sort of coverage. I am suggesting that it is important to recognise one's basic definition. In this context we are saying that we will continue with the scheme. I make another point which I think is relevant in the context of this debate. At the current time there is probably only one primary industry which can really take advantage of this, because its producers are earning high incomes; that is the wheat industry. That is recognised. Other industries, such as the sugar industry, are finding that their current income performance would not enable them to take advantage of the scheme. We on this side recognise that; at the same time we recognise that their inability to take advantage of an income equalisation deposit arrangement will depend on the economic performance of that industry. To some extent-I will talk a little further about this in a moment-that economic performance depends upon international market factors as well as domestic production factors and costs. That leads me to say that I think if we are talking about the performance of various sectors of primary industry there are reasons for saying that industry in general is better off. I am not going to talk about the breaking of the drought, because obviously that is an external factor. One might want to claim that the breaking of the drought had something to do with the arrival of the Prime Minister (Mr Hawke) in the Lodge. There are other factors that do suggest that if we can win major sporting events and get the economy performing perhaps the Prime Minister is not beyond events of that supernatural quality, but that would be beyond the scope of this debate. What we do want to say is that in the context of setting an economic framework it is clear that the rate of inflation has been reduced under this Government. That is a substantial performance because in the primary sector inflation can be a very difficult thing to cope with. But the rate of inflation has been reduced. Of course, in the last quarter it in fact fell by 0.4 per cent. In terms of cost pressures, primary producers are now better off than they were under the previous Government. Let us not make any bones about that. Cost reductions provide a benefit to primary producers. They flow through with respect to export markets. We on this side are conscious that it is very difficult when dealing with an export market and when prices are determined by international factors to deal with a continually rising cost base in terms of domestic inflation and wages. But I suggest in the context of this debate and this Bill that at the present time primary producers in general are better off than they were before we came into office, because we have reduced inflation. At the same time, arising from that reduction there has been a reduction in wage pressures. I am conscious of the fact that wage pressures represent a cost to primary producers, but I suggest that the performances of the 4.3 per cent and the 4.1 per cent national wage increases were substantially better performances in terms of the kind of assistance that industry like this might need. So we have the score on the board there. I think something else has to be added in the context of this debate and that is that interest rates have fallen. If we consider the cost position that primary producers are facing, we see that there has been a substantial decrease in interest rates under this Government. That has been due not only to the successful acceptance of the deficit in the last Budget, but also to market factors. But the combination of a reduction in deficit pressure and the facts that our Budget and the prices and incomes accord were accepted and that the National Economic Summit Conference laid a foundation of confidence has meant that we now have a lower rate of inflation, lower rates of wage increases and lower interest rates. That all suggests that, in terms of a macroeconomic picture, primary producers are facing a better condition than they were prior to our coming into government . I have already mentioned that the breaking of the drought is obviously good news. It is good news for everyone and we are as pleased as the other side. But to talk in terms of the bad deal primary producers have got under this Government just does not add up because in fact the economic framework is substantially better than it was before we came into office. I believe that we have done a great deal to restore a degree of stability. I think it is important for me to talk in terms of equity because obviously speakers in this debate will talk about it. One of the claims made is that under this arrangement we are not allowing people to earn the maximum market interest rate as a result of their main deposit from this income equalisation deposit arrangement. If we consider what has happened to taxes in the past we see quite clearly that a great degree of inequity developed in the tax system. It has to be said to members of the Opposition that they have to take this on board. Between 1976-77 and 1981-82 the percentage of tax paid by individuals, that is people on pay-as-you-earn taxes, went up from 61.03 per cent of all taxes collected to 65.77 per cent of all taxes collected. In other words, the ordinary Australian citizen-remember in this Bill we are talking about equity as one criterion-has had the experience under the previous Government of bearing this substantial increase in taxes. It is very hard for people in the Opposition to come into this place during this debate and say that we are not proceeding on the basis of equity because the figures do not work for them; they work against them. Where was the decrease in taxes being paid? There was a small decrease with respect to company tax. It fell from 20.21 per cent in 1976-77 to 19.08 per cent in 1981-82. Thus there was a small decline in company taxation, largely, incidentally, as a result of the recession that the Opposition brought on. The economic vandals who are now in the Opposition brought on a substantial recession. As a consequence of that vandalism the percentage of company taxes fell. The area in which taxes did fall was in other payments by individuals. Other payments fell from 18.07 per cent in 1976-77 to 14.38 per cent in 1981-82. We know how that decrease came about. It was due to tax avoidance and the schemes that were dealt out. This Bill specifically addresses itself to the need to eliminate tax avoidance. No one is coming into this place and saying that tax rorts have been practised by primary producers, but we are saying that tax rorts were practised when the Opposition was in government. What we are trying to do with respect to this legislation is eliminate that possibility. No one is pointing the finger and saying that primary producers are into tax rorts. We are saying that this legislation recognises the possibility. If people are going to come into this place and talk in terms of equity, it must be recognised that, quite clearly, the pay-as-you-earn taxpayers were those who suffered under the previous Government. Those who, in fact, got the worst deal were ordinary Australian citizens. It is no good coming into this place saying that this Bill is bad news for primary producers because, in fact, as I have indicated, the macroeconomical framework has improved. There has been a reduction in inflation, in interest rates and in wages pressure. Along with the breaking of the drought, all of these factors have contributed to a substantial improvement in the kinds of circumstances that confront primary producers. We, as well as the Opposition, are pleased about that, but we cannot avoid the reality that primary producers are facing a better macro-economic picture than was evident when we came into office. Part of that damaged macroeconomic picture had to do with the failed policies of the person who preceded the honourable member in the seat of Wannon and the present honourable member for Bennelong (Mr Howard). I think that has to be said. In conclusion, one final point needs to be made. When one talks about income equalisation, one can make a very strong case for saying that we should look at income equalisation for professional athletes. I am very conscious that the people who suffer greatly in terms of income equalisation are those with a very short earning career, particularly in professional sports such as Australian rules football, rugby league and cricket. I refer to people such as Dennis Lillee and Rodney Marsh. People who compete in Sydney, Melbourne, Brisbane and other cities in Australia do need to have some capacity to equalise their income because they have a very short earning span and a very high income. Often they have earned a relatively low income prior to getting into that role and after that role. So one can make a good case for extending income equalisation to professional sports people. We would be doing them a favour. That is the sort of issue which I think we on this side of the House will be taking up. I am pleased to support the Bills. Mr ANDREW(Wakefield)(5.31) —I rise to address the attention of the House to the Loan (Income Equalization Deposits) Amendment Bill. I make the point to the honourable member for Stirling (Mr Ronald Edwards) that his speech smacked of the remarks of one of his predecessors, who once suggested to farmers that not only were things getting better but that they had never had it so good. I point out to the honourable member that the rural picture is not at all the picture that he painted here this afternoon. In reality, the farmers across Australia have not seen an increase in unit income. Even the grain farmers, who the honourable member said have had a remarkably good year, have not had an increase in unit income. There has not been an increase in the price per tonne of grain; there has been an increase only in the volume of grain delivered. That increase, of course, reflects the vagaries of the seasons and, for those who would accept it, the intervention of divine providence. The reality with which the honourable member for Stirling must come to grips is that farm incomes over the drought period fell by between 50 per cent and 75 per cent. What would have been the reaction of the honourable member's friends in the Australian Council of Trade Unions if their incomes had fallen similarly by 50 per cent to 75 per cent? The honourable member said, as did other speakers from the Government, that the Australian Labor Party's excuse for introducing the Bill was to minimise the tax avoidance that was occurring under the income equalisation deposit scheme. I want to say on behalf of the Opposition that IEDs were never introduced to be a form of tax evasion. Our shadow Treasurer has said that some tax leakage did occur, but the removal of in-out averaging effectively eliminated that tax leakage. Mr Hawker —Say that again. Mr ANDREW —For the benefit of the honourable member for Wannon (Mr Hawker), I will repeat it: The removal of in-out averaging effectively removed that tax leakage. This afternoon I ask the House: What do IEDs do? The income equalisation deposit scheme provides primary producers with an opportunity to level out their tax bill. It ensures that the tax burden which a primary producer faces is not more than it would be if he had a steady income. Some people might say that tax averaging does the same thing. I would agree; so it does, but tax averaging does it for a period of three years and farms and seasons, sadly, do not work to three-year cycles. Averaging allows a farmer to average his past income. IEDs allow a farmer to anticipate what his future income will be and so manage his economy to accommodate what he expects to happen in the future. With IEDs farmers endeavour to take some of the unpredictability out of farm cash flows. IEDs place real demands on farmers for responsible management decisions. It is essential that the income equalisation deposit scheme should contain some incentives for farmers to want to use it. The old scheme provided such incentives. It is true that the scheme needed some modification. We agreed with that earlier this afternoon. The changes which the Government proposes to make to the scheme destroy those incentives. The new scheme has been in existence since May last year. What has happened since then? Subscriptions to IEDs have gone from $160m to $3m. What does that tell us about the new scheme? The reality is that the last drought cost the Government $300m, but what did it cost the farmers, the country people, of Australia? The figure is inestimable. The sobering thought for this House is: What would be the cost of a drought today without the IED resource that was available to help farmers through the last drought? The old scheme was designed to allow prudent farmers to make provision for future eccentricities in farm management. I turn my attention for a moment to the comments made by the honourable member for Bendigo (Mr Brumby). Sadly, the honourable member gave only qualified support to the impact of the farm sector on the current economic recovery. The honourable member was not gracious enough to acknowledge the impact, for example , of the wages pause on the present economic recovery; nor did he trouble to acknowledge the snowballing impact the farm sector has on the Austrlaian economy . He did say that there had been a 20 per cent rise in tractor sales. What does he imagine is the impact of that rise in tractor sales and the rise involved in what farmers are spending on fences, chemicals, and sundry and assorted farm improvements on the Australian economy? Farming is known as primary industry. It is primary industry because what happens to it affects the rest of the Australian economy. For that reason, the rest of the economy is known as secondary industry. Mr Hawker —It is still the biggest exporter. Mr ANDREW —The honourable member is quite right; it is still the largest exporter. The honourable member for Bendigo went on to say that the old scheme was used for tax strategy. The Opposition has no qualms about that. That is what the old scheme was designed for; not for tax avoidance but for tax strategy. Is the honourable member for Bendigo against big wheat farmers? Does he not want there to be any export? The scheme was designed to aid major exporters in Australia to continue to be viable primary producers. The whole purpose of the old scheme was better cash management. The impression I gained, sadly, from members of the Government this afternoon in the debate was that they were trying to say that the farmers of Australia, as a result of the drought, have suddenly become the wealthiest people in Australia. What I and members on this side of the House know is that in reality farmers are frequently cash poor. The honourable member for Eden-Monaro (Mr Snow) said that there was no money available for IEDs, largely taking up the thrust of my argument. The honourable member was right. But that is no excuse for ruining a scheme that works for those farmers who need to use it. Does the honourable member want all farmers to be too poor to use IEDs? Would it not be better to look at those farmers who are currently not generating the income that allows them to use IEDs to see what we can do to aid them to move into a higher income bracket? What would have happened to the Hawke recovery if it were not for those productive farmers who have been a part of the national recovery? Has the Government opposite forgotten that only the wheat and grain growers have seen an increase in real income? And that has been as a result of the increase in tonnage delivered, not price per tonne, as I said earlier. Has the Government forgotten that early this year the Bureau of Agricultural Economics forecast that the farm income per man/year on horticultural farms would decrease from $1,596 in 1982-83 to $740 in 1983-84? Mr Hawker —Is that per farm? Mr ANDREW —Yes. This reflects, of course, also on the diary industry and on other rural industries. The honourable member for Bendigo and the honourable member for Eden Monaro were anxious to tell us that only 6 or 7 per cent of farmers used the old scheme. That is perfectly true. Only 8 per cent of farmers used the old scheme because the rest of them were damn near broke. They were damn near broke as a result of the drought. What they need-and needed-are not poorly structured IED alternatives but responsible economic management. They needed a government prepared to honour its promise when it said there would be no wine tax, prepared to honour the fact that fuel excises ought to be indexed, prepared to make satisfactory trading arrangements for beef and citrus industries, prepared to fight the 14 per cent wage claim that Australian rural industry currently faces, prepared to make a real commitment to smaller government and not go about the irrational expansion of Parliament that we are about to see, prepared to extend the Fraser Government's wage pause and prepared to tone down some of the arrogance of the Prime Minister (Mr Hawke) that has made it so difficult for us on this side of the House to make real political points. The change to the legislation does nothing to redress real farm difficulties. An unreal demand is now made on farmers to forecast their income. Under this legislation there is the threat of imprisonment if they fail, 12 months in advance, accurately to guess what their income will be given the vagaries of the weather, export markets, exchange rates, government action and bond rates. What the farmers of this nation would welcome, rather than the emasculation of the IED scheme, is some positive action, some assurance that this Government will impose no capital tax or death duties, no assets test on farmers and the reintroduction of the Fraser Government's water resource program. The honourable member for Wannon has rightly pointed out that the new proposals introduce an element of inflexibility into the IED scheme. IEDs were designed to be a tool for farmers to use to enable them to pay the same amount of tax as would apply if their income had been spread over a vast number of years. I support the amendment moved by the shadow Treasurer to help to keep income equalisation deposits as effective management tools for Australian farmers. Mr SINCLAIR(New England-Leader of the National Party)(5.43) —I endorse totally the remarks by my colleague the honourable member for Wakefield (Mr Andrew), who has just resumed his seat. Having heard something of the earlier debate on this subject, I commend those who look towards the income equalisation deposit scheme as a way by which farmers can better manage their agricultural enterprises. I want to comment on a number of aspects of the change but I think philosophically the first and most important part of this legislation that all Australians should register is that for reasons that we see related to the Government's philosophy, it progressively is removing the opportunity for individuals in this society to take steps to care for themselves and to preserve the standard of living they wish to have on retirement. We had a debate earlier today on the general subject of what will happen when an assets test is introduced affecting pensioners. We know that the scheme that had been in place over many years under successive coalition governments was designed to ensure that those who are in the retirement bracket are in a position where they can help through their own savings to preserve a standard of living. In the changes we introduced to remove the assets test on the assessment of pension entitlement we recognised that people did not always want to dispose of their assets. But what we are talking about here relates very much to the sorts of incentives we sought to provide in the pension area, only in this instance to the rural sector. In the pension area we sought to provide an opportunity for people to provide during their working lives for their retirements. In this income equalisation deposit area we sought to provide an opportunity for people in the rural sector to set aside funds in good years so that they would be better able to care for their farming operation when any form of natural disaster hit. That was the whole purpose of the scheme I set down when first introducing the legislation in 1976 as Minister for Primary Industry. I think it is worth commenting that at that time there were two prime aspects to the legislation. The legislation now before the House removes altogether the advantages that were in the old legislation and, supposedly on the bandwagon of trying to avoid some type of tax manipulation, we have, as has been described in a paper prepared by a member of the Australian Rural Adjustment Unit in the University of New England, made a regressive move. The paper states that the scheme represented by this legislation: . . . constitutes a backward step in agricultural policy-making. It is one which does not take full cognisance of the problems associated with farm income instability in this country. Sadly, the scheme had not been in place long enough before all these dramatic changes were introduced to it. We had two changes. I think many honourable members on this side of the House could have worn the IED changes proposed in May 1983 but the changes now proposed, in my view, put the scheme back in the same category as the earlier drought bonds proposal which all of us felt was inadequate. People need to remember that there are several elements affecting agriculture. The honourable member for Wakefield has just referred to one of them; that is, the fluctuating seasons. Those of us from rural electorates know how diabolically the drought of the last three to four years affected rural incomes. It did not only affect rural incomes; it also contributed to unemployment and the decline in income and employment opportunities generally right throughout this nation. Indeed, it was the breaking of the drought more than any other single factor that led to the economic recovery over the last 12 months. The IEDs were intended to minimise the need on future occasions for governments to provide the back-up to the rural community to offset the effect of drought. They were designed to help not only in drought but also in all other forms of natural disaster. While the withdrawal proposals are there in this legislation, the whole concept was to try to even out the fluctuations of income and to provide an offset which the farmer himself could initiate against the disasters which affect so many areas. We tried in the past to devise some form of insurance. The honourable member for Wakefield spoke about the problems in the horticultural industries. There are many industries in which, for example, there might be a propensity to storm damage and in which any type of crop insurance is available only at a very high premium at an almost prohibitive level. We sought in the area of IEDs to give an alternative, whether for horticultural crops, the pastoral industry or the farming industry. We sought to provide an income equalisation deposit scheme as a means by which the farmer at a time when he had a high income would be given an incentive to put funds aside. By removing the tax incentive the whole concept of IEDs is changed. What I see as happening at the moment is that the Government is providing not much more than an interest-bearing deposit. With all this heigh -ho about the interest rate that is payable, the Government is not providing the incentive that a meaningful IED scheme should contain. We were after the two concepts-a real incentive to avoid fluctuation of income and a real incentive to try to ensure income tax equality with other sectors of the community. Without going over that income tax argument, we need to remember that at the time of my introduction of this legislation we also made significant changes to tax averaging which were designed to provide for farmers something like equality of tax opportunity with other members of the community. This Government, far from providing tax equality, is not only removing this part of that package but also providing for anybody whose income under the average scheme falls below the threshold to pay tax. As I understand it, the farmer is now called upon to pay tax only where his tax in any one year under the averages scheme falls below the tax threshold. His option, under the schemes introduced by the Government, is to pull out of averaging.That will remove the option of coming back into averaging. The consequence is he loses. It is a catch -22 situation; he loses whichever way he goes. In nothing of what I am saying am I contending that proper action against any sort of tax avoidance scheme should not be taken by government. Indeed, one of the reasons why tax minimisation is indulged in so much less frequently today than it was in past years-my colleague the Deputy Leader of the Opposition (Mr Howard) has frequently come into this place and pointed this out-is the many steps we took. It is not because of steps that this Government has taken. Indeed, for all this Government's rhetoric, it has been notably short in legislation to reduce tax avoidance. So nothing of what I am saying with respect to this legislation is intended to condone tax avoidance. I totally accept measures that are intended to reduce steps in that direction. The whole IED scheme is not there as a tax avoidance mechanism. It is there because the tax incentive is the only way, in a time of high income, that farmers will be encouraged to deposit reasonable sums of money. Regrettably the Government has not even realised the total package that was there. I have mentioned tax averaging and IEDs, but when we introduced the scheme it was linked with the Primary Industry Bank of Australia. This Government has now provided a subsidy for PIBA to try to ensure that it can provide long term loans . At the time the Primary Industry Bank of Australia began operations the average term of lending for farmers was about four years. Some, if they were lucky, might have got about six years. As a result of the introduction of IEDs it was possible to provide some funds, from the moneys that were deposited as income equalisation deposits, to the Primary Industry Bank to enable the term of loans to be extended. Whatever people argue about PIBA, the catalyst that its long term loans provided spread throughout the rest of the trading banks and suddenly we found trading banks saying to their customers: 'Look, perhaps we can provide you with a longer term loan than the one you have'. If honourable members want to know why we wanted longer term loans, let me explain. Behind the philosophy of the National Party of Australia and the Liberal Party of Australia is the concept of the family farmer. If we are to preserve the family farmer we have to provide the opportunity for a young person who goes on the land, who sets up his business, to have a reasonable chance of repayment of the very large sums of capital now required over the term of his operation of that property. If we do not provide the incentives for him to retain some funds when he has a good crop he pays the money out in tax. The result of that is that when there is a natural disaster-a drought, a flood or a bushfire-he puts out his hand to get help from the Government or, frankly, he is just unable to operate and is forced to sell out his property. Any type of drought insurance will not work, in my view, unless it is linked to some form of tax incentive-unless it is there with a low interest scheme. I have not been one of those who believe it is necessary to provide a premium interest rate to attract people into this sort of scheme. In the past under the drought bond scheme it was not the interest that proved to be the inducement necessary to provide that insulation against fluctuating incomes and drought. The sad thing was that, whilst IEDs were introduced in 1976, the run of seasons had not been sufficiently beneficial for enough funds to be put into them. In spite of that, many millions of dollars were invested from IED funds in PIBA. For many people it represented a very worthwhile way to offset their incomes. Sure, there might have been abuses. I know that some people have looked at the tax avoidance mechanism and complained about it. Others have said that it provided for the wealthy and not for the poorer farmer, but it did provide for the family farmer. It there were changes needed to this scheme they are not the changes represented by this September package which is now being transmitted into legislation. I am afraid that what we are seeing is but another attack by this Government on the two keys of success of Australia: One is personal endeavour and the other is family operation. The thrust against personal endeavour is that this scheme is designed to ensure that the average fellow will not understand the scheme. It is just another interest bearing deposit. It is not a scheme that is going to be sufficiently attractive for the small farmer even to get the value out of it when he has a good season. The thrust against the family farmer is that unless there is an inducement of this sort more and more family farmers will be dependent on hand-outs from government when the natural disasters come. We will find that their tax liabilities are higher than they can afford and there will be an accelerating trend away from that key element of agriculture in Australia which has been so important in establishing the rural industries in this nation, which are so important to the whole maintenance and development of the Australian economy. I very much regret that the Government is changing such a worthwhile scheme in such a regressive manner. Mr HURFORD(Adelaide-Minister for Housing and Construction and Acting Treasurer)(5.56) —I thank all honourable members who have taken part in this debate on the Loan (Income Equalization Deposits) Amendment Bill. I particularly thank the Opposition for its co-operation in reducing the number of speakers who have taken part in this debate. I accept there were many other honourable members on the other side who would have liked to have been involved in the debate, just as there were on this side. I also thank those honourable members who have cut short their speeches in order to accommodate more honourable members taking part . I regret I have not been able to be present throughout the debate, but I have received reports from senior officers of both the Department of the Treasury and the Australian Taxation Office about the arguments that have been presented. First of all I want to clear up one piece of misinformation which I believe is probably the genesis of this amendment to the motion for the second reading of the Bill that we are dealing with this evening. That misinformation relates to the amount of funds that are at present involved in the income equalisation deposits scheme. The Deputy Leader of the Opposition (Mr Howard), in moving the Opposition's amendment-I cannot believe that the person who presented these figures to him did not do so mischieviously-said, if I have the report correctly , that the amounts involved had reduced from $160m to $3m. Does he confirm that those are the figures on which he based his argument? Mr Howard —That is the figure, yes. Mr HURFORD —For the sake of the House being well informed on this matter, let me run through what the actual levels of IEDs have been. At 30 June 1977 the level was $37m, at 30 June 1978 it was $67m, at 30 June 1979 it was $79m, at 30 June 1980 it was $136m, at 30 June 1981 it was $163m, at 30 June 1982 it was $166m, at 30 June 1983 it was $155m and at 31 March 1984 it was $135m. There are two interesting factors there. One is that the Deputy Leader of the Opposition has been misinformed. I cannot think how that has happened, but he has been. The second very important factor to note is that the level of deposits started to decline well before the introduction of the new scheme, or the doing away with the tax advantages in relation to the old scheme. The fact that we all know is that the new scheme virtually came into effect on 1 September 1983 and not in May 1983, when the figures started to decline. I draw the attention of the House again to the fact that, whereas the level of deposits at 30 June 1982 was $166m, by 30 June 1983-two months before any changes were made-there had already been a reduction. Of course there was a reduction in the level of deposits because of the cycle relating to the drought. That is why the level of the deposits has now gone down further to $135m. That is the whole purpose of the scheme-for that withdrawal to take place in poor times. I have great confidence that this scheme is sufficiently attractive to fulfil the purposes that have been very eloquently outlined from both sides of the House. We are very anxious to help the farming community, just as the Opposition is. Most of these points have already been made by my colleagues the honourable member for Bendigo (Mr Brumby), the honourable member for Eden-Monaro (Mr Snow) and the honourable member for Stirling (Mr Ronald Edwards) and in my second reading speech. In all those cases the Government's position has been set out clearly. We are anxious to assist the farming community, but we do not favour leaving benefits to the whim of this tax scale, particularly when it allows loopholes for tax minimisation schemes. The Leader of the National Party (Mr Sinclair) was gracious enough in what was otherwise a pretty ungracious speech to agree that this scheme had allowed loopholes in that tax minimisation schemes were being used. The Government is determined to stamp out all those sorts of loopholes. This is one of the reasons why the changes have been made. I repeat: We do favour income equalisation deposits. This is what the new IED scheme is about as well. We do favour schemes that are of benefit to all income groups, not just the tall poppies, and that is what this IED scheme is about too. The previous scheme gave most of the benefits to those on higher incomes. Labor's scheme benefits all. With the previous scheme the higher the tax rate one paid, of course, the more benefit one got. With our scheme people, whether big or small, will get benefits . It is a genuine income equalisation scheme. The points I have made are not just political rhetoric. We have had enough of that in the debate. Before resuming my seat-I know I must not take much time as many other members had to cut short their speeches-I want to quote from a letter dated 27 May 1983 from the former Deputy Director of the National Farmers Federation, which he sent to the Minister for Primary Industry (Mr Kerin). This letter is one of the reasons why we decided there was need for such changes to the scheme. In the course of the letter, the then Deputy Director, Mr David Trebeck said: I believe it would be far simpler to have investment in IED's at the determined interest rate without the complicating or contrived trappings of either 'tax credits' or returned cheques. That statement comes from somebody who is not making political rhetoric. It comes from the former Deputy Director of none other than the National Farmers Federation. When we in this Government, who are anxious to help the farming community, receive a letter to that effect we act accordingly, and this letter was one of the reasons why we have so acted. The Opposition's amendment does nothing more than return to the bad old days. The existing scheme is not a scheme which would be without its difficulties and it allows loopholes for tax minimisation. We will not allow that to happen. That is why we have made these changes. I urge the House not only to oppose the amendment but also to support this very worthwhile Bill. Question put: That the words proposed to be omitted (Mr Howard's amendment) stand part of the question. The House divided. (Madam Deputy Speaker Mrs J. Child) Ayes . . . . . . . . . . . 69 Noes . . . . . . . . . . . 42 —— Majority . . . . . . . . . 27 —— Baldwin, P. J. Jones, BarryBeazley, K. C. Keating, P. J.Beddall, D. P. Kelly, R. J.Bilney, G. N. Kent, L.Blanchard, C. A. Keogh, L. J.Brown, John Kerin, J. C.Brown, Robert Klugman, R. E.Brumby, J. M. Lindsay, E. J.Campbell, G. McHugh, J.Charles, D. E. McLeay, LeoCharlesworth, R. I. Maher, M. J.Chynoweth, R. L. Mayer, H.Cohen, B. Mildren, J. B.Cross, M. D. Milton, P.Cunningham, B. T. (Teller) Morris, AllanDarling, E. E. Morris, PeterDawkins, J. S. Morrison, W. L.Duffy, M. J. Mountford, J. G.Edwards, Ronald O'Neil, L. R. T.Everingham, D. N. Punch, G. F.Fatin, W. F. Reeves, J. E.Free, R. V. Saunderson, J.Fry, K. L. Scholes, G. G. D.Gayler, J. Scott, J. L.Gear, G. Snow, J. H.Gorman, R. N. J. Staples, P. R.Griffiths, A. G. Steedman, A. P.Hand, G. L. Theophanous, A. C.Hayden, W. G. Tickner, R. E.Holding, A. C. Uren, T.Hollis, C. Wells, D. McM.Howe, B. L. West, S. J.Humphreys, B. C. (Teller) Willis, R.Hurford, C. J. Young, M. J.Jacobi, R. Adermann, A. E. Hunt, R. J. D.Aldred, K. J. Katter, R. C.Andrew, J. N. Lusher, S. A.Blunt, C. W. McArthur, F. S.Braithwaite, R. A. McGauran, P. J.Cadman, A. G. MacKellar, M. J. R.Cameron, Donald McVeigh, D. T.Cameron, Ewen (Teller) Macphee, I. M.Cameron, Ian Millar, P. C.Carlton, J. J. Newman, K. E.Coleman, W. P. O'Keefe, F. L.Connolly, D. M. Porter, J. R.Cowan, D. B. Robinson, IanFife, W. C. Rocher, A. C.Goodluck, B. J. Ruddock, P. M.Groom, R. J. Shipton, R. F.Hall, Steele Sinclair, I. McC.Hawker, D. P. M. Spender, J. M.Hicks, N. J. (Teller) Tuckey, C. W.Hodgman, W. M. White, P. N. D.Howard, J. W. Wilson, I. B. C. Bowen, Lionel Dobie, J. D. M.Blewett, N. Fisher, P. S. Question so resolved in the affirmative. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Hurford) read a third time. Consideration resumed from 2 May, on motion by Mr Hurford: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Hurford) read a third time. [COGNATE BILL: DIVIDEND RECOUPMENT TAX BILL 1983 [No. 2]] Debate resumed from 2 May, on motion by Mr Hurford: That the Bill be now read a second time. Mr HURFORD(Adelaide-Minister for Housing and Construction and Minister Assisting the Treasurer) —Madam Deputy Speaker, may I have your indulgence to suggest that the House has a general debate covering this Bill and the Dividend Recoupment Tax Bill 1983 [No. 2] as they are related measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. Madam DEPUTY SPEAKER(Mrs Child) — Is it the wish of the House to have a general debate covering both measures? As there is no objection, I will allow that course to be followed. Mr HOWARD(Bennelong)(6.14) —This is the fourth occasion on which Bills of this kind have been before this Parliament since the Hawke Government was elected and for the fourth time I announce, on behalf of the Opposition, that we will be opposing this legislation through all stages. I know that that will not be surprising to honourable members opposite, but there is a difference between this particular batch of Bills on this particular occasion on which we are debating these measures and on all previous occasions because since the Senate last September rejected the scaled down version of the original monstrosity we have had a very significant announcement from the Prime Minister (Mr Hawke). In Adelaide, just before Easter, the Prime Minister said that he was going to make the attitude of the Liberal and National parties towards tax avoidance a major issue during the election campaign. Government supporters-Hear, hear! Mr HOWARD —Well may my friends on the Government side say 'hear, hear' to that par- ticular injunction because there is one thing that the Prime Minister ought to realise when he embarks upon that campaign. Not only will he have the enthusiastic opposition of the Liberal and National parties but also he will have a fair amount of lead in his saddle bags. The greatest piece of lead in the saddle bags of the Prime Minister on this particular issue will be none other than his mate from Fremantle, the Minister for Finance (Mr Dawkins). On two counts the Minister for Finance is really going to be lead in the saddle bags of the Prime Minister. Firstly, by self-confession, the Minister for Finance has been involved in a bottom of the harbour tax arrangement. By self-confession, he does not deny it. The Minister for Finance-the Prime Minister's colleague from Fremantle-therefore earns the title of a bottom of the harbour socialist. That is the first piece of lead he has got in his saddle bags. But even more significant, given the character of the debate that the Prime Minister wishes to have on tax avoidance, is the fact that on 16 April this year the Minister for Finance addressed a gathering of chartered accountants in Sydney. One can almost imagine the scene. One can imagine that the Minister for Finance wanted to spread the impression of a government that understands the business community, that he wanted to give the impression that really the Government is made up of a very moderate group of people. One can imagine, as the night wore on, the Miniser for Finance wanting to get friendly with these accountants and wanting to reassure them that really the Government did not regard all accountants as being supporters of tax avoidance. Maybe a few things had been said in anger to that gentleman by some of his colleagues in the House. But when the chips were really down the Minister wanted to give the impression that he understood that everybody was working together. Of course, as the night wore on the Minister for Finance made a very interesting declaration. He said that as far as the Government was concerned tax avoidance was no longer an issue in Australia. That is not me speaking, although I support those sentiments. Mr Donald Cameron —Who said that? Mr HOWARD —That was the Minister for Finance. A senior Minister in the Hawke Labor socialist Government said that tax avoidance in Australia was completely dead as an issue. That was said on 16 April. The Minister will have had some reason for saying that because he is not a person who says such things out of charity. I am quite sure that when he said it he meant it. I am quite sure that he said it quite deliberately and I am quite sure that he said it on advice. So we have to accept then that a Minister of this Government, in fact somebody who had ministerial responsibility for the Taxation Office in the first four or five months of Labor's term of office ought to have known more about tax avoidance matters in a ministerial capacity. We all know his knowledge about tax avoidance matters in a private capacity because that has been very carefully documented. But he, above most other people in the Government, would know the state of play on tax avoidance. He said on 16 April-that was almost within days of the Prime Minister's declaration-that tax avoidance was dead as an issue. That is a tremendously interesting statement and it can only mean that it was his view that legislative action taken over the last few years had effectively put an end to tax avoidance as a problem in Australia. I agree with the Minister for Finance. I believe, and in fact most impartial observers believe, that tax avoidance, in its sophisticated, blatant and artificial form, is not longer the problem it was. Nobody denies it was and nobody denies that a lot of effort had to be put in to stamping it out. Of course, the interesting thing about the Minister's statement is that when one looks at the legislation to which he was obviously referring one finds a very interesting fact. We find that the people whom the Prime Minister pleases to describe as friends of the tax avoidance industry-that is the Liberal and National parties-have in fact been responsible for passing the legislation on which the Minister for Finance based his declaration. The truth is that the legislative action of the Fraser Government brought tax avoidance in this country to an end. The facts, as they stand, cannot be disputed. Nothing that has been done by this Government, nothing that has been said by the Prime Minister and nothing that will be said by the Prime Minister can gainsay the fact that we have the runs on the board, that we brought in the legislation and that we killed off the industry. What the Government is doing by this legislation is generating a phoney sense of outrage in the community with its true McCarthyist tactic. We have seen it on other issues. It is all right while we go along with the Hawke Government; it is all right while we agree with the Prime Minister; but when it comes to disagreeing, if one dares to dissent from this Prime Minister, then one is automatically- Government members interjecting- Madam DEPUTY SPEAKER(Mrs Child) —Order! Honourable members will stop interrupting. Mr HOWARD —I do not mind, Madam Deputy Speaker, because it only indicates-- Madam DEPUTY SPEAKER —It is not for the honourable member to mind; it is for the Chair to mind. Mr HOWARD —I apologise to you, Madam Deputy Speaker, and to no one else. It is all very well to agree with this Prime Minister, but if any people dares to disagree with him it is said that in some way they have an ulterior motive, are being absolutely outrageous and are friends of all sorts of crooks and have all sorts of impure motives. The fact is that the Commissioner of Taxation advised me when I was Treasurer that our legislation had effectively brought tax avoidance to an end. All this Government can do in the name of fighting tax avoidance is to bring in this outrageous piece of legislation and that outrageous piece of legislation dealing with so-called cherry picking tax avoidance arrangements. The fact that that is all it can do demonstrates the bankruptcy of the charges it has made against the Liberal and the National parties on this issue of tax avoidance. If the Prime Minister bases the next election campaign on this issue he will be basing that campaign on fraud because the claim he has made against our parties on this issue is a fraudulent, dishonest, misleading and deceitful claim and a claim about which he ought to be totally and utterly ashamed. I rest that charge on no other authority than the judgment of the High Court of Australia. Only a few weeks ago the High Court of Australia upheld the constitutional validity of the recoupment legislation passed by the Fraser Government in 1982. That legislation, as honourable members will recall, recovers all of the evaded company tax involved in these arrangements. The High Court of Australia said that that legislation was valid, constitutional and covered the field. In the face of that decision, for the Prime Minister to say that by opposing this penal discriminatory legislation we are acting as friends and allies of the tax avoidance industry is to twist the truth and the Prime Minister wells know it. The Minister for Finance well knows it because within days of the Prime Minister making his statement the Minister for Finance said that tax avoidance was dead. If tax avoidance is dead, what is the necessity for this legislation? The Government cannot have it both ways. It cannot, on the one hand, say that tax avoidance is dead and, on the other hand, say that unless this legislation is passed this Parliament will be seen as being a friend of the tax avoidance industry. When Government members vote they will have to make a choice. Either they will choose to vote in support of the Prime Minister who has misled this Parliament on this issue and who has been deceitful or they will side with the Minister for Finance who, in a moment of truth and in a flash of total honesty on this subject, was prepared to concede that tax avoidance had been brought to an end. It will be very interesting to see how honourable members opposite behave on this issue. It will be very interesting to see whether they choose the argument advanced by the Prime Minister or the argument advanced by the Minister for Finance. More importantly, it will be interesting to see what the Minister for Finance does on this measure because he said that he was satisfied that tax avoidance was dead. If tax avoidance is dead, what is the need for this legislation? This legislation represents nothing other than an attempt by this Government to impose an unfair penalty on people who are already being forced to pay tax that was illegally evaded. It is as simple as that. The tax that was evaded is already being collected under our legislation. There is no argument about that. All the head shaking by my friend, the honourable member for Hunter (Mr Robert Brown), cannot alter that fact. It is all being collected under our legislation. I have no better authority to support that than the High Court of Australia. What this Government is doing by this legislation is imposing a retrospective penal sanction on people. This legislation, if passed, will do considerable economic damage to quite a large number of small proprietary companies in Australia. There is no doubt about that. Let nobody on the opposite side of this chamber who professes to represent a small business constituency have any illusion about the fact that this legislation will have very harsh consequences. The Government cannot take something like $300m away from companies on the basis of an imputed distribution of profits, on which companies have already paid tax- I ask honourable members to mark the words 'on which tax has already been paid under other legislation'-without the companies suffering many consequences. Those consequences will involve unemployment. No honourable members opposite should be in any doubt about that. At a time when this country faces its worst private investment strike in 10 years, when the prospects for private investment in Australia are worse then they have been for over 10 years. The Hawke Government is trying, for the fourth time, to squeeze out of the small business sector $300m on the basis of an imputed distribution of earnings on which company tax is already being paid. I think that is a fairly outrageous, dishonest and anti-business proposition. To categorise that as being in the nature of an anti-tax avoidance operation is to turn the logic and the fairness of the situation. In introducing this legislation the Government has really hit the bottom of the barrel as far as its morality on taxation is concerned. Mr Uren —Oh! Mr HOWARD —It is all very well for the Minister for Territories and Local Government to go 'Oh'. The Minister and many of his colleagues do not like the fact that we have got the runs on the board in knocking over the tax avoidance industry. They do not like the fact that we passed legislation such as Part IVA of the Income Tax Assessment Act, the Crimes (Taxation Offences) Act and the recoupment legislation that was passed in 1982. The Government does not like that. No doubt Government members get a bit of jollying along at some of their branch meetings and are reminded of all those speeches that were made before the election by the Prime Minister and others who were running around saying that when they got into office they would bring in legislation to bring all the wicked tax avoidance to an end. When they got in they found that it had all been brought to an end. Late at night and in good company the Minister for Finance, in a flash of honesty, is prepared to admit that that is the case and tax avoidance is really at an end, but the Government has to preserve this veneer- Mr Robert Brown —You are quoting him out of context. Mr HOWARD —The honourable member for Hunter said that I am quoting him out of context. I will be interested to hear and everybody on this side will be delighted to hear a contribution in this debate by the Minister for Finance because if there is anybody on the Government side who would be an expert in talking about some of the measures that are covered by this legislation, it would be the Minister for Finance, that well known bottom of the harbour socialist who represents the electorate of Fremantle. The Prime Minister may want to fight an election campaign on this issue but he has started off with an enormous amount of lead in his saddle bag-the Minister for Finance. Such an election campaign would be based on a total and complete fraud. It is interesting that when the Prime Minister made his statement just before Easter I replied with a statement in which I challenged the Prime Minister, and indeed any member of the Government, to produce one significant member of the accountancy or legal profession in Australia who was prepared to support the Government's position on this piece of legislation. Since then there has not been one offer of support or one declaration of support from any member of either profession because they know as well as the more honest members of the Government know that this legislation is not only totally unnecessary, it is totally unfair, totally penal in character and will be seen by the Australian people as an example of gross overkill which will work to the detriment, both in terms of operations and employment, of a large segment of the small business community in Australia. Of course, since the legislation was last rejected by this Parliament, we have had the decision of the High Court of Australia which has totally upheld the validity of the legislation and made it totally clear that the legislation passed by the Fraser Government in 1982 has effectively covered this field. I believe that not only is this legislation unfair and unnecessary; not only does it represent a gross overkill on the part of this Government in this whole area; not only does it fly in the face of the declaration of the Minister for Finance (Mr Dawkins) that tax avoidance was no longer an issue in Australia; but also I believe that it can fairly be described as imposing a retrospective capital gains tax. I think it ought to be described as that because that is a very well deserved and meritorious description. It is interesting that, as I found when I went through the Hansard debates over the last few months on this issue, at no stage has the Government ever tried to give an explanation of why it believes it is just to try to impose this totally new taxation liability. At no stage has the Treasurer (Mr Keating) or the Minister Assisting the Treasurer, the Minister for Housing and Construction (Mr Hurford), endeavoured to do that. All those Ministers have done is to cast a general smear upon the members of the Opposition and say that by opposing this legislation we are automatically friends of the tax avoidance industry. How laughable it is. As I said in one of the earlier debates, if members opposite want to see some of the letters I received when I was Treasurer on the subject of tax avoidance from people affected by the legislation that I passed, they will be very quickly disabused of the idea that I had any friends in the tax avoidance industry. Of course, the truth is that most of the people who constituted that industry have very unhappy recollections of the time when I was Treasurer and indeed of the legislation that I sponsored and the activity undertaken by the former Government in this area. So I dismiss totally that charge. It is a dishonest one and the Government will find, as the campaign wears on, that the Australian people cannot be fooled by such gross misrepresentation. They will accept a reasonable argument; they will understand and support effective legislation to recover evaded tax in situations involving bottom of the harbour arrangements; but they will not accept as fair something that will ultimately lead to the bankruptcy of many small companies in Australia and the dismissal of thousands of their employees. Let nobody on the other side who is worried about employment be in any doubt; that will happen. If the Government passes this legislation in this House and if it is passed in the Senate, the Government cannot extract that $300m out of those companies without doing a number of those companies very great damage indeed. That is one of the reasons why the Opposition opposes this legislation. This legislation, as everybody in the House will know by now, not only imposes what amounts to a retrospective capital gains tax on these companies but also extends the concept of a bottom of the harbour arrangement far beyond the arrangements originally embraced in the legislation passed by the Fraser Government. I repeat for the benefit of those opposite that, in opposing this Bill, the Liberal and National parties are behaving quite consistently with the line which we took when we were in Government because all of the measures contained in this Bill were put forward by the then Labor Opposition as amendments to the legislation put forward by the Fraser Government. We rejected those amendments in 1982 when we had the numbers, not only here but also in the Senate, and we rejected them again. I make it perfectly clear that in no way is the Opposition behaving inconsistently by on the one hand supporting the 1982 legislation and on the other hand opposing this piece of legislation. We believe it was a supportable proposition to collect unpaid company tax which had always been due and payable and to retrospectively shift the burden for that to those who got the benefit of its non-payment. We were prepared to support that proposition, although there were some who believed that even that was a proposition that could not be supported, on the proper grounds that we were collecting a tax that had always been due and payable. But what the Government is doing with this legislation is not to collect tax which has always been due and payable. Those who know how companies operate- there are quite a number on both sides of the House who know precisely what sort of arrangements are involved and who know-- Mr Tuckey —Mr Dawkins knows how to strip them. Mr HOWARD —Mr Dawkins not only knows how they operate; he knows how to strip them, and to do that extremely well. Not only do they know how they operate but they also know that a number of companies that perhaps were never involved in a distribution of retained earnings on which company tax had been paid would in fact be involved in that kind of distribution and will be caught and brought to liability under this legislation. That will not only have very damaging effects on those companies; it will not only lead to the bankruptcy of many of them; it will not only lead to the dismissal of many of their employees; but also it will impose a very harsh and unfair penalty. I invite members of the Government during this debate to draw on any authority of any repute, other than the rhetoric of their own front bench, on this issue. I invite them to draw on any authority of repute outside this Parliament who believes that the legislation now being sponsored by the Government is fair legislation and does not represent a monstrous overkill by this Government in the name of generating a phoney debate about tax avoidance in the Australian community. I know quite well the McCarthyist tacticts that will be used. The Prime Minister came into this Parliament yesterday and appealed for bipartisanship and calm and moderation of language on a highly sensitive issue and in a way that may for some time have gained him some kind of respect on that issue, but now he uses very bad, ill-chosen, prejudicial and totally monstrous language on this issue. For him to descend to the sort of language that he has used on this Bill demonstrates very clearly that when the Prime Minister is after a vote, when the Prime Minister is on an election campaign trail, truth will be one of the very early casualties. What the Prime Minister said about the Liberal and National Parties on that issue really does mean that this election campaign will be based very much on the fraudulent statements of the Prime Minister and cannot be supported in essence or by the facts. The Opposition will once again oppose these Bills. They will be opposed by the Opposition parties in the Senate. We oppose them because, firstly, we believe we are supported by none other than the Minister for Finance, a senior member of the Government, who said that tax avoidance is no longer an issue in Australia because of the legislation passed by the Fraser Government. Mr McVeigh —It was your legislation. Mr HOWARD —It was passed by the Fraser Government and it was legislation that I sponsored to that Government. Tax avoidance is not dead in Australia because of any legislation passed by the Hawke Government; the Hawke Government has not passed any legislation in this area. It is very interesting that the Minister for Finance is saying: 'Look, tax avoidance is dead'. He does not say it is dead because of our legislation; he just says that it is dead. Of course it is dead; it is dead because of legislation passed by the Fraser Government. That is the second reason why we oppose it. The third reason why we oppose it is that this legislation is grossly unfair penal legislation. It imposes a penal retrospective liability on people who are already being forced to pay up under the legislation passed by the Fraser Government and recently ratified as totally valid by the High Court of Australia . They are being forced to pay up under that legislation. If this legislation is passed it will lead to bankruptcies; it will increase unemployment; it will further depress the investment outlook situation when we are facing the worst private sector outlook for investment in Australia for many years. I say on behalf of the Opposition that if the Government wants to have a full blooded debate on tax avoidance either here or anywhere else we will welcome it because our record is a superb record of fighting and controlling tax avoidance. Our record has brought tax avoidance to an end in Australia. Our record is recognised by the Australian people for that reason. This legislation is an outrageous overkill, demonstrating very clearly that, when it comes to electoral advantage or grabbing a vote, this Prime Minister throws any semblance of honesty and true statement of fact out of the window. If this Prime Minister embarks upon an election campaign on this issue he will not only be embarking upon a campaign based on fraud. I can assure the Prime Minister-in fact I promise the Prime Minister-that at every turn he will be reminded by the Opposition of the lead in his saddlebag, the Minister for Finance, who will become-- Mr Barry Jones —That is the seventh time you have said that. Mr HOWARD —Yes, and I will say it for the eighth and ninth time because I have learned one thing from the Prime Minister, and that is that if one keeps repeating things sooner or later a lot of people start to believe them. The Prime Minister is very good at that and he has gone on and on. Some things I do not learn from the Prime Minister; many things I do not want to learn from him. There are a lot of things none of us want to learn from him. One thing I do recognise in the Prime Minister is his ability to adopt that charmingly simple tactic of repeating something that he believes in. All I have to say to the Prime Minister is that two can play at that game. If he thinks he is going to have a monopoly on that he has another think coming. He will be reminded time and time again over the coming months of what an enormous embarrassment the Minister for Finance is to him. He will be reminded that a senior member of his Government, by self-confession, has been involved in bottom of the harbour tax arrangements. Not only will he be reminded of that; he will be reminded also that that very same person in a late night flash of honesty was prepared to concede that tax avoidance in Australia is dead. I say to the Prime Minister: If he really wants to have an election campaign on this matter he has chosen the wrong issue because the facts do not support him and the Australian people will not agree with him. He is using a dishonest line of argument and adopting an approach, not only legislatively but also in his argument, that will cause a great deal of unnecessary distress to many hundreds of private companies in Australia. So we reject this legislation. I would welcome a debate with the Prime Minister , the Treasurer or anybody else on the subject of the former Government's record on tax avoidance. I would love to have a debate with the Treasurer on that issue during the coming election campaign. Mr Griffiths —You will. Mr HOWARD —I will be absolutely delighted to have that because it will give us and the Australian people the opportunity to realise what a totally deceitful, dishonest and fraudulent charge of the Prime Minister against the Opposition is constituted by both this legislation and what he has said about it, both in this House and before Easter. The Opposition totally opposes this legislation. Our record in fighting tax avoidance is a superb one. We have brought it to an end, as recognised by the Minister for Finance, and over the months ahead that will be recognised by the Australian people. Debate (on motion by Mrs Kelly) adjourned. Bill presented by Mr Uren, and read a first time. Mr UREN(Reid-Minister for Territories and Local Government)(6.45) —I move: That the Bill be now read a second time. On 6 April, the people of the Cocos (Keeling) Islands made an act of self- determination to integrate with Australia. The Government welcomes that historic decision. The act of self-determination was observed by a United Nations mission which visited Cocos at the invitation of the Australian Government. The people could have chosen free association with Australia or independence. They chose to integrate with Australia. The Australian Government's policy with regard to Cocos has been to bring about conditions which would enable the people of the Territory to exercise freely their right to self-determination in accordance with the relevant resolutions of the General Assembly and the principles of the United Nations Charter. To this end, the Australian Government has implemented a wide range of programs for the political, social, economic and educational advancement of the people in accordance with our obligations under Chapter XI of the Charter. The Government views the choice by the people of integration with Australia as a successful outcome of its policies for the Territory. All 261 eligible voters voted in the referendum and only two informal votes were recorded. The result was: For integration with Australia 229 votes For free association with Australia 21 votes For independence 9 votes The visiting mission will prepare a report for the United Nations Secretary- General on the conduct and outcome of the Act. We expect that this report will form the basis of a resolution to be placed before the next regular session of the General Assembly to remove the Cocos Islands from the United Nations list of non-self-governing territories. This process should be completed by the end of December 1984. There were reports in the Press that the Chairman of the United Nations mission was critical of the extent to which Australia had prepared the people for the act of self-determination, and educated and informed them of the consequences of the various options. It appears that these reports have magnified a minor comment about the placement of election posters around the island into a major criticism. The chairman of the mission told me that the reports dramatized and overplayed his comments, which had not been intended as a criticism of the Australian Government. The Cocos leaders have explained that the means by which political education had been conducted was consistent with Malay cultural practices. I informed the House on 28 March of the details of the three options from which the people would choose. I said that under integration the Cocos people would have the full rights, privileges and obligations of other Australian citizens and I outlined specific measures that would be taken by the Government to give effect to that promise. Amongst those measures were the measures now before the House. I will not take the time of the House in presenting in any detail other measures we have taken and will take to houour our commitment to the people of Cocos. Those are a matter of public record. I again draw the attention of the House to Australia's commitment to observe the relevant resolutions of the General Assembly and the principles of the United Nations Charter in relation to the act of self-determination. Principle ( viii) attached to United Nations Resolution 1541 provides that integration with an independent state should be on the basis of complete equality between the peoples of the Territory in question and those of the independent country with which it is to be integrated. Equality should include opportunities for effective participation at all executive, legislative and judicial levels. There are four measures addressed in this Bill. Amendments to the Commonwealth Electoral Act 1918 The Government enthusiastically acknowledges its obligation to extend to the island community full voting rights in relation to the Australian Parliament. To meet that obligation, this legislation provides for the Commonwealth Electoral Act to be amended to incorporate the Territory of Cocos (Keeling) Islands as a district in the Federal Division of the Northern Territory. The right to vote is a precious right in a parliamentary democracy and marks the acceptance by the people of Cocos of their full responsibilities as Australian citizens. I emphasise that the inclusion of Cocos in the federal electorate of the Northern Territory will not affect access of the Cocos people to the Federal Government through me, as the Minister responsible, or my Department. I also emphasise that the Government of the Northern Territory will have no role or responsibilities in relation to Cocos. The electors of Cocos will benefit from the additional representation of the honourable member for the Northern Territory, who I am sure will effectively represent their interests in this House. The financial implications of this action are minimal, and are restricted to those expenses incurred in registering the names of eligible voters on the Islands, freighting of ballot papers and other documentation on the occasion of elections and referendums, and the casual engagement of polling officials. Expenditure of only $2,000 to $3,000 on each occasion of election is envisaged. Commonwealth Grants Commission Act 1973 The legislation also amends the Commonwealth Grants Commission Act to provide for a reference to be given by the Minister to the Commission in relation to the Territory. The Government will be looking to the Grants Commission to determine methodologies and procedures which will enable it to recommend to the Government appropriate forms of assistance to the Islands community to ensure that it enjoys a standard of living comparable to that on the Australian mainland. Costs incurred by the Commission in pursuing this task are expected to be minimal, mainly involving travel expenses of the commissioners and associated staff to and from the Islands. Health Insurance Act 1973 and National Health Act 1953 The effect of the extension of this legislation will be to place the people on Cocos in a similar position to mainland residents in respect of public medical and hospital services, provided that the Cocos hospital charging arrangements are brought into line with those of public hospitals on the mainland; that is, no charges being levied for public medical and hospital services. This will require the consequential repeal of the Cocos (Keeling) Islands Medical Charges Ordinance 1963. The financial impact of the changes resulting from these amendments will be negligible. Social Security Act 1947 This measure is essential for equality for the people of the Territory. It is estimated that the cost of payment of pensions, benefits and allowances to residents of Cocos (Keeling) Islands will amount to $240,000 in a full year. In accordance with the community's wishes, it is proposed to make arrangements for payment to be made to the Cocos (Keeling) Islands Council. This is in line with the community's practice of pooling its resources to maximise the benefit to all members of the community. Further, this arrangement will ensure that local wage structures will not be disrupted following the extension of the legislation. I am pleased that at the table is the honourable member for Darling Downs (Mr McVeigh), who is the former Minister for Home Affairs and Environment and was responsible for the Cocos (Keeling) Islands. I know that he personally has a similar commitment to that of the Government and I am pleased that he is in the House on this very historic occasion when we are introducing this Bill on behalf of the Cocos Island people. I commend this Bill to the House. Debate (on motion by Mr Ruddock) adjourned. Bill presented by Mr Willis, and read a first time. Mr WILLIS(Gellibrand-Minister for Employment and Industrial Relations)(6.56) —I move: That the Bill be now read a second time. This legislation contains several amendments to the Conciliation and Arbitration Act, most of which are relatively minor in nature. These amendments are designed primarily to overcome certain problems that have been identified in the operation and administration of the Act and which the Government considers require immediate attention. Honourable members will recall that when I announced the establishment of the review of Australian industrial relations law and systems in July last year, I explained that the establishment of the review would not preclude changes being made to the Act before the committee finalised its recommendations where these were considered necessary. The amendments proposed in the Bill will not in any way impede the committee's work which, as honourable members know, is well under way at the moment. Consistent with the Government's commitment to consultation, the amendments have been considered by the National Labour Consultative Council and there is agreement on them. The first aspect of the Bill to which I draw honourable members' attention is the changes proposed to Part VIIIAA of the Act. This Part sets out the various accounting and financial reporting requirements for organisations registered under the Act. Honourable members will recall that Part VIIIAA was amended last year. Those amendments allowed organisations whose federal bodies exercised effective control over the financial management of the whole of the organisation to consolidate their accounts for the purposes of Part VIIIAA. When I introduced those amendments, I indicated that the NLCC was examining proposals to allow organisations with less centralised control of branch assets also to consolidate their accounts. I foreshadowed my intention to introduce legislation to give effect to those proposals in the autumn sittings of Parliament. The amendments I am now introducing permit the federal body of an organisation to file its accounts and those of its branches at the same time with the Registrar. The existing legislation requires the federal body and each branch of the organisation to file their accounts separately. Under the changes to be introduced, where the rules of the federal body and each of the branches of the organisation so provide, where organisations elect to file in such a manner and where the accounting periods of the federal body and the branches are the same, then the federal body will be obliged to file all of the accounts of the organisation with the Registrar. A further amendment is proposed to assist branches to bring their accounting periods into line. Where, for whatever reason , the federal body is unable to file all the relevant accounts with the Registrar, the organisation and each of its branches will be required to file their accounts separately in accordance with existing requirements. I should point out that the proposed changes do not affect the present obligation on each part of the organisation, including branches, for the preparation and auditing of accounts, their supply to members and their presentation to meetings. Nor is it intended to alter the existing rights of branch members in relation to the accounts of an organisation or the requirements for the Industrial Registrar to investigate apparent deficiencies in accounts. It is expected that some organisations will find that the amendments provide a simpler, more convenient and less costly procedure for the filing of financial documents than exists under the present legislation. It will also provide a greater co-ordination role and due recognition to the central position within the organisation of the federal body. I now turn to the other matters contained in the Bill. Three measures are designed to improve certain administrative arrangements under the Act relating to members of the Conciliation and Arbitration Commission and registrars. First, leave for commissioners is to be approved by the President of the Commission rather than by the Minister as at present. This is a more appropriate and efficient arrangement. Secondly, for administrative convenience, provision is to be made to enable the appointment of persons to act as Industrial Registrar or as a Deputy Industrial Registrar. The absence of such a provision has resulted in unnecessarily cumbersome arrangements for such appointments. Thirdly, it is proposed that during any period when the senior Deputy President exercises the powers and functions of the President of the Commission under section 10, that he be entitled to the salary and allowances of the President. This is consistent with the situation where a formal acting appointment is made. The amendment contained in clause 6 of the Bill relates to section 133AB which was introduced last year by the Government. This provision enables the rules of an organisation to provide for the filling of casual vacancies that arise in offices in organisations. Some difficulties have since been identified in the wording of section 133AB which could create unnecessary problems for organisations. These particular amendments are designed to give effect to the original intention of the 1983 legislation. Provision is also made to prevent existing casual vacancy rules of organisations from being declared invalid simply as a result of the deficiencies in section 133AB in its present form. The Bill also proposes the repeal of section 27 of the Conciliation and Arbitration Amendment Act (No. 2) 1983. That provision relates to the rule altering powers of committees of management of organisations. It has not been proclaimed and has been made unnecessary by the decision of the Federal Court in Wright v. McLeod. I commend the Bill to the House. Debate (on motion by Mr Braithwaite) adjourned. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS(Fremantle-Minister for Finance and Minister Assisting the Prime Minister for Public Service Matters)(7.02) —I move: That the Bill be now read a second time. On 28 September 1983 I announced that the Government intended to reform the Australian Public Service along the lines of the proposals it had presented to the Australian people prior to the March election and set down in the platform document 'Labor and Quality of Government'. Since that time the Government has been involved in a process of extensive policy development, consultation and discussion in order to produce this significant and far-reaching legislation. In reaching its decisions the Government has drawn substantially on the findings and recommendations of the 1976 Coombs Royal Commission on Australian Government Administration, the 1982 Reid Committee of Review of Commonwealth Administration and the report of the Parliamentary Joint Committee of Public Accounts in 1982, then chaired by the honourable member for Bradfield (Mr Connolly), on the selection and development of senior managers. Unfortunately, little had been done to implement these reports. Many of the deficiencies that were identified were not remedied and as a consequence the problems have worsened. Morale and quality of administration have suffered and the delivery of programs has been affected. Throughout the Western democratic world many countries have addressed this problem and are concerned to reform their administration to achieve better value for all government expenditure, and to ensure that the administration is responsive to democratic direction and to the changing requirements of the community it serves. Although Australian political processes have expanded and changed, administrative and budgetary processes, the essence of efficient and effective government, have not. It is no coincidence that most of the Western democratic nations are now engaged, not just in developing policy to cope with the world- wide recession but also in efforts to modernise and improve their administrations and to apply modern techniques to their program and personnel management. All Organisation for Economic Co-operation and Development countries are confronting a situation in which the need for a very disciplined approach to the tasks of government has greatly increased. All acknowledge that this greater discipline needs to be applied both in respect of the total size of the public sector and, just as importantly, to the efficiency in, and delivery of, public sector programs. All have come to the conclusions, as I have frequently put it, that quality of administration is as much a public policy issue as are the programs being administered. Clearly, therefore, reform of our administration is not a case of change for change's sake. The proposals can reasonably be categorised as the pursuit of the objectives of economy, efficiency and effectiveness. They involve changes at both ministerial and departmental level in decision-making processes and resources management. I announced our intentions in this area some eight months ago. Since that time, as part of our desire to ensure that all those affected had the opportunity to consider our proposals and consult with the Government, the following actions have taken place: The Government's intentions were announced in the discussion paper, 'Reforming the Australian Public Service'; I elaborated on our proposals and discussed them at meetings sponsored by the Royal Australian Insitute of Public Adminsitration in Canberra and Melbourne, at the Australian National University Conference on New Developments in Public Sector Management and various Public Service Board meetings and training courses; and extensive consultations have taken place between the Government, the Australian Council of Trade Unions and its affiliated public sector unions and the Second Division Officers Association. I am pleased to be able to say that the response to our proposals has been overwhelmingly favourable. The essential message of the comments that have been made is that the reforms are sensible, balanced and long overdue. Of course, not all of those who have comments on the Government's policy paper have agreed with every word of it-that could not be expected with such comprehensive reforms-and, as a result of the consultations, the Government has made a number of changes to the decisions it announced in December. Further, the consultations have provided the parties with an opportunity to gain an appreciation of each other's point of view on those few issues where agreement has not been possible. As a result, after many months of work we are now in a position to introduce to the Parliament the Public Service Reform Bill, and the associated Bills providing for the creation of a new and independent Merit Protection and Review Agency for Australian Government employees and new employment arrangements for the staff of Ministers and other members and senators. These represent the most comprehensive and thorough going legislative review of the Australian Public Service at least since the passage of the present Public Service Act in 1922 and will ultimately result in the development of a modern, efficient, responsive and accountable Australian Public Service. In developing its proposals the Government has had a number of general objectives: First, there is the need for Ministers to supervise more closely the management of their departments and for departments to be more responsive and accountable to their Ministers; second, new arrangements need to be made for senior management in the Public Service to ensure a fully productive relationship between it and governments, and to enable senior managers in the Service to realise their full potential; third, processes of resource allocation need to be improved by a closer involvement of Ministers and a greater co- ordination of financial and staffing resource decisions, coupled with better opportunities for the review of programs and their administration; and fourth, there is a need for more explicit legislative support for more enlightened personnel policies and practices especially equal employment opportunity and industrial democracy, and for more appropriate arrangements to be made for the independent handling of staff grievances and appeals. These will form the basis of a more equitable administration. This Bill and the Bills that will soon be introduced have been developed to meet these objectives and to establish a legislative framework for the continuing reform of the Australian Public Service. The House will recall that in 1982 Parliament passed the Public Service Acts Amendment Act. The main provisions of this Act related to the abolition of the so-called divisional structure in the Public Service and the institution of a system of promotion based solely on merit. Because of the Government's intentions to amend further the Public Service Act and other Commonwealth employment legislation, and for other reasons, only parts of this Act have been proclaimed. The Public Service Reform Bill does not affect substantively the 1982 Act, although it is necessary to amend some of its provisions to accommodate the changes that are now proposed. The need to amend these provisions and the need to ensure flexibility in implementing the reforms accounts, in large measure, for the complexity of the Public Service Reform Bill. To assist the House I will make available to honourable members a background paper summarising the Government's reform policies. I turn now to the major provisions of the Bills. Secretaries to Departments The Public Service Act will be amended to clarify the traditional understanding of the relationship between Ministers and secretaries to departments in relation to their responsibilities for the administration of departments. Except where specific powers are vested in a secretary by statute, legislation will now make it clear that a secretary's responsibility for the general working of a department is subject to the Minister's powers under the Constitution. Under current arrangements, secretaries to departments, currently designated in the Public Service Act as 'Permanent Heads', are appointed under provisions introduced by the Fraser Government in 1976. These provisions create two classes of officers at this level according to whether the name of the appointee is included on a list of candidates prepared for the Prime Minister by officials. The provisions are gratuitous and they place an inappropriate power in the hands of the public servants involved. The Public Service Reform Bill provides therefore that the Governor-General should appoint, transfer and unattach secretaries to departments in accordance with a recommendation of the Prime Minister, after the Prime Minister has obtained a report from the Chairman of the Public Service Board. The legislation is similar in intent to that prevailing from 1922 to 1976, but stronger, to the extent that it requires, rather than merely allows for, a report from the Chairman of the Public Service Board. An option will also be provided for secretaries to departments to be appointed for fixed periods if that should suit the convenience of an appointee and the Government. The Government intends to place a legislative obligation on the Public Service Board to attempt to secure the redeployment of unattached secretaries to departments, with the Board being able to determine that the officer should continue to be treated as a secretary for the purpose of pay, allowances and associated conditions of service. If it becomes apparent that suitable redeployment is not likely the Board will be required to place the officer at the most senior level in the Senior Executive Service. In these circumstances officers will be able to retain superannuation entitlements at the secretary to department salary rate as that is updated from time to time. Provisions will also be made to allow secretaries to departments to be retired with their consent, from the Service, with appropriate benefits being determined by the Public Service Board in each case. After a secretary to a department has been in a position for five years the Chairman of the Public Service Board will raise with the officer and the Minister the possiblity of another placement and report to the Prime Minister as appropriate. To facilitate the policy of rotation of secretaries to departments the Governments will continue the practice of mantaining the salary and status of a secretary when he is moved to another position that may have a lower salary determined for it by the Remuneration Tribunal. The Senior Executive Service The Reform Bill will reshape the existing Second Division of the Public Service into a more unified and cohesive group to be called the Senior Executive Service -SES-in which arrangements for staff selection, development, mobility, promotion and tenure will be designed specifically to meet the requirements at senior levels. The Australian Public Service is unusual in the extent to which it relies on its officers making their own careers, both in seeking advancement and in obtaining the training and development to equip them for senior management positions. While preserving the strengths of the existing systems, the Government wants to see a greater degree of management leadership in the development and placement of senior staff. It also wants the Service at senior levels to be more open, mobile and competitive. The following provisions are accordingly provided in the Reform Bill: All SES vacancies will be open for application from persons outside the Public Service, as well as from serving officals. An option will be available for appointments to be for a fixed period. All promotions into and within the SES will be made by the Public Service Board on the recommendation of a secretary to a department. The Board will be empowered not to accept a recommendation of a secretary to a department only in limited circumstances-where it believes, in the interests of the Service, that an officer should be transferred into the position, where the person recommended is unsuitable, where proper procedures have not been followed or where a wider search is desirable. There will be no appeals against promotions in the SES. The Public Service Board will be empowered to transfer an officer from one department to another. In exercising this power the Board will be most thorough and meticulous in its consultations with the officers affected and their departments. When selecting persons for positions in the SES, greater reliance will be placed on policy advising, general management and professional skills. Less emphasis will be given to experience relevant to specific duties. In other words , a person's ability to perform at a level will be an important and recognised element in selection. New provisions will be included in the Public Service Act for the handling of surplus and unsatisfactory staff in the SES in place of the existing legislative provisions in the Commonwealth Employees (Redeployment and Retirement) Act. As it will be normal management practice for staff who are not performing satisfactorily or who become surplus to be moved to another job as part of a staff mobility program, the new legislation will be needed only from the point where it becomes clear that they cannot be satisfactorily redeployed at their existing level. A right of appeal will be provided only against a decision to reduce an officer to a lower level or to retire an officer from the Service. These measures enhance the ability of secretaries to departments and the Public Service Board to see that senior staff are deployed in the best possible way. The Board, in particular, will take a much more prominent and active role to see that the interests of the Service generally are fully taken into account in the disposition of senior staff. For this purpose it will establish a Senior Executive Staffing Unit to assist the Board and secretaries to departments in the selection, development and placement of senior staff. A committee of secretaries to departments will also be set up to advise the Board on the whole range of senior staffing matters. The Board will be represented in all staff selections in the SES, and will develop programs of staff development and mobility, co-ordinate the introduction of staff appraisal and establish a Temporary Assignment Pool of staff who can be used for short term tasks or to meet urgent needs. The Government believes that these new arrangements provide the best possible balance between the requirements of Service-wide management of senior staff, the needs of individual departments and the interests of the staff themselves. Not surprisingly, the staff organisations have expressed misgivings about the abolition of appeals against promotions in the SES. The Government understands their concern but does not share it. Already the number of successful appeals against provisional promotions in the Second Division is extremely small-five over the last five years. The new arrangements will be more objective and thorough going and final decisions will be made by the Board, the authority which now decides appeals against provisional promotions. There will be adequate protection of the rights and interests of staff through arrangements for staff appraisal, the direct participation of the Board in promotion decisions, the establishment in the Board's Office of a Senior Executive Advisor to counsel staff, and the right of staff to approach a new authority-a Merit Protection and Review Agency-where discrimination or other improper practice is alleged. The Government is conscious that some staff may be concerned about the effect on their career expectations of the decision to advertise all positons as open to competition from outside the Service. Given the ability and professionalism of the staff of the Service, however, any outsiders will need to be very good to win a position. I am sure that public servants do not fear or resent fair competition with outsiders, and the Government sees its decision to allow outside applications for all senior positions as a tribute to the open mindedness and robustness of the career service. Staff for Ministers and other Members of Parliament The Government believes that Ministers should have assistance in key projects from able people who share the Government's values and objectives or who can bring to government relevant specialised or technically advanced skills. Governments have in the past engaged consultants to assist Ministers either by the use of simple contract arrangements or by the use of the temporary employment provisions of the Public Service Act. To that extent the Government's intentions are not new. There are, however, legal concerns about contract arrangements of this kind, while the use of the Public Service Act could be seen as an inappropriate vehicle for the appointment of consultants. To overcome these problems, the Members of Parliament (Staff) Bill makes provisions for Ministers to be able to engage a limited number of consultants for work on nominated projects or reviews directly for a Minister, or on duties agreed between the Minister and the secretary to the department and under the secretary's supervision and direction. The Prime Minister will approve all such engagements on a recommendation from a Minister that in each case will be accompanied by a report from a merit panel whose composition has been approved by the Prime Minister, and which would include a nominee of the secretary to the department where the consultant is to work under the secretary's supervision and direction. Engagements will be for periods up to three years, but will be able to be terminated by Ministers at any time. I have indicated that the number of ministerial consultants at any one time will be small; it is not possible to be more precise than that. Some will be engaged for only short periods or part time . In some cases the consultancy may be taken up by a firm. But the Government wants it to be quite clear that the legislation will not be used for contracting out significant areas of work now performed by the Public Service, nor will consultants working in departments exercise delegated powers. By providing for the possibility of consultants working in departments the Government's proposal avoids the potential for divisiveness inherent in any substantial expansion in the numbers of advisers working in Ministers' offices. The scope it provides for combining the talents of career officials with the special skills of other competent individuals and organisations will strengthen the policy development capacity of governments. I might add that the provisions are consistent with some of the recommendations in the recent Liberal Party Committee of Review-the so-called Valder Report-but they are not as radical or potentially disruptive as other proposals in that report. Provisions of the Members of Parliament (Staff) Bill will also empower Ministers and other members and senators to engage their own personal staff. As honourable members will be aware these staff are now engaged under the temporary employment provisions of the Public Service Act and decisions about the engagement of these staff must formally be taken by officials in the Department of the Special Minister of State. This is quite unsatisfactory. The terms and conditions of employment for these staff will henceforth be determined by the Prime Minister, and before the legislation comes into effect the Government will , after proper consultations, decide upon more satisfactory conditions of employment for these staff. The numbers and levels of these staff will continue to be decided by the Government on the recommendation of the Remuneration Tribunal. These staff will have the same access to arbitration as other Commonwealth employees. Officers of the Public Service who are engaged by Ministers or other members or senators will have access to a special tripartite committee to determine the level at which they may be reintegrated into the Service upon the completion of their engagements. The Public Service Reform Bill provides for the amendment of the Governor-General Act so that provisions similar to those for the personal staff of Ministers and members and senators can be provided to regulate the employment of the staff of the Governor-General. Integration of Financial and Staffing Decisions The staff ceilings systems of previous Governments were highly centralised. Not all Ministers or departments were necessarily or usually involved in the final negotiation or determination of ceiling limits. As a result decisions were often arbitrary and frequently not properly co-ordinated with financial decisions taken in the course of the preparation of the Budget. The Government has already taken steps to see that Ministers and departments are more fully involved in the determination of staff numbers. The Government now wishes to go further to integrate staffing and other resource negotiations in the normal estimates and new policy proposals processes of the Budget and, at the same time, to provide departments with greater flexibility in the use of their staff resources. The Public Service Reform Bill contains provisions enabling secretaries to departments to create, abolish and classify positions and determine their duties . These decisions were previously taken by the Governor-General on the recommendation of the Public Service Board, after the Board had received a report from the secretary to the department. Under the new provisions the Board will be responsible for the design of occupational groups and the determination of related pay rates. It will prepare classification standards and guidelines, and will have a power to audit and, if necessary, require departments to reclassify positions. The Department of Finance will advise the Government on and administer human resource budgets, which will provide a framework for managing staff members and the expenditure on staffing. The provisions are a significant devolution of power from the Public Service Board to departments. They require an organisational separation of controls over the numbers and levels of positions from other aspects of personnel management still within the responsibility of the Board. This decision has not been lightly taken and obviously it is not without its costs. The Government believes however that these are outweighed by the compensating benefits of flexibility for departmental management and the closer integration of financial and staffing decisions. From the Board's point of view it should facilitate the development of more satisfactory relations with departments where in the past these have been adversely affected by the tension that can result from disputes over numbers and levels of positions and will enable the Board to concentrate better on the many personnel management reforms provided in these Bills. Personnel Policies and Practices The legislative backing to modern personnel policies and practices in the Public Service is not adequate. It is not explicit and it does not provide sufficient guidance and support to those who have to develop and administer the policies or those who are affected by them. It does not, for example, give sufficient recognition to the principles of equal employment opportunity and merit in selection, recruitment or career advancement, or the importance of precluding unjustified discrimination or to the rights of staff to participate in decisions affecting them at work. Indeed, in some respects, the personnel policies and practices developed by departments and the Public Service Board in the last ten or fifteen years have outgrown the legislative provisions in the Public Service Act. The Government now wishes to provide a more up to date framework for the further development of these policies and practices. First, a clear statement of merit principles will be included in the Public Service Act as a basis for developing and administering personnel policies. While the Act already makes it clear that entry to the Public Service is to be by open competition and that promotion is to be on the basis of relative efficiency, these criteria will now be made more explicit and comprehensive. Second, a positive obligation will be placed upon departments to develop and implement equal employment opportunity programs for disadvantaged groups. The Public Service Board will promulgate guidelines for the development of these programs and will monitor them. To facilitate the application of the Government' s equal employment opportunity policies outside the Public Service Act area, it is intended that these provisions will be capable of being applied by regulation to authorities not staffed under that Act. The Government is firmly committed to policies of equal employment opportunity that will complement and strengthen the merit principles by removing those barriers which disadvantage some groups in competition for jobs, and, where necessary, include special measures to bring about the greater employment of groups under represented in the Public Service. Third, and associated with its equal employment opportunity policies, the Public Service Reform Bill contains provisions for the introduction of permanent part time work, with superannuation, in the Public Service. The Government is acutely aware of union sensitivity on the question of permanent part time work. Therefore, staff organisations will be consulted fully, and provisions are included in the Bill that would prevent the compulsory transfer of an officer from a full time to a part time position with consequent reductions in pay and conditions, or vice versa. The Government does not see these legislative provisions leading to the wholesale conversion of positions from full time to part time. Nor can it be seen in other areas of employment as a precedent for reductions in hours and pay and conditions of employment. Permanent part time work will not be a right, but it will provide more satisfactory and flexible employment arrangements where the interests of staff and departments can be matched. Fourth, as with equal employment opportunity, the legislation will require departments to develop, maintain and implement industrial democracy action plans to be monitored by the Public Service Board. These provisions will also be capable of being applied, by regulation, to statutory authorities not covered by the Public Service Act, but in these cases the monitoring role of the Public Service Board will be confined to those authorities where it is required by legislation to approve an authority's determination of terms and conditions of employment. Arrangements for other statutory authorities are yet to be determined. The Public Service Board and departments will, of course, be required to consult with staff organisations in the development and application of these plans. The plans are important because a more participative approach to management will not only improve decision making, but will enrich the working lives of the men and women in government employment. Debate interrupted. Madam DEPUTY SPEAKER(Mrs Child) —Order! It being 7.30 p.m., I propose the question: That the House do now adjourn. Mr Young-I require that the question be put forthwith. Question resolved in the negative. Debate resumed. Mr DAWKINS(Fremantle-Minister for Finance and Minister Assisting the Prime Minister for Public Service Matters)(7.30) —Fifth, consistent with its policies on industrial democracy, the Public Service Reform Bill provides for joint selection committees, that is committees including a staff organisation representative, for use in choosing people for promotion. Appropriately this concept was developed through the Joint Council some years age. Unfortunately it was not implemented at that time. The use of these committees, which will be dependent on the agreement of the relevant staff organisation, will speed up the filling of vacant positions and provide an opportunity for participation in an area of very significant interest to staff. Finally, so that the implementation of the Government's personnel policies can be monitored, the Public Service Board will be empowered to require reports on personnel policies and practices from departments and authorities covered by the Public Service Act, and to take follow up action in each case. Merit Protection and Review Agency The Merit Protection (Australian Government Employees) Bill provides for the establishment of a Merit Protection and Review Agency for Australian Government employees. The Bill will not provide further avenues of appeal and grievance for staff, but it will allow for appeals and grievances to be considered independent of departmental management and the Public Service Board. The current powers of the statutory tribunals under the Public Service Act and the Commonwealth Employees (Redeployment and Retirement) Act will be retained but the Merit Protection and Review Agency will take over responsibility for the opeation of these tribunals. The Agency will have an additional determination power in relation to discipline appeal matters involving dismissals where the final decision is now made by the Public Service Board. The Agency will also be responsible for review and investigation of personnel decisions and actions which are the subject of grievances. The Agency will be empowered to review certain specified decisions where appeals may now be made against departmental decisions to the Public Service Board, for example, in relation to the deferral of increments or decisions not to grant certain types of leave. (Extension of time granted) I thank the House. In relation to general grievance matters the legislation provides a framework for the Agency to investigate grievances lodged by officers and employees. For Public Service Act staff, the regulations will continue to provide for officers and employees to take up grievance matters initially with the Secretary to the department. Where a grievance is not resolved in this way, it may be referred to the Agency and will be investigated by the Agency's own investigation staff, who will also be empowered to counsel and conciliate. Therefore, the Agency will have powers to investigate, recommend a course of action to a department or to the Public Service Board and in specified circumstances reach conclusions on questions of fact and confirm, vary or set aside a decision. The legislation provides a framework for the extension of the Agency's jurisdiction to other authorities staffed outside the Public Service Act, should it be so decided, after consultation with the authorities concerned and relevant staff organisations. The Government believes that all statutory authorities not covered by the Public Service Act should adopt modern disciplinary codes. It also believes that, unless more appropriate mechanisms are in place, authorities should be covered by the new Agency for disciplinary appeals. This issue is at present being pursued with authorities and staff organisations. The Agency will be staffed under the Public Service Act, with the Director of the Agency having the powers of a secretary of a department. The members of the Agency will consist of a full time director responsible for the day-to-day running of the Agency and up to four other members, with a maximum of two of these being full time. In appointing members to the board of the Agency the Government would expect that one member at least would have substantial management experience and also that appropriately skilled people from disadvantaged groups would be considered. One member will be selected after consultations between the Government and the Australian Council of Trade Unions. The Government will take care to ensure that members of the Agency have a status and reputation appropriate to their duties. There will be a need for close co- operation between the Agency and the Public Service Board and also between the Agency and the Human Rights Commission on discrimination matters. Australian Government employees will not be precluded from making applications to the Commission in relation to such complaints as it can deal with. Aspects of Remuneration The Government is aware that in recent years there has been a considerable erosion in senior Public Service remuneration compared to that in the private sector. Public Service remuneration at these levels has never matched those of the private sector, but the widening gap will only make more difficult the recruitment of talented people from the private sector, even for short periods. In present circumstances there is little that can be done about this; but as far as legislation is concerned there are two changes proposed. First, all fixed term appointees as secretaries to departments and to the Senior Executive Service, ministerial consultants and ministerial and electorate staff who are not already members of the Commonwealth superannuation scheme will be given an option to join the scheme or to be covered by an endowment superannuation policy providing for benefits on completion or termination. Second, the Public Service Reform Bill provides for an amendment of the Remuneration Tribunals Act to allow the Tribunal to review the salaries of the various groups within its jurisdiction at different times. Other Matters The Public Service Reform Bill contains provisions on a number of other matters not covered in the policy information paper issued last December. Some of these are of a more technical nature; others are more substantive. First, the British subject requirement for appointment to the Public Service is to be removed and replaced with an Australian citizenship requirement, with a power being provided for the appointing authorities to waive the requirement where this is desirable. Where the waiver occurs other than in individual cases the details will be tabled in Parliament and notified in the Commonwealth of Australia Gazette. The legislation of various statutory authorities where citizenship requirements exist will also be amended to bring them into line with the requirement in the Public Service Act or to remove the legislative provision altogether in some cases. Second, an opportunity is being taken to remove doubt about whether offences for impersonation at examinations cover various tests conducted by the Public Service Board for entry to the Public Service. The penalties for offences are also being updated. Third, a provision is included in the Public Service Reform Bill for the voluntary unattachment of staff from their positions. The written consent of the officer will be required in each case. This will not only provide a clear head of power for long-standing and necessary practice but also will simplify some of the existing provisions relating to unattached officers. In conclusion may I say that the Australian people have a right to expect that the public services they support with their taxes and rely upon for the administration of government policies and programs are the best that can be provided. The staff of the Public Service should be able to expect that their work will be satisfying and will provide challenges and opportunities for career advancement within a modern personnel system that adequately protects their rights. If government is to serve the people efficiently, effectively and equitably it must ensure that the public sector operates in such a way as to attract the best people to work for it, acknowledge the interests of the community and be prepared to be accountable to the community and its elected representatives. The public sector has a major and continuing role in the development of our nation and if this is to take place effectively the Australian Public Service must be a modern and efficient body. Other areas of activity remain to be examined and reformed to ensure the vital role the public sector has to play in the lives of all Australians. I have much pleasure in introducing these Bills, which provide further evidence of the Hawke Government' s intentions to take important and landmark decisions that are necessary prerequisites for a better and more successful nation. Debate (on motion by Mr Braithwaite) adjourned. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS(Fremantle-Minister for Finance and Minister Assisting the Prime Minister for Public Service Matters)(7.37) —I move: That the Bill be now a read a second time. Mr Cadman —If you are going to interrupt the adjournment we will interrupt the business of the House. Mr DAWKINS —This speech has about two sentences. In my speech introducing the Public Service Reform Bill I outlined the Government's intentions to provide for the engagement of ministerial consultants and the employment of personal staff by members and senators. This Bill will introduce the necessary legislative provisions to give effect to these arrangements. I commend this Bill to the House. Debate (on motion by Mr Braithwaite) adjourned. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS(Fremantle-Minister for Finance and Minister Assisting the Prime Minister for Public Service Matters)(7.39) —I move: That the Bill be now read a second time. In my speech introducing the Public Service Reform Bill I outlined the purpose of this Bill. The Merit Protection (Australian Government Employees) Bill will introduce the necessary legislative provisions to give effect to the Government' s policy on this aspect of the reform proposals. I commend the Bill to the House . Debate (on motion by Mr Braithwaite) adjourned. Mr PEACOCK(Kooyong-Leader of the Opposition) —Madam Deputy Speaker, I seek leave to make a personal explanation. Madam DEPUTY SPEAKER(Mrs Child) —Does the honourable member claim to have been misrepresented? Mr PEACOCK —Yes, I do. Madam DEPUTY SPEAKER —Please proceed. Mr PEACOCK —I have just heard allegations made on the Australian Broadcasting Corporation program PM alleging, firstly, that there is division in the Opposition ranks on the current immigration debate. There is not. It is also alleged that the honourable member for Balaclava (Mr Macphee) does not agree with my statements yesterday. In fact he does and will indicate this. Furthermore, the program alleged that I destroyed bipartisanship and later said I had discarded bipartisanship. Both these statements are incorrect. Bipartisanship does not now exist because of the imbalance in figures that I and all Opposition speakers referred to yesterday and today. At a Press conference yesterday I was asked, among other things: Are you saying that if there were a balance, there would be bipartisanship? To which I answered: Yes, I am. In other words, when the Government returns to a balanced program it will have restored bipartisanship. Mr MACPHEE(Balaclava) —Madam Deputy Speaker, I seek leave to make a statement. Madam DEPUTY SPEAKER —Does the honourable member claim to have been misrepresented? Mr MACPHEE —I do, Madam Deputy Speaker, on the same program. Madam DEPUTY SPEAKER —Please proceed. Mr MACPHEE —On the same program I was accused of providing an insight into divisions within the Opposition. As, indeed, there are no divisions, I was not providing an insight into them. In fact, the prefatory remark in my question to the Minister for Immigration and Ethnic Affairs (Mr West) was in relation to a misrepresentation which he made of something I said yesterday when he answered the previous question. A reading of the Hansard of today and yesterday will show that I was correct. The Opposition has continually called for a return to the bipartisan policy and has asked the Minister over and over again to explain why under his administration the European component has dropped. We have not yet had a satisfactory answer to our questions. At no time did I imagine- Madam DEPUTY SPEAKER —The honourable member will not debate the issue. Mr MACPHEE —Madam Deputy Speaker, at no time did I imagine that the Leader of the Opposition (Mr Peacock) was saying anything different from what I was saying . Indeed, I know that he was not. Bill presented by Mr West, and read a first time. Mr WEST(Cunningham-Minister for Immigration and Ethnic Affairs)(7.43) —I move: That the Bill be now read a second time. It gives me great pleasure to introduce this Bill into the House, for it will remove another piece of totally discriminatory legislation. The Aliens Act, which applies only to non-British subjects, succeeded the war-time National Security (Aliens Control) Regulations. The Act, when passed in 1947, was intended principally to provide information concerning the non-British population, including its distribution by industries and localities, and to provide a basis for imposing limitations, if considered desirable and necessary, on the entry or stay of non-British subjects of any specific nationality. As a result of amendments made to the Act from time to time, non-British subjects are required only to register, notify my Department if they marry, and obtain consent to change a surname. For many years the Department has not fully maintained the aliens register, and moreover, few people now comply with the notification requirements. Having regard to the high proportion of Australian citizens born overseas and the large number of non-citizens who have irrevocable permanent residence in Australia, I believe the Act is based on outmoded concepts. The Act has been left in place essentially to satisfy national security interests. Until recently , there was no suitable alternative means of providing information on all non- citizens in Australia, particularly at a time of national emergency. An alternative means of obtaining information is now available through the Government's visa and entry permit systems. Almost all foreign nationals are required to supply information before obtaining authority to travel to Australia and upon arrival are required to complete passenger cards before being granted entry. The gathering of this information is being computerised by my Department so as to enable it more effectively to monitor and identify those who are entering and departing Australia. My Department has been tasked with the responsibility of preparing guidelines for access to this computerised information, in consultation with other interested departments and authorities. The Government will closely and carefully consider these guidelines to ensure that personal information provided to my Department by those seeking to enter and remain in Australia, is properly protected from unnecessary disclosure. The financial impact of this proposed legislation is minimal, given that there are no staff engaged full time on maintenance of the aliens register. The additional cost of building the requirement to replace the aliens register into systems that the Department is developing to meet needs associated with control over entry is $380,000 for microfilm and associated data entry equipment. This amount will be spend in 1983-84. There will be ongoing costs of $50,000 per annum for the operation of this equipment. I commend the Bill to the House. Debate (on motion by Mr Hodgman) adjourned. Motion (by Mr Young)-by leave-agreed to: That so much of Standing and Sessional Orders be suspended as would prevent the debate on the motion that the House do now adjourn to proceed for 30 minutes. Motion (by Mr Young) proposed: That the House do now adjourn. Mr CADMAN(Mitchell)(7.47) —In Monday night's adjournment debate I put down figures that I had obtained from the Department of Immigration and Ethnic Affairs in regard to family reunions for Australians seeking to have their families join them from Europe, Asia and other parts of the world. The figures provided for me by the Department clearly show that on an annualised basis there is an increasing interest in migration to Australia. The figures on the reunion of families that I requested show that the statement of the Minister for Immigration and Ethnic Affairs (Mr West) on 7 March is grossly misleading and inaccurate. The figures demonstrate that there is an 18 per cent increase in interest for family reunion from Europe and a 19 per cent increase in interest from all the countries of Asia except Sri Lanka and Vietnam which show a 900 per cent and 300 per cent increase in interest respectively. The figures were basically confirmed today by the Parliamentary Library as being accurate. Today the Minister, in answer to a question, endeavoured to explain precisely what was the case as far as immigration programs were concerned. He lumped together various programs and came up with a mishmash of haphazard figures which were quoted in a most uninformative way. In one instance, he lumped three years together and tried to demonstrate a trend by that process. At other times by using single years he endeavoured to demonstrate other trends. The way in which the Minister endeavoured to demonstrate his argument was completely unsatisfactory. The Minister tried to prove the point that there was a declining interest amongst people sponsoring relatives from overseas and a declining interest in immigration by families seeking reunion in Australia. I tabled all the figures at the end of Question Time. Subsequently, immediately after Question Time, I wrote to the Minister for Immigration and Ethnic Affairs requesting of him the precise details of the figures he quoted in the House. I requested that he provide them to me by the end of this day's business. He has failed to do so. Mr Beazley —Oh, get off it. Mr CADMAN —If he can quote from them in the House, he can provide them and the Minister for Aviation knows it. It is no problem for the Minister for Immigration and Ethnic Affairs to read off a mishmash of figures which are obviously from tables prepared by his Department. He has been asked for figures by the honourable member for Balaclava (Mr Macphee) and by the shadow Minister, the honourable member for Denison (Mr Hodgman), time and again. He has not produced figures. Today he produced a mishmash and has refused to provide the verification of those figures. I believe that the Minister demonstrated how reticent and reluctant he is to provide information to the House. If one makes a statement that there is declining interest than one has to be able to substantiate that. The Minister has had 36 hours in which to consult his Department and draw on the readily available figures. That is not too much to ask any Minister. The Minister for Aviation (Mr Beazley) who is in the chamber at the moment would immediately come into this place the next morning with the facts and figures. He always does. There is no hesitation by that Minister to demonstrate precisely the figures on which he has based his arguments and his ministerial statements. He made a ministerial statement today and I am certain he can support it with figures. There are other matters that are of concern to me about the administration of the Department of Immigration and Ethnic Affairs. It takes me and other members of the Parliament up to nine months to get matters effectively dealt with by the Department or through the Minister. This is an inordinate and distressing delay to families seeking to have their relatives come to Australia or for individuals who are applying for residency in Australia. I do not believe that any government can tolerate a nine-month delay while matters such as this are being dealt with. The previous Minister instigated the setting up of a panel of review to deal with these matters. That panel of review cannot deal with all matters. There was a waiting time of up to eight months for the panel of review. There are inordinate delays through the Minister and the Department and through the panel of review. I charge the Minister with reticence and providing details of policy, with reluctance in answering questions, with belligerency when he is opposed and with incompetency in the management of this portfolio. The administration of the Department of Immigration and Ethnic Affairs lacks direction and leadership. Madam DEPUTY SPEAKER(Mrs Child) —Order! The honourable member's time has expired. Mr MOUNTFORD(Banks)(7.53) —I am speaking tonight in order to highlight the inadequacy in a particular part of the National Health Act and to call on the Minister for Health to seek its amendment. The initial legislation called the National Health Amendment Bill 1978 was introduced into this House in 1978 by the previous Government in order to implement a Government undertaking to assist people who lived in isolated areas to obtain specialist medical treatment. The scheme which became known as IPTAAS, that is the isolated patients travel and accommodation scheme, was set up to redress the disadvantages suffered by people living in remote areas, because of the high cost of travel and accommodation incurred in seeking specialist medical attention which was not available to them locally. The legislation recognised that people living in remote areas were being discriminated against if they required health services which were only provided in major centres. The scheme provided for fare and accommodation subsidies for people requiring to travel more than 200 kilometres from their home to obtain specialist medical treatment or services. If a patient was under 17 the benefit also covered an escort, for example a parent. During the debate on the second reading speech the Minister stressed the extra costs of, say, a child living in Bourke, who is referred to a Sydney specialist because there is no appropriate specialist closer, as compared with a child in Sydney referred to a Sydney specialist. As the Minister said: People living in large urban and metropolitan centres do not always generally appreciate some of the disabilities suffered by people living in the remote regions of Australia. What was not foreseen by the legislators when they drafted the legislation was the possibility that a particular medical service may only be available in selected major centres necessitating people living in the major centre without the service, travelling long distances to be able to receive the treatment or service. In the Austin Hospital, Victoria, a specialist treatment is being offered for victims of epilepsy. This treatment is not available elsewhere in Australia and as a result, patients from Sydney are being referred there as are other patients from traditionally remote areas. As a consequence of the legislation, the patients having to travel from Sydney to Melbourne are not eligible under IPTAAS whereas people from other parts of New South Wales are. I know of patients from such places as Dubbo, Canberra, Orange, Albury, Inverell and Maitland all having received assistance under IPTAAS when they have attended the Austin Hospital epilepsy centre. Yet two of my constituents who live in a Sydney suburb have been rejected. I am sure any reasonable person would see this as discriminating against the Sydney people. Why should a patient from Canberra, requiring treatment in Melbourne, be considered disadvantaged, whereas a patient from Sydney requiring treatment in Melbourne is not? The Commonwealth Department of Health is sympathetic to the problem. However, because the legislation specifically excludes people coming from the metropolitan areas of Sydney, Melbourne, Brisbane, Adelaide and Perth there is nothing that can be done. Clearly the situation I have shown to be occurring was not considered by the original legislators. I therefore believe that the legislation should be amended so as to provide for such cases. In the meantime some arrangement should be made for people living in metropolitan areas who require particular medical services not available to them locally to receive comparative fare and accommodation assistance as would a person who resides within the remote area category as defined by the legislation. Mr O'KEEFE(Paterson)(7.56) —A number of pastoralists in my electorate who know and have been associated with the Kimberley area of Western Australia are concerned at the pastoral deterioration of this valuable part of Australia. Recently an advertisement appeared in the Land newspaper that Drysdale Station in the Kimberlies was for sale at $400,000. The station was abandoned. Just about everything had fallen down and none of the 5,000 head of catle had been near a yard for years and were running wild over 250,000 acres. It is a vast wilderness area. Excluding stations along the Fitzroy River and some intensive farming on the Ord River, the area is very nearly uninhabited. Stagnation is largely caused by corporate companies. Outside the Ord scheme there is only one owner-operator left and that is Fossil Downs. The companies have no long term interest in the land. They skin the stations, a term used out there for mustering and trucking out, then do either of two things: Sell out for capital gain or, if that is not possible, install a caretaker or skeleton staff and wait . In almost every case turnover is never sunk back into the station. The only solution-it just seems common sense-is to alter the tenure of the leases whereby the owner-operators are encouraged to go there and improve their holding. Through Government channels there would need to be finance available. None of the private institutions will touch that area. The under world area could become one vast national park, that is, the river system north of the King Leopolds. Heavy tick infestation and walk-a-about disease will hold out against progress there. This area has the productive potential of the Liverpool Plains which is an area I represent and is one of the most fertile wheat and grain growing areas in Australia. It has wilderness areas as beautiful as New Zealand's southern Alps. It cannot be compared to Arnhem Land which will always be dominated by Darwin. The Kimberlies have got to be settled, and not for economic reasons. In the 1930s, stations in this region employed all Aboriginal stockmen and they were better than the white ringer. These Aboriginal stockmen no longer exist and social welfare programs are to blame. Large Aboriginal corners exist, being dependent on hand outs from social security. The future security of this nation could be at stake. The region is only 300 miles from Timor. We know there has been an unsettled situation there over the years. Unlike most of Australia, the terrain has abundant water and wild life with very few roads. It should be developed with land tenure being looked at to attract the owner-operator back to the Kimberley. It is requested that both the Federal Government and the Western Australian Government investigate this situation with a view to arresting a serious problem pastorally and otherwise to the benefit of Australia. Mr STEEDMAN(Casey)(8.00) —In the grievance debate last Thursday I made mention of one of our leading racist organisations, the League of Rights. Tonight I want to talk about an individual called Graeme Maguire. Graeme Warren Maguire is a leading figure in the National Party of Australia in the Blue Mountains, west of Sydney. But Maguire, under his real name Graeme Theo Royce, was and is one of Australia's most notorious nazis and Hitler-lovers. Last year Royce hosted National Party functions in the Blue Mountains which were attended by, amongst others, Senator Bjelke-Petersen. In 1959 this same man was the proud bearer of the Bronze Medal of the Order of Adolph Hitler, presented to him by American Nazi Party leader, George Lincoln Rockwell. Rockwell declared Royce the 'first international member of the World Union of Free Enterprise National Socialists'. Royce's nazi career is detailed in David Harcourt's book Everyone Wants to be Fuehrer. Not only was Royce one of the most public members of the tiny Nazi Party in the 1960s but also he was a notorious con man. In 1964 Royce was sentenced to three years gaol after pleading guilty to 16 charges of false pretence. The judge said of him: 'You are a clever and systematic rogue and your wicked, cruel frauds have caused broken hearts among many people who could not afford to lose the money concerned. I will see you don't take anybody else down for a long time'. But when Royce was released he continued his career as a con man in Sydney, Canberra and other cities. When he was asked in his bankruptcy hearings how many aliases he had, Royce replied that they were beyond count; in fact he had over 40 aliases. Things got a bit hot for Royce after Harcourt's book was published. He then moved to greener pastures in Perth where he soon joined the National Party. In May 1975 he changed his name by deed poll to Graeme Warren Maguire. Royce- Maguire returned to Sydney in 1977 and was soon a member of the national executive of the racist neo-nazi group, the National Alliance, which now goes under the name of National Action. In October 1979, Maguire-Royce, with two neo-nazis, Frank Salter and Myles Ormsby, set up a company called Eureka Publishers and Distributors Pty Ltd, which hired premises in Kings Cross. It was to distribute nazi and racist literature and publish a newspaper using the talents of another old racist, Frank Browne. The venture failed and Maguire-Royce was thrown out of the National Alliance because he conned it out of $3,600. After he was thrown out of the National Alliance Royce-Maguire changed the name of Eureka Publishers to Tristan Grae Shoes Pty Ltd, which operates a shop in Castlecrag in Sydney. But Maguire-Royce also operates a shoe importing business under the name Eleni Shoes Pty Ltd in Station Street, Blaxland in the Blue Mountains. The National Party presents Maguire-Royce as a respectable businessman when he acts as its spokesperson in the local Press. If anyone rings National Party headquarters in Sydney wanting to join the National Party in the Blue Mountains he is told to contact Royce-Maguire. Yet the National Party Leader in the New South Wales Parliament, Leon Punch, was informed many months ago of his real identity. Nothing has been done by Punch or others in the National Party of New South Wales or of Western Australia who know exactly who he is. It is no accident that Maguire-Royce is closely linked with the neo-nazi wing of the Liberal Party of Australia led by ex-war criminals Urbanchich and that old-time neo-nazi and anti-Semite, Geoffrey Holt, who is now a Liberal Party alderman on the Waverley Council in Sydney. Maguire, Urbanchich, Holt and Major Ashley-Riddle, who was an unsuccessful Liberal candidate in Waverley, are all together in Liberty Research, a far Right group operating out of the offices of Instep Shoes and Smith and Lane Ltd in Bathurst Street, Sydney. Smith and Lane is run by other old time extremists in the Liberal Party, Stanley Eskell, a former Liberal Member of the Legislative Council, and Raymond Lord. Lord and Eskell have for years been involved in fraud, including the infamous VAM Ltd case. Lord and Eskell have many dubious dealings with Nugan Hand. While Urbanchich, Alderman Holt, Eskell and Lord push their ideas in the Liberal Party, Maguire has found his home in the National Party. It is a division of labour, not of ideas. Both groups work hand in glove with Eric Butler's League of Rights. In Australia the National Party is covering up for these people. It is covering up for the League of Rights. Senator Bjelke- Petersen, whom we mentioned the other night, patronises this organisation. These extremists and their racism are having increasing success in these parties which are desperate and unprincipled enough to use racism, pure and simple, in an attempt to win votes. The Liberal and National parties have adopted these policies of the extreme Right. I find it, as many in those parties do, rather sad that this happens. They have taken that line on Asian immigration and the attitude to South Africa in recent times. The Liberal and National parties, through our Enoch Powell of Australian politics, the honourable member for Denison (Mr Hodgman), have adopted the dirty banner of racism to cover their nakedness. No wonder Royce, Holt and Urbanchich find a comfortable home in the Opposition parties. Mr Hodgman —I raise a point of order, Madam Deputy Speaker. I require a withdrawal of the statement, untrue and malicious, that I am 'the Enoch Powell of Australian politics'. Madam DEPUTY SPEAKER(Mrs Child) —The honourable member for Casey will withdraw. Mr STEEDMAN —May I ask a question of the Chair? Madam DEPUTY SPEAKER —No. The honourable member may not ask a question. The honourable member will withdraw. Mr STEEDMAN —I did not know that the name Enoch Powell was offensive. Madam DEPUTY SPEAKER —The honourable member does not have to perpetrate an offence; if he has offended the honourable member for Denison he will withdraw. Mr STEEDMAN —But, Madam Deputy Speaker, I could offend him doing anything. Madam DEPUTY SPEAKER —The honourable member will not argue with the Chair. Mr STEEDMAN —I will not argue with the Chair. I just wondered what he had against a senior Conservative politician that he found offensive-- Madam DEPUTY SPEAKER —The honourable member will not debate the matter with the Chair. The honourable member will withdraw. Mr STEEDMAN —I withdraw. Madam DEPUTY SPEAKER —The honourable member will resume his seat. Mr TUCKEY(O'Connor)(8.06) —During Question Time today the Minister for Immigration and Ethnic Affairs (Mr West) went to some pains to explain that there is an ever-declining application rate for immigration to Australia from the United Kingdom. I thought this was a good opportunity for me to draw his attention to one of the reasons for that. On 4 January this year I had reason to write to him about the case of a potential migrant from the United Kingdom who has special circumstances which needed my representations at interview. Of course, since then I have had to put a question on notice to ask the Minister why he had not even bothered to acknowledge my request. It was not the first request; in fact my office had been in contact with his office on the telephone in the previous session of Parliament, before Christmas. That fact is recorded in a letter I wrote to the Department of Immigration, on behalf of this same gentleman, requesting that he be given an extension of his time here on a visitor's visa so that some action could be taken on this matter. This matter is one of considerable compassion. It is a fact that this gentleman does not entirely meet the 'i'-dotting requirements presently laid down. In fact his first request was refused in the time of the Liberal-National Party Government. But, as has been agreed by the Minister in correspondence directed to Mr Old, a State member of parliament who first made representations on this gentleman's behalf, there is a basis for action on humanitarian and compassionate grounds. I put to the House that this gentlman fits that situation entirely. He is elderly; he has two pensions and therefore would not be a drain on the economy of Australia. He has a company pension an a national pension from the United Kingdom. He originally sought to come here on the ground of family reunion. The reason he has not been able to dot the i's is that some closer relatives of his still reside in the United Kingdom; but it just so happens that they will not talk to him. The man is elderly, not well and in fact was sent to Australia to this next closest relative, a nephew, to assist him in a time of great need. His son, who had been a policeman in the United Kingdom force, recently had been fatally stabbed when attempting to arrest a drug pusher. The gentleman had been separated from his wife in most unhappy circumstances. He was in hospital obtaining an operation and when he came out his wife had disappeared. All in all , he was in a very bad state. I have long held that the principal role of politicians is to be the insulation for the community against the rules of government. It is our job to bend the rules in the interests of the community. But the point I am making is that my representations on this matter were treated in a very cavalier fashion. In fact, it was only after I put a question on notice to the Minister that I got any action at all. That is disgraceful in these circumstances. It is most unfortunate; but it is not the only time it has happened. My colleagues tell me time and again that if they write letters to the Minister on matters relating to United Kingdom residents they go to the bottom of the pile. Because of my question on notice my office was contacted today. No one can find my letter. My letter did not go to the bottom of the pile; it went into the bin. That is where it ended up. That is where it ended up, and it is a tragedy. This matter has to be raised and it has to be pointed out that these are the reasons that the percentages are changing; these are the reasons that this House has been subject to the performances of the last couple of days. It has become the obligation of honourable members in this place to represent the views of the people of Australia. To quote Mr Charlie Fitzgibbon, they want to see no more and no less than an even-handed approach. All the evidence, including the evidence I have just put before the House, is that that even-handed approach is not occurring any more. Ms McHUGH(Phillip)(8.10) —In the continuing struggle by the people of Chile against the repressive Pinochet regime, the women of Chile play a vital and courageous role and I am proud to place on the record of the Parliament of Australia tonight a letter sent from the women of Chile to their Australian sisters and to the people of Australia. It was presented to the Australian Ambassador on 22 March, and says: Through your means we want to bring to the attention of women of Australia and your country's public opinion in general, the plight of women and of the people of Chile. We deem it necessary to do so as part of our struggle for life in our country. Who are we? We are Chilean women from many different sectors, professional and blue-collar workers, students and peasants, artist and homemakers; women of all ages who have survived more than a decade of a deadly government system whose clearest signs have been assassinations, exile, disappearances, secret jails, torture, banishment, repression of dissidents and all kinds of power abuse and arbitrary actions which hit the poorest sectors of the population. We accuse the military regime of plunging our country into the most serious crisis in history, an overall crisis which goes beyond the political, economic and social crisis. In this crisis, the future and the life of our nation are at stake. We live in a generalized atmosphere of violence, of growing poverty and unemployment; there are hundreds of thousands of youths without any hope whatsoever in the future. This hopelessness turns many youths to drugs and prostitution, often at a very early age. All this explains our feeling of urgency when we fear for our fate as a people. We seek a future where life might have a chance. We women have therefore declared a permanent state of mobilization, in order to confront what we consider is an inhumane government. We are not just women in pain, complaining about our country's tragedy. Last December, twelve thousand women met here in Santiago and made a pledge to struggle for life in Chile and to keep up this struggle until we put an end to this deadly regime. The month of March was declared 'Women's Month' and we made several peaceful demonstrations to publicize our purpose. On March 8 we suffered the government's repression: 33 women were arrested; 9 union leaders were held without charge for 5 days at the order of the Ministry of the Interior and one of them suffered an abortion as a result of this ordeal. Gross mistreatment by the police force was denounced in several cases. The brutality of government repression has made it impossible to carry out other activities destined to denounce the violation of human rights, in general, and women's rights, in particular. Thus we decided to culminate this 'Women's Month', addressing the women and the people of the world. Because what happens to the people of one country also affects the people of all other countries. It is to the conscience of Humanity-and to each man and woman-that we turn to denounce these crimes. Silence and indifference only condone these criminal deeds. In a few days-on March 27-there will be another Day of National Protest in which women will participate actively. We remind world public opinion of the recent massacre which took place in Chile on August 11, 1983, when 18,000 soldiers occupied the city of Santiago and there were 82 dead and hundreds of injured. Justice has not yet been done. We know that those of us in Chile who want to put an end to this rule of death are a majority. We feel strengthened by both reason and morality in our struggle against the force of weapons, of greed and petty interests. We know that difficult and painful times are ahead in our struggle for life and democracy. We are, however, willing to run risks because that is what our conscience dictates. We know also that the women of the world will understand us and that they would be willing to do the same: to struggle to regain freedom and leave the legacy of a decent country to our children and grandchildren. I place that letter on record in solidarity with my sisters in Chile. Mr HODGMAN(Denison) —Madam Deputy Speaker, I wish to make a personal explanation . Madam DEPUTY SPEAKER(Mrs Child) —Does the honourable member claim to have been misrepresented? Mr HODGMAN —I do. A few moments ago in the adjournment debate the honourable member for Casey (Mr Steedman) described me-- Madam DEPUTY SPEAKER —Order! The honourable member for Casey withdrew his description of the honourable member for Denison at the request of the Chair. If that is the misrepresentation, then it has been withdrawn by the honourable member for Casey. Mr HODGMAN —Madam Deputy Speaker, I accept your ruling. It effectively means that people can say anything they like, providing they withdraw. Madam DEPUTY SPEAKER —Order! The honourable member for Casey withdrew. If you remember exactly what happened, I required him to withdraw several times and he withdrew without equivocation. In that case, the honourable member cannot claim to have been misrepresented. Question resolved in the affirmative. House adjourned at 8.16 p.m. The following notices were given: Mr Young to move- (1) That, for the purposes related to the inquiry into the televising and radio broadcasting of proceedings of both Houses of Parliament and their committees: (a) the Joint Committee on the Broadcasting of Parliamentary Proceedings have power- (i) to appoint a sub-committee consisting of 2 or more Senators and 2 or more Members of the House of Representatives, 2 members of the sub-committee to form a quorum of the sub-committee; (ii) to appoint the chairman of any sub-committee who shall have a casting vote only, and at any time when the chairman of a sub-committee is not present at a meeting of the sub-committee, the members of the sub-committee present shall elect another member of that sub-committee to perform the duties of chairman at that meeting, and (iii) to refer to such a sub-committee any matter into which the committee is instructed to inquire; (b) any sub-committee appointed by the Joint Committee on the Broadcasting of Parliamentary Proceedings have power- (i) to send for persons, papers and records, and (ii) to authorise publication of any evidence given before it, or any information obtained in the course of its inquiry, or any document presented to it, and (c) the Joint Committee on the Broadcasting of Parliamentary Proceedings or any sub-committee appointed by the committee have power to move from place to place. , (2) That the foregoing provisions of this resolution, insofar as they are inconsistent with the standing orders, have effect notwithstanding anything contained in the standing orders. (3) That a message be sent to the Senate acquainting it of this resolution and requesting its concurrence. Mr Young to present a Bill for an Act relating to representation in the Parliament, Parliamentary elections and related matters. Mr Young to present a Bill for an Act relating to certain remuneration and allowances. Mr Kerin to present a Bill for an Act to amend the Australian Meat and Live- stock Corporation Act 1977. Mr Kerin to present a Bill for an Act to establish an Australian Meat and Live- stock Industry Policy Council. Mr Kerin to present a Bill for an Act to establish a committee to nominate persons for appointment as members of the Australian Meat and Live-stock Corporation. Mr Kerin to present a Bill for an Act to amend the Live-stock Slaughter Levy Collection Act 1964. Mr Hurford to present a Bill for an Act to amend the Life Insurance Act 1945 consequent upon the enactment of the Insurance Contracts Act 1984. Mr Hurford to present a Bill for an Act relating to insurance intermediaries. Mr Duffy to present a Bill for an Act to make various amendments of the Statute Law of the Commonwealth, and for related purposes. Mr Carlton to amend notice of motion No. 1 for general business Thursday No. 5 standing in his name to read as follows: That this House- (1) expresses its grave concern over the pressures put on public hospitals throughout Australia under the so-called 'free public hospital' provisions of the Government's Medicare scheme, and because of the Health Minister's coercive measures against doctors practising in public hospitals, and (2) calls on the Government to abandon these aspects of the scheme. The following paper was deemed to have been presented on 9 May 1984: States Grants (Petroleum Products) Act-Amendment of the schedules to the subsidy schemes in relation to the States of New South Wales, Victoria, Queensland, South Australia and Western Australia, dated 30 April 1984 The following answers to questions were circulated: (Question No. 512) Mr Mountford asked the Minister for Aviation, upon notice, on 14 September 1983 : (1) Is it a fact that employees and their relatives of Qantas and TAA are entitled to reduced air fare benefits both within Australia and overseas; if so, (a) what are the benefits available, (b) how frequently are they available, (c) what sum was foregone by each airline during the 1982-83 financial year and (d) is it a condition of employment that such benefits are made available. (2) Can he say whether similar benefits are available to employees and their relatives of Ansett and other local airlines. Mr Beazley —The answer to the honourable member's question is as follows: (1) I have been advised by TAA and Qantas that concessions for domestic and international travel are offered to all employees and their close relatives. (a) The level of benefits provided by Qantas varies according to an employee's length of service. All categories of staff concessional travel are subject to space being available after all commercial requirements are met. The benefits available on TAA services are similarly dependent on the number of years of service and are available to the employee and spouse. Benefits on overseas airlines arise from reciprocal agreement with individual airlines. (b) The frequency with which these benefits are made available by Qantas is dependent upon an employee's length of service and the destination. For employees of TAA, concessional travel is unlimited on an unbooked basis- travel available only when space available. Concessional travel with the benefit of a booking is restricted to a limited number of off peak flights which are continualy reviewed to ensure changes in passenger booking requirements are not compromised by staff concession travel. (c) Qantas has advised that because all staff concessional travel on Qantas is subject to commercial requirements, revenues are not foregone. In 1982-83 Qantas fully recovered the administrative costs and the additional out of pocket expenses generated by concessional travel. I am advised that in 1982-83 the Qantas concessional travel scheme yielded approximately $3.3m after deducting the expenses itemised above. TAA has advised that the estimated revenue from staff concession travel availed on TAA services for financial year 1982-83 is $4.3m. Rather than revenue being foregone, TAA advises there is a contribution to overheads, since in the majority of cases staff travel is on a space available basis so that seats are not taken from full fare paying passengers. (d) Staff concession travel is an employee benefit and not a condition of employment. (2) While I am aware that Ansett together with other domestic airlines and operators generally provide travel benefits to their staff, I do not have details of the conditions or the extent of travel allowed under these concessional arrangements.