Tuesday, 5 June 1984 Mr SPEAKER (Hon. Harry Jenkins) took the chair at 2 p.m., and read prayers. Mr TUCKEY(O'Connor) —I give notice that, on the next day of sitting, I shall move: That this House- (1) notes that the delays to the upgrading of the Melbourne Cricket Ground and the associated intrusion on the rights of workers seeking to undertake that work is the result of inter-union struggle and greed, and (2) condemns the Minister for Employment and Industrial Relations for his inability to solve this and other such issues under his responsibility. Mr LINDSAY(Herbert) —I give notice that, on the next day of sitting, I shall move, and the Government Whip, the honourable member for Griffith (Mr Humphreys) , will second: That this House- (1) is of the opinion that the Government- (a) has made a binding commitment to fund the Burdekin Dam in contrast to the previous Government's prevarication, and (b) has guaranteed 100 per cent of the finance for the full cost of constructing the dam, thereby exceeding its pre-election promise to provide funds on a 2:1 basis, and (2) calls upon the Queensland Government to- (a) fulfil its obligation to fund the downstream works, and (b) agree to a settlement policy which is fair to both existing landholders and new settlers. Mr HAWKER(Wannon) —I give notice that, on the next day of sitting, I shall move, and the honourable member for Corangamite (Mr McArthur) will second: That this House- (1) is of the opinion that the statement of the Minister for Primary Industry on Thursday, 31 May 1984, that the picket line on the Portland Wharf was 'called off yesterday', reveals an ignorance by the Minister of the true situation on this important matter, and (2) notes that on 5 June 1984 this picket was still in place. Mr STAPLES(Diamond Valley) —I give notice that, on the next day of sitting, I shall move: That this House- (1) notes that Tuesday, 5 June 1984, is World Environment Day; (2) views with deep concern the growing threat to this fragile planet of industrial pollution, waste of the world's resources, the proliferation and storage of radioactive wastes without reliable disposal methods and the spectre of total destruction of our world's environment by nuclear war, and (3) calls on all citizens of this planet, especially Australians, to make every day a world environment day by becoming more aware of the dangers to our environment and more determined that our environment will not be further endangered. Mr Ian Cameron proceeding to give notice of a motion- Mr SPEAKER —Order! The honourable member is out of order. He knows the rule with regard to giving information. I suggest that he recast his notice. Mr MAHER(Lowe) —I give notice that, on the next day of sitting, I shall move and the honourable member for Herbert (Mr Lindsay) will second: That this House- (1) notes with pleasure that a grant has been received from the Minister for Employment and Industrial Relations to establish the first community youth support scheme within the Electoral Division of Lowe, known as Burwood CYSS, and (2) congratulates the interim committee of Burwood CYSS for the voluntary work undertaken to launch this important work for young unemployed Australians. Mr HODGMAN(Denison) —I give notice that, on the next day of sitting, I shall move: That this House- (1) condemns the Prime Minister for ignoring the recommendation of the Gruen Panel of Review that an assets test should not have the effect of discriminating between cultural backgrounds or advantaging one background over another, and (2) calls upon the Government to forthwith abandon its discrimination against Australia's elderly migrants. Mr HOLLIS(Macarthur) —I give notice that, on the next day of sitting, I shall move: That this House- (1) expresses its pleasure that the Courtauld collection of impressionist painters is now on exhibition at the Australian National Gallery; (2) notes that the exhibition was made possible by an effective partnership between the Gallery, the Government and the private sector, and (3) congratulates- (a) those responsible for arranging to bring the exhibition to Australia, and (b) the Government which, through the Minister responsible for the arts, the Honourable B. Cohen, has displayed an enthusiastic and responsible attitude to the arts. Mr Donald Cameron proceeding to give notice of a motion- Mr SPEAKER —Order! The honourable member knows that the motion should be a substantive one. He is supplying information. The notice is out of order. Mr RONALD EDWARDS(Stirling) —I give notice that, on the next day of sitting, I shall move and the honourable member for Perth (Dr Charlesworth) will second: That this House- (1) notes that this is World Environment Day and that the theme for this day is Chemicals Can be Hazardous, and (2) emphasises the need for full and adequate consultation with the union movement, in particular the fire brigades unions, in the development of an adequate coding system for the transport, handling and storage of hazardous chemicals. Mr CARLTON(Mackellar) —I give notice that, on the next day of sitting, I shall move: That this House- (1) expresses its grave concern over the threatened collapse of the NSW hospital system due to the resignation of surgeons from public hospitals; (2) deplores the one-sided and unhelpful editorial in the Sydney Morning Herald of 5 June 1984 entitled 'How to Knife the Surgeons'; (3) notes that legislation introduced last year by the NSW Government removes the civil rights of doctors to discuss with patients their insurance status, and (4) calls upon the Federal and State Ministers for Health to stop goading hospital specialists into further action and address the root cause of the doctors' legitimate concern. Mr BLANCHARD(Moore) —I give notice that, on the next day of sitting, I shall move and the honourable member for Stirling (Mr Ronald Edwards) shall second: That this House notes the comments of the Chief Minister of the Northern Territory, Mr Everingham, that- (1) the Federal Opposition has no chance of winning the coming election, and (2) the Government will be returned with just as large a majority whenever the election is held Mr GOODLUCK(Franklin) —I give notice that, on the next day of sitting, I shall move: That this House condemns the importation and distribution of hard-core pornography and the fact that all members of the ALP failed to vote against such destructive measures. Notice of Motion Mrs DARLING(Lilley) —I give notice that, on the next day of sitting, I shall move: That this House- (1) notes that under the proposed veterans' entitlements bill, discrimination has been removed against the spouse and children of a female veteran, and (2) congratulates the Minister for Veterans' Affairs and the Government for ensuring that all veterans will be treated on the same basis. Mr FISHER(Mallee) —I give notice that, on the next day of sitting, I shall move: That this House- (1) condemns the Government for the introduction of an assets test that will stifle the incentive for individuals to prepare for their own retirement and will throw more people onto the welfare system; (2) notes that this test- (a) discriminates against Australia's 170 000 farmers and thousands of small business people, where assets represent a capacity to create income and employment, and not necessarily a capacity to retire, and (b) will cost the Australian taxpayer $30 million in its first year of operation, and (3) calls on the Government to withdraw this proposed legislation. Ms FATIN(Canning) —I give notice that, on the next day of sitting, I shall move: That this House- (1) congratulates the Minister for Social Security for providing assistance to women's refuges, shelters and half-way houses in Western Australia, and (2) notes that the new services are sited in areas of high need under the Women 's Emergency Services program. Mr IAN CAMERON(Maranoa) —I give notice that, on the next day of sitting, I shall move, and the honourable member for Riverina will second: That this House applauds the substantial amount of food aid which the hard- working farmers of Australia have produced for the current Emergency Food Aid donation to overseas countries. Mr SHIPTON(Higgins) —I give notice that, on the next day of sitting, I shall move: That this House- (1) calls on the Government to make a clear statement as to whether pensioners' family investments in small business will make them ineligible for a pension under the proposed assets test; and (2) condemns the Government for proposing an assets test which will act as a disincentive to investment. Mr WHITE(McPherson) —I give notice that, on the next day of sitting, I shall move: That this House condemns the ALP for supporting the peddling of hard-core pornography. Mr TUCKEY(O'Connor) —I give notice that, on the next day of sitting, I shall move: That this House- (1) notes with concern that part of the 4 June 1984 Financial Review editorial said that now that the assets eligibility criteria have been restored, the possibility of changing and tightening the criteria will become part of the normal political agenda once again, and (2) condemns the Government for its failure to publicly reject this suggestion and thus allow further destabilisation of pensioners, those approaching pensionable age, and those younger families confronted with the future support of dispossessed parents. Dr HARRY EDWARDS(Berowra) —I give notice that, on the next day of sitting, I shall move: That this House- (1) recognises that the Minister for Science and Technology has made a strong case for the upgrading of the Bureau of Meteorology, while at the same time is grateful for the assurance by the Minister for Aviation that air safety standards are being maintained though at higher cost and reduced operational efficiency; (2) notes that shortages of staff which the present Government could have rectified are critical, as well as equipment, and (3) urges the Minister and the Government to provide adequate funds in this area of science and technology as well as in respect of the Antarctic, CSIRO, the Australian Research Grants Scheme, the Starlab project, and other areas including the LANDSAT facility. 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 over 15 months to respond to the House of Representatives Environment and Conservation Committee Report on hazardous chemicals, and (2) notes that- (a) World Environment Day 1984 has as its theme ''Chemicals Can Be Hazardous'', and (b) the Coalition Parties' environment policy emphasises the need to develop complementary state legislation to ensure uniformity in the control of hazardous chemicals throughout Australia. Mr CADMAN(Mitchell) —I give notice that, on the next day of sitting, I shall move: That this House deplores the fact that all members of the ALP in this House voted in favour of the distribution of hard-core pornography. Mr NEWMAN(Bass) —I give notice that, on the next day of sitting, I shall move: That this House- (1) notes that the Government, by its actions, is encouraging the widespread distribution of hardcore pornography and other highly objectionable material; and (2) condemns the Prime Minister for his weak leadership in failing to give a proper and responsible lead on this important social issue. Mr Baldwin having given notice of a motion, it was later ruled out of order. Mr Burr proceeding to give notice of a motion, it was later ruled out of order. Mr HAWKER(Wannon) —I give notice that, on the next day of sitting, I shall move, and the honourable member for Corangamite (Mr McArthur) will second: That this House- (1) expresses concern that the Victorian Police Force are stopping law-abiding citizens going about their lawful business of delivering live sheep for export at the Portland wharf; (2) notes that the police are being directed by a picket line that does not have official ACTU support; and (3) condemns the Victorian Labor Government for requiring the Police Force to be used in this fashion. Mr DONALD CAMERON(Moreton) —I give notice that, on the next day of sitting, I shall move: That this House condemns the Government for refusing to allow its members to exercise a conscience vote on the motion of disallowance on the ACT Classification of Publications Ordinance 1983. Mr PEACOCK —My question is directed to the Minister representing the Minister for Social Security. How many of the elderly will lose their pensioner health benefit cards under Labor's assets test? Dr BLEWETT —As health benefit cards are already very finely tested, it would be very unlikely that many pensioners at all would have their health benefit cards affected by the assets test. As I pointed out yesterday, at the most we expect something like 40,000 pensioners only to be affected by the assets test, something like 25,000 in Social Security and 15,000 in Veterans' Affairs. Mr ROBERT BROWN —Can the Treasurer advise whether recent economic indicators provide any support for the view that the Government's economic policies and the prices and incomes accord have led to the achievement of a strong and widely based economic recovery in Australia? Mr KEATING —The national accounts for the March quarter were published today and I can give the honourable gentleman some information about the state of the economy. It is a cause for great satisfaction to the Government that the accounts reveal and confirm that the recovery is growing strongly and is becoming much more broadly based. The House may remember that in March the Government announced that our estimate of growth in gross domestic product over the course of the year would be of the order of 10 per cent. The March accounts reveal today that, over the three quarters to March, growth is of the order of 9 .2 per cent. So with one quarter to go we are well on course for achieving that 10 per cent estimate which, of course, was attacked by honourable gentlemen opposite as being overly optimistic. The fact is that the recovery is much more broadly based with strong contributions from private sector investment and also from stocks, which is particularly pleasing given the growing confidence of business. The non-farm contribution in the three quarters to March was 7.6 per cent, which is exceedingly strong, and in the March quarter itself it was 2.4 per cent . So, while the farm sector has played an important role in this recovery, just concentrating on the non-farm sector, let me repeat: It was 2.4 per cent for March and 7.6 per cent for the three quarters to March, which shows strong performance in housing, private business investment, stocks and, of course, the public sector. In respect of private business investment, we have seen a turnaround of about three and three-quarter per cent in the March quarter, after removing the distorting effects of sale and lease-backs from the public to the private sector in the accounts for December and March. What we are seeing overall is a dramatic turnaround from the legacy of stagnation left by the former Government at the same time accompanied by a decline in inflation. What we are seeing is a non-inflationary recovery; we are seeing growth rise, not to be aborted by another price and wages round, but a further decline in inflation which, of course, is testimony to the Government's policies and particularly the operation of the prices and incomes accord. The fact is that the Government's policy of giving the economy a kick-start with the fiscal stimulus last year is proving successful and what we are hoping for now, given the fact that we are coming off a very low base, with this very strong activity which is about the strongest growth of all the Organisation for Economic Co-operation and Development countries this year, is that we will see that recovery broaden out into a period of sustained growth. Earlier I mentioned stocks. What is particularly pleasing about stocks is that when we see yesterday's figures in respect of sales and factory production, which are the subject of report in today's papers, it is highly significant that the manufacturing sector is now back in to recovery in the economy. I think what is heartening in respect of the growth prospects for 1984-85 is that the stock to sales ratios, while turning around, are still particularly low, which means there is tremendous room for further rebuilding of stocks over the course of the year. Mr Moore —Business confidence. Mr KEATING —It is particularly important in respect of business confidence which the honourable gentleman opposite mentions-and I concur that that is improving. The gross operating surplus of companies has increased by 17 per cent in March and over 50 per cent in the 12 months to March. The corporate profit share is 16 .2 per cent in the six months to March, compared with a dismal 12.7 per cent to March 1983 under the policies of the discredited former Government and the discredited former Treasurer. I might add that the profit share is now the highest since 1973, which is testimony to this Government's interest in seeing a return of the healthy levels of investment in this country in the private sector , and seeing a broadly based recovery take place. What these figures confirm is that the recovery is strong and broadly based and the manufacturing sector is back in there, not simply as the Opposition tried to label it, because of the breaking of the drought. We are now seeing a very broad recovery. These are very strong figures. The fact is that we are looking at growth in the three quarters to March of 9.2 per cent with a prospect of meeting, or even exceeding, our target of 10 per cent. I think that is indeed a startling performance for an economy so debilitated by the policies of the former Government which could resort to nothing else but draconian monetary policy, high interest rates and high inflation. It is no wonder the people of Australia chose the Australia Labor Party as the Government in March 1983. On the principal basis of our election to office-that of restoring economic health to the Australian economy-these accounts confirm that that restoration is well and truly under way. Mr PEACOCK —My question is directed to the Minister representing the Minister for Social Security. Under Labor's assets test, how long will the Government give a recently widowed pensioner to divest himself or herself of assets to retain the equivalent level of single pension? Is it the 12-week period which was set out in the original Bill, or is it now a harsher six-week period as claimed in Press reports? Why has the Government not accepted the 12-month period recommended by the Gruen report? Dr BLEWETT —As the Leader of the Opposition is well aware, the present arrangement under the income test is that if a spouse dies the remaining member of that family receives the payment of the couple's provision for another 12 weeks before the income test for a single pensioner comes into effect. We are examining a range of options. I can certainly say now that the period will not be less than the 12-week period, which is the same as that which applies for the income test. As was pointed out, Professor Gruen suggested a 12-month period, but one of the major reasons for his suggesting that was that under his proposals the family home, that is, a major asset, was not exempted. As I say, a number of important technical matters are involved as well as great concern for pensioners in this situation. We can guarantee that the period will not be less than that which now operates under the income test. We will make the final decision on this matter in the context of the legislation. Dr EVERINGHAM —Will the Minister for Employment and Industrial Relations inform the House whether the Government has made any decision to change the sponsor contribution guidelines under the community employment program for 1984-85? Mr WILLIS —Yes, I am in a position to inform the House of some changes which have been made by the Government to the sponsor contribution guidelines. However, before going to those, I want to say that the community employment program has proved to be an enormous success. I will be making a detailed statement about that later this week. It will be seen from that statement that this program has made a major contribution to job growth and particularly to alleviating the position for the long term unemployed. However, the Government has been concerned for some time about some difficulties being experienced in some aspects of the program, particularly for local government and community groups in meeting the current requirement for a minimum sponsor contribution of 30 per cent of total project costs under CEP. It has also been concerned about some inequities and inconsistencies in the assessment of exemptions from that contribution in different States and between different sponsors. Accordingly, the Government has decided that the local government and community component of the program, the sponsor contribution, should be reduced from 30 per cent to 20 per cent. Local government sponsors will not be entitled, however , to exemption from that level of contribution although this provision for exemption will still be available to community groups. There will also be a more consistent and realistic approach to the use of non-cash sponsor contributions up to a limit of 10 per cent of total project costs for local government and community projects. In our view, this will provide more flexibility in the nature of contributions, especially for local governments. To maintain the employment objectives of the program under these new arrangements, sponsors in the local government and community sectors will be obliged to ensure that 65 per cent of the Commonwealth grant received is devoted to the direct wage cost of the target group. Currently the guideline is that 50 per cent of the total project cost should be spent on wages for the target group. We believe that moving to 65 per cent of the Commonwealth grant will not only fit better with the new guidelines for sponsor contribution but also enable greater flexibility and the use of more capital intensive projects but still with the same employment effects from the Commonwealth expenditure on CEP. All these changes will apply from 1 July and relate to the year 1984-85. I am confident that these new arrangements will make the CEP an even better program than it has been. This is the one area in which we have had a problem building up. We believe that these changes will eliminate that problem and that the CEP in 1984-85 will make a major contribution towards alleviating unemployment for the long term unemployed and other disadvantaged groups in the community. Mr CARLTON —My question is directed to the Minister for Health. I refer to his answer to the question yesterday from the honourable member for Prospect when he tried to justify his freeze on nursing home bed approvals over the last 15 months. Did he, or his Department, make any estimate of the additional demand that would be created for nursing home beds before he reduced the period allowed for insured patients in acute care hospitals from 60 days to 35 days? Does he acknowledge that squeezing patients out of hospitals without providing alternative accommodation is causing grave distress to sick elderly people and their families? Why do the new guidelines also fail to make this provision? When will this Government stop persecuting the elderly? Dr BLEWETT —First of all, let me point out that the new guidelines which have been introduced for nursing home bed approvals provide in fact for 80 beds for every 1,000 people aged over 70 years, which in some ways is certainly more generous than the previous provision and is also, much more importantly in view of the aging of the population, directed very much to areas of need. It is true that those provisions are also qualified by consideration of the domiciliary care available in the area, so that we are looking at the total picture. But another important aspect which I am sure all members of the House will welcome in relation to those guidelines is that, instead of just the first in getting a nursing home bed approval once an area of need is identified, there are proper systems of advertisement so that the whole community can contribute to the decision as to what is the most appropriate nursing home provision for that area . We think that those guidelines are a very big improvement. I turn to the point raised by the honourable member for Mackellar in relation to the 35-day rule; that is, the rule that after a person has been in an acute hospital for a period of 35 days-five weeks-he is classified as a nursing home type patient unless he is regarded as a continuing acute patient. First of all, if there is a classification that that patient is an acute care patient needing all the highly acute services in the hospital, he will go on being covered by the ordinary hospital provision. However, if he is regarded as a nursing home type patient, there is some reduction in what is paid to the hospital, but the important point which has not been acknowledged by the honourable member for Mackellar is that for caring for that person as a nursing home type patient that private hospital receives at least twice the amount that a good quality nursing home gets. So there should be no justification whatsoever for any private hospital rejecting such a patient simply because he is classified as a nursing home type patient. Because a few private hospitals in this country have been trying to bring pressure on the Government by using those kinds of tactics, two actions are being taken. Firstly, such problems should be reported to my office. We have already had negotiations with a number of private hospitals to deal with particular problems in that regard. Secondly, in each of the States officers have been appointed to the task of assisting relatives and patients threatened by private hospital actions of that nature to be relocated, in the few situations in which private hospitals refuse to accept a payment for the care of these patients which is at least double what a good nursing home gets. Mrs CHILD —My question is addressed to the Prime Minister. In the light of the recent number of reports questioning the credibility of the Government's economic program, what is the evidence that the Government's policies have already led to a substantial improvement in the economy and in living standards for Australians? Mr HAWKE —I am indebted to the honourable member for Henty for her question. I can answer it very briefly, really. At the outset I just refer to a couple of, admittedly, very important indicators. I do that in the context of making the observation, which is now generally accepted, that the Opposition, when in government, was undoubtedly one of the worst economic management teams in the history of this country. Let us first of all look at the question of inflation. In the 12 months to the March quarter of 1983 the inflation rate was 11.5 per cent. In the 12 months to March of this year it was 5.9 per cent. Even excluding the Medicare effect, the inflation rate in that 12-month period was the lowest for a decade. In April last year unemployment under the previous Government was 10.2 per cent. It is down now to 9.5 per cent. It is probably within the recollection of a number of honourable members in this House that some enterprising economists in the United States of America devised what they called a misery index. It received some prominence about four years ago during the then presidential election. It involves simply a sum of the unemployment and inflation rates. While this admittedly is a somewhat simple indication, it is, nevertheless, in those simple terms, a measure of relative economic performance. I ask honourable members, particularly those on the other side of the House who, since they have been in Opposition, have traditionally and continually engaged in this misery process, just to look at these figures. The misery index figure for the 12 months to April of last year would have been 22. That figure is obtained by adding the unemployment rate at April 1983 to the inflation rate for the 12 months to the March quarter of 1983. The former Government's misery index was 22. If we compile the misery index for the current equivalent period we see that it is down to 15. The former Government's misery index was 22; we now have a very substantial reduction to 15. No wonder honourable members opposite are looking so miserable. They ought to. If we add to that misery index, which so obviously condemns Opposition members, and take into account also the figures put before the House by the Treasurer today, we see that this exercise in which members of the Opposition have been engaged, of trying to undermine this economy, simply will not stand up. It is indeed the case that there is more than ample justification in these circumstances for the observation made by their friend, colleague, ally and fellow Party member, the Chief Minister of the Northern Territory, who said yesterday, not surprisingly in these circumstances, that this Government will easily win the next election. It is worth looking at the statement in this light . Honourable members opposite have to add Mr Everingham to the list of candidates that I gave the other day for the position of Leader of the Opposition after the next election. I have referred to the Deputy Leader of the Opposition and I have referred to their colleague and my friend, Mr Elliott; but now, of course, they have to think about the Chief Minister. The only thing I can say about the possible challenge of the Chief Minister of the Northern Territory is that it will never eventuate because he will not beat the present honourable member for the Northern Territory. Nevertheless, while he is mistaken in respect of any chance of ever taking the seat of the honourable member for the Northern Territory, I think he was very accurate when he said: No, I don't see the coalition as having any reasonable chance in the next federal election. I don't think it really matters when it's held-in November or March. I'm quite convinced that if things go on as they are, the Federal Government will be returned with probably as strong a majority. He is dead right on that. Mr CONNOLLY —I trust that we go from the ridiculous to the sublime. I ask whether the Minister for Home Affairs and Environment is aware that the Australian Heritage Commission has employed a consultant to survey the tropical rain forests between Townsville and Cooktown in northern Queensland, including the Daintree rain forest, to assess their international significance. Can the Minister tell the House when the report will be completed? Does the Minister intend to make the findings public? Does he propose to discuss the report with the Queensland Government? Mr COHEN —I am aware of the Heritage Commission survey of the Cape Tribulation area to assess its potential as a World Heritage area. I cannot give the honourable member an exact date for the completion of the report. In relation to discussions with the Queensland Government, as a matter of fact I have already had discussions with the Queensland Government, including Mr McKechnie, the Minister for Tourism, National Parks, Sport and the Arts, and Mr Tenni. I will be meeting with Mr Tenni in about 10 days time to discuss the Cape Tribulation area. I will be happy to report back to the House on what I find out. Mr KEOGH —I ask the Minister for Science and Technology whether it is true that the Japanese geostationary meteorological satellite, known as the GMS, has failed and is no longer sending image transmissions? If this is the case, how is the Bureau of Meteorology to maintain its weather forecasting services? Opposition members interjecting- Mr SPEAKER —Order! I remind honourable members that there are occasions for humour but when it carries on it becomes ridiculous. I can assure honourable members that those who listen to the broadcast do not appreciate it. Mr BARRY JONES —Mr Speaker, this has nothing to do with the Budget. It is often said opposite that there is no such thing as a free lunch, but there is such a thing as free weather forecasting because the Japanese charge us nothing for the use of the satellite. Honourable members ought to be aware of that. Nevertheless , the Japan Meteorological Agency has advised that the satellite has failed and can scan only the upper Northern Hemisphere. Mr Porter —No wonder they are not charging. Mr BARRY JONES —I really do not know why matters of meteorology are regarded as so irresistibly amusing by the Opposition. The GMS series of satellites since 1977 have provided three-hourly cloud pictures of the Australian region. The imagery has become a key input to our forecasting operations and has compensated in a major way for the decline in availability of conventional meteorological data over the period. The satellites have made an enormous contribution to tropical cyclone location, tracking and warning services, and the GMS cloud picture has become an integral part-something we are used to every day-of morning and evening television weather presentation throughout Australia. However, in January, GMS2, the second satellite, failed when a vital component- its scanning mirror-ceased to operate. The original GMS1, which had been decommissioned but held as a back-up, was moved from its parking orbit to take over from GMS2. Mr Fisher —This is history. When is it going to be fixed? Mr BARRY JONES —It has very serious implications. We will have to rely on the United States of America and the Union of Soviet Socialist Republics polar orbiting satellites which, although providing useful data, do not have the same frequency or extent of coverage as the GMS. We have been able to maintain satellite pictures to the media but if the system becomes more eratic it is possible that this service will have to be discontinued. We have not made any public announcement of the problem until now because it is not impacting on the public weather service, but we will have to do so if the situation deteriorates. The Japan Meteorological Agency, the JMA, plans to launch a new satellite, GMS3, in August. Although it states that the satellite will not be declared operational until December, previous satellites have provided virtually full service from about two months after launch, so we hope that most services will be restored by October. Fortunately, that will be before the start of the tropical cyclone season. Mr Harry Edwards —Mr Speaker, knowing that the Minister does not require notes, I ask whether he will table the public document from which he was quoting. Mr SPEAKER —Was the Minister quoting from a document on public affairs? Mr Barry Jones —No, not a document on public affairs. Mr TUCKEY —I refer the Treasurer to my question No. 1353 which first appeared on the Notice Paper on 1 May and which, for his information, relates to the probable foreign currency breaches occurring in relation to foreign currency which was included in a sum of $5,600 stolen from Robert J. L. Hawke at the Boulevard Hotel in Sydney. I ask: Do any of the facts I seek require lengthy research by the Treasurer's officers? If not, why has the Treasurer taken so long to answer a question that has implications of breaches of Federal laws subject to his administration? Mr KEATING —It will come as no news to the honourable gentleman that neither my Department nor my office stands on its head to answer his questions, most of which are wrongly premised and which are normally an abject waste of time, as is this one. There seems to be an underlying implication in the honourable gentleman's question that holding foreign exchange is illegal. It is not illegal . There are regulations in Australia which govern the acquisition or disposal of foreign exchange in Australia but they cover the question of buying and selling foreign exchange and they do not cover the question of holding. It is not illegal to hold foreign exchange, whether purchased in or out of Australia. The regulations relate simply to the buying and selling of foreign exchange. The fact that my colleague the Prime Minister held foreign exchange has nothing whatsoever to do with the regulations. Mr GAYLER —Is the Minister for Science and Technology aware of the serious problems in some northern electorates, including Leichhardt, Herbert, the Northern Territory and Kalgoorlie, caused by the box jellyfish, which problems of course include the death of three young Australians this year? Does the Minister recall an election undertaking to provide funding for research into a box jellyfish repellant? If so, what action has been taken? Mr BARRY JONES —The issue was raised in Queensland during the 1983 election campaign and there was some vigorous discussion at a Press conference in Brisbane between my namesake, Senator Gerry Jones, and me as to whether specific funds should be earmarked with an upper limit for research into the box jellyfish, the chironex fleckeri. The final decision that we came to was that there ought not to be an upper limit but that funds would be made available within the funding of AMSTAC, the Australian Marine Sciences and Technologies Advisory Committee, and within ARGS, the Australian research grants scheme. Although we have maintained and, indeed, emphasised our willingness to support such research, it is necessary that public money be spent only on projects of the highest quality. A number of applications were received under the ARGS and the marine science and technologies grants scheme seeking support for box jellyfish research during 1984. In accordance with the normal processes, these proposals were considered by the relevant advisory committees after receiving projects from expert assessors. This, again, is a very serious matter in those northern electorates. Young people have died. I am advised that no proposal relating to box jellyfish was assessed as being of sufficient standard to warrant funding in competition with other research proposals submitted under the scheme. Mr Carlton —The promise was separate from that. Mr SPEAKER —Order! The honourable member for Mackellar seems to be having a field day in interjecting. He will cease doing so. Mr BARRY JONES —There was never a separate promise. I have checked that out repeatedly. I checked it out with, among other people, Bill Ord, the chief environment writer for the Courier-Mail in Brisbane, who confirmed that no separate promise was made as to an upper limit or a separate fund; that it was considered as part of general funding available for scientific projects. Regrettably, it has not been possible to fund box jellyfish research projects in 1984 because the projects submitted were not regarded as of acceptable quality. We are still awaiting high standard proposals from researchers in response to invitations advertised in March 1984 for grants to be taken up in 1985. In addition, knowing the concern of the honourable members for Leichhardt, Herbert and the Northern Territory, I shall ask the Australian Institute of Marine Science and the Australian Marine Sciences and Technologies Advisory Committee to look at the box jellyfish problem as a matter of urgency and see what we can do to resolve it. Mr HOWARD —My question is addressed to the Treasurer. It relates to the national account figures published today. I preface the question by saying, on behalf of the Opposition, that we welcome the improvements in the economy which have been demonstrated by these figures. In that vein, I refer the honourable gentleman to his claim that the 2.4 per cent increase in non-farm product in the March quarter reflected strong growth in housing, private sector investment, stocks and the public sector. Is it a fact that, contrary to his statement today, public sector spending accounted for 1.9 per cent, or the great bulk of the quarterly rise in gross domestic product, while private sector consumption growth was halved to 0.4 per cent and private sector capital spending fell from 5.1 per cent to 0.4 per cent? Also, will the Treasurer release to the House the figures on which he bases the claim that private sector investment, when adjusted by the Treasury, rose by 3.75 per cent in the March quarter? Do these do no more than offset an equivalent fall resulting from this adjustment in the previous quarter? Mr KEATING —Let me deal first with consumption, which is in the accounts at 0.4 per cent. They understated the consumption figure, which was actually 0.7 per cent when adjusted for the treatment of Medicare. In the December quarter, health was recorded as private consumption, whereas in the March quarter it was recorded as public consumption. In respect of the question raised by the honourable gentleman about investment and the 3.75 per cent, that was a correction made by my Department, which I am quite happy to let him have, because of the fact that in the December quarter public authorities sold equipment to the private sector, which, of course, was recorded as private sector investment. Turning to the contribution to growth numbers in the national accounts, one will find that there are quite strong contributions from dwelling and non- dwelling construction. They all increased except equipment, the figure for which was minus 0.6, and the equipment change was again the result of that discrepancy in respect of the selling of public assets to the private sector. I am quite happy to let the honourable gentleman have that advice. Mr WELLS —Is the Minister representing the Minister for Veterans' Affairs aware that many hundreds of Australians volunteered for experiments with mustard gas, some of which took place in north Queensland during World War II? Is he aware that many of these men thereby sustained permanent physical disabilities? Will the Government consider providing a service pension to members of the armed forces who did not serve in a theatre of war but who volunteered to act as guinea pigs in such experiments? Mr HOLDING —I thank the honourable gentleman for the question. It is a subject which has been a matter of concern to my colleague the Minister for Veterans' Affairs. It was last dealt with in an answer provided in this House in October 1981 by the former Minister for Defence, Mr Killen, as he then was, when he indicated that at that stage Army records showed that there were 400 volunteers at Proserpine. Other test sites were Townsville, Singleton, Forbes, Grafton, Innisfail, Tully, Cairns, Humpty Doo, Darwin and Port Wakefield. According to the information provided on that occasion, it was estimated that the total number of volunteers was in the vicinity of 750. The Department of Veterans' Affairs has been able to identify 172 claims for repatriation disability pensions, but that figure is by no means comprehensive as the statistical information collected by the Department in relation to claims for acceptance of incapacity is not normally collected on the basis of individual disabilities claimed or the circumstances of the service on which the claim is based. For this reason, within the Department it is not possible at this stage to identify the number of ex-service personnel exposed to mustard gas tests during World War II who have applied for repatriation benefits. I assure the honourable gentleman that it is a matter of continuing concern to my colleague the Minister for Veterans' Affairs. He would stress, as I would, that the disability pension was designed to compensate a veteran for incapacities suffered as a result of service. The Minister appreciates the unusual service that these volunteers provided to their country and he would want me to assure the honourable member that the question of eligibility for a service pension is a matter which is under constant review. In short, in answer to the honourable gentleman's question, the appropriate benefit to address the suffering of persons who volunteered for these experiments, as of now, is the disability pension. Mr MACPHEE —Is the Minister for Employment and Industrial Relations aware that the Administrative and Clerical Officers Association is meeting today to consider placing an indefinite national ban on the community employment program? Is he also aware of existing ACOA bans which are preventing unemployed Australians getting work through the adult workers subsidy scheme, the special youth employment training scheme and other Commonwealth programs? If so, could the Minister tell the House how long such industrial action against the unemployed has been going on? How many Australians have been denied employment because of these bans? What action is the Minister taking to ensure that the threat of a national ban on the CEP is not carried out? Will he publicly condemn the actions of the ACOA and make it clear that the Government will not condone industrial action against the CEP by people already in secure and well paid jobs who are seeking to improve their own working conditions and lighten their workload? Mr WILLIS —It is a fact, of course, that the ACOA has instituted various bans in relation to the Commonwealth Employment Service, the issue at stake being staffing levels within the CES. The Government has had discussions on several occasions with the ACOA about that matter, as a result of which it increased the staffing levels in the CES effectively by 197. The response from the ACOA to that action, which represented a bringing forward of the numbers which would have been brought in during 1984-85-or at least a large part of the increase for that year-was that that was not enough and that, from recollection, another 414 were required. We have had subsequent discussions with the ACOA about that. The Department strongly disputes the need for any further increase at this time. I support the Department in that regard. It seems to me that there is no case at this stage for a further increase in staffing levels although, in the context of the Budget, levels of staffing for the CES will, of course, be considered for 1984-85. All of that has been conveyed to the ACOA. We have offered to have discussions with it in relation to general staffing levels in the Public Service for 1984-85 . My colleague the Minister for Finance has written in his capacity as Minister Assisting the Prime Minister for Public Service Matters to the Australian Council of Trade Unions and to the ACOA, indicating that we are prepared to have such discussions but a prerequisite for those discussions is that the bans on the CEP and on the Department of Social Security, which are also related to staffing levels, should be withdrawn. The Government will certainly not accede to demands for increases in staffing levels which it does not believe to be justified. We are thoroughly prepared to consider proper proposals from the ACOA. We are prepared to discuss with the ACOA the staffing levels for 1984-85 across the Public Service-in different levels, and in various departments and agencies of the Public Service-but we will not submit to the industrial disputation and activity which is taking place at present. Yesterday I conveyed verbally to one officer of the ACOA my total condemnation of any attempt by the ACOA to place a total ban on the CEP. That would be completely and utterly objectionable. I agree with the honourable member for Balaclava that it would be the height of indecency for people in permanent and secure jobs to take industrial action against the Government and in effect also against people who are unemployed, who have been unemployed for a long time and who are in desperate need of employment. That would be totally and utterly unforgivable and we will condemn the ACOA if it takes that action today. As I understand it, such a proposal has been put forward from a national job delegates meeting yesterday to the organisation's executive. Whether the executive adopts that proposal today remains to be seen. I have indicated to the ACOA our great concern that we would certainly not stand idle if such a ban were instituted. We have already conveyed to it our great concern about the sporadic and to this stage not tremendously upsetting bans which have been placed on the adult workers subsidy scheme and especially on the special youth employment training program. Even at that level, which has involved a relatively small number of people not being able to take up employment, it is concerning enough. But a total ban on the CEP would be absolutely intolerable and will not be tolerated by the Government. Mr GEAR —Will the Prime Minister assure the Parliament and the people of Australia that the Government will maintain its fight against tax avoidance? Mr HAWKE —If one thing is quite clear in the Australian political context it is that the people of Australia totally condemn tax avoidance. I am pleased to say that this Government has already done a number of things which are relevant in that regard. Let me refer very briefly to the fact that our amendments to section 26(a) of the Income Tax Assessment Act will ensure that speculative gains derived indirectly will be accounted for as taxable income. Further, the new arrangements for taxation of superannuation lump sums and our move against bogus or cherry picking superannuation schemes will bring about a situation where superannuation can no longer be used as a means of tax avoidance but will be used for the appropriate objective of providing genuine retirement incomes. The Government is also reviewing the nature and the level of penalties in the income tax law which deal with tax avoidance and evasion. I understand that the Commissioner of Taxation has tightened the guidelines for remission of penalty taxes. The Government has done these specific and constructive things. It is a matter of great regret not only to this Government but also, I think, to the overwhelming majority of Australians that the further attempt of this Government to secure under bottom of the harbour legislation some $270m in respect of tax already avoided has been deliberately frustrated by the Opposition in this House and in the Senate. Mr DAWKINS(Fremantle-Minister for Finance) —Pursuant to section 17 (4) of the Commonwealth Schools Commission Act 1973, I present the Commonwealth Schools Commission annual report for 1983, together with the text of a statement by the Minister for Education and Youth Affairs (Senator Ryan) relating to the report. Mr JOHN BROWN(Parramatta-Minister for Sport, Recreation and Tourism and Minister for Administrative Services) —For the information of honourable members I present the Government's revised response to the report of the House of Representatives Standing Committee on Expenditure presented to this House in May 1981, a report on Commonwealth Government purchasing. The response of the previous Government to that report was presented to the House on 9 December 1982 . Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr Steele Hall) adjourned. Mr UREN(Reid-Minister for Territories and Local Government) —Pursuant to section 5 of the Parliament Act 1974, I present the proposals for the construction of a two-storey prefabricated modular building in the House of Representatives gardens and linked to the existing building by a covered walkway at the first floor level. The views of the Joint Standing Committee on the New Parliament House are being sought on the proposals. When these are available I shall take action under the Parliament Act to seek approval by the House of the work. Mr UREN(Reid-Minister for Territories and Local Government) —Pursuant to section 5 of the Parliament Act 1974, I present the proposals for the construction of formal seating at the Australian National Gallery amphitheatre. The views of the Joint Standing Committee on the New Parliament House are being sought on the proposals. When these are available I shall take action under the Parliament Act to seek approval by the House of the work. Mr HAWKE(Wills-Prime Minister) —For the information of honourable members, I present the Government policy discussion paper on affirmative action for women. I seek leave to make a statement. Leave granted. Mr HAWKE —I thank the House. With this release of its policy discussion paper on affirmative action in employment, the Government has moved to implement one of its major commitments to raising the status of women in Australian society. This is a commitment on which many in our community expect fearless, clear and effective leadership from the Government. As I said in the Boyer lectures in 1979: . . . in the area of the status of women . . . the formal process of accepting their equality as human beings has not been matched by the hard political and administrative decisions necessary to give effect to that acceptance. The Australian Labor Government is determined to rectify this situation by making those decisions. The Government has already taken such major steps as the enactment of sex discrimination legislation, the appointment of more than 90 women to government boards and authorities and, now, the introduction of an affirmative action program. We are committed to the development of policies which will give women the opportunity to participate fully in employment. We are committed to policies to ensure that women are given the opportunity to improve their labour market prospects, to compete for a wider range of jobs, and to be able to apply on an equal footing with men for those jobs that are available. The approach we now propose should ensure that women are no longer excluded from many occupations and concentrated at the bottom end of the labour market. Women should now assume the place of their choice in our society. I should emphasise that this, we appreciate and recognise, will see many choosing a traditional role in the home. Affirmative action of the kind now proposed by the Government is a means of improving women's position in the work force by ensuring that discriminatory practices or traditions are reviewed and removed. We aim to see that women are enabled to compete equally with men for jobs at all levels. Our approach is not one which relies on the experience of other countries. We have explicitly rejected the American model with its system of court-imposed employment quotas. Rather, we have developed a set of proposals which are appropriate for the Australian environment. They are the product of our unique industrial relations and business practice traditions. Put quite simply, equal employment opportunity is our objective, and affirmative action is the way to achieve it. We must shake ourselves from the inertia and complacency which for too long has characterised Australian policy on matters such as this. What I said in the Boyer lectures in 1979 remains true today-namely, that: We luxuriate in the comfortable assertion that women enjoy equality. We have salved our consciences by eliminating the more obvious discriminations like unequal rates of pay for work of equal value. But we have not eliminated the inheritance of the millenia that women are lesser beings, an inheritance which still manifests itself in a whole range of prejudice and other forms of discrimination. We are, as a society, more aware of this dichotomy, between principle and practice, but the very awareness is a source of guilt and conflict between women and women, between women and men, and within women and men themselves. I see it as crucial that we confront this dichotomy head on. It is not enough simply to say that there should be equal employment opportunities for women or that all employers should treat men and women equally. What we need is concerted action-affirmative action-to ensure its achievement. Special measures and programs are needed to ensure that women acquire the skills, experience and training to compete on an equal basis with men for jobs and for promotions. Such special measures include making it explicit in job advertisements that women and girls can apply, companies advising their employees that all positions are open to women, companies analysing their work force to identify areas where women are not employed and designing strategies to attract them to these areas, and companies consulting with female employees on their perceptions of where barriers to full equality of opportunity might exist. Some companies will already have adopted such measures. These are, after all, what many would see as being integral to good management practice. Successful companies will not ignore the talents and skills of all their employees. Such practices should become the rule rather than the exception. Women are now 37 per cent of the Australian workforce. Two and a half million women, 60 per cent of them married, are in the work force. The economy and standards of living we know today would collapse if women were to withdraw to their pre-war rate of labour market participation. Women today do not have the same diversity of occupational choices available to men. Sixty-four per cent of women workers are employed in only three occupational groups: Clerical; sales; and service, sport and recreation. Women in these occupations work largely as stenographers, typists, sales assistants, waitresses and cleaners. Women are under-represented in administrative, executive and managerial positions, in agricultural work and in the transport and communication occupations. They are notably under-represented in the trades, production- process and labouring occupational groupings. Even within occupations where women predominate, men tend to have the higher-level, decision-making positions. Indeed, amongst Organisation for Economic Co-operation and Development countries , Australia has the highest level of occupational segregation of women and one of the highest levels of industrial segregation. There is no evidence of this segregation diminishing. Rather, as I observed in the 1979 lectures: The range of employment readily open to women is restricted because of discrimination built into our education system and the attitudes of some employers and trade unions. There is still the unstated but operative assumption that women are not entitled to equal opportunity because their place is, or ultimately should be, in the home. In the final analysis, what we have to recognise is that while there is an inevitable imbalance in circumstances where a significant number of women chose not to enter the workforce, there is still, as I observed in the Boyer lectures, a gross lack of proportion. We have a situation where women comprise half the population, and yet still occupy so few positions of authority in government, business, trade unions, and other organisations of significance within the community. The Government's affirmative action proposals aim to redress this situation. We aim to open up a greater and more satisfying range of job opportunities for women. The union movement has a very important role to play in securing these objectives. The Australian Council of Trade Unions Congress' decision to hold a seminar for all affiliates should help see the unions make their essential contribution. But it is the co-operation of Australian employers which will be absolutely vital for the long term success of an affirmative action program. In this regard the Government has sought and received the co-operation of many Australian companies and of the higher education institutions. This co-operation augurs well for the prospects of the approach we are now proposing and we are particularly grateful to all those concerned for their co-operation. Following my invitation, the following companies and tertiary institutions have agreed to join a pilot program establishing affirmative action for women in employment: Australian Mutual Provident Society Ansett Transport Industries Ltd ANZ Banking Group Limited Boral Ltd Borg-Warner (Australia) Limited The Broken Hill Proprietary Company Limited Castlemaine Tooheys Limited G. J. Coles & Coy. Limited Argyle Diamond Mines Pty Limited and Sulphide Corporation Pty Limited, divisions of CRA Limited CSR Limited Dunlop Olympic Limited Esso Australia Limited John Fairfax & Sons Limited Ford Motor Company of Australia Limited Grace Bros. Department Stores IBM Australia Limited ICI Australia Limited Mitsubishi Motors Australia Ltd Reckitt & Colman Australia Limited Santos Ltd Simpson Ltd Southern Pacific Hotel Corporation Limited Thomas Nationwide Transport Limited Unilever Australia Limited Westpac Banking Corporation Woolworths Limited Wormald International Limited J. B. Young Limited The Australian National University Griffith University South Australian College of Advanced Education The pilot program is a unique and historic challenge. The participation by such a representative cross section of our business and education communities gives the Government and I confidence not only of the likely success of the program, but also of the seminal influence it will have on community attitudes in this vital area. Between them, the participants in the pilot program I have listed employ almost a quarter of a million Australians. Sixteen of the 28 companies which are participating in the program are listed by Business Review Weekly as being amongst Australia's top 150 companies in terms of their market capitalisation. Six of the participating companies are amongst Australia's top 10 companies. Quite deliberately, however, the pilot program is not confined to such companies; it necessarily encompasses a wide range of sectors and regions and a variety of company sizes. On this basis the demonstration effect of the pilot program should be both considerable and, above all, credible. I am very confident that the practical attainment of improved employment opportunities for women through the pilot program will dispel any lingering misapprehensions about the appropriateness of affirmative action as a strategy for improving women's job opportunities. A special Affirmative Action Resource Unit has been established in the Office of the Status of Women to assist participants in the pilot program. It will help employers design affirmative action programs and will provide advice when problems arise. It will also assist employers in monitoring the progress of their programs. In this regard I should like to pay tribute to the clarity and sensitivity of approach adopted by many in Australian business and industry to the challenge involved in mounting affirmative action programs. This is reflected, for example, in the attitude of the Confederation of Australian Industry which has acknowledged that: Industry, as a part of society, cannot escape the fact that it has a role to play . . . In the main, real and positive advances will only be made in this area through co-ordinated and co-operative action by industry, the trade union movement and governments . . . Affirmative action programmes carried out on ( this) basis have the full support of CAI. The Business Council of Australia, to which most of the companies participating in the pilot program belong, is also holding a series of working sessions throughout the year for participating companies. This initiative is a practical approach which should be of particular value to all the companies concerned. That so many in business are both receptive to the purpose of affirmative action and prepared to give it practical effect in their own enterprises gives me real confidence that we have found a most effective means of securing real progress in this vitally important area. Mr Speaker, the paper before us defines affirmative action as a systematic means, determined by employers in consultation with employees and unions, of achieving equal employment opportunity for women. It is not a means of generating increased employment-other policies are directed to this end. Affirmative action is aimed at promoting improved job choice for women in the work force. In this regard the Government strongly believes that all jobs should be awarded on merit. We reject the use of employment quotas for women or any disadvantaged group. What is needed is a self-determined, industry specific approach. Such an approach would be one which would adopt goals or targets rather than binding, operational quotas. Affirmative action programs will only achieve long term benefits, for women and for the economy, if they are regarded as employment policies designed to improve the skill, efficiency and mobility of the work force. They should be designed to redress discrimination where it occurs within organisations, to identify obstacles to women's employment or promotion, and to take systematic steps to remove these. Affirmative action does not threaten the jobs of men. Rather it ensures equitable treatment for individual employees, and urges employers to make optimal use of all skills and talents available both inside and outside the organisation. We cannot afford the situation any longer where women remain concentrated at the bottom of the labour market; where women continues to receive a disproportionately low share of wages and salaries; and where their access to non-traditional occupations will not improve. Only if we utilise all available skills and resources will we have any hope of enhancing, indeed maintaining, our relative standard of living. Australia needs to establish a more efficient, more productive and, ultimately, more competitive industrial base. Our labour market, industrial relations and education policies should contribute to the process. A labour force which is low -skilled, immobile and occupationally stultified will only impede our progress. The affirmative action proposals now before the House will have an important place in achieving the necessary conditions for progress. They are part of a wider effort by the Government to improve the educational, training and employment prospects for women and girls. We are giving particular attention to the achievement of equal access to jobs for women and men under the community employment program job creation scheme; we have introduced special rebates under the Commonwealth rebate for apprentice full-time training scheme for employers who take on female apprentices in trades other than hairdressing; we have commenced information campaigns to encourage young women to train for non-traditional occupations; we have also introduced the participation and equity program and the computer education program within the educational system both of which should be a particular assistance to girls in their later quest for jobs. While each employer is now being asked to design affirmative action programs suitable for the conditions and traditions of the industry concerned, most affirmative action programs should, nevertheless, have certain common features. These include: The appointment within each organisation of a senior executive responsible for the implementation of the program; an analysis of their work force to identify areas where women are concentrated or under-represented; a review of the organisation's employment policies and practices; the formulation of specific goals or targets to remedy any shortcomings disclosed by this analysis and review; and an evaluation and monitoring component to enable the organisation to assess whether it is making demonstrable progress to equal employment opportunity for women. There is nothing particularly difficult or costly about any of these steps. I would urge all employers to consider the benefits involved most carefully. The Government proposes that legislation should ultimately be introduced covering the introduction of affirmative action programs for women employees in private sector organisations with more than 100 employees. Such legislation needs to be carefully evolved for the Australian context. It needs to be implemented in a way which is not disruptive to business and the other organisations it will affect. It should also be such as not to prejudice women's long term employment prospects. In order to make sure that affirmative action legislation achieves these goals and has broad business, union and community support, the Government proposes to follow the successful consultation mechanism developed to consider the legislation for the Prices Surveillance Authority. With this in mind, I am also pleased to announce today that a working party is to be established to advise the Government on the most appropriate form of legislation in respect of affirmative action. This working party will be a direct and formal link between the Government and the parties affected by the affirmative action proposals. It will be kept informed of progress of the pilot program and will draw on its experience in framing the options for legislation. The working party is to be chaired by the Minister for Education and Youth Affairs (Senator Ryan) representing me in her capacity as Minister Assisting the Prime Minister on the Status of Women. The Minister for Employment and Industrial Relations (Mr Willis) and the Attorney-General (Senator Gareth Evans) will also participate in the working party as will representatives of the Australian Council of Trade Unions, the Business Council of Australia, the Confederation of Australian Industry, the Australian Vice-Chancellors Committee, the Australian Committee of Directors and Principals of Colleges of Advanced Education and women's organisations. I welcome the indications I have received from the Leader of the Opposition (Mr Peacock) of the Opposition's support for the Government's proposals on affirmative action. I thank him for this expression of support. In the circumstances I am happy to respond positively to his suggestion that the shadow Minister for Employment and Industrial Relations, the honourable member for Balaclava (Mr Macphee), should also be a member of the working party. The Government hopes that all large employers-not only those taking part in the pilot program-will start to move towards adopting affirmative action programs for their women employees prior to the report of the working party. I am most heartened by the interest shown already by a number of organisations, educational institutions and statutory authorities and applaud them for their initiative in this important area. The Government will, of course, also provide as much assistance as possible to these organisations through the Affirmative Action Resource Unit. The Government, it will be appreciated, is not applying one standard to the private sector and another to its own employees in the public sector. The Public Service Reform Bill introduced into this House on 10 May 1984 by John Dawkins, as Minister Assisting me on Public Service Matters, contains provisions requiring Commonwealth departments to introduce affirmative action programs for women and disadvantaged minority groups. This legislation will also apply to Commonwealth statutory authorities on a case by case basis. I would hope the example set by the Government will provide an incentive for many others to follow suit. The proposals in this paper have been widely discussed between the Government, business, and unions. I repeat how grateful my Government is for the very substantial support we have already received from these quarters. To that I now add the indication of support from the Opposition. This demonstrates, I believe, that all parties affected by the Government's proposals will see them as realistic and practical, and in their interests to implement. For far too long women have been denied their right to compete on equal terms with men for jobs or to have reasonable prospects within those jobs. The Government's objective is to redress this situation so that women's position and status in the labour market markedly improves. We are, in this important area, I believe, on the threshold of a major transformation of the place of women in our society. Australia will be a better and more prosperous place for it. I present the following paper: Affirmative Action for Women-Ministerial Statement, 5 June 1984. Motion (by Mr Young) proposed: That the House take note of the papers. Motion (by Mr Young)-by leave-agreed to: That so much of the Standing Orders be suspended as would prevent the honourable member for Balaclava speaking for a period not exceeding 25 minutes. Mr MACPHEE(Balaclava)(3.33) —The Opposition welcomes the discussion paper Affirmative Action for Women and its appendices and makes the point that it is important that there be the widest possible discussion of all aspects of the matters raised in the paper. I congratulate Dr Summers and her staff in the Office of the Status of Women on the quality of their data and its presentation. That quality of work will greatly aid the achievement of equality between the sexes. My participation in the working party on behalf of the Opposition is to enable that goal to be achieved in the most harmonious way possible. It is of course without commitment regarding the ultimate policy which might be adopted as a result of the working party's assessment of the pilot program, but the Opposition is delighted to participate in that working party. The goal of equality of opportunity is one to which the coalition parties have been committed for many years. Lest anyone think that the modern approach to this challenge had its origins in the 1979 Boyer lectures, I remind the House of the coalition's policy statement of 1974 entitled 'The Way Ahead'. Page 51 of that document stated, and I quote in full: The Liberal and Country Parties are dedicated to the pursuit of social freedom and the maximisation of equality of opportunity and status for men and women in the Australian community. Any form of arbitrary discrimination of a social, economic, legal and educational nature is inconsistent with the philosophy of the Liberal and Country Parties. Where such discrimination is seen to exist, it is the policy of the Parties to strive concertedly for its elimination. Certain differences in status continue to exist between the roles of men and women in the Australian society. These exist in both institutional and attitudinal terms. Where these differences are seen to arise from unfair discrimination or inequality of opportunity, a Liberal and Country Party Government is pledged to work actively for their elimination. A Liberal and Country Party Government will promote, as a basic responsibility, those conditions in society that will enable all individuals to achieve their full potential. One of the most important developments in the latter half of the twentieth century has been the major reassessment of the role of women. The advancement of technology, the greater availability of education and the continuing decline in the number of children per family has greatly reduced the demands on women to fill a totally domestic role. Therefore the options and opportunities available to women today exceed those of her counterpart in past generations. Throughout the twentieth century women in western society have been granted greater legal, political and social status. There still remain areas in community life, however, where women have not yet achieved full equality with men. It is towards the eradication of these pockets of discrimination that the main thrust of a Liberal and Country Party Government's policy for women will be directed. Governments, employers, trade unions and education institutions are not fully attuned to the changing social attitudes and relationships in modern society. The Liberal and Country Parties believe it is not sufficient to rely on slow evolutionary change to achieve full social justice for women. Rather the Parties are committed to the active advancement of women's rights in the context of a broad and integrated women's policy. The first step towards the achievement of equal rights must obviously be to create and develop in the minds of all Australians a consciousness of the degree to which sexual discrimination continues to exist, the reasons why it continues to exist, and the means necessary to accelerate its eradication. The Fraser Government pursued policies consistent with that policy commitment and, as is well known, appointed the National Women's Advisory Council to provide data and advice. Indeed, much of the advice in Volume 2, the appendices of the document tabled by the Prime Minister (Mr Hawke), was inspired by the work of that Council and the Fraser Government. The Fraser Government also believed in leading by example. In the area of Commonwealth employment it instituted equal opportunity policies which were voluntary in character but which were designed to redress the balance as it then stood against women in Commonwealth employment. Also, one of the earliest Cabinet decisions of the Fraser Government was to try to obtain a greater representation by women of appropriate ability on the various advisory bodies of the Government. As the Prime Minister said in his remarks, we always sought people of quality. There was never an occasion when we appointed a woman for the sake of it; there was never tokenism. As a result of that very conscious decision to seek out women of quality to give advice to government in its various forms there are many women on such bodies, and there were during the period of the Fraser Government, those whose appointments would not otherwise have been contemplated. Perhaps the most prominent of those appointments was Dame Leonie Kramer. It is fair to say that, despite her ability and that of other women, had there not been a conscious seeking out of women of quality it is most improbable that a woman would have been made head of the Australian Broadcasting Commission. The most important point is that in areas where government appointments were made, and often where promotion was made in government, there was an underlying assumption that males should be appointed. We believe the spirit of what the Prime Minister has outlined today is part of the continuing evolution of the policies put in place by the previous Government in respect of its own employment and advisory boards. I repeat the point that a great deal of the information available in the appendices in Volume 2 came from the sources advising the government of the day or was inspired through academic study by the attitude then taken. I again congratulate the Office for the way in which the appendices have been assembled in a most convenient and clear form, which should assist those companies which seek to implement the policy and other people who seek to develop their own better understanding of the many problems involved. There is one short part of the Prime Minister's statement to which I particularly wish to refer, that is, four paragraphs which state the undeniable facts. I repeat briefly what the Prime Minister said in rather greater detail: Women today do not have the same diversity of occupational choice that is available to men. Women are under-represented in administrative, executive and managerial positions. They are notably under-represented in senior management. Even, for example, in this building, where we see many women, including Dr Summers, who was formerly bureau chief of the Australian Financial Review, and many women in the journalistic profession, very few have reached senior management levels in our major media organisations. There are many examples of that which, if management were prepared to question its assumptions on the matter, could be rectified and the talents, creativity and energy of women in those occupations could be more greatly utilised. One of the dilemmas, though, is that even in those occupations in which women predominate, men often gain higher level decision-making positions. One of the classic examples of that is the nursing profession, which was assumed to be a woman's occupation. Now there are positions called directors of nursing, formerly often called matrons, which are occupied by men. I think a great deal has to be examined in the course of looking at this program to see why it is that that happens. The same thing happens at female schools where there are more and more male teachers. A corresponding pattern is not emerging at all-male schools where the teachers are still predominantly male. As the Prime Minister also observed, amongst the Organisation for Economic Co- operation and Development countries Australia has the highest level of occupational segregation of women and also one of the highest levels of industrial segregation. Some excellent papers were presented at a seminar at the Australian National University last year, to which I have referred in other debates in this House, which bear on the nature of that segregation, which is partly historical but quite unacceptable in the modern Australia. The paper tabled today therefore may be seen as part of the continuing progress towards equality between the sexes. The means chosen is sensible. Certainly, any prescriptive approach by way of legislation would have been unacceptable not only to the Opposition but also to the community. I have made our opposition to that clear in the past. Quotas would have been counter-productive to women and to our private sector prosperity. Even so, before legislation is contemplated- the Prime Minister has indicated the Government's predisposition to that-the Opposition would wish to see pilot programs published and discussed extensively. My having access to the working party will no doubt assist in that. The Opposition is predisposed against legislation. It is very much, in our belief, in the enlightened self-interest of management to harness the best talents available. Statistically, 50 per cent of those ought to be female. We believe that, if the enlightened self-interest of management is appealed to and if the barriers erected by various other institutions, including tribunals and trade unions, are dismantled, legislation need not be necessary. But, even if legislation were ultimately thought by the Government to be needed, it ought to be tabled and as widely discussed as this document will be before the passage of any legislation is actually attempted. The Prime Minister was right in his reference to the role of employers. He was also right in his remarks, which he did not embellish, about the responsibility of the trade union movement. There is no doubt that unions have a deep-seated assumption about the role of women. This assumption needs to be changed if the employers, exercising their enlightenment, are to find that enlightenment matched by success. One can think of many areas in which the trade unions have to do a lot of soul searching and education of their members. Page 17 of Volume I of the documents just tabled by the Prime Minister records a commitment by the Australian Council of Trade Unions Congress in 1983 to: . . . convene a meeting of unions upon the release of this Policy Discussion Paper to discuss such ramifications of the Paper as the need for 'structural changes necessary to implement equal opportunity and affirmative action programs '. One of the most important things for us to do is to move towards more flexible patterns of working. It is very important that we get away from the rigid notion that all persons permanently employed must be employed for what are regarded as full time working hours-whether it be 38 hours or 40 hours a week as the case may be. It is the increasing desire of the community, particularly of women in the community, to have career paths which enable them to move into full time employment on leaving school, into part time employment at various stages of their later life and back into full time employment later. It is again often the case that it suits the convenience of the family for males to do that as well. What most Australian families seem to aspire to in income terms is a one and a half income family. Very often, even when a family member is pursuing job satisfaction, that kind of arrangement suits the family's requirements. It can also suit the employers and it should not be a threat to the trade union movement; it should be compatible with its objectives. As a matter of fact, despite the Prime Minister's proper disclaimer that the approach outlined today is not aimed at employment creation, I believe that a widespread permanent part time employment program with pro rata conditions of service in accordance with trade union standards would lead to the creation of more jobs. If we are to question people's assumptions and the approach taken by employers, trade unions and educational institutions to the employment of women in what hitherto were regarded as male jobs, we ought also to be looking at those patterns of work. I believe that what this country needs is a core of full time employees, probably over half of the work force at a particular place, but in addition a very substantial flexible grouping of people employed on a permanent part time basis. That fits in, too, with the need for an industry to update its technology-not to replace people with technology but to justify the capital investment in some of the productivity improving technology. In this respect we often need to work for longer hours than is the case with some of the older technology and, rather than pay someone in full time employment to work overtime , it makes a great deal of sense to alleviate some of the unemployment and to meet some of the needs of individuals by having more flexible approaches to working with that technology. A machine working 10, 12 or 16 hours a day could quite conceivably involve somebody working eight hours and two other people working four hours, or four people working four hours. This kind of imagination is very much needed. If one looks at the issue in this way, one sees that there are a number of interrelated matters which fit in with the ACTU's resolution about structural changes. If we are to meet the restructuring of industry of which the Prime Minister has spoken and of which other people on this side of the House have spoken over many years, it is time to question all of our assumptions across a range of related matters, one of which is to do with the initial employment of women in what were hitherto seen to be male jobs and another of which is their promotion. But others again relate to the patterns of working and the receptiveness of the work force to new technology and retraining on the job. One of the ways in which we will employ more women, and one of the ways in which we will employ them at higher levels, is for there to be more flexible retraining programs than we have had. Not only do we have prejudices on the ground of sex to the admission of women as apprentices-those prejudices being on the part of both the trade union movement and the employers-but also we have barriers to flexible training and retraining programs anyway, affecting males and females. Now is the time to grasp the nettle. I believe that, in the course of the preparation of this extensive discussion paper, the pilot programs and the surveillance by the working party, it is time for us to examine very carefully what we can do to reduce our unit labour costs, give people more job satisfaction, better meet their social aspirations and help at the same time to improve our competitiveness and therefore our capacity to employ people. A related issue is discussed on page 25 of volume 1 of the document just tabled by the Prime Minister. It concerns education and training. The first paragraph under that heading is worth reading. It states: The trend to increased participation by girls to Year 12 and in higher education in the past fifteen years has tended to eclipse the fact that the patterns of studies and subjects undertaken by females and males remain markedly different and that the overall participation rate of males remains markedly greater than that of females. At ages 15 to 16, the total participation rates for males and females are equal at 85 per cent; at ages 17 to 19 the rate for males is 53.4 per cent whereas that for females is only 38.6 per cent. At ages 20 to 24, the rates are 21.1 per cent for males and 13.6 per cent for females. The issue is not merely one of participation by males and females in the various training programs, particularly in the higher training programs, but also one of curricula. It often begins at school level with assumptions about what is appropriate women's work and, therefore, what courses girls will be given at schools. While it is pleasing to see the number of technical schools now teaching boys and girls similar programs in the traditional trades and the so- called domestic sciences, a great deal more co-ordination will be required at State government level to produce people who are employable in these equal opportunity programs. With all the goodwill in the world on the part of trade unions, higher training institutions and employers, they will not be able to get near an equality between sexes and use of the natural capacities and talents of people if at the more junior levels of education there has been a bias in the curricula towards certain occupations for females. Madam Deputy Speaker, I am delighted to see you in the chair on this occasion. In this general community discussion we must not continue some of the blind assumptions which have inhibited discussions about this kind of subject in the past. I look forward very much to being involved in the working party to monitor the pilot program. As is well known, I think, my participation will be wholehearted and constructive; but, as it would be on the part of the Australian Council of Trade Unions and employers concerned, it must be without commitment to an outcome that necessarily involves legislation. I believe that, if the discussion can continue as it has begun today, and if all the interested groups, including State governments and the educational institutions, examine carefully the very concise high quality publications that have been presented today, it should be possible for us to harness the talent that we know is there and to give individuals equality of opportunity with an overall benefit to the nation. Debate (on motion by Ms McHugh) adjourned. The Clerk-Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: Sales Tax: Confectionery To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia shows that the current discriminatory application of sales tax on confectionery at the rate of 20% is an unfair and unjust burden on this important manufacturing industry and your petitioners therefore pray that confectionery be treated in a similar fashion to all other foods, including snack foods, which are exempt from sales tax. And your petitioners as in duty bound will ever pray. by Mrs Child,Mr Ronald Edwards,Mr Goodluck,Mr Howard,Mr Humphreys,Mr Barry Jones,Mr Kent,Mr Rocher,Mr Simmons,Dr Theophanous and Mr Uren. 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 Publications 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 (e.g. 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 approximately 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 Cadman,Dr Charlesworth,Mr Groom,Mr Jacobi and Mr Wilson. 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, with its traditional approach, restricts the freedom to select the health care practitioner of one's choice and does nothing to reduce the excessively high cost of health care in Australia. That a financial disadvantage will be incurred by those citizens utilizing chiropractic care, many of whom find that their health complaints are vertebragenic (spinal) in origin and therefore 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. by Mr Cadman,Mr Drummond,Mr Hawker and Mr Rocher. 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 Braithwaite,Mr Ruddock and Mr Spender. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth: That the Sex Discrimination Bill 1983 contains provisions inconsistent with principles of justice and equality which could be used to: Undermine civil liberties and religious freedom; Entrench abortion funding and render liable to action Hospitals, Doctors and Nurses, who conscientiously refuse to become involved in morally objectionable operations; Deny to parents their rights to insist that the school 'community' provide an environment conducive to the development, including moral development of their children. Deny to parents their rights to have their children enjoy single-sex sporting activities, e.g., boys cricket team, boys football team, etc. Your petitioners humbly pray that the Parliament assembled: should amend the Bill so as to prevent the possibility of its use in the manner stated above and urge, because of the importance to society of all principles involved, that a conscience vote on the Bill be permitted to all Members of Parliament. And your petitioners as in duty bound will ever pray. by Mr Cadman,Dr Charlesworth and Mr Leo McLeay. To the Right Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: 1. We are completely satisfied with the design of the existing Australian national flag. 2. We are aware it properly reflects the immutable characteristics of Australia , namely: The Union Jack-itself the creation of 3 Christian crosses-represents the nation 's historical origin, and the source of its language and law. The Southern Cross on a azure blue background signifying its place in space. The large star depicting the advent of Federation in 1901. 3. We know the flag has been a source of inspiration to generations of Australians in peace and war. 4. We recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. We are certain that any change to the flag will produce division in the Australian community. Your petitioners therefore humbly pray that your honourable house will: Propose and pass a motion that 'the existing Australian national flag remains sacrosanct from change.' And your petitioners as in duty bound will ever pray. by Mr Blunt and Mr Groom. To the Honourable the Speaker and members of the House of Representatives assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: 1. Omega by sending low frequency signals, penetrating sea water enables hunter -killer submarines to establish their position and to launch a ''first strike'' attack. Omega is also used by AWACs, the flying radar stations, and for other military purposes. 2. Omega is an important U.S. military base and a potential nuclear target. A nuclear attack on Omega would have a disastrous effect on Victoria and Melbourne . 3. Omega and other U.S. bases in Australia endanger, rather than protect us. They add a new unnecessary menace to a nuclear arms race that must be stopped, if we are to survive. And your petitioners as in duty bound will ever pray. by Mrs Child and Mr Kent. 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 shows : That we are vitally concerned at the proposed changes to the Commonwealth Censorship Controls. We consider that such changes are not in the best interest of Australians, and will only satisfy an unwanted trend within our Society that shows no concern for moral standards and principles. We believe that our existing laws concerning classifications are still relevant for our time, and pray for their retention. And your petitioners as in duty bound will ever pray. by Mr Adermann. 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 shows: That, having received information from the Attorney-General's Department concerning the New Commonwealth Censorship Procedures for Publication, we are abhorred by the intent of the Government to change the already liberal Censorship Laws into such Laws as will open the doors to nearly complete license where publications are concerned. We most strongly feel that in this way the Government would be intentionally instrumental in perverting the thoughts and actions of young and older Australians. We therefore request the Government to abandon its 1983 decision to alter the A .C.T. Classification of Publications Ordinance forthwith. And your petitioners as in duty bound will ever pray. by Mr Adermann. 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 shows: That we are deeply concerned at the proposals in relation to the censorship laws, and the lifting of certain 'barriers', allowing producing and importation of films, videos that deal with matters of sex, drugs, crime, cruelty, or revolting phenomena in a manner that is likely to cause offence to a reasonable adult person, and sale of any pornographic material. We the undersigned request the Government to abandon its 1983 decision to alter the A.C.T. Classification of Publications Ordinance forthwith. And your petitioners as in duty bound will ever pray. by Mr McVeigh. To the Honourable the Speaker and Members of the House of Representatives of the Australian Parliament in Canberra assembled. The petition of certain citizens respectfully showeth. That the current ''epidemic'' of adverse reactions to medical drugs (both prescription and over-the-counter) constitutes a severe health problem. The monitoring of such reactions is inadequate. There is a lack of awareness of the role of such drugs in causing disease. Consumers are confused by the large number of unnecessary brand names for the same drug. There is insufficient onus on drug companies to compensate the victims of adverse drug reactions. Your petitioners therefore humbly pray- 1. That there should be- (a) MANDATORY REPORTING of suspected drug reactions to the Adverse Drug Reactions Advisory Committee (A.D.R.A.C.). (b) Recording of pre-death medication on death certificates. (c) Collection and publication of the resulting statistics. 2. That the labelling of drugs should include- (a) GENERIC (or chemical) NAMES in place of brand names. (b) WARNINGS of recorded adverse reactions. 3. That Australia should seek UNIFORM INTERNATIONAL SURVEILLANCE of medical drugs. 4. That Pharmaceutical companies be made AUTOMATICALLY LIABLE for injury or death caused directly or indirectly by their products. And your petitioners as in duty bound will ever pray. by Mr Blanchard. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: 1. The Federal 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 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. scrap its proposed assets test legislation; 2. either institute a broad enquiry into Australia's retirement income and taxation systems or await 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 Blunt. 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 R.A.A.F. Base Richmond would make operations impractical. 4. It would destroy the historic village of Pitt Town, environmentally important wetlands, and their unique adherent wildlife. 5. Your petitioners reject these proposals and call for endorsement of the MANS Committee findings. And your petitioners as in duty bound will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we, the loyal citizens of Australia firmly express our strong opposition to any proposals to remove or undermine the importance of the place of God and/ or the Queen in our national life, and democratic institutions. Your petitioners therefore humbly pray: That the Parliament assembled reaffirm our nation's total dependence on God the Creator in accordance with our Australian Constitution, which commences with the words ''Humbly relying on the blessing of Almighty God'', and the Standing Orders of both the Senate and the House of Representatives which prescribe that Parliament each day shall open with a special prayer to Almighty God and the Lord's Prayer. We also call on the Parliament assembled to re-affirm our genuine loyalty to our Head of State, the Queen of Australia, Elizabeth II-'God save the Queen'. And your petitioners as in duty bound will ever pray. by Mr Carlton. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The undersigned citizens of Australia respectfully showeth : 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 the Speaker and Members of the House of Representatives in Parliament assembled: The humble petition of certain citizens of Australia shows that the Soviet Union continues to violate human rights in Latvia. This is clearly demonstrated by the recent case of Janis Rozkalns, a practising Baptist who, on January 6, 1983, had his house forcibly entered into by K.G.B. agents searching for various religious publications. The K.G.B. confiscated 40 Bibles. Mr Rozkalns was charged with ''anti-Soviet agitation and propaganda'' and now faces a sentence of seven years deprivation of freedom plus five years internal exile. Your petitioners therefore pray that the House of Representatives in Parliament assembled condemns the religious and human rights persecutions within the Soviet Union. And your petitioners as in duty bound will ever pray. by Mr Gear. The Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The petition of certain citizens of Australia respectfully shows: RE the deep and urgent concern being experienced as a result of the decision not to proceed with the Alice Springs-Darwin rail link, whereby employment security in the Iron Triangle cities of Port Pirie, Port Augusta, and Whyalla is adversely affected, and in some cases seriously threatened; and further, that the rail link is regarded as vital for Australia's defence security; and also that the tourist potential of Darwin and the Northern Territory in consequence is gravely hampered. Your petitioners therefore pray that your Honourable House will readdress itself to the Alice Springs-Darwin railway project as a matter of paramount priority in the light of the manifest detrimental consequences to employment prospects in the Iron Triangle, the necessity for stablising the State's economy , the significant requirement to add to national defence capability, and the express need to develop Northern Territory tourist opportunities. And your petitioners as in duty bound will ever pray. by Mr O'Neil. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled, Parliament House, Canberra, ACT 2600. We, your petitioners, humbly showeth: That permitting kangaroos to be commercially exploited when permissible cropping rates are unknown and the means of enforcing controls or protective laws are completely ineffective in this land, is allowing this unique animal to follow the path to ratify or extinction along which all wild animals have gone when subjected to exploitation in similar circumstances. We Australians, have the right to see kangaroos in reasonable numbers on the landscape: we find the commercial slaughter of the kangaroo to be abhorrent and unjustified. Commercialisation of wildlife should be stopped, particularly as exemplified by the kangaroo industry. We your petitioners therefore humbly pray that you will. 1. ban the export of products made from kangaroos. 2. take action to see that state governments prohibit the commercial killing of kangaroos. And your petitioners as in duty bound will ever pray. by Mr Porter. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia shows their concern for the present unresolved economic, social, biological, genetic, environmental and technical problems associated with the mining of uranium, the development of nuclear power and the proliferation of nuclear weapons. Your petitioners therefore pray that your Honourable House will 1. prohibit the establishment in Australia of nuclear power plants and all other stages of the nuclear fuel cycle. 2. declare a moratorium on all mining and treatment of uranium in Australia. 3. prohibit the export of Australian uranium. And your petitioners as in duty bound will ever pray. by Mr Staples. To the Honourable the Speaker and Members of the House in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth. The undersigned strongly protest at any proposal to use Darkes Forest as the site for the second Sydney Airport on the following grounds: 1. The effect of noise on the residents of and visitors to the northern suburbs of Wollongong. 2. The effect on the environment of the Darkes Forest area and catchment areas generally. 3. The airport would mean the prohibition of hang gliding, the area's unique tourist and recreational attraction. The Petitioners humbly pray that the Parliament assembled reaffirm that there be no airport in the Darkes Forest area. And your petitioners as in duty bound will ever pray. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth: that the restructuring of the Australian Army Cadet Corps is a reprehensible step in that it will mean the ultimate destruction of this valuable youth training scheme. Although appreciating the the need for wider based Community Units we believe these should be in addition to the current School Cadet Units, and feel that the financial restrictions placed on most current Units will lead to their demise. Your petitioners therefore humbly pray that the Federal Government will maintain full support for existing School Units. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of concerned people of the Electorate of Indi respectfully shows their desire to prevent hard core pornographic video-tapes being permitted for home viewing. 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 petition of concerned people of the Electorate of Indi respectfully shows their desire to stop the spread of Paterson's Curse. Your petitioners therefore humbly pray that Your Honourable House (the Government) act to implement the biological control of Paterson's Curse. And your petitioners as in duty bound will ever pray. by Mr Ewen Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the citizens of Queensland respectfully shows: last year, over 3,300 people died on Australian roads; alcohol is a factor in 50 per cent of road deaths; alcohol advertisements do not show the perils of driving after drinking alcohol ; alcohol advertisements are glamorous and increase their effect on teenagers, indicating drinking alcohol as the social pastime. Your petitioners therefore humbly pray that the Parliament will legislate to ban the advertising of alcohol from commercial television and radio. And your petitioners as in duty bound will ever pray. by Mrs Darling. 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. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Tasmania shows: (a) We are shocked and disappointed at the Federal Government's decision not to upgrade the Wynyard Airport. (b) This decision will inevitably lead to downgrading and closure of the Wynyard Airport. (c) Closure of Wynyard Airport will cause grave hardship and inconvenience to the people of the North West and West Coast regions of Tasmania. (d) We urge the Federal Government to immediately reverse this disastrous decision. And your petitioners as in duty bound will ever pray. by Mr Groom. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The humble petition of the undersigned electors of the Division of Bass respectfully showeth- 1. Although Australia is endowed with vast quantities of natural gas, Tasmanians are denied reasonably priced access to those resources. It should be shared equally between all Australians. 2. The Tasmanian householder using liquefied petroleum gas (LPG) pays $35-$40 for an average household cylinder. In Melbourne, the same cylinder can be purchased for as little as $23-$77. 3. A Tasmanian family on reticulated gas supply pays double the price paid by a Melbourne family on natural gas. 4. Tasmanian commercial and industrial users, paying high prices for their gas, are penalised. Your petitioners therefore humbly pray that the Commonwealth Government gas subsidy of $20-$31 per tonne should be increased to Tasmania to compensate for Bass Strait freight charges. The subsidy should be raised so that Tasmanian users pay no more than the average of Australian users. And your petitioners as in duty bound will ever pray. by Mr Newman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of certain citizens of Whyalla South Australia, electors of the division of Grey, respectfully showeth that an operation was introduced to Australia for 'downs syndrome' children. This operation consists of reducing the size of the tongue of the children which helps them to breathe through their nasal passages, and also enables them to speak much more clearly. There are certain setbacks. 1. the operation can only be performed in Melbourne at present. 2. the operation which in our opinion is a necessity for the well being of these children is not covered by medicare. 3. the operation costs approximately two thousand five hundred dollars ($2,500) . We hope to change all this by producing this petition to federal parliament. We are signing this petition so that 'downs syndrome' children do not have to be denied this treatment and can live their lives to the best of their ability. Your petitioners humbly pray that the Government take steps to make this operation available under medicare and the appropriate action to ensure that any loss incurred travelling to and from the service centre for such operation are fully recoverable. And your petitioners as in duty bound will ever pray. by Mr O'Neil. Petitions received. The following Bills were returned from the Senate without amendment or requests : Appropriation Bill (No. 3) 1983-84 Appropriation Bill (No. 4) 1983-84 Appropriation (Parliamentary Departments) Bill (No. 2) 1983-84 Supply Bill (No. 1) 1984-85 Supply Bill (No. 2) 1984-85 Supply Bill (Parliamentary Departments) Bill 1984-85 Audit Amendment Bill 1984 Madam DEPUTY SPEAKER(Mrs Child) —Mr Speaker has received a letter from the honourable member for Boothby (Mr Steele Hall) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The failure of the Government to take adequate action to suppress the drug trade. 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 STEELE HALL(Boothby)(4.00) —Last week, part of the text of an Australian Broadcasting Corporation Nationwide program on drugs stated: . . . it's believed the right wing of the New South Wales Labor Party is putting considerable pressure on the Federal Government to make sure the Costigan Commission does in fact wind up on the 30th of next month. A number of individual tests could be used to assess the Australian Labor Party' s attitude to crime prevention and the suppression of the drug trade. There is one overall question, however, which would encompass them all-that is, which party would a top criminal operator or a member of an organised crime syndicate prefer to have in power in Canberra? In making such an assessment a criminal would already understand how crime detection and prevention had been made more difficult under several State Labor governments. He would remember how Mr Dunstan had destroyed the files of the Special Branch of the South Australian Police Force and thereby created such a continuing furore that in the end, by sacking the Police Commissioner, he dramatically brought about his own resignation. He would also know that in more recent years the new Cain Government has in the same tradition reduced the effectiveness of Victoria's Special Branch. He would not really have to remember much about New South Wales. He would instinctively know that criminals operate on a wide front in that State and that the commissions and prosecutions concerning prominent people involved in crime in that State are but a froth on the deep waters wherein the bigger operators safely hide. He would know that monstrous delaying tactics would be used by the New South Wales Government to inhibit the investigation of significant crime in that State which might embarrass that Government. The disgusting initial police investigation into the tapes and Jackson affair, when the material put before the investigating officers was first screened by the Police Commissioner, is a prime example of those tactics. What, then, of the Federal Labor Government? For a start, it is soft on convicted drug criminals. Last week the Attorney-General (Senator Gareth Evans) approved the release of Murray Riley after he had served just short of six years of a 17-year sentence. Some might cynically say: Why not in the circumstances? A report in the Sydney Morning Herald on 30 May last stated: While at Long Bay Riley had been allowed out on designated days. He had been observed looking tanned and fit lunching with his wife in expensive eastern suburbs restaurants. That is just another example of how to serve a gaol sentence under a Labor government. Last year, in March, the same Attorney-General let out what are known as the drug grannies after they had served five years of a 14-year sentence. Strangely, each case shares a number of similar characteristics-about two tonnes of cannabis worth about $2m; an inadequate penalty for such monstrous crimes against our society, and a direct encouragement to those who are obviously successful in penetrating Australia's Customs and surveillance systems . The Special Minister of State (Mr Young) shares some of his colleagues' leniency. The new electoral Act which he sponsored extends the vote to convicted criminals, even though they have been sentenced for terms of up to five years. Previously, a prisoner was unable to vote if he or she had been sentenced to a term of more than one year. The main discussion about crime, however, in the term of this Government concerns a national crimes commission. It has taken place under two main parameters: Firstly, the Fraser Government set up the enabling legislation in 1982; and, secondly, numerous royal commissioners have stressed how urgently it is needed. The reports of the commissions have provided the evidence for their strongly held views. The seminar held last year to consider the ambit of a crimes commission marked a turning point, however, in the Government's position and attitude to crime and drugs. Until then it had travelled a few months in office on the promise of the Prime Minister (Mr Hawke) that an effective national crimes commission would be set up. I refer to a question asked of the Prime Minister by the Rt Hon. Doug Anthony in May of last year, when Mr Anthony asked the Prime Minister whether the Government would proclaim the legislation passed by Parliament last year to establish such a commission. He then referred to the Fraser legislation which had passed both Houses. In answer the Prime Minister said: . . . there will be a position in which there can be the most effective transition from the work of the Costigan royal commission to the work of the National Crimes Commission. He continued: . . . at the beginning of 1984, we will be in place, with the proclamation of the Act, for the National Crimes Commission to take over, in the most effective way, the work of the royal commission. At that time the Prime Minister was saying that he would proclaim the Fraser Act . However, on 29 July 1983, Senator Gareth Evans and the Minister for Aviation ( Mr Beazley), the then Special Minister of State and his co-host at the seminar, surrendered the interests of crime prevention to the interests of organised crime in Australia. At the close of the seminar-honourable members should listen to this-the Attorney-General stated: If the question before us really was as stark as that which Mr Costigan put to us-that the only justification for a Crimes Commission is if you give it these kinds of wide-ranging royal commission powers and that you should not establish it if you are not prepared to do so-if that is the question that we had to answer I think that the answer of the great majority here would be, 'Do not establish the Crimes Commission'. That was the first real retreat of the Government from a real and effective crimes commission. From that seminar, therefore, those States which did not want crime investigated within their borders or which did not want to surrender any of their prerogatives went away content that the Federal Government would not press them on that issue. Needless to say, those lawyers who spoke at the seminar, especially those who used the theme of privacy to protect the interests of criminals, were also content. The Attorney-General, however, went much further than just protecting and looking after States' interests. The Bill which he introduced into the Senate to establish what he described as a crimes authority contains a State veto not only in areas of crime investigation within State jurisdiction, but also in all of those areas-I repeat, all of those areas- within Federal jurisdiction. Since the introduction of the so-called crimes authority legislation, the Senate has had the good sense to study it in the Senate Standing Committee on Constitutional and Legal Affairs. The upshot was that majority and minority reports recommended significant strengthening of the legislation. Given this considered view-some of it bipartisan-Committee members must now be astonished to find the Attorney-General introducing a Bill which includes a State veto. The fact that it is likely to come to this House with that State veto removed by Senate amendment will test the Labor Party's resolve. Will it proceed with a Bill which the Senate has hardened against criminals? With this background, what is the measure of crime in Australia? Obviously, the answer is evolving from the work of royal commissions, the results of operations of various police forces and the revelations of some notable journalists who fearlessly report crime. Commissioner Costigan, in his address to the crimes commission seminar, stated: Firstly, there is no doubt in my mind, on the evidence that I have seen, that a comparatively small group of people in this community are waging war on it in an organised fashion across a wide spectrum of criminality . . . I believe their activities cannot be checked by existing law enforcement agencies with the powers that they are given, and a new attack on major organised crime is essential. Bob Bottom, the well known crime commentator, has said that Australia now faces a bigger threat from organised crime from within than from any threat externally . Paul Lynch, writing in the Weekend Australian of 19-20 May this year, with regard to marihuana in Australia, had this to say: Outwardly there are few clues to expose the small border towns which straddle the Murray River in NSW and Victoria as the centre of a massive illegal drug trade which, in just 10 years, has made marihuana the third-largest agricultural cash crop in Australia, worth an estimated $375 million each year. These types of assessment illustrate the magnitude of the problem. Our law enforcement agencies are fighting a war against the drug trade which they can win or lose. From current reporting and publicity it appears that they may be losing that war. Last week the Age reported on drug developments in Queensland. That report was the work of a team which is highly knowledgeable in its field, and is part of what is obviously a crusade against crime by the Age newspaper. Those who doubt its effectiveness should ask ex-Minister Jackson about its efficiency. Clearly, there is substantial and organised importation of drugs, especially cocaine, into Queensland. The drugs are widely distributed, fairly flamboyantly, I understand, at Noosa. Sydney has long been acknowledged as being the heroin capital of Australia. Recent reports indicate that its market is saturated, that there is no shortage of supplies and that its surplus is going elsewhere in Australia. Sydney is now a transit area for supplies to other countries. The head of the Federal Police narcotic investigation, Chief Superintendent Winchester, is quoted as saying on 8 March 1984: We have intelligence that heroin is being shipped from Sydney to the United States, the United Kingdom . . . or possibly to Amsterdam, which seems to be the centre of the drug distribution network to Europe. Parallel with this trade are the murders committed within the ranks of its operators to maintain discipline or exert vengeance. Even this past week we have been reminded by the Age of the unsolved murder of the Bashams in August 1982. Was this an isolated tragedy? It is my understanding that the chief suspect in the murders of Nelson and Morrison, the members of the Melbourne branch of the Federated Ship Painters and Dockers Union, the murder of Chuck Bennett at the Melbourne City Court and the murder of Ian Carroll of Mount Martha, is one and the same person. The distillation from all that I have said is that the Government is not serious about fighting the drug trade. I ask honourable members to listen to the following: The Government gives early release to big time drug criminals. It is resolute in its determination to undermine all attempts to set up an effective national crimes commission. It hastens to close the Costigan Royal Commission of Inquiry on the Activities of the Federated Ship Painters and Dockers Union. It is involved with discussions on defamation laws which will restrict the revelation of crime in this community. Why is the Government so adamant that it wants to reduce in this way the strength of the fight against the most despicable merchants of death? There has to be a reason and there must be a reason why the Prime Minister said on 19 May last year that he would proclaim the initial Fraser Government National Crimes Commission Bill, yet now, a year later, he has succumbed to pressures which now induce him to reject that Bill. Where do these pressures come from? I repeat that the ABC in its Nationwide program said: . . . it's believed the right wing of the New South Wales Labor Party is putting considerable pressure on the Federal Government to make sure the Costigan Commission does in fact wind up on the 30th of next month. Mr Hodgman —Why? Mr STEELE HALL —The question is why? What on earth would be the reason for the haste to close the Costigan Commission? I suppose he is the most successful commissioner, and this is shown in the results that have emanated from his most intrusive discoveries and investigations into crime in Australia. There has to be a reason for the Government's haste. One can only assume that pressure from within the Labor Party has changed the Prime Minister's mind, because it has been changed. I remind the Minister that one year ago the Prime Minister said in this House that he would proclaim the Fraser legislation to set up a national crimes commission. By July the Attorney-General had changed his mind, using the work and discussion at a national crimes commission seminar as a crutch upon which to make that change. It was quite evident whom he was listening to in those discussions, and the change has been made and the legislation has been brought into Parliament. The legislation was studied by a bipartisan Senate Committee on Constitutional and Legal Affairs. That Committee, which included some Government back bench senators, has, I believe to the great shame of the Government and the Special Minister of State, said that the legislation was deficient and it pointed the finger squarely at the veto power as the number one offender. I refer to the veto power which is to be possessed by governments like that of New South Wales, of all governments, over the direction in which a National Crime Authority could go in its investigations. It is an absurd restriction to place on crime investigation in Australia. From any point of observation, the Labor Party reeks of the influence of those who do not wish to pursue crime. The Government stands condemned for its failure to suppress the drug trade in Australia. Mr YOUNG(Port Adelaide-Special Minister of State)(4.15) —I think that the honourable member for Boothby (Mr Steele Hall) obviously got his speech notes mixed up. They must have been his speech notes for debate on the National Crime Authority legislation which will come on later in the week or perhaps next week, because he did not present one iota of evidence about this Government's performance in relation to the enormous problem of the drug trade in this country. Let me remind the honourable member for Boothby and all other honourable members opposite of the reports of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union, the Williams Royal Commission of Inquiry into Drugs and the Stewart Royal Commission of Inquiry into Drug Trafficking. The commissions produced volumes which were an indictment of the previous Government's performance in its attack on crime, because all these inquiries showed that under the seven years of the Fraser-Anthony coalition Government a volcano of crime was building up in this country. We have been in government for slightly over a year, yet honourable members opposite have come into the House and said that the Australian Labor Party is not serious about fighting crime. It is bad enough that they infer it, but the honourable member for Boothby spoke without one shred of evidence to substantiate the claims he was making. He will have plenty of opportunity to speak on the National Crime Authority. I hope he gets a new speech writer so that he can say something relevant to the topic before the House. The honourable member for Boothby made an accusation that a very major section of the Labor Party, probably some thousands of people in New South Wales, are gathering together to bring influence to bear to bring the Costigan Royal Commission to an end. It was the desire of the Fraser Government that the Costigan Commission should come to an end. When Malcolm Fraser was here it was decided that Costigan would finish. When we came to power discussions were held with Commissioner Costigan, and the National Crime Authority Bill was introduced into the Senate by the Attorney-General (Senator Gareth Evans). The Senate decided that the Senate Standing Committee on Constitutional and Legal Affairs should look at the legislation, which it took several months to do. After the Committee had completed its report, we called the States together, because there has to be a co-operative effort in fighting crime in this country. It was not just New South Wales which made suggestions about amendments to the National Crime Authority Bill and it was not just the politicians from the various States . Many very eminent people in the field of law said that the Senate Committee's recommendations ought to be altered. The States of Queensland and Tasmania also said that some sections of the Committee's report on the National Crimes Authority Bill had to be altered if we wanted their co-operation. I can assure honourable members opposite-the honourable member for Bass (Mr Newman) will know this as a former police Minister-that it is absolutely essential to get the co-operation of the States if we are to do anything constructive in fighting crime in this country. But the honourable member for Boothby says: 'Oh, no, some large section of the Party is all to blame for this'. The poor old honourable member for Boothby is too young to be senile but he does attract such an accusation when he starts talking about what Don Dunstan did with the Special Branch of the South Australian police. God knows what that has to do with our last 15 months of administration here in Canberra, and I would be surprised to know. Perhaps the honourable member for Boothby, who was one of the most extreme right wing Premiers this country ever saw, could tell us what he used to do with the Special Branch in South Australia, because to my knowledge the Special Branch is not involved in drug investigations. I would be very interested to know the way in which he used the Special Branch in South Australia when he was Premier. That is something he does not seem to have learnt . The honourable member made accusations against the Cain Government, just straight off the top of his head, with no evidence and with nothing to substantiate the charges. But it is a Labor Government; so he said: 'Let me say something about it'. He did not deal with the Bjelke-Petersen Government or the Gray Government, which have been involved in all these discussions. He believes that one can kick a government only if it is a Labor government. The honourable member said that we allowed the grannies to go home. It is true that the families of those two ladies who were involved in drug charges made a plea to Australia that on humanitarian grounds they should be allowed to go home , and after some years the Government agreed. Let me remind the honourable member for Boothby that two immigration Ministers in the last couple of years of the previous Government's administration decided to deport an offender accused of drug related offences in this country and a third immigration Minister reversed their decision. Those sorts of things do happen in government. Am I to stand here and lay the charge that the third immigration Minister in the Fraser Government was corrupt or must have got money to change the decision of the earlier two? Of course not. It makes these things sound stupid. The honourable member then said that the Age exposed the involvement of a Minister in New South Wales. I cannot see any relevance to what the Age said happened in New South Wales in relation to that Minister. Let me give the House some information on what is going on in this country in relation to the drug trade. There it is for everybody in Australia to see. Those reports were not written under the administration of this Government. They are reports, containing thousands and thousands of pages, showing what was happening in Australia while the Fraser Government was in power: Who was manipulating; who was carrying out the crime; what was going on; how the drugs were getting into Australia; and what was not being done by the Government. The Costigan Royal Commission was not set up to chase drug offenders. It was set up by the Fraser Government because it thought it might be able to pin a trade union, and it was embarrassed and was not able to hold the 1982 election because the Costigan Royal Commission exposed the Liberal Party throughout this country for not carrying out the proper activities of government. The honourable member for Boothby says that the Government is not doing its job . What he really means is that the Australian Federal Police, the leading law enforcement authority in this country, is not carrying out its charter. That is the charge, because the Federal Police is ultimately in charge, not only leading but also co-operating with State police forces in carrying out this task. As the report of the Williams Royal Commission of Inquiry into Drugs said: The elimination of drug abuse in Australia is an unattainable goal. At best, society can hope to contain the problem. It is therefore necessary for governments to provide the best resources so that the agencies concerned with suppression of the drug trade are best equipped to meet this important task. When we came to government last year we were presented with a number of issues surrounding the drug trade and the web of organised crime in which it is entangled. We had the report of the Royal Commission of Inquiry into Drug Trafficking, headed by Justice Don Stewart. This report contained a number of recommendations and we set about implementing them. On a basic level, let us look at what has been done for the Australian Federal Police , the front line of the nation's fight against the drug trade. In our first Budget we increased funding to the AFP by $4m over the previous year. The bulk of this amount provided additional police. The Australian Federal Police is the group concerned with suppression of the drug trade. It has the staff on the ground. It does the hard work of intelligence gathering. It does the sometimes lonely and dangerous work of surveillance and infiltration. When the Opposition says that the Government has failed somehow to take adequate action to suppress the drug trade, it is saying in effect that the Australian Federal Police is failing in its charter, especially as the Australian Federal Police has not once complained to the Government about the lack of resources being given to it by this Government. When we look at the results of the activities of the AFP, working with Customs services and State authorities during the last 12 months, we see a picture which does not reflect a police force stripped of resources. Last Friday I gave details of major drug seizures in the past 12 months. I will repeat those figures: In June last year 35 kilos of heroin were seized and, as a result, a person was sentenced to 18 years in prison. In August a person was apprehended after 27 kilos of heroin were seized. In December, as the result of 70 kilos of cannabis resin being seized, two persons were apprehended. Over the New Year period 23 kilos of heroin were seized, although the offenders have yet to be identified. January of this year saw two persons apprehended after 264 kilos of cannabis resin were seized. Over the period February to March 2.2 tonnes of cannabis resin were seized and three people were apprehended. There were 28 kilos of heroin seized in April and six persons apprehended. Just last month two tonnes of cannabis resin were seized and, although no one has yet been apprehended, inquiries are continuing. Yesterday, following a number of reports in the Press and on the broadcast media, the honourable member for Boothby asked me about seizures of cocaine. Mr Coleman —What about cocaine? Mr YOUNG —Hang on. This is the first time I have seen the honourable member for Wentworth awake in 12 months. The details are: In 1982, 8,900 grams of cocaine were seized. There were 19 seizures in that period and 19 persons were apprehended. In 1983, 36 persons were apprehended from 34 seizures, which accounted for 8,700 grams of cocaine. This year in the months to April 3,700 grams of cocaine have been seized, which represents 11 seizures and accounts for the apprehension of 11 persons. These figures, I point out, relate to Federal agencies. There have also been significant seizures by State authorities, particularly in New South Wales. New South Wales police report that there has been a significant increase in the use of cocaine, reflected in the amount those authorities are coming across. Several police forces, however, report that there is alleged to be a greater street availability of cocaine in Australia. Police also inform the Government that a significant fact about the cocaine trade in Australia is that recent seizures have turned up drugs of high purity. Police intelligence suggests that the drug is being imported directly from South America. One of the problems associated with cocaine of which this House should take note is that the people who predominantly seem to be using it are not the type of people who naturally come into contact with the police. This aspect of cocaine use means that the detection of use is all the more difficult. This difficulty aside, the police forces of Australia are well aware of the increased popularity of cocaine use and the House can be assured that this problem is being addressed with determination. I do not intend to get into the debate about whether there might be a cocaine smuggling and distribution ring operating on the coast of Queensland. As I told the House last Friday, it has never been the practice of governments to start public discussions about sensitive and ongoing operational matters in which Federal Police authorities may or may not be involved. If the Opposition wishes to jeopardise the success of any operations aimed at suppressing drug trading and organised crime in Australia by reckless statements, that is something it will have to live with; but the people of Australia can rest assured that this Government will always put first the protection of Australians, especially the young, from the tragedy of drug abuse and will never be tempted to use this extremely important and delicate matter for point scoring. The House should be aware, however, that the Government is vitally aware of the potential problems which the northern coastline presents in terms of drug trafficking. While I do not intend to canvass the details of any operations, I can inform the House that the Australian Federal Police and the Queensland Police are co-operating closely in regard to that State. The Stewart Royal Commission addressed this problem in its fifth recommendation when it suggested the establishment of a joint task force to operate in and on the north Queensland coast to investigate drug smuggling, illegal fauna trade and illegal immigration rackets that might be occurring there. The Government is addressing itself to that problem. Another major measure this Government has taken in an attempt to check potential drug trafficking along the vast northern coastline is to carry out a comprehensive review of coastal surveillance. In 1979 the Williams Royal Commission of Inquiry into Drugs had this to say: . . . the present effort in respect of coastal surveillance as to drugs is inadequate and misdirected. The majority of detections have been fortuitous or as a consequence of a source of information unrelated to coastal surveillance. That was five years ago. We have already made a statement in the House about the change in authorities in relation to coastal surveillance. Coastal surveillance will now come under the charter of the Australian Federal Police. Units will be set up in north Queensland, the north of Western Australia and Darwin, directed primarily at the entry of drugs into this country. The Coastal Protection Unit will play an increasingly important part in the fight against drug trafficking, especially as police and Customs personnel become more effective in closing off the more traditional and widely used points of entry for illegal drugs. One aspect of drug importation which has been referred to repeatedly in reports to governments is the use of containers. As a result of these problems raised by royal commissions, this Government, in concert with the New South Wales Government, established a joint task force to inquire into the security of wharves and containers. Mr Newman —The last Government did that. Mr YOUNG —Certainly we were involved in the decision when we came into power. I accept that. That task force is now preparing its report and we should have the result of its 12 months of work by the end of this month. Of course, drug trafficking in Australia is not an occupation that criminals pursue in isolation . As I said earlier, it is part of a web of organised crime. Commissioner Costigan neatly summed up what organised crime is when he said in his Sir John Barry Memorial Lecture of October last year: The first thing to remember is that the organisation is directed towards the accumulation of money and with it power. The accumulation of money does come about from trafficking in drugs. There are vast profits to be made; but organised crime interlocks itself with other nefarious activities. It is inevitably intertwined with illegal gambling, tax avoidance, major theft and, as the Stewart Royal Commission so graphically illustrated, murder and violence. It is therefore necessary for a government to have investigatory arms which, as Commissioner Costigan said, can trace the money trail. Commissioner Costigan has done excellent work in tracing money trails and this Government has given him its full support. We increased the number of people working for him from 69 to 120. We increased his funding from $2.9m to $6.3m. This Government has done more in a year than the Fraser Government did in seven years. Honourable members should look at these volumes, because all that is written in them is an indictment of seven years of Fraser. For all the crooks that honourable members opposite say may be in the Labor Party, the only people caught as a result of these inquiries were members of the Liberal Party. They are the people who have filled the gaols as a result of Costigan, Stewart and Williams. Because honourable members opposite did nothing about it we have to overcome these problems. Just as with the economy, unemployment and everything else, those opposite refused to do anything when they were in power for seven years. They ought to be better prepared on a subject like this when they bring such a debate into the House. Madam DEPUTY SPEAKER(Mrs Child) —Order! The Minister's time has expired. Mr COLEMAN(Wentworth)(4.30) —It is of some concern to note that when the Special Minister of State (Mr Young) was ranting about the investigations into the Noosa, Queensland cocaine ring he gave no assurance, although he had been asked to give the assurance, that when Commissioner Costigan finishes his inquiry the prosecution will continue, that the seizure of piffling amounts of cocaine will not be the end of the matter and that there will be adequate financing of the investigations of the rackets there. Plainly, by all reports, the police are inadequately financed since it is a pretty expensive matter to investigate crime and drug trafficking of that kind. The Minister may rant as he did but he has not come to the heart of the matter. He avoided the key questions and preferred to shout rather than to answer them. On the basic matter, it is necessary to have a very clear idea of how grave the drug problem and the drug threat are to Australia and how they are getting graver. Last year, at the conference of the Australian and New Zealand Association for the Advancement of Science, Mr Justice Moffitt, President of the New South Wales Court of Appeal and a judge who has investigated organised crime in New South Wales-the first major inquiry set up by the Liberal Government there-had this to say about organised crime of which the drug trade is a part: While there is an increasing public awareness of the operation of organised crime and its significance, the public generally and many people in responsible positions are not aware, in any true sense, of how serious it is and how serious a threat it poses. Even some dealing with some aspects of crime, probably have the naivety I had prior to 1973. The year 1973 was the year of Mr Justice Moffitt's inquiry into organised crime. He went on to say: Unless there is public and political awareness of the true depths of organised crime and its significance to us all, and unless in consequence prompt and maximum measures are taken to control it, it is highly likely that it will be impossible to contain it. Time is short. Five years, maybe less, could be too late to launch any effective defence against it. Its advances in the last 10 years in Australia have been enormous. We now have, as the judge implies, as a result of the inquiries, the royal commissions and media investigations-this is one area where the media must be praised for their work-a vast amount of evidence on the public record about organised crime ranging from tax evasion, bankruptcy, fraud and currency violations to illegal gambling, vice rackets and drug trafficking. I will confine my remarks to the drug trade which is the subject of this matter of public importance. The drug trade concerns particularly the people in my State since Sydney has long been the drug capital of Australia. It is now the centre from which heroin is distributed throughout Australia and a transhipment centre between Asia and the United States of America and Europe. Chief Superintendent Winchester of the Australian Federal Police said that if the Bureau of Narcotics seized a couple of kilograms of heroin in 1980 it was considered a large seizure. Two years later the Federal Police seized over 100 kilograms. Between 1980 and 1982 they seized from 2 kilograms to 100 kilograms of heroin. Similar increases occur with other drugs and despite large seizures more drugs are entering the country. That is shown in drug related crimes. Police authorities state that there were 1,600 armed robberies in Sydney in 1982, 85 per cent of which were drug related. There were 13 drug related murders. For years New South Wales has had the worst record in combating crime. We all know that criminal corruption has a long reach in that State. Despite the fact that Donald Mackay of Griffith was murdered not long after the Labor Government came to office in New South Wales, that Government still treated the drug trade as of minor importance. In 1977 the Labor majority on a joint committee on drugs recommended decriminalising marihuana within a very short time after the murder of Donald Mackay. In keeping with this, the State Labor Government's early legislation-the poisons Act which covers drugs in New South Wales-insisted on minimum penalties, indeed among the lowest in Australia. Most recently we have seen the Premier, unconcerned about the contents of the Age tapes, determined to punish whoever made the tapes. The State Government created the position of Commissioner for Public Complaints about which the Sydney Morning Herald editorialised as follows: . . . the emphasis of the bill seems to be more on reducing the number of allegations- frightening people away from making allegations- than on detecting corruption among public officials. The Society of Labor Lawyers stated: The commissioner has no power to compel the person complained about to answer questions, produce documents or give explanations for conduct. But the Commissioner has all these powers as well as the powers of a royal commissioner to interrogate the complainant. We recognise that the Commonwealth must move into this area when the State governments will not, or cannot, do the job. Certainly in New South Wales the State Government has for years been in what amounts to a state of war with the best part of the police force. It is because of this that the Fraser Government proposed a special and new Commonwealth crimes commission. The Labor Government concedes that there must be a crimes commission otherwise it would not be proceeding with the National Crime Authority; but it has produced a typical Hawke Government face saver, a cosmetic authority, an authority without teeth, without the authority to investigate crime on its own initiative and subject on all sides to restrictions. We have an Attorney-General who is grossly lenient, a Special Minister of State who is uninterested in the question and a government that is uninterested in the question. Of course we all know that a Federal government must move carefully in the area of crime because of Commonwealth and State considerations. But so great is the issue that it is necessary to move in a meaningful way. A government with the will will find solutions-indeed the present Attorney-General (Senator Gareth Evans) stated this when he was in Opposition-to the Commonwealth-State problems. However, this Government, normally so hostile to the States, has suddenly become rigidly federalistic on the question of the Crime Authority, so much so that it will even prevent one State referring a matter to the proposed Crime Authority if another State objects, which is an extraordinary state of affairs. The Government is proposing to weaken, rather than strengthen, law enforcement in Australia and that will be the consequence of the proposed Crime Authority. The Fraser Government's Crimes Commission was set up to strengthen law enforcement and to combat the drug trade and other forms of organised crime. However, we now have a crime authority which will weaken law enforcement-an extraordinary result but an indication of the lack of seriousness with which the Government regards this question. Why, as the honourable member for Boothby (Mr Steele Hall) asked? A writer, described as a leading criminal lawyer, recently wrote in the Melbourne Age in these terms: A crime authority would, necessarily, be heavily involved in investigations in NSW. Sydney has a record far surpassing any other city in Australia for allegations concerning organised crime. It is the most sensitive city for the ALP. The work of the crime authority may well prove more embarrassing in that city to the ALP than in any other place in Australia. This must certainly be a large part of the answer to the questions why the Government wants a toothless crime authority and why it is rejecting completely the former Government's Crimes Commission, which it had at first supported and which the Prime Minister (Mr Hawke) said would be proclaimed with reasonable speed, only suddenly to decide, after further consideration, to convert it into the weakened and toothless Crime Authority that is now proposed. It will weaken, rather than strengthen, law enforcement in Australia. I support the matter of public importance; the Government is to be condemned. Mr DUFFY(Holt-Minister for Communications)(4.39) —I think in starting I ought to remind the House of what the matter of public importance before us is. It is: The failure of the Government to take adequate action to suppress the drug trade. This is a matter which has been almost totally avoided by those opposite because they do not have one bit of evidence to support that outrageous claim. The fact is that this is another classic example of honourable members opposite coming in here and preaching to people about what should be done and what the Government ought to be doing. As was indicated by the Special Minister of State (Mr Young), the record of the former Government during its period in office is absolutely disgraceful. I shall deal with the matters raised by the Opposition to date. It started off with the proposed National Crime Authority. As was indicated by my colleague earlier, the National Crime Authority legislation will be debated in this chamber later this week or next week. At present it is before the Senate. There has been an exhaustive process of consultation and debate. If the National Crime Authority is to work, it is absolutely necessary that such consultation and debate take place. The Crime Authority will represent a departure from traditional Australian techniques of criminal investigation. It is a very big step and it needs the sort of consideration we have given it. Co-operation with the States is absolutely essential. It is all right for those opposite to talk about States rights and co-operation with the States when it suits them. The honourable member for Wentworth (Mr Coleman) indicated that the Government had become rigid about this matter and had been considering the rights of the States. The position is that, if we do not, the National Crime Authority will not work effectively. It is about time that the facts in relation to this matter were understood by those opposite. It was suggested that under the Bill currently before the Senate the National Crime Authority will not be able to work effectively. Let us consider the area of drugs. The Authority established under that Bill will have ample power to deal with the importation of drugs into Australia. Drug offences are specifically referred to in the Bill and in the amendments circulated by the Government in response to the report of the Senate Standing Committee on Constitutional and Legal Affairs. Mr Steele Hall —You know that if the States do not want it to happen it will not happen. Mr DUFFY —Occasionally it would not be a bad idea if the honourable member for Boothby listened. In view of the appalling ignorance he displayed here today it would be a good idea if he just kept quiet and listened. I am about to deal with the matter raised in his interjection. The amendments make it perfectly clear that the failure by one State to join in a reference to the Authority does not affect that reference except in relation to offences against the laws of that State. There is nothing to prevent the Authority from investigating Commonwealth offences such as drug importation within any State. It is, therefore, not true to suggest that that will stop the investigation of drug importation within any State. It is about time the honourable member understood that position. Honourable members opposite should look at the aim of the National Crime Authority. Its aim-I would have hoped that all honourable members opposite would have agreed with it-is to investigate effectively the kinds of organised crime which conventional law enforcement methods have proved incapable of eradicating. We have had plenty of proof that conventional methods are incapable of eradicating such crime. As indicated by my colleague the Special Minister of State, the Williams Royal Commission of Inquiry into Drugs, the Stewart Royal Commission of Inquiry into Drug Trafficking and the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union are the greatest indictment of any government in the history of this country. The former Government did not want to do anything about organised crime or could not do anything about it-or a combination of both. The fact is that that is what this is all about. It is absolutely massive, breathtaking hypocrisy for the Opposition even to raise this issue today when one considers its past performance. No government has been able to eradicate organised crime without a national crime authority. That is agreed. Then what happens? The principal aim then goes further. The evidence for subsequent prosecutions has to be assembled. It is not much good having heaps and heaps of paper if one does not go ahead with prosecutions. Mr Steele Hall —You will not assemble much. You are closing up Costigan. Admit it. Mr DUFFY —The Opposition knows all about no prosecutions. According to the Costigan Commission, the bottom of the harbour schemes surfaced in 1973, yet the Opposition did not launch one prosecution although it was in government until 1983. That is not a bad performance! I will come back to the point the honourable member for Boothby kept raising-the support and participation of State governments. It is absolutely essential to have their support and participation. Most drug-related offences are State offences. The Opposition had better start understanding that. The Commonwealth can have no role in regard to such offences except with the permission of the States. Drug importation only is a Federal offence. Trafficking is a State offence. That fact alone makes the State governments' participation in the National Crime Authority absolutely essential. The Opposition talked about the National Crime Authority as being 'this great toothless tiger'. The Bill will do exactly what it has to do to make a crime authority work. In addition to the matters I have been through earlier today, I mention that the Authority will have access to taxation records, recommended by Costigan and Redlich as a very useful investigation tool. Access to taxation records will be available to the National Crime Authority under the provisions of the Bill. In regard to the oversight of the Crime Authority, there will be detailed annual reports and regular judicial audit. The Authority also will be subject to oversight by an ombudsman. I return to the subject of the matter of public importance. It has been necessary, in fact, to debate the National Crime Authority, which has nothing to do with what the Opposition supposedly was on about. The Opposition has a habit of coming in here and making accusations against State governments, particularly in regard to any semblance of Labor association with them. The Opposition mentioned New South Wales and Victoria. This problem was not raised by only New South Wales and Victoria. The honourable member for Denison (Mr Hodgman) knows well that Tasmania also expressed its concern, as did Queensland; in fact all of the State governments. The evidence against the claim inherent in the matter of public importance that the Opposition has put forward-pathetic thing that it is- is that in 14 months this Government has taken more steps against drug- associated crime than the Opposition took in its whole period of office. Opposition members interjecting- Mr DUFFY —Opposition members do not like it when they have to listen to a few facts instead of all the rubbish they go on with. The fact is that there has been an increase in personnel for the Australian Federal Police. The Opposition knows of the criticism of the lack of resources of the Australian Federal Police during the period it was in office. A bipartisan joint parliamentary committee on which the Opposition had the numbers drew attention to that specific point during its medifraud inquiry. The necessary management review of the Australian Federal Police has already been carried out. The office of a second Deputy Commissioner of the AFP with specific responsibility for better Australia-wide co-ordination of Australian Federal Police activities has been established. The proposal to establish a national crime authority is now well underway. We have just dealt with that subject. The Opposition wanted to debate it because it had nothing to say on the real issue. As I indicated earlier, the evidence indicting the former Government for its passive indolence regarding drugs is massive. That is about the best one could say for it. Honourable members should look at the Williams, Stewart and Costigan royal commissions. We know that the drug trade is notoriously difficult to eradicate. But, of course, most of the investigative and policing functions must be carried out by State police forces. That is something the Opposition does not seem to understand. The Commonwealth has a limited role in co-ordination. Those comments do not apply, of course, to drug importation, which is a Federal offence and which I dealt with earlier. For those reasons, the successes achieved by Federal agencies will always be qualified and will be partial successes only. The Special Minister of State went through what we have done. He dealt with the recent drug seizures between June 1983 and May 1984. He dealt with coastal surveillance and the fact that on 30 March it was announced that a coastal protection unit had been established within the AFP. Did that not ever occur to the Opposition? Why did it not do something about that if it was serious about the matter? It was left until 30 March for this Special Minister of State to make that essential announcement. Is the Opposition serious about this matter? The cheap nature of the Opposition's attack today indicates that all it wants to do is to eradicate from the public mind its own shabby and shameful record in this whole area. That is the best way it could be described. The Opposition has a readiness to sensationalise and distort the issues behind a complex, urgent, legal and human crisis in this country because it thinks that by doing so it may be able to obtain some miserable party advantage and eradicate from people's minds how hopeless it was. The Opposition has a contemptible desire to inflame and exacerbate political hatreds and bitterness. Honourable members opposite love to divide the Australian community against itself by their disgraceful assertion that somehow this present Government has some sympathy with drug pushers. The public turned its back on this worthless, hate mongering sort of attitude when we were elected to government. Madam DEPUTY SPEAKER(Mrs Darling) —Order! The Minister's time has expired. Mr NEWMAN(Bass) —I wish to make a personal explanation. Madam DEPUTY SPEAKER —Does the honourable member claim to have been misrepresented? Mr NEWMAN —Yes, I do. During the debate the Minister for Communications (Mr Duffy) accused the last Government, of which I was the relevant Minister, of being responsible for a massive delinquency for allegedly doing nothing about the drug problems in Australia. I do not want to take up the time of the House, but I would just make this point: In the speeches that were made today certain things were claimed to have been initiatives of this Government; for example, the inquiry into the container position-- Madam DEPUTY SPEAKER —Order! I ask the honourable member to state how he has personally been misrepresented. Mr NEWMAN —That is exactly what I am doing. Government speakers said that we had been responsible for a massive delinquency and did nothing. I am putting-- Madam DEPUTY SPEAKER —Order! It can be only a personal explanation regarding the honourable member, not the entire Opposition. Mr NEWMAN —It was against me; I was the Minister. It was directed at nobody else except me. As I was saying, three initiatives were claimed by the Government: Firstly, that there was an inquiry into containers and the problems that they presented in the importation of drugs. That was initiated by the last Government , by me, in consultation with the Minister responsible in New South Wales. Secondly, it was claimed that a joint task force was formed in northern Queensland to look at the problems of the importation of drugs. That joint task force, or the origins of it, was started by me with the Minister responsible in Queensland, Mr Hinze. Thirdly, there was a claim that a massive amount of money was given to increase the establishment of the Australian Federal Police. It now has a new establishment of, I think, 250 officers. That was also initiated by the last Government. As the Special Minister of State (Mr Young) knows, that also was well in place when he assumed his portfolio. I could detail a number of other initiatives, but I just make those points to show how ignorant the Minister for Communications was in what he was talking about. He certainly maligned me in a most malicious and unjust way. Madam DEPUTY SPEAKER —Order! The honourable member has come to the end of his personal explanation. Mr CADMAN(Mitchell)(4.55) —I move: That so much of the Standing Orders be suspended as would prevent the honourable member for Mitchell moving the disallowance of the Ordinance and Regulations specified in notices of motion Nos 491, 492 and 493, general business, of yesterday's Notice Paper. The Government, and every one of its members last night, voted in support of importing and distributing hard core pornography. Motion (by Mr Young) put: That the honourable member for Mitchell be not further heard. The House divided. (Madam Deputy Speaker-Mrs E. E. Darling) Ayes . . . . . . . . . . . 63 Noes . . . . . . . . . . . 42 —— Majority . . . . . . . . . 21 —— 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.Blewett, N. Kerin, J. C.Brown, John Klugman, R. E.Brown, Robert Lindsay, E. J.Brumby, J. M. McHugh, J.Charles, D. E. McLeay, LeoCharlesworth, R. I. Maher, M. J.Child, J. Mayer, H.Cohen, B. Milton, P.Cross, M. D. Morris, AllanDawkins, J. S. Morris, PeterDuffy, M. J. Morrison, W. L.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. Scott, J. L. (Teller)Gayler, J. Simmons, D. W.Gear, G. 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. Young, M. J.Jacobi, R. Adermann, A. E. Howard, J. W.Andrew, J. N. Hunt, R. J. D.Blunt, C. W. Lloyd, B.Burr, M. A. Lusher, S. A.Cadman, A. G. McArthur, F. S.Cameron, Donald McGauran, P. J.Cameron, Ewen (Teller) MacKellar, M. J. R.Cameron, Ian Macphee, I. M.Carlton, J. J. Millar, P. C.Coleman, W. P. Moore, J. C.Connolly, D. M. Newman, K. E.Cowan, D. B. O'Keefe, F. L.Drummond, P. H. Porter, J. R.Edwards, Harry Robinson, IanFife, W. C. Rocher, A. C.Fisher, P. S. Ruddock, P. M.Groom, R. J. Shipton, R. F.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. Cunningham, B. T. Aldred, K. J.Mountford, J. G. Braithwaite, R. A.Chynoweth, R. L. Katter, R. C.Bowen, Lionel Dobie, J. D. M. Question so resolved in the affirmative. Madam DEPUTY SPEAKER —Is there a seconder to the motion? Mr McGAURAN(Gippsland)(5.00) —Yes, I second the motion. This Government is washing its hands of one of the most important issues to come before this Parliament. Motion (by Mr Young) put: That the honourable member for Gippsland be not further heard. The House divided. (Madam Deputy Speaker-Mrs E. E. Darling) Ayes . . . . . . . . . . . 63 Noes . . . . . . . . . . . 44 —— Majority . . . . . . . . . 19 —— 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.Blewett, N. Kerin, J. C.Brown, John Klugman, R. E.Brown, Robert Lindsay, E. J.Brumby, J. M. McHugh, J.Charles, D. E. McLeay, LeoCharlesworth, R. I. Maher, M. J.Child, J. Mayer, H.Cohen, B. Milton, P.Cross, M. D. Morris, AllanDawkins, J. S. Morris, PeterDuffy, M. J. Morrison, W. L.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. Scott, J. L. (Teller)Gayler, J. Simmons, D. W.Gear, G. 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. Young, M. J.Jacobi, R. Adermann, A. E. Howard, J. W.Andrew, J. N. Hunt, R. J. D.Blunt, C. W. Lloyd, B.Burr, M. A. Lusher, S. A.Cadman, A. G. McArthur, F. S.Cameron, Donald McGauran, P. J.Cameron, Ewen (Teller) MacKellar, M. J. R.Cameron, Ian McVeigh, D. T.Carlton, J. J. Macphee, I. M.Coleman, W. P. Millar, P. C.Connolly, D. M. Moore, J. C.Cowan, D. B. Newman, K. E.Drummond, P. H. O'Keefe, F. L.Edwards, Harry Porter, J. R.Fife, W. C. Robinson, IanFisher, P. S. Rocher, A. C.Goodluck, B. J. Ruddock, P. M.Groom, R. J. Shipton, R. F.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. Cunningham, B. T. Aldred, K. J.Mountford, J. G. Braithwaite, R. A.Chynoweth, R. L. Katter, R. C.Bowen, Lionel Dobie, J. D. M. Question so resolved in the affirmative. Mr Newman —Madam Deputy Speaker, at 2 o'clock this morning approval was given to the most depraved, cruel and monstrous-- Madam DEPUTY SPEAKER(Mrs Darling) —Order! The honourable member has not been given the call. Mr Newman —publications ever to be on video tape-- Madam DEPUTY SPEAKER —Order! The honourable member for Bass will please be seated. He has not been given the call. Motion (by Mr Young) put: That the question be now put. The House divided. (Madam Deputy Speaker-Mrs E. E. Darling) Ayes . . . . . . . . . . . 63 Noes . . . . . . . . . . . 44 —— Majority . . . . . . . . . 19 —— 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.Blewett, N. Kerin, J. C.Brown, John Klugman, R. E.Brown, Robert Lindsay, E. J.Brumby, J. M. McHugh, J.Charles, D. E. McLeay, LeoCharlesworth, R. I. Maher, M. J.Child, J. Mayer, H.Cohen, B. Milton, P.Cross, M. D. Morris, AllanDawkins, J. S. Morris, PeterDuffy, M. J. Morrison, W. L.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. Scott, J. L. (Teller)Gayler, J. Simmons, D. W.Gear, G. 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. Young, M. J.Jacobi, R. Adermann, A. E. Howard, J. W.Andrew, J. N. Hunt, R. J. D.Blunt, C. W. Lloyd, B.Burr, M. A. Lusher, S. A.Cadman, A. G. McArthur, F. S.Cameron, Donald McGauran, P. J.Cameron, Ewen (Teller) MacKellar, M. J. R.Cameron, Ian McVeigh, D. T.Carlton, J. J. Macphee, I. M.Coleman, W. P. Millar, P. C.Connolly, D. M. Moore, J. C.Cowan, D. B. Newman, K. E.Drummond, P. H. O'Keefe, F. L.Edwards, Harry Porter, J. R.Fife, W. C. Robinson, IanFisher, P. S. Rocher, A. C.Goodluck, B. J. Ruddock, P. M.Groom, R. J. Shipton, R. F.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. Cunningham, B. T. Aldred, K. J.Mountford, J. G. Braithwaite, R. A.Chynoweth, R. L. Katter, R. C.Bowen, Lionel Dobie, J. D. M. Question so resolved in the affirmative. Original question put: That the motion (Mr Cadman's) be agreed to. The House divided. (Madam Deputy Speaker-Mrs E. E. Darling) Ayes . . . . . . . . . . . 44 Noes . . . . . . . . . . . 63 —— Majority . . . . . . . . . 19 —— Adermann, A. E. Howard, J. W.Andrew, J. N. Hunt, R. J. D.Blunt, C. W. Lloyd, B.Burr, M. A. Lusher, S. A.Cadman, A. G. McArthur, F. S.Cameron, Donald McGauran, P. J.Cameron, Ewen (Teller) MacKellar, M. J. R.Cameron, Ian McVeigh, D. T.Carlton, J. J. Macphee, I. M.Coleman, W. P. Millar, P. C.Connolly, D. M. Moore, J. C.Cowan, D. B. Newman, K. E.Drummond, P. H. O'Keefe, F. L.Edwards, Harry Porter, J. R.Fife, W. C. Robinson, IanFisher, P. S. Rocher, A. C.Goodluck, B. J. Ruddock, P. M.Groom, R. J. Shipton, R. F.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. 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.Blewett, N. Kerin, J. C.Brown, John Klugman, R. E.Brown, Robert Lindsay, E. J.Brumby, J. M. McHugh, J.Charles, D. E. McLeay, LeoCharlesworth, R. I. Maher, M. J.Child, J. Mayer, H.Cohen, B. Milton, P.Cross, M. D. Morris, AllanDawkins, J. S. Morris, PeterDuffy, M. J. Morrison, W. L.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. Scott, J. L. (Teller)Gayler, J. Simmons, D. W.Gear, G. 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. Young, M. J.Jacobi, R. Aldred, K. J. Cunningham, B. T.Braithwaite, R. A. Mountford, J. G.Katter, R. C. Chynoweth, R. L.Dobie, J. D. M. Bowen, Lionel Question so resolved in the negative. Mr FIFE(Farrer) —On behalf of the Parliamentary Standing Committee on Public Works and in accordance with the provisions of the Public Works Committee Act 1969, I present the thirteenth report relating to the following proposed work: Construction of accommodation for the Australian Broadcasting Corporation ( Stage 1), Hobart, Tasmania. Mr HODGMAN(Denison) —by leave-This project comes before the Parliament with the support of both sides of the House. I firstly compliment the Standing Committee on Public Works and all who worked so effectively and efficiently to conduct the hearings to enable the report to be brought into the Parliament before we break for the winter recess. It is an extremely important project, a $7.7m project. I wish to refer to only two aspects of the Committee's report in congratulating it on the findings that it has made. The first is the question of timing. I refer specifically to paragraph 43 on page 11 of the report. I urge the Government to move the necessary expediency motion so that work can commence on this major project in the financial year 1984-85. Documentation can proceed and work should commence. One hopes that it will commence by November at the latest. Secondly, I refer to the Committee's recommendations in paragraph 44 that the Government move on with stage 2, which is television, making the total project a $20m project for the Australian Broadcasting Corporation headquarters in Hobart, as soon as possible and at the very latest at the end of completion of stage 1. I hope that the Government, across party lines, will recognise the importance of the Committee's report and the importance of this project to Hobart and to the Australian Broadcasting Corporation. I thank the Special Minister of State ( Mr Young) for giving me two minutes in which to speak on this very important matter. [COGNATE BILL: INCOME TAX (COMPANIES, CORPORATE UNIT TRUSTS AND SUPERANNUATION FUNDS) AMENDMENT BILL 1984] Debate resumed from 30 May, on motion by Mr Hurford: That the Bill be now read a second time. Mr YOUNG(Port Adelaide-Special Minister of State) —Madam Deputy Speaker, may I have your indulgence to suggest that the House have a general debate covering this Bill and the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Bill 1984, 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 Darling) —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. Motion (by Mr Young)-by leave-agreed to: That so much of the Standing Orders be suspended as would prevent the Deputy Leader of the Opposition from speaking for a period not exceeding 42 minutes. (Quorum formed) Mr HOWARD(Bennelong)(5.25) —The Income Tax Assessment Amendment Bill (No.3) is without doubt the most important taxation measure that this Government has introduced. I welcome this opportunity of presenting the views of the Opposition on what is not only the most important taxation measure that the Hawke Government has introduced but also without question the most complicated taxation measure that this Government has so far presented to this Parliament. This legislation effects the unpopular, unwelcome, unpromised and unheralded increase in the level of taxation on lump sum superannuation payments. After more than 13 months the Parliament has finally received this legislation. Finally we are being given the opportunity of debating a piece of legislation that will directly and indirectly affect about 1,800,000 Australians and their families. Let no honourable member who sits opposite in the ranks of the Government do other than treat this legislation with the utmost seriousness. I say to the Government that this legislation will bite very deeply into the feelings of hundreds of thousands of Australian people. We are not dealing here with a tax increase on the wealthy, a tax slug on the tall poppies, a small elite of the Australian population who will be affected by this measure; we are dealing with literally hundreds of thousands of Australian battlers who will find that their lump sum payment, that nest egg at the end of a long working life, which has become so much a part of the Australian psyche, is in a very unwelcome way to be subject to a much higher level of taxation. One of the big mistakes that the Hawke Government and, in particular, the Prime Minister (Mr Hawke) have made about this legislation is to imagine that it will hit the wealthy supporters of the Liberal and National parties. It was no doubt conceived by the Government and sold to the Government by its advisers on that basis. I can just imagine the Cabinet meeting at which this decision was taken. The Prime Minister would have been told: 'Don't worry, Bob; it will only hit the Opposition's supporters; it will only hit the tall poppies who always vote for the Liberal and National parties; it will not in any way affect the people who vote for the Australian Labor Party'. The truth of the matter is that this measure will affect many hundreds of thousands of Labor Party supporters and swinging voters throughout the length and breadth of Australia. If honourable members opposite want any proof of that I invite them to look at the statement made by the Minister for Finance (Mr Dawkins) almost 11 months ago when he was talking about the impact of the measure. He produced some figures which demonstrated that over 90 per cent of lump sum superannuation payments are for amounts of less than $30,000. In other words, over 90 per cent of people who take lump sum superannuation payments in Australia take amounts of less than $30,000. We are looking at literally hundreds of thousands of people who take a lump sum of $20,000 or $30,000. They use it to finally pay off the mortgage on their house-- Mr Hunt —Are they going to be taxed? Mr HOWARD —Yes, they will; all of them. They will be paying an increase in taxation on that lump sum. They use their lump sum to buy a holiday home, not on the Mornington Peninsula or in some of the more highly priced areas of Australia , but on the central coast of New South Wales, in electorates like the one represented by the honourable member for Robertson (Mr Cohen). He knows very well the enormous pensioner belt, the retiree belt, on the central coast of New South Wales. These people have worked hard in the industrial areas of Sydney all their lives. They take this modest lump sum, and they buy a holiday home; or they lend it to a daughter or a son so that the daughter or son may buy a first home; or they use it for a trip around the world; or they use it to buy a caravan. They do not use it for wealthy elite purposes. The overwhelming majority of the people who will be affected by this measure fall precisely into that category. So the first thing that must be said about this measure is that it is a tax slug on the middle and lower middle income earners of the Australian community. It is purely and simply a tax slug on middle and lower middle Australia. Let the Government understand that in both social and political terms . The legislation now before the Parliament is the most complicated taxation Bill that this Government has presented. The explanatory memorandum alone exceeds 120 pages. The Bill was introduced only last week, after more than 12 months of preparation-12 months of backing and filling, three back-downs, several more reversals, and false leads as to the final shape of the legislation. After all of that, we finally get the Bill, and what does the Government do? It invites this Parliament to pass the Bill without so much as a week's opportunity to look at it. I say firstly to the Government that it really is treating the process of serious legislative examination with total contempt to invite the Parliament to take a serious look at a Bill of this magnitude and complexity in such a short time. Before coming to the details of the Bill, I should like to say something about what this Bill says of the credit, integrity and honour of the Prime Minister. I remind the House of a few things that the Prime Minister said would not happen. I have in my hand an extract from the Australian Financial Review dated 18 April 1983, six weeks after the election of the Hawke Government and the present Prime Minister assuming office. So let us put aside for a moment all the phoney and discredited deficit arguments. Let us look at this statement by the Prime Minister when he had been the Prime Minister for six weeks. The heading of the story says: No rise in super tax-PM. The story says: The Prime Minister, Mr Hawke, has confirmed that there will be no increase in the tax rate for lump sum superannuation payments. There had been considerable speculation that the Government intended to increase the rate after deciding to restrict the level of superannuation payouts for federal politicians. A speech by the Minister for Social Security, Senator Grimes, to the National Economic Summit, in which he had referred to the tax advantages enjoyed by superannuation , only seemed to fuel the speculation. So what happened? The Prime Minister came charging in and he said: 'Don't worry, fellows, nothing will happen; I have command of the situation, and, as Prime Minister, I am telling you that we shall not do anything about this'. Mr Hunt —How could you believe his word again? Mr HOWARD —How could one, indeed. The Deputy Leader of the National Party invites an obvious question. This was six weeks after the election; six weeks after the Government was aware of the responsibilities ahead of it as the Government of this country. What the Prime Minister did on this occasion was to confirm the commitment that he had made before the election that there would be no alteration in this area. The article goes on to state: Mr Hawke had said on Friday that comments he had made some weeks ago about the review of existing expenditure and taxation- listen to this: had been given a currency they did not deserve. Can honourable members not just imagine, over the next few months, headline after headline, saying, 'No capital gains tax-PM', 'No extension of the assets test-PM', and 'No inclusion of the family home-PM'? Can they not just imagine that on issue after issue over the months ahead we shall be treated to the same kind of assurances? What will they be worth? They will be worth no more than that particular statement of the Prime Minister, made in the full knowledge of the facts, made without the protection of any phoney excuses that he has used to justify breaking election promises, and made deliberately and deceitfully to the people six weeks after he had become Prime Minister. Therefore, at the beginning of this debate, I say that in introducing this measure the Prime Minister has totally repudiated that very clear commitment that he made. It is no wonder that Mr Barry Unsworth, the former Secretary of the New South Wales Trades and Labour Council and now the Minister for Transport in the New South Wales Government, when asked by Richard Carleton during an interview back in May of last year 'What do you think of this tax on lump sum super?', said: 'I was appalled when I heard the Treasurer's speech'. Mr Hunt —He is honest. Mr HOWARD —Of course he is honest, and so are many other members of the Australian Council of Trade Unions. They know darned well that this measure will hit their members harder than any other section of the community. They know that the ordinary trade unionist taking a modest lump sum will really get it in the neck as a result of this measure. Mr Unsworth went on to say how totally appalled he was. At the beginning of this debate, therefore, I make it quite clear that in introducing this measure the Government is unaware of the breadth of its impact and unaware of the whirlwind of political opposition it will inherit as a result . The Government does this in clear and open breach of solemn undertakings that it gave both before and after the election, and they were given by the Prime Minister. As there has been a little speculation on this matter, I remind the House that during the 1980 election campaign I issued a statement on behalf of the former coalition Government saying that there would be no alteration in the taxation arrangements affecting lump sum superannuation payments during the lifetime of the subsequent Parliament. We stuck to our word on that subject. Despite advice on occasions that one of the options that the Fraser Government could have adopted was to increase the lump sum superannuation tax, we did not pick that option up. We stuck to the promise that we made during the 1980 election campaign. That is in stark contrast. This Bill will significantly reduce the value of accumulated lump sum payments to many hundreds of thousands of people. It is built upon the totally unsupportable proposition that in some way it is more virtuous, more correct and more desirable for people to take an annuity than it is for people to take a lump sum payment. I know that it is said in aid of the Government's case that we have an anomalous situation at present in that a person who takes his superannuation payment in the form of a lump sum and has to pay tax on only 5 per cent of the amount has an advantage over people who get a pension and who have to pay taxation on the full amount of that pension. There is no doubt that the present lump sum superannuation provisions are a very valuable and very attractive incentive. However, I want to examine for a moment the value of a system which encourages people to accumulate their capital . The Opposition believes that one of the great advantages of the present system is that it encourages people to accumulate capital. We believe that the accumulation of capital is a good thing, and not a bad thing. We believe that people should have the opportunity and the hope for something of a nest egg and something in the way of a lump sum to which to look forward when they retire, when they have an opportunity of deciding what they will do with it, when they can choose to invest it in any manner that they wish-to buy a small business or a small house, to invest it in shares, to lend it to their family, or to spend it on an overseas trip. Surely there is not something inherently sinful and wrong about a situation that allows many hundreds of thousands of ordinary modest income-earning Australians to have access to that kind of facility every year. Why is it that they now have to be told: 'Despite what you have done in the past and despite the expectation that has been built up, we, the Hawke Government, have decided that lump sums are bad for you and annuities are good for you'? That is really what this legislation is all about. It is not really valid for the Government to say: 'We are trying totally to even out the taxation treatment of lump sum superannuation payments and other forms of retirement income'. What this legislation does-the more one reads it, the more apparent it becomes-is to confer upon annuities enormous taxation advantages which do not exist at present. So the Government cannot say 'All we are doing is ironing out the tax inequity in the present position, all we are doing is taking the bugs out of the system and all we are doing is taking away the enormous advantage that is conferred on people who get lump sums', because in the same legislation it is conferring enormous advantages on people who take out annuities. It is very much a case of the Government saying: 'We have decided that lump sums are bad for you and annuities are good for you'. Of course there is a taxation advantage in taking a lump sum. There are enormous taxation advantages in owning a home in this country. But does that mean that we ought to have some kind of crazy notional rent tax for owning homes ? There are some instances in our tax system when it is part of the Australian way of life to have a bias towards a particular form of activity. Whilst I certainly think that there is a strong case for having more neutrality in the taxation system in many areas, if one carries neutrality of the taxation system to demented lengths one will end up with some very strange results. Some of the arguments that I have heard on this issue are examples of neutrality of the taxation system being carried to very demented lengths. Many individual aspects of the Bill will be dealt with by Opposition members during this debate and during the Committee stage. But one aspect of the Bill that has received very little attention-that is not surprising because we have only had the Bill for a week now-is the section relating to approved deposit funds. Under the legislation it will be possible for a person who draws a lump sum and who puts it in one of the approved deposit funds not to pay any tax on it at the higher rates-it will be tax free-while it remains in that approved deposit fund. This is an attempt by the Government to introduce in a halting way some concept of portability with regard to superannuation. To that extent I will not criticise it. But I want to direct my remarks to the very interesting agglomeration of institutions which are being given the right to take deposits. We find amongst them banks, insurance offices, co-operatives, building societies , credit unions, and trustee companies. We also find trade unions and employee organisations. That, of itself, would not-- Dr Theophanous —So what? Mr HOWARD —Hang on; do not get too excited or you will get into trouble. That of itself would not be objectionable if the rules of the game applying to trade unions were the same as the rules of the game applying to banks and building societies. But they are not, because in this legislation the Government is conferring upon the trade unions a privileged position so far as the taking of deposits is concerned. The Government is saying: 'You can take deposits in the same way as a bank or building society, but we will not put any prudential regulations on you'. It is saying: 'We will have prudential regulations on the banks. We will have some kinds of controls on building societies and co- operatives under the State legislation that governs their activities. For the first time in decades we will give the trade unions of this country access to enormous capital mobilisation through these deposit funds. But we will not impose upon them the prudential obligations that are imposed upon other deposit taking institutions in Australia'. It is little wonder that not much has been said about this aspect. One almost misses the reference to it as one reads the speech of the Minister for Housing and Construction and Minister Assisting the Treasurer (Mr Hurford). Almost as an afterthought he said: 'The Bill does not of itself impose any prudential requirements on the institutions that are authorised to take deposits. That will be dealt with by the charter of those institutions'. The snag is that the charter governing the behaviour of trade unions in this country says nothing about prudential requirements because it was never intended that trade unions would be deposit taking institutions. Mr Hunt —That is cunning. Mr HOWARD —Of course it is cunning. During the debate the Minister Assisting the Treasurer will be expected by the Opposition to reply to that point, because it represents the conferring of an enormous privilege upon trade unions to take these deposits. Under the present law not only does the Conciliation and Arbitration Act say nothing about asset ratios, gearing ratios or deposit taking of any kind-as do the Banking Act, the co-operative Acts of various States and the Life Insurance Act, which governs the activities of life insurance companies -but also trade unions do not even have an obligation to reveal their financial position, let alone any prudential safeguards. One can imagine the scope for blackmail that might exist in the hands of some trade unions to force members leaving one job to place their approved deposit funds with the trade union if they wish to remain in the trade union. The scope is quite obvious. I ask another question: If employee organisations and trade unions are included in this category, why is it that employer organisations have been excluded? Was this part of the deal that was made to try to dampen some of the trade union opposition to the measures contained in the Bill which will increase tax on lump sum superannuation payments? This is a further example of the privileged position being conferred upon the trade unions of this country by the Government . Not only do we have the spectre of the Government negotiating the shape of the next Budget with the Australian Council of Trade Unions; the next Budget may well be titled 'Cliff Dolan's first Budget' and not 'Paul Keating's second Budget'. It will indeed be Cliff Dolan's first Budget because at present the Treasurer (Mr Keating) is negotiating with the ACTU about the shape of the Budget. When we look through a piece of legislation such as this and we see the privilege conferred upon the unions in terms of taking deposits, it is no wonder that many people in the community will brand the coming Budget as 'Cliff Dolan's first Budget'. That is certainly how the Vice-President of the ACTU regards it because when he was asked about his negotiations he said: 'It is an old trade union practice that when you go into a bargaining position you do not reveal your hand and your ambit claim publicly at the beginning of the negotiations, because it might prejudice your position'. There is certainly no doubt about the sentiment and the attitude with which they are approaching it. What will be the limits on the scope for unions charging mammoth management fees, the proceeds of which might at some stage find their way into Labor Party coffers to finance election campaigns in the interests of the Australian Labor Party? The way in which this law will operate will be determined very significantly by regulations that we have not seen. For example, does the legislation say what types of investment will be allowed in respect of the deposit funds-shares, property, government securities, any required liquidity ratio, particularly in view of the exemption from the 30 : 20 rule? What happens if the value of the shares or property falls and the deposit fund is unable to repay the equivalent of the capital contributed by the depositor? What happens if that occurs in relation to a trade union that has taken a large deposit of funds? What happens if there is a catastrophic fall in the value of the shares and the union cannot pay out the value of the depositors' funds? What will happen then? That could very easily happen because there are no required asset ratios. No prudential requirements or no prudential regulations will be placed on them in the way in which they are placed on banks, trustee companies, building societies and the like. That just reminds one again and again of the extent to which this Bill imposes a massive tax increase on the many hundreds of thousands of ordinary hard working Australians who have looked forward to that nest egg at the end of their working lives and to the opportunity of using it not for some elite purpose, as so many honourable members of the Government seem to imagine, but just for those ordinary, simple things like paying off a mortgage, buying a holiday home or helping their son or daughter to buy his or her first home. What is so terribly wrong about that? Why is it that those people are now being told: 'We really do not think it is good for you to do that. We will make it less attractive for you to do that and we will make it more attractive for you to take out annuities'? This really strikes me as being a very strange set of priorities and it is a very strange government which has introduced such a Bill. I say on behalf of the Opposition that from the very beginning we criticised not only the wisdom but also the equity of this change to the taxation law. We criticised it because we believed it would hit thrift, self-provision and capital accumulation and that it would hit what is very much part of the Australian dream of accumulating a small nest egg. That remains our view. It may well be that one can construct arguments about anomalies in the taxation system. There are hundreds of anomalies, and I do not believe that any government, whether it be a government of the present political persuasion or a government of our political persuasion, will ever eliminate all of the anomalies in the taxation laws. That is a utopian pipedream. It will never happen. Certain things have grown up as part of the Australian way of life and one of them is home ownership. We have seen that demonstrated pretty clearly. We have also seen the Government recognise that very clearly. Another expectation among a growing number of Australians is that they have an opportunity to accumulate a lump sum on retirement. Certainly there is a case for it being available to more people than it is at present. Those are basically the reasons why the Liberal and National parties have been against the measures in the Bill from the very outset. These proposals are part of the Government's Budget-type measures. We have indicated that, if the Government is determined in the final analysis to go ahead with this legislation, be it on its head. Having pointed out all of the deficiencies and problems involved with this legislation, if the Government is determined to have such legislation, because it is part of its Budget measures, it is our policy to allow that to occur. Let there be no doubt as to where we stand and about the commitment that was made by the Leader of the Opposition (Mr Peacock) in August of last year that these measures, these changes, these increases, would be repealed upon the election of a coalition government. I turn for a moment to some of the other provisions of this Bill. This 130-page monster not only refers to the huge increase in lump sum superannuation tax but also deals with a number of other taxation changes. Some of these are of a minor nature, and the Opposition very readily supports them. For example, I refer to the amendment of some of the gift provisions. There are also a number of other changes that deal very importantly with section 26(a). Section 26(a) is probably one of the most litigated sections of the taxation Act. We all remember that before the last election the present Prime Minister and the shadow Attorney- General, now Senator Evans, said-- Mr Barry Jones —He was always Senator Evans. Mr HOWARD —He was always Senator Evans. I stand corrected by my friend the Minister for Science and Technology. The then shadow Attorney-General, Senator Evans, and the present Prime Minister said: 'We will not have a capital gains tax but we will strengthen section 26(a) to stop all those wicked speculators'. They said it would all be part of the massive onslaught of the Hawke Government against all tax avoidance about which the previous Government had allegedly done nothing. The truth came out when the Minister for Finance said: 'Tax avoidance in Australia is dead. It is no longer an issue. It has been cleaned up by the previous Government. Let us forget all about it'. Mr Fife —He paid us a compliment. Mr HOWARD —The honourable member for Farrer rightly points out that he paid us a compliment. The Bill involves major changes to sections of the tax Act about which very little has been said and for which no appropriate time for study has been provided. This applies particularly to section 26(a). This practice is in stark contrast to the process adopted by the former Government when it allowed very extensive time for the consideration of changes to complex taxation laws. The rewriting of section 26(a) is of enormous significance. Yet, with less than one week's notice and only three working days after obtaining the explanatory memorandum of 148 pages, the Opposition is presented with a demand to deal with this legislation in the next day or so. Let me remind the Government that the accountancy profession is quite properly infuriated about the lack of time provided to it, to the legal profession and to other interested people who will be massively affected by the changed status of section 26(a). It is after all, as I said a few moments ago, one of the most litigated sections in the taxation Act. Specific problems have emerged, on my necessarily brief examination of the Bill, in a number of other areas. In regard to clauses 18 to 20, which deal with repairs, borrowings, lease documents and the grant of patents, the explanatory memorandum says that expenditure on repairs will be deductible only to the extent that it is incurred for the purpose of producing assessable income. But the Bill adds this very important phrase: . . . as, in the opinion of the Commissioner, is reasonable in the circumstances- What does that mean? What kind of discretion is that? I know that some discretion is necessary in the tax Act. It is always easy to criticise the exercise of discretion by the Commissioner of Taxation. He has a very difficult job. But why is such a blanket discretion given? Why should taxpayers be put to the inconvenience of pursuing this matter to a taxation board of review, with now perhaps a seven or eight-year time wait. They may then have to go to the Administrative Appeals Tribunal if the Commissioner takes a different view of ' reasonable' from reading the guidelines set out in the explanatory memorandum. The Government must justify this different wording, otherwise it will appear to be yet another unwarranted extension of the Commissioner of Taxation's discretion. I refer now to clause 10 of the Bill which contains proposed new section 25A(3) . This section determines that the assessable income of a taxpayer shall include profit arising from the sale of any property acquired by him for the purpose of profit-making even if it is held in a company, partnership or trust that is the vehicle for the sale. However, this enables the Commissioner to have an incredible discretion. It creates enormous uncertainty and allows the Commissioner to tax the whole of the consideration on the sale of such a company even if the sale price is only partly made up of assets purchased for the purpose of resale. For example, retained profits could theoretically be taxed as a sort of capital gains tax at the discretion of the Commissioner. This becomes even clearer in proposed sub-section (9) of new section 25A, where the Commissioner's discretion runs riot. This sub-section is regarded by senior accountants to whom I have spoken as a major disaster, with the Commissioner's discretion being seen as way beyond that which is exercised in other parts of the industrialised world. I will be very interested to hear some comments on that subject from the Treasurer and the Minister Assisting the Treasurer. I say again that some elements of discretion are necessary, but to give the Commissioner a discretion of this magnitude really introduces into the whole area of the Act a concept of taxation by the fiat of the Commissioner. I think that is something that ought to be offensive to honourable members on both sides of the House. Finally, it is a result of the Government having made a quite impossible commitment in the whole section 26(a) area. When Senator Evans before the election said: 'We are going to tighten up section 26(a)', it was pointed out to him by the then Government that the only way to really tighten up 26(a) was to introduce a capital gains tax, because that was the next logical step. I know that many in the Government wanted to do that, but they did not get their way. A couple of those now in the chamber would like to have seen a capital gains tax brought in. The miserable compromise was to say: 'Let us give an unfettered discretion to the Commissioner'. All I can say is that I feel sorry for the Commissioner that he has been given such a mission impossible by being given such an absolutely outrageous discretion. It is a miserable compromise on the part of the Government. This proposed sub-section really is quite unacceptable. To rush through a major change of this kind in the tax Act is quite improper. It is the sort of thing that should have been referred to an advisory committee on taxation of the type that the previous Government maintained and the present Government has not continued or replaced. It is very strange indeed that in a complicated and difficult area such as this the Government has found itself unwilling to seek some outside advice to complement the normally excellent advice it receives from the Taxation Office in areas of this nature. Time does not allow me to deal with all the provisions contained in this Bill. The main part of it is the superannuation tax slug. I return to the remarks I made at the beginning. The Government, in introducing this increase of taxation on lump sum superannuation payments, however watered down it may be from the original proposal, however much it might argue the cause of removing an anomaly from the tax Act, and however much it might argue that it is better for people to have annuities than to have lump sums, is attacking the nest eggs of thousands of Australian working men and women. It cannot get away from that. It cannot escape the odium of that. It cannot escape the political and social consequences of doing that. For years hundreds of thousands of people have geared their retirement expectations on the basis that a particular arrangement would continue. Mr Baldwin —It is not retrospective. Mr HOWARD —In a strict sense it is not retrospective, and the honourable member for Sydney is quite right to say that; but it radically alters the retirement plan expectations of many people. The honourable member should try to sell the theoretical argument of retrospectivity to some of his constituents who were hoping to use their money to buy somewhere on the central coast when they retired, and see how far he gets. He will not get very far and he will find it a very difficult argument to advance. By this measure the Government has put theory above substance and feeling. It has elevated the removal of an anomaly in the tax Act to a position that it does not always deserve. I think that the Government deserves the political criticism and odium that it will receive from this measure. If it is determined to go ahead with it, it will find to its political cost just what an expensive exercise this theoretical slavishness to removing anomalies from the tax Act has really been. Mr ROBERT BROWN(Hunter)(6.04) —Of the two related Bills, the Income Tax Assessment Amendment Bill (No. 3) and the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Bill, that the House is considering at the moment, the most important is the one on which the Deputy Leader of the Opposition (Mr Howard) concentrated most of his attention-the Income Tax Assessment Amendment Bill (No. 3) 1984. That Bill, as the honourable member for Bennelong has suggested, contains a number of extremely important provisions, the two most significant of which are new taxation arrangements for lump sum superannuation payments and the strengthening of section 26(a) of the Income Tax Assessment Act. Both of those provisions were announced earlier. The one concerning the taxation of lump sum superannuation payments was first announced as part of the economic statement of 19 May 1983 by the Treasurer (Mr Keating). Details of the second provision, concerning the strengthening, the restating, of section 26(a) of the Income Tax Assessment Act, were given in an announcement on Budget night last August. It is not possible because of the time constraints to respond to all the matters raised by the Deputy Leader of the Opposition, but in the first instance I assure those people in the community who have been made fearful of the possible implications of this legislation that the fearmongering which has been going on by the Opposition parties around Australia is not justified, seriously misrepresents the position, and is based quite clearly on a paucity of any constructive and sensible policy on the part of the Opposition parties. They have found it necessary to revert to this fearmongering to attract the attention of the electorate. It will not work. Before I go into some of the details of the provisions, I will indicate exactly how the legislation will apply. It does not impress me that the Deputy Leader of the Opposition referred to these hundreds of thousands of working people in Australia who will be financially devastated by this legislation, as he put it. Let me put it into perspective: All the entitlements, all the superannuation benefits, to which any superannuation fund member became entitled before 30 June last year will not be affected in any way contrary to what happened previously; that is, 5 per cent of any lump sum taken from that entitlement will be added to the income of the recipient in that year and will be taxed at the normal marginal rate. What happens to the entitlements that accrue from 1 July last year into the future? First of all, those entitlements will accrue as the result of contributions that are made by the superannuation fund member. Secondly, they will accrue as the result of contributions made by the employer. The accrued benefits from 1 July last year which result from the employee's contributions will not be affected at all-will not be taxed one cent. What will be taxed? It will be only the accrued benefits which result from the contributions of the employer after 1 July last year. I emphasise that the whole of this legislation, of this change in the provision for the taxation of lump sum benefits, is based simply and purely on equity considerations. I want to put these propositions to the House. All the taxation concessions built into a superannuation scheme hitherto have been built in in a bipartisan way, with cross-party support, to encourage people who are in employment to contribute to a superannuation scheme so that they will be able to provide for their retirement and, as a result, not make a claim against the public revenue. Were those tax concessions achieving that objective, I would agree entirely with what the Opposition is proposing and I would agree entirely that proposals of the kind we are now introducing were inappropriate. That has not been the case. Let us look at the types of tax concessions which have been provided to encourage people to provide for their retirement, not to develop some taxation subsidised nest egg which, when they reach the age of retirement, they can suddenly take out of the system, out of the fund, and put into some sort of capital appreciating asset, at the same time dipping back into the public purse to take out a pension. Not only has that been happening but also the provisions of superannuation schemes have been used quite positively and deliberately in various tax avoidance schemes. I do not have time to go into those schemes but they are well known and well understood throughout the community. Let us look at the tax concessions which are being provided to encourage people to provide for their retirement. First of all, when the employer makes his contribution on behalf of the employee into that fund it, like any other type of production cost such as wages, is treated as a cost and is tax free. Of course those people in the community who do not have access to a superannuation scheme will be getting that additional income in the form of their wage or salary which would be taxed at their normal marginal rate. However, for those employees in the community who do have access to a superannuation fund and a superannuation benefit, one can consider the employer's contribution as a form of deferred income. Instead of paying the employee now, the employer will allow the money to accumulate with numerous taxation benefits so that the employee can take it at the time he retires in the form of lump sum deferred income. But when the employer makes those payments into the superannuation fund on behalf of the employee he gets a tax concession. So there is the first benefit that goes to members of the fund. The second benefit is that the income which is earned from the superannuation fund's investments are again tax free. So there is the second taxation concession that is available. The third benefit is that as soon as the employer' s concessional expenditure exceeds the amount of the concessional rebate which this year is $2,000, any contribution which he makes into a superannuation fund, up to $1,200 a year, is again a tax benefit to him. So there have been three forms of taxation benefit which have been designed to ensure that people provide for their retirement. What has happened until the present time is that when people finally retire and take a lump sum, which all along the line, has been inflated by all of those tax concessions, they are taxed on only 5 per cent of it. So the maximum tax on any lump sum is 3 per cent. That is at the highest marginal rate. Someone who pays 60c tax in the dollar will pay 60 per cent of 5 per cent of that lump sum benefit and that represents 3 per cent. No one can convince me that there is any equity in that. Of course there is not. Madam Deputy Speaker, I tell you, members of this House-including members of the Opposition-and members of the community, that the people who are making it possible to provide these taxation concessions are all the real battlers in Australia, not the people who are represented by the crocodile tears of the Deputy Leader of the Opposition. He knows exactly what the basis of this scheme has been and it is less than honourable for him to get up here and argue for a scheme of that kind which, quite clearly, is grossly inequitable. It cannot be tolerated. The total cost of taxation benefits to superannuation funds every year is about $2,500m. All that the Government intends to pick up in the first year is something like $70m. So these provisions are extremely moderate. It is the real battlers, the wage and salary earners in Australia who, as a result of their increased taxation, are making it possible for these lump sum benefits to become inflated. Because there are only 10 minutes available to me to debate the matter, I will finish on this point. All the members on this side of the House and those on the other side of the House will be personally disadvantaged, in terms of their own superannuation entitlement, as a result of this legislation. I will be disadvantaged as a result of this legislation. There is nothing that I can do other than support it because I do not want an inflated lump sum benefit being available to me as a result of increased taxation burdens being placed on the wage and salary earners of Australia. I would not want that type of consideration. Governments do not seek to alienate electoral support. However, when there are fundamental principles of equity and justice that demand a certain course of action, a courageous and principled government will take that course. Equity demands that these changes be made and they, together with other measures being adopted by this Government now and increasingly in the future, will ultimately represent a very necessary progression to a fairer system and a sounder taxation structure. Debate (on motion by Dr Harry Edwards) adjourned. Mr UREN(Reid-Minister for Territories and Local Government)(6.15) —Pursuant to section 5 of the Parliament Act 1974, I present proposals for a temporary enclosure of the verandahs on the main floor level of the provisional Parliament House, on the northern facade of the building. The views of the Joint Standing Committee of the New Parliament House are being sought on the proposal. When these are available I shall take action under the Parliament Act to seek approval by the House of the work. Mr BARRY JONES(Lalor-Minister for Science and Technology) —I ask leave of the House to move a motion to discharge certain Customs Tariff proposals which were moved earlier in the session and which constitute part of order of the day No. 62. These proposals were incorporated in the Customs Tariff Amendment Bill 1984 which has now been assented to. Leave granted. Mr BARRY JONES —I move: That Customs Tariff Proposals Nos 15 to 19 (1983) and Customs Tariff Proposals Nos 1 to 4 (1984), constituting part of order of the day No. 62 Government Business, be discharged. Question resolved in the affirmative. [COGNATE BILL: INCOME TAX (COMPANIES, CORPORATE UNIT TRUSTS AND SUPERANNUATION FUNDS) AMENDMENT BILL 1984] Debate resumed. Dr HARRY EDWARDS(Berowra)(6.19) — As my colleague the Deputy Leader of the Opposition, the honourable member for Bennelong (Mr Howard), has pointed out, the principal thrust of this legislation is the 30 per cent lump sum superannuation tax slug which is a head-on attack on the retirement nest egg of hundreds of thousands of Australian employees. Such a tax has no place in a sensible coherent package to provide retirement incomes for the aged. The coalition-the Opposition-is unequivocal that it will repeal this legislation on return to office. The honourable member for Hunter (Mr Robert Brown) can declaim for all his worth, but the fact is that this tax does impact very unfairly on many small Australians. I suggest that he try talking to some of the Commonwealth car drivers. I talked to one the other night who anticipates retiring in three or four years time during which his anticipated lump sum will increase from in the order of $50,000 to $65,000. Mr Ruddock —He will pay the higher rate on that now. Dr HARRY EDWARDS —That is right. As my colleague says, on the last $15,000 he will pay tax, regardless of whatever the honourable member for Hunter said, at the rate of 30c in the dollar-a sum of the order of $4,500. That sum, combined with the tax payable previously, is playing havoc with the ideas and proposals he had in mind for his retirement. So I warn the Government that it is not only tall poppies it is getting at with this legislation; it is getting at a lot of ordinary Australians who for years have planned their retirement on that basis. Mr Ruddock —Little violets. Dr HARRY EDWARDS —My colleague calls them little violets but they are ordinary Australians who have been looking forward to retirement. The Government has adopted a shotgun approach to retirement income. We have a tax on superannuation of 30 per cent after a relatively low threshold. We have the reintroduction of the means test for pensioners over 70 years old, and, of course, the continuing saga of the assets test, with all the harassment and trauma amongst the aged that it involves. In short, piecemeal and ad hoc measures have been introduced without regard to their likely impact elsewhere in the economy. At the very least, if the Government is set on that course of taxing lump sums, it ought to have introduced a superannuation tax applying to persons just about to enter into such superannuation arrangements. They could then make their choice and arrange their affairs with full knowledge of what they were being subjected to. But no, the Government proceeds with this iniquitous impost. The question of what the Government will do next can be raised. The honourable member for Hunter had much to say about equity. What will the Government do next ? Perhaps it will tax the proceeds of the sale of, say, a newsagency that someone has spent a lifetime building up hoping that realisation of the goodwill will be his retirement benefit. Where is the equity between such a person, not taxed, and someone retiring on a lump sum? My main purpose in speaking to the Income Tax Assessment Amendment Bill (No.3) 1984 is to draw attention to clause 21. This clause, at long last, will enact the taxation legislation necessary to implement the 100 per cent deduction for money subscribed as venture capital within the framework of the Management and Investment Companies Act 1983. It is not before time. Mr Barry Jones —Hear, hear! Dr HARRY EDWARDS —I am glad that the Minister for Science and Technology agrees because it is now 5 June and the financial year ends on 30 June. The financial year ends in just 25 days. The Government-and the Opposition joins with it in this-is keen to ensure that the $40m which can be subscribed within the framework of this legislation this financial year is subscribed. If that aim is to be achieved, it is time this Bill was introduced, passed by this Parliament and proclaimed. I hope that will be the case. I take this opportunity to stress that the Management and Investment Companies Act enjoys-and will continue to enjoy when we win the next election-bipartisan support, indeed, enthusiastic bipartisan support. Briefly, under the Management and Investment Companies Act, seven such companies were licensed last month to accept subscriptions of capital to a limit approved by the licensing board which then became 100 per cent tax deductible on the part of the subscribers. It is then the task of the management and investment companies-venture capital companies in short-to seek out, invest in and afford management, marketing and technological assistance, as well as capital, to fledgling, high technology, potentially high growth businesses. They are referred to in the Act as eligible businesses. There are many of them around -small companies or individuals with innovative ideas and processes that they wish to develop and to carry through into thriving, profitable, job-generating businesses in Australia. Some of those fledgling businesses, although now small, have very great potential. We are not just talking about small businesses but really 'large businesses just starting out'. So often we find that companies or individuals in that position are totally frustrated in their endeavours. No one wants to know them. No bank wants to know them; no government wants to know them. It is the lack of a venture capital market, of venture capital companies such as the management and investment companies, providing, as I said, not only venture capital, that is, equity finance at high risk, but also, as their name implies, management, marketing and technological assistance, which has been perhaps the biggest single proximate cause of the limited development of advanced technology industry in this country. So I say that the provision in regard to this matter in the Bill, clause 21, commands bipartisan support. Mr Cadman —What about the lump sum tax? Dr HARRY EDWARDS —I have already had a lot to say about the lump sum tax. As my colleague points out, it is a most iniquitous and inequitable impost that will impact not only, as the honourable member for Hunter kept implying, on the 'tall poppies' in the community but also on the great majority of ordinary Australian citizens. I even suggested-perhaps my colleague was not here at the time-that the Minister talk to some of the Commonwealth car drivers, for instance, who have had a lot to say to me about this matter and who, anticipating retirement in, say, four or five years time, will find themselves faced with a massive slug of taxation which had no part in their previous retirement plans. I return to clause 21 of the Bill which is very important. The way in which this Bill has been drafted is a grave disappointment to me. In implementing the legislation to establish the management and investment companies, the Government has, to its credit, followed, pretty much to the letter, the recommendations of the Espie committee report initiated on this side of the House over two years ago-a committee of the Australian Academy of Technological Sciences. That committee recommended the management and investment company framework and the 100 per cent deduction embodied in the clauses of this Bill. However, it also recommended this: That profit made on disposal of shares of a GBIMC-- that is, a management and investment company- . . . not be assessable provided they have been held for at least two years. I want to direct the balance of my remarks to the implications of the Government 's failure to take account of that recommendation. Sitting suspended from 6.28 to 8 p.m. Dr HARRY EDWARDS —Before the suspension of the sitting I was saying that the main purpose of this legislation is to implement the iniquitous tax slug on lump sum superannuation. I stressed then, and I stress again, that the main impact of this measure is not on the tall poppies, as members of the Labor Party tend to carry around in their heads, but rather on ordinary, everyday Australians. I said that I was talking the other day to a Commonwealth car driver-if they were out on strike against this superannuation measure I would understand it-who has been slogging it out in the city traffic for eight, 12, or more hours a day for years and who was looking forward very much to his retirement four years from 1 July last. His lump sum will move over that period from about $50,000 to $65,000 . So he will pay his tax on 5 per cent of $50,000 or about $800 and then 30 per cent on $15,000 or about $4,500, a total of nearly $5,500, compared with the less than $1,000 he would pay on 5 per cent of the sum. Honourable members should put themselves in his place with the prospect of seeing, for the first time, $65,000 all in one go after years of struggle on a meagre income and then under this lousy legislation having to write a cheque to the Commissioner of Taxation for $5,500 when he has never written a cheque of that size in his life. That is the kind of ordinary Australian that the Government is striking at. I repeat the unequivocal promise that when the coalition wins this election at the end of this year it will repeal this iniquitous legislation. I went on to refer to clause 21 of the Bill relating to management and investment companies. I had drawn attention to the fact that in the Espie report , which the Government says it is following very closely, there was a recommendation that profit made on the disposal of shares of a management and investment company not be assessable provided they have been held for at least two years. The Government, in this Bill, has not taken up this recommendation of the Committee, and that is a great disappointment. It would have been a very useful additional incentive to know that a profit on the sale of the shares in a management and investment company would not be subject to tax. However, this much can be said: The impact in the context of subscriptions to the present management and investment companies is not so great in that it is necessary, under the terms of the legislation, to hold the shares for four years in any event in order to get and retain the full 100 per cent deduction. It is patient money that is sought and hopefully the Commissioner of Taxation, in the event of a sale after four years, will hardly see the investment as having been made primarily to make a profit from sale-section 26(a). But the effect of such a provision would have been important in this way: The purpose of the management and investment companies legislation is to seed the development of a private venture capital market, as was stated by the Minister for Science and Technology (Mr Barry Jones) categorically when he introduced the management and investment companies legislation. We all want to see more than the $40m licensed under the Act per year going into this area. What is certain is that the great incentive for people and companies to invest directly-that is to say, outside the framework of the Act; not receiving the 100 per cent deduction-in promising fledgling high technology, high growth companies is the prospect of capital gain in the value of the shares. Let me refer to the experience in the United States of America. It had a pretty high rate of tax-50 per cent compared with the 60 per cent one might be liable to under the 26 (a) legislation-on such gains on sales of shares up to 1978. During the eight years preceding that only about $50m of new share capital was subscribed each year. In 1978 the rate of tax was reduced from 50c to 28c and in the 18 months following, $1 billion of new capital became available. In 1981, the rate was lowered to 20c in the dollar and in 1983 alone $4.1 billion was made available. That is what makes the system in the United States tick. That, among other reasons, is why the United States high technology industry is going ahead in leaps and bounds and generating many new jobs. So why I suggested it would have been very important to accede to the recommendation of the Espie committee, as I read it out, which the Government has chosen to reject, is in the guidance, the indication of the thinking of the Parliament, which it would have conveyed to the Commissioner in relation to the market, hopefully a large one, which will develop, which will be seeded by but additional to the licensed management and investment companies. No doubt this is all pie in the sky anyhow because who can believe the protestations of the Government that there will be no capital gains tax after the next election? At the last election-and even after the election-the Prime Minister (Mr Hawke) continued to assert that there would be no tax on superannuation lump sums. He did so at the National Economic Summit Conference in this very chamber to Cliff Dolan. Yet what was that promise worth? So we do not want to expect too much. As my colleague the Deputy Leader of the Opposition and former Treasurer said, this is a Budget Bill, so we do not intend to press an amendment. But if the Government is serious about encouraging advanced technology industry development, if it is serious about translating Australian science which so frequently leads the world, into technology development and then into thriving, profitable job generating businesses, it had better tread very warily, I suggest, in this area of capital gains taxes. It is a very great pity that, while it has accepted so much of the Espie committee's report, it has failed to pick up this additional recommendation. Mr BALDWIN(Sydney)(8.07) —The Income Tax Assessment Bill (No.3) contains a wide variety of provisions relating most significantly to the superannuation tax provisions, the management and investment companies and the redrafting of section 26 (a) of the Income Tax Assessment Act in order to catch more effectively speculative capital gains. But I would like to focus on and confine my comments, in the limited time frame to which we on the Government side have been restricted, to the superannuation tax issue. I think that is probably the most contentious part of the legislation. From listening to Opposition speakers on this matter I must say that at various stages I was nearly moved to tears by their protestations of concern about the fate that is to befall working people under this allegedly dreadful, iniquitous piece of legislation. It would be difficult to believe that this was coming from the very same political party that for years has espoused an approach to economic management that is based on the premise that we have to reduce real wages in order to bring about an economic recovery and which sought to introduce one piece after the other of draconian industrial legislation. It is rather amusing to hear those self-same people stand up here today and protest their concern about the taxation effects of this legislation on ordinary people. One point that has to be addressed in what Opposition members are saying is the constant reference to claims that people's retirement plans which were based on the former tax status of lump sum superannuation payments will be disrupted in some massive way. The point I made by way of interjection on the Deputy Leader of the Opposition (Mr Howard) earlier was that there is no element of retrospectivity in this legislation. The fact is that it will only bite over time insofar as people will be taxed only on that portion of the lump sum which accrues as a result of payments made after mid-1983. Even then we will have to deduct the employee contributions that have not earlier attracted some kind of taxation deduction. So really it will take effect fairly gradually. I will give a couple of illustrative examples. An employee with a 40-year working life who begins that working life after the trigger date of this legislation, 1 July 1983, who retires in 2023 with a lump sum superannuation payment will even then be paying only 15 per cent in tax. Researchers in the Parliamentary Library have tabulated the proportions of tax payable by people retiring at different times with different sizes of lump sum payments. I think the table makes it clear that the supposedly draconian effects of this legislation are pretty small. People who are retiring in the next few years will be affected only in the most minimal way. I seek leave to have this table incorporated in Hansard. Leave granted. The table read as follows- TAX PAYABLE ON LUMP SUMS ($) Date of retirement 50 000 100 000 200 000 500 000 $ % $ % $ % $ % 1.7.1983 1 500 3 3 000 3 6 000 3 15 000 3 1.7.1993 3 000 6 6 000 6 12 000 6 41 250 8 1/2 1.7.2003 4 500 9 9 000 9 25 500 12 3/4 75 000 15 1. 7.2013 6 000 12 15 750 15 3/4 39 000 12 1/2 108 750 21 3/4 1.7.2023 7 500 15 22 500 22 1/2 52 500 26 1/4 142 500 28 1/4 Mr BALDWIN —I thank the House. This legislation merely seeks, insofar as superannuation tax is concerned, to treat people who elect to take their retirement benefit in a lump sum in more or less the same way as people who elect to take it in an income stream. There is no doubt that this legislation goes only part of the way towards redressing the difference in treatment between people who take lump sum payments and people who prefer to take a pension. It goes part of the way but it does not go anything like the whole way. If anything , it errs on the side of being too conservative in that respect. The need to try to remove these anomalies is something which has been a common feature of virtually every significant study of superannuation in this country in recent times. What the Government is seeking to do is in no way out of kilter with what the best informed expert opinion in these sorts of areas have advocated for some time. I wish to quote a couple of paragraphs from the Asprey Taxation Review Committee report. That Committee investigated the Australian taxation system. As I pointed out earlier, the Asprey report made a specific reference in paragraph 21.64 to the retrospectivity angle. We are not dealing with a scheme with retrospective effect, but this is what Asprey said about the retrospectivity angle of any proposed scheme to eliminate these sorts of anomalies. There is nonetheless a limit to the extent to which concern over such retrospectivity can be allowed to influence recommendations for a fundamental change in the tax structure. Pushed to its extreme such an argument leads to a legislative straitjacket where it is impossible to make changes to any revenue law for fear of disadvantaging those who have made their plans on the basis of the existing legislation. I have quoted that segment not because this legislation has any retrospective effect. It does not, but this is the way Asprey addressed this whole issue of people having their retirement plans supposedly disrupted by the introduction of a new piece of legislation. Clearly, the thrust of what he is saying is that at some point we have to set aside that sort of consideration and make a value judgment about just how severely people will have their retirement plans disrupted. I think the table I incorporated earlier makes it pretty clear that there is nothing very draconian about this legislation. There is a fairly detailed argument in the Asprey report. I guess that the first sentence of paragraph 21.75 encapsulates the point. It states: The acceptance of the views above would mean that all lump-sum retiring allowances would be taxable in full, subject to whatever 'spreading' arrangements are thought appropriate. In other words, what Asprey is saying is that the entirety of these lump sum payments should be taxable. But obviously if one was dealing with a lump sum the tax liability would need to be spread over a period of years. Asprey talks in terms of 10 years or 15 years. Later in that report Asprey talks about various possible options to remove these anomalies. The particular course that he favours is to raise progressively the component of lump sum superannuation to be added to taxable income from 5 per cent to 100 per cent over a reasonably protracted time period. In other words, I think Asprey, certainly in the long term, would go considerably further than is currently envisaged by this Government. But I think it is fairly clear that the sorts of arguments put forward by the Opposition are not to be taken terribly seriously. I do not believe for a minute that the better informed members of the Opposition believe their own arguments on this score. Statements have been made by their spokespersons over the years that clearly indicate a belief that taxation and welfare payments should also be, as much as possible, oriented towards need. That they continue to oppose this legislation is a sheer piece of political opportunism. That fact is particularly so when we bear in mind the sort of approach to macroeconomic strategy that they favour. They affirm the centrality and importance of reducing the magnitude of the Budget deficit. No doubt they would also not favour a reduction in the Budget deficit without being prepared to specify what areas of expenditure they would be prepared to cut into or what areas of taxation they would favour increasing. The fact is that this is the sort of measure that really should be introduced if equity in the tax system is to be improved. It is a very legitimate way, in my opinion, to go about tackling the problem of the Budget deficit insofar as one regards that as a central economic concern. Again, I think that sort of consideration just shows the sheer hypocrisy on the Opposition benches in arguing against this legislation. They clearly perceive that it is an issue on which it is possible to mobilise some kind of a scare campaign in a similar way to that which is being undertaken in respect of the assets test. They are trying to rely on the fact that people will not look too closely at the actual provisions of the legislation being put forward to understand that they will not be drastically affected. The Opposition will thereby engineer some sort of a campaign to try, as a last desperate effort , to win the next election. I think the nearest thing I can think of to a valid objection to this legislation which is of some concern to me is the idea that we are tackling one area of inequity in the tax system while leaving other areas of inequity essentially untouched. I am talking about the fact that there is no taxation on capital gains and no taxation on wealth. Again, I think any rational appraisal or any of the major reports on the tax system in recent times affirm the rationality of that. Many of the anomalies and problems associated with lump sum superannuation would cease to exist or would be considerably attenuated if we had a proper taxation framework. Of course, I do not assert that that is the intention of the Government at this stage. I think the Government has initiated a fairly wide-ranging inquiry into the taxation base and also into the distribution of wealth in this country. Hopefully what we will see flowing from that will be a constructive, major and equitable restructuring of our taxation base. That is something that lies in the future. I believe that is the only reasonable area of objection. (Quorum formed) Mr CONNOLLY(Bradfield)(8.20) —This package, the Income Tax Assessment Amendment Bill (No. 3) and the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Bill, will go down in Australia's political history as a shining example of the duplicity of the Hawke Government. A leader of the Australian Labor Party said to the Australian people as reported in the Australian Financial Review on 18 April 1983: 'There will be no rise in superannuation taxation'. On 22 April, in the Australian newspaper was the heading 'Worry about tax unfounded'. That is how our glorious national leader, the Prime Minister (Mr Hawke), reassured the people of Australia. Tonight, with the legislation before us the people of Australia are facing the reality of what this Government proposes to do. The changes it has introduced, which will date back to last June, will have a profound effect on the ability and the willingness of many thousands of Australians to save during their time in the workforce to give them a sense of security and independence in retirement. The essence of this entire program, if we can call it that, is that people should not be permitted to save capital during their time in the work force for their retirement but that they should be dependent on annuities, and a regular income in the form of a pension from the Government. This is based on the fundamental socialist belief that capitalism is bad and that the right of individuals to save for their future and to acquire capital is to be discouraged. The simple reality, nay the very ethos of the Australian people for so long, is that, regardless of the sector of the community they come from, most believe that it is their right to save and to maintain a degree of independence for which our people have been renowned. So that they could, if they wished, use their lump sum to go overseas, buy a beach house, help to educate their grand children, or put it to some other desirable purpose. The essence of an effective superannuation scheme is to give people the capacity for a greater degree of freedom of choice. The legislation we have before us has been put to the people in various guises. It has been said that it will save taxation; that it will be fairer because it will average out the problems of a taxation system which is manifestly unfair to some and which will obviously always have problems within it. However, the difficulty the Government has tended to ignore in this situation is that in its efforts to overcome one anomaly, as often as not, it merely creates another. That is really what has happened in this situation. In the second reading speech by the Minister for Housing and Construction (Mr Hurford) a few days ago we were told that there were three major elements in this so-called package. They were improvements to occupational superannuation; improvements to the age pension; and consideration of a national superannuation scheme. These are all laudatory objectives. The simple reality is that tonight we look in vain for any detail as to in what form a national superannuation scheme will be; what an effective occupational superannuation scheme will be; and what changes to the old age pension will be effective and will protect the interests of the Australian people. Dare I say that the assets test changes introduced into this House in recent days and which will come forward in the next Budget are, like this legislation, a misguided attempt to make an even greater mess out of certain aspects of the social welfare system, which I believe all honourable member in this House would wish to improve. The Government is not going to be able to improve a situation by introducing into it further ad hoc changes, which is really what we have seen since this Government was elected last March. On at least two occasions since then the Treasurer (Mr Keating) has come into this House, made a mini-Budget speech and tabled statements. There has been a national furore and he has had to take the proposal out again, and then bring it back with further changes. Of course governments have difficulties with complex issues but the people of this nation expect of a government that it will get its sums right before trying to implement legislation. No section of the Australian community involved in the superannuation industry has been by any means totally satisfied with the way in which the Government has gone about this. There are complexities in the situation. There is the issue, which is a very legitimate one, that we all want to see a widening of the superannuation base in the Australian Community. There is the issue as to whether it is necessarily correct that over 80 per cent of all persons who take superannuation, should take lump sums. Surely this ignores the fact that since 1914 that has been permitted by the law of this land. Succeeding generations of Australians have entered into superannuation schemes in the belief that the basis on which they did so, namely, their access to lump sums, would remain for their period in the work force. Attempts have been made by the Government to reduce the implications of that. Essentially, these attempts have been ham-fisted. Essentially, the Government has tended to ignore the reality in an attempt to overcome what it sees as the problem of lump sums which we on this side of the House see this as a deliberate manifestation of the Government's belief that individuals should not have the freedom to say: I want a lump sum because my situation and that of my family can best be safeguarded in retirement by taking one. We have a government here which will also say that the people do not have the right to determine whether they should have a mixture-a lump sum, a partial lump sum or no lump sum. Once again we see the authoritarian hand of a socialist government which believes that it knows all the answers and that it, above all others, can tell the people of this country what is best for them. All I can say to honourable members who take that view is that the time will come when the people of this nation will rise and rebel against any government that persists in dictating to them how they should maintain their affairs, how they should save for their retirement and, above all else, how they should live in retirement. For those who are interested in the subject of superannuation, I hope it is well known that for many years I have taken a very close interest in this field. It was during the last two years of the Fraser Government that substantial work was done on a major reform package in this area. But the essence of the reforms that we were considering was based on the belief that the people, not just the government, are sovereign, that it is the people who must determine how they want their resources to be utilised for their own best interests. It is for that reason that we have systematically rejected the view that for allegedly short term gains any government has the right to atone for the Australian people how they should live and how their resources and their standards of living should be affected by their capacity in that regard. It is a matter of profound concern to me how this Government apparently believes that all superannuants are rich and if they are rich it means that they must be supporting the Liberal and National parties and what a good thing it is to make life hard for people who support the Opposition! The simple statistical realities are, and I quote no other than the Minister for Finance (Mr Dawkins) in a statement he made earlier this year: Only one per cent of all the people of this nation, some 1,800,000 of them, who are in receipt of superannuation benefits in fact take lump sums in excess of $100,000. Ninty-two per cent get less than $20,000. And three-quarters of these people take less than $5,000. What a vast amount of money! Yet the Government has taken the view that even those people have to be treated differently, that even their rights have to be circumscribed because what a terrible thing it is that anyone, even the most lowly worker in a factory, who has access to a superannuation scheme should have the right to determine the manner in which he is able to claim from it! As I said, the situation that has existed up till now has been in place, whatever difficulties there may have been, since 1914. Where this Government has demonstrably failed is that having spoken so much about the need for a more simplistic system of taxation, it regards the need to collect revenue as being the summum bonum of everything in this Bill, but those who suffer will not just be the so-called rich but hundreds of thousands of ordinary blue collar Australian workers, the very backbone of the Australian Labor Party that forms the Government of Australia at this time. I do not just make such comments alone , but may quote from none other than Simon Crean in the AM interview on 31 May this year. He spoke of the Government's failure. He said: We indicated to the government that we felt the legislation should not be introduced, that's still our view, because we didn't see that concentration on one aspect only of retirement benefits was the appropriate way to go. I say amen to that. What we have seen in this legislation and what we have seen in recent days in relation to changes to the assets test and so forth is a classic example of a government going down the road of ad hockery yet again. Earlier tonight I quoted from the Minister's second reading speech in which it was made quite clear that the Government believes it should be directing its efforts towards the creation of a total package for retirement income. That is a laudatory aim but the sad thing is that it has failed to take into account the establishment of a Senate committee inquiry into all aspects of retirees' income , an inquiry which will complete its efforts within the next two or three months . Not being satisfied to wait for a bipartisan analysis-I emphasise the word ' bipartisan'-the Government has gone ahead helter skelter down this road which will do nothing but damage irretrievably the financial independence of many thousands of Australia's citizens. If ever there was an area of government policy which was so complex that it could only be solved by a serious attempt to reach a bipartisan approach it is this. I am amazed-in fact I am appalled-that a government that stands for that glorious word 'consensus' should have demonstrated now, after nearly one and a half years in power, its utter inability to contemplate seriously the prospect of achieving a consensus on these fundamental issues. It could have done, had it waited for that Senate report to come through, when all parties in the Parliament would have access to the same level of intelligence, which is vital if we are to make the right decisions. The other aspect of this Bill which concerns me particularly is the role it gives to the trade union movement. A few years ago, in an address to the Association of Superannuation Funds-ASFA-in Melbourne, I said: It has been estimated that if an ACTU or union controlled fund was successful it would within a relatively short period be able to mobilise enough capital for investment in selected companies and industries to significantly influence, if not actually, control them, e.g. if the trade unions controlled a membership of 1.5 million contributors, each paying a combined contribution of 10% of salary, they would have at their disposal $2.5 billion p.a. or $7 million per day; which is considerably more than the combined daily average investment of the AMP Society and the National Mutual. In the event of a compulsory national scheme being introduced by a government which may be partial to greater trade union involvement and assuming 100% membership coverage such a fund would have at its disposal $5.1 billion per annum. Making it the largest investor in Australia with enormous economic and political power- I emphasise- political power! That is the direction which this Government has deliberately taken in its attitude towards superannuation and the expansion of organisations capable of being involved in superannuation. I think it is only right to ask: What thought has been given to assuring those who will contribute their funds to these bodies whether they will have the prudential safeguards or other statutory controls which are currently in place for the existing superannuation industry? There is no evidence in this Bill that the trade unions, individually or collectively, will be expected to be under the same statutory control as banks, insurance offices, co-operatives, building societies, credit unions or trustee companies. Trade unions do not even have an obligation to reveal their financial position, let alone have any prudential safeguards. The scope for blackmail by trade unions to force their members, on leaving one job, to place their approved deposit funds with their trade union if they wish to remain in that organisation , is clearly evident. We know too well that in organisations such as the Builders Labourers Federation, for example, a person cannot get a job in the industry without his ticket. It is equally clear that a union which controls access to superannuation has the future of every one of its personnel within its grasp. But that is something that the Labor Party likes. Mr O'Neil —You do not like the trade unions. Mr CONNOLLY —As for the suggestion that I do not like the trade unions, let me make it quite clear that I do not like trade unions having the power of life or death over their members, any more than I believe that in a democracy such as Australia, any organisation should have such power. There is no suggestion here that employee associations should not be involved, yet employer associations have been excluded. This is more evidence that the Government is doing what it told the Australian Council of Trade Unions it would do-buying off the opposition of the trade union movement as proposed in this legislation with specific relevance to the question of lump sums. As I said earlier, what we need is a system in which people have freedom of choice. I am all for the full development of a superannuation industry. I want to see everyone in Australia have access to superannuation. I want to see freedom for people to move between employment and to take their funds and their assets with them. I want to see in place vesting, preservation and portability provisions. We want to see these because they are essential for a free and democratic society in which people have the right to save for their future and the right to feel confident about their years in retirement because they do not have to be dependent absolutely on the Government of the day. However, the route that the Government has taken is in direct contradiction to those very valued principles upon which the Australian people have depended for so long. Mr GEAR(Tangney)(8.40) —I rise to support the Income Tax Assessment Amendment Bill (No. 3). I shall illustrate why these taxation reforms are necessary. In particular, I turn specifically to the need for an equitable national retirement income. The present system has acknowledged weaknesses, and the reforms in this Bill, which deal with occupational superannuation, are a step in the right direction to providing a fair go for the retired. But this kind of reform raises questions as to how we should achieve equity. We must ask ourselves just what the options are. Tonight I shall examine some of them. Firstly, I will look at the erosion of the principle of pensions based on need. Some people believe that the payment of taxes during one's working life provides each citizen with a right to a pension-that is, that taxation is a form of superannuation, and not just moneys paid into the general revenue. The Australian people cannot afford this attitude. As the report of the Panel of Review of Proposed Income and Assets Test headed by Professor Gruen pointed out, the universal age pension is not an affordable option in the short term. Abolition of the current income test for all aged and service pensioners would cost about $1,100m in the first year, or more than $3 a week for every income taxpayer in this country. Already the taxpayer, in 1984, is providing a much greater proportion for the aged than was originally the case when pensions were introduced federally in 1908. By the 1930s, less than one-third of those of pensionable age received the old age pension. By 1933 the figure had reached nearly 74 per cent. If the income test were abolished, about 280,000 people currently not receiving the age or service pension would receive it. (Quorum formed). A second option is the continuation of the present system, which is based, in theory, anyway, on the view that most people have the ability to make suitable retirement arrangements, and those who do not have that ability will be provided for by the aged pension. Many people took advantage of the removal of an asset test in 1976 to receive a pension, destroying the concept of pensions based on need. Moreover, the idea that people have the ability to provide for their retirement is undermined when one realises that most adult Australians do not participate and, in fact, cannot participate in superannuation schemes, and many have no access to a scheme at all, as I have said previously. In 1974 there were an estimated 5.75 million people in civilian employment, but only 29 per cent belonged to superannuation or similar schemes. Even this low figure is misleading as many people did not enjoy their retirement benefit. A change of employment has meant a significant loss of entitlement in that regard. This Bill recognises the importance of portability by providing for the setting up of approved deposit funds. This is an excellent method of allowing workers to change jobs without being disadvantaged. Other statistics point to weaknesses in the present system. For instance, the participation rate for employed females is much lower than that of their male counterparts. An Australian study covering 583 private businesses which operated more than 700 schemes showed that the participation rates were 56 per cent for male employees and only 22 per cent for women. Moreover, even within the circle of those people who did have access to superannuation funds there was gross inequity. Of all the executives employed in private industry, 91 per cent were covered by superannuation schemes. Of salaried employees, 72 per cent were covered by superannuation schemes. When we get down to the workers, for whom honourable members opposite are now crying crocodile tears, we see that only 32 per cent of them were covered by superannuation schemes. These reforms are part of this Government's plan to provide a fairer retirement package. As my honourable colleague the Minister Assisting the Treasurer (Mr Hurford) has explained, this is made up of three elements: Improvements to occupational superannuation, improvements to the age pension, and consideration of the national superannuation scheme. It is this third factor to which I shall now address myself. Providing for the aging population will continue to put increasing pressure on the working population. Looking back as far as 1881, one finds that only 2.5 per cent of the population were over 65 years of age. A hundred years later, that figure had reached just over 10 per cent, and it is calculated that by the year 2001 it will rise to close on 12 per cent. It is interesting in this regard to look at a debate in 1938 when a conservative Treasurer, Mr Casey, told Parliament that he was greatly concerned about the future cost of pensions. Mr Casey looked 40 years into the future. That is a refreshing change for a conservative, considering what they do nowadays; they never look further than the next election. But what he did then was to extrapolate what the cost would be in 1978. He then predicted that there would be 1,280,000 pensioners. The actual figure was 1,380,000 pensioners, so he was not far out; it was an error of only 2 per cent. When Mr Casey estimated the cost he calculated in 1978 values at $476m. The actual cost in that year was $3,229-an error of about 680 per cent. So in estimating the escalating costs of pensions today, one should consider that 10 years ago there were about 950,000 pensioners and the age pension cost $888m. This year there are nearly 1.5 million pensioners, which is a rise of about 50 per cent, but the cost to current taxpayers is nearly $5,000m-a rise of 450 per cent. So, what we are looking at is not a linear relationship. With the aging of our population we have an exponential rise in the cost of pensions to which we must address ourselves. Certainly Treasurer Casey did that back in 1938. I should like to quote part of his speech. He said: The Government was not prepared to commit future generations to a liability of such magnitude- That was the $478m which I mentioned- and we came to the conclusion that, if this national insurance scheme is to be brought into operation, the present generation-the generation which is to benefit by the creation of the initial deficit-must make some contribution in advance of the immediate needs. The Bill that Mr Casey was describing was not confined to age pensions. However, the arguments used in 1938 to justify compulsory insurance that in part served that purpose are even more critical today. I believe that the statistics I have used indicate that we must have a national superannuation scheme sooner rather than later. Let us look at those countries that have such a scheme. A feature of these schemes is that some of the money that is paid into the scheme today is put aside and used to pay retirement incomes in the future. If we look at the document entitled 'International Benefits Guidelines-1983' we can compare some of the countries that were certainly a little more social progressive than this country and showed a bit more compassion for their aged population and a bit more business acumen than did the Opposition when it was in government. In Austria the retirement pension is paid at the rate of 79.5 per cent of the average revalued earnings after 45 years in the work force. In Belgium the pension is 60 per cent of career averaged revalued earnings. In Germany an individual receives 66 per cent of his lifetime earnings related to the average weekly earnings but paid at present day values. They are a few examples, but they illustrate that other countries give greater financial security to their retired people than we do. A feature of the schemes is that they are contributory schemes and have no means test. I do not have much time left. Certainly, I think that today we have made a start along the road to having a national superannuation scheme in which the Government of the day can be involved in making sure that people who retire have an adequate income and do not have to rely on the government of the day to provide it for them. Mr WHITE(McPherson)(8.52) —The purpose of the Income Tax Assessment Amendment Bill (No. 3) 1984, as stated by the Minister for Housing and Construction and Minister Assisting the Treasurer (Mr Hurford) in his second reading speech, is as follows: . . . to introduce new taxation arrangements for retirement and kindred payments . . . Later in his speech the Minister stated: . . . I . . . wish to make some remarks about aspects of the Government's retirement income policies . . . It is to that aspect that I will initially address my remarks. In recent days the Government has announced a new assets test. One was proposed in August last year which was later abandoned. It is little wonder that it was abandoned because it created confusion and fear throughout the community. Despite the fact that 1,500 public servants were recruited to implement the scheme and despite the comprehensive selling policy that was undertaken, no one in the community could understand it. The Prime Minister (Mr Hawke), having been overseas and having had a little time to think about it on the plane, announced when he came back that it was to be abandoned, much to the embarrassment, we all know, of the Minister for Social Security (Senator Grimes) and the Minister for Veterans' Affairs (Senator Gietzelt). It was abandoned because it was unjust. Having gone through that exercise, we now have a new scheme being put in place which is equally incomprehensible. If there is any doubt about that, the 40 calls I received in my electoral office yesterday would put those doubts to rest. I would think that in all electorates in Australia an equal or greater number of phone calls would have been received from people who simply could not understand what the Government was aiming at. People are confused and badly frightened. They do not know the details.They know that there is some grand philosophic concept. But what are the practicalities of this assets test? What assets will be valued? Will it involve the lawnmower, the chooks in the back yard, a horse that a pensioner couple might keep for the grandchildren or a bicycle in the garage? Who will knock on the door to check on them? Why is the Australian Taxation Office involved? What happens when assets change, as they must in the case of any family or pensioner? What happens when a partner dies? We asked that question of the Minister for Health (Dr Blewett) today and received yet another version of what might happen in the future. The question that must really be asked is this: Why has the Government rushed in yet again with a scheme, so shortly after the last one was abandoned, which is entirely incomprehensible to the people that it will affect? What is the rush ? There has been big talk about retirement philosophies in the speeches of the Treasurer (Mr Keating) and the Minister Assisting the Treasurer, about how they will look after the old people. All they have done in the last six months is to confuse them totally. Why does the Government not wait for the report of the Senate Standing Committee on Social Welfare, which is currently examining the question of retirement incomes systems? In September 1983 the Committee was given the task to investigate and to report. I quote from its terms of reference : . . . report on, or before, the first sitting day in August 1984: existing retirement income systems, with particular reference to any changes which may be necessary to ensure equitable and comprehensive income security for Australians of retirement age. That is the charter that was given to the Senate Standing Committee; a comprehensive charter to look at retirement incomes in Australia. It is due to report in August. The Government, instead of waiting for that report, commissioned the report of the Gruen Panel of Review of Proposed Income and Assets Test. It was not put out for public discussion and, I suspect, was not even read by most Government members. Yet the Prime Minister last week made an incomprehensible statement to the House about what might happen in the future. He gave the broad guidelines and none of the details. The same mistake was made last September. Where is the much vaunted consensus and consultation that we are always hearing about from the Government? The Gruen Panel reported to the Government and suddenly the Government makes great decisions which affect 1.5 million people now, about 10 per cent of the population, and within a few short years they will affect 15 per cent of the population. It is certainly poor politics by the government, but it is much worse for the people who are now being affected. People are having to face up to yet another change in their life style at a time when they can least afford it. They have to make whatever arrangements the Government says they should make. But will the new scheme be proceeded with? The last one was abandoned. I think it is probably odds on, when the community starts to react, that this one will be abandoned also. The Government has made its decision for the time being and it must live with it. Again, I ask the question: Why does the Government rush in, having talked for 15 months about consultation with the people being affected? What is the rush? It abandoned an assets test in September. It set up the Gruen Panel to report back to the Government. Mr Kent —Madam Deputy Speaker, I raise a point of order. I think the honourable member is suffering from after dinner confusion. He is discussion the assets test instead of the Bill before the House, the Income Tax Assessment Amendment Bill (No. 3). Madam DEPUTY SPEAKER(Mrs Child) —I thank the honourable member. I was just about to point out to the honourable member for McPherson that we are not yet debating the social security legislation. We are debating the two income tax Bills. Mr WHITE —Madam Deputy Speaker, I take the point that you have made. But I also refer to the opening remarks of the Minister Assisting the Treasurer in his second reading speech: 'I wish to make some remarks about aspects of the Government's retirement income policies'. That is what he said in his second reading speech. That is what I am talking about. I think it is entirely relevant that I talk about that. If the Minister Assisting the Treasurer can talk about it in his second reading speech, I think it is entirely proper that the Opposition can talk about it as well. Madam DEPUTY SPEAKER —That is quite correct. Mr WHITE —Thank you, Madam Deputy Speaker. Why did the Government rush in? The simple answer is: Because of an overbearing arrogance which is starting to characterise the Government and an overconfidence. Mr Robert Brown —We are humble! Mr WHITE —Yes, the Government is very confident now, as was the Whitlam Government in its early years. Government members have the feeling that they can walk across water, that they can implement unpopular policies and brush aside the consequences. I do not know why I should be warning honourable members opposite; they should be working it out for themselves. But they are doing the same thing that the Whitlam Government did. They will come to the same unhappy conclusion because of the arrogance of some Government members and Ministers who , having gone through the disaster of the assets test last year, now say: 'We will just gear it up again. We will have another go. We will not care what people say. We do not care what the effect will be on 1.5 million pensioners, because the polls show us looking good'. It is that arrogance and the ability that honourable members opposite think they have to walk across water that will leave a gaping hole in their path. Mr O'Neil —We have not lost it yet. Mr WHITE —We will see. That is my view. Honourable members opposite obviously have a different one. We will see where this arrogance will lead them. Some Ministers talked about ad hockery. The Government will not wait to see a comprehensive retirement policy or at least a suggestion come from the Senate Standing Committee. No, it will rush in. Having abandoned one plan not six months ago as being unworkable, the Government is now putting another one in its place which is equally unworkable. Dr Theophanous —You had seven years. What did you do in seven years? Mr WHITE —We are talking about what you are doing. Madam DEPUTY SPEAKER —Order! The honourable member will address the Chair and not hold a private conversation. Honourable members on my right will cease interjecting. Mr WHITE —We are talking about what the Government is doing and the proposals it has put before this House and the people of Australia in the last week. That is the issue now before this House, not what happened in the last seven years. This is something that the Government has done, and we are debating it. I was talking about ad hockery. I will quote from the speech of the Treasurer to the Life Insurance Federation of Australia on 31 May. He said: The retirement income area has tended to develop on the basis of ad hoc decisions and arrangements which had little regard to underlying demographic and economic developments. That is what the Treasurer said on 31 May. Yet the Government has gone ahead and introduced the worst bit of ad hockery concerning retirement incomes that we have probably ever seen. It will not wait because it feels it has the wind in its sail, and it is developing an arrogant and overbearing attitude. In the long term it seems to me that in this country we face two choices on retirement incomes. We either have an income and an assets test or we put into place as soon as possible a system whereby payments are made into a fund during a person's working life, so that at a certain age everyone will get a benefit from that fund. Then we will not have to go rummaging through people's lives and checking on their assets and on what personal choices they may want to make regarding their money. I see that one or two honourable members opposite are nodding their heads. That is the choice we will really have to make. Dr Theophanous —A national superannuation scheme. Mr WHITE —The honourable member can call it a national superannuation scheme if he likes. That is one of the things that must be considered. Why then do we have this ad hockery before the Senate Standing Committee which, when charged with looking at this very problem, reports back in a few short months? Why did the Government charge in with another half baked scheme so soon after abandoning the last one? I would have thought, having seen the effects of the last assets scheme, that the Government would have gone very slowly and certainly would have tried to give some sense of peace and security to older people, those who are least able to rearrange their affairs. I will pass on to another matter in the Bill, the tax on lump sum superannuation payments. Having now decided to tax lump sum superannuation payments, it must be admitted that this is a positive disincentive for people to save and to look after themselves. It is an incentive for people to throw their hands in the air and lean once again on the Government. Mr Robert Brown —You did not listen to what I said. Mr WHITE —No, I did not, but I would be happy to read it. We on this side of the House wish to encourage people to look after themselves. We wish to encourage some choice and diversity. If people wish to enter a scheme which gives them a lump sum, that should be their choice. Why did the Government pick a 15 per cent rate of tax on lump sum payment up to a certain amount and a 30 per cent rate of tax on the rest? Mr Robert Brown —That is the lowest marginal rate of tax. Mr WHITE —Fifteen per cent and 30 per cent are figures taken out of the air; they mean nothing. They are excessive. One must also ask about the place of the Australian Council of Trade Unions in the whole scheme of things. The ACTU is opposed to the tax on lump sum superannuation. What do we see now? We see the ACTU being invited in, as a trade-off, to advise the Government on what sort of taxation policies it would like to see in the next Budget. It is like Daniel inviting the lion to come right into the den. As the Deputy Leader of the Opposition (Mr Howard) quite rightly said when he was speaking a little while ago, what we will see in August, in a few short months, will be Cliff Dolan's first Budget. I wonder how many more we will see-not too many, I should think, if there is to be an early election. Mr Howard —Paul had one Budget. That was last year. This will be Cliff's first. Mr WHITE —This will be his first and last as well. I wish to highlight the effect of taxation on lump sum superannuation payments to one sector of the community, those who serve in the defence forces of this country. If a person over 55 years of age takes a lump sum, the first $50,000 will be taxed at a rate of 15 per cent and the remainder at 30 per cent. If a person under 55 years of age takes his lump sum superannuation he will be taxed at a rate of 30 per cent on the lot. This is a very severe penalty on people who serve the defence forces of this country because almost everyone who serves retires well before 55, not through choice, but because he has to. That is one reason why such people deserve special consideration. The other reason is the nomadic life that people in the Services live. At the end of that rather nomadic life, having been posted all over Australia or all over the world, they need a lump sum to establish themselves back in the community. They retire from the Services at a time when they are too young to retire. They have to work. They have children to put through school and university and they have to make a living. So out they go, through no choice of their own, before they are 55. They need that lump sum to buy a house, to start a business, to do all the normal things that the majority of the population had been doing for the previous 20 or 30 years. What will happen to those people? They will get hit with a 30 per cent tax because they are told they are too old for the Army, the Navy or the Air Force. Mr Robert Brown —They do not get hit with a 30 per cent tax at all. Mr WHITE —They do and the honourable member knows that is true. I will illustrate this. A major retires at 47. A lieutenant-colonel retires at 50, and that is when the peak starts to narrow as very few servicemen reach over that rank or the equivalent rank. Non-commissioned ranks serve by engagement and most of them retire after 20 or 30 years. The proportion of Service personnel who serve past 55 is minuscule. It is a young man's profession and its members are told when to retire. Yet these people are being discriminated against. It is no good honourable members opposite looking up tables and seeing what cosmetic conditions are being granted to members of the Services by the Government. It would mean nothing to them. They know that when they retire before 55 they will be taxed at a rate of 30 per cent on their lump sum superannuation. We must ask: Why does the Government continue to single out the Services for discrimination? Why is a review of the Defence Force retirement benefits scheme being undertaken? Why are members of the Reserve forces being taxed on their pay? I urge the Government to take a longer term view of this problem; to get off the backs of the pensioners; to wait for a comprehensive review of retirement incomes; and to stop rummaging through people's lives and give them some peace and security. We should be encouraging people to look after themselves by diversifying and taking advantage of the different superannuation schemes. We must recognise that not all employment in this country is the same, and the Government must get off the backs of the Service personnel as well. I urge the Government to think again on the assets test and on the ramifications of additional taxation of lump sum superannuation payments. Dr THEOPHANOUS(Burke)(9.11) —I agree with one thing that the Deputy Leader of the Opposition (Mr Howard) said: This is an extremely important taxation measure , perhaps the most important tax measure to be put forward for many years. Unfortunately he did not deal with it properly in his remarks. In fact he tended to concentrate on only one aspect of the whole matter, completely ignoring, not even mentioning, all the positive features, never mind actually saying whether or not the Opposition welcomed them. The particularly positive feature of great concern to me and to the Government industry committee is the provision in relation to management and investment companies. This legislation provides the possibility for management and investment companies to claim their tax deductions; in other words, it provides the fundamental basis of those companies . Let me remind the House what those companies are about. They were formed specifically to allow high technology development to take place in this country after the scandalous ignoring of it for many years by those opposite. It was found that we would have to provide enormous encouragement to get management in this country to think again about high technology investment. Because that has been ignored for so many years we were forced into offering extremely generous provisions, including a 100 per cent tax write-off for four years. Those generous provisions have been enthusiastically taken up. As a consequence, we had over 40 applicants for the small number of licences for management and investment companies that were offered this year. I say to those who missed out that this is not the end; there will be more next year and possibly the year after. We intend to continue this program of encouraging technological development through the taxation system. Although it has taken some time to draft this legislation, it is extremely important to the achievement of that goal. I point out that some of the State governments have been involved in these management and investment companies, which will benefit from the proposals that are going through the House tonight. That is one of the positive benefits, and it surely was uncontroversial and should have been welcomed by the Opposition. But Opposition speakers mentioned nothing about it. They preferred to carry on with political point scoring on matters to which I come back shortly. Let me turn to another positive feature which was mentioned by the Deputy Leader of the Opposition but which he seems to have run away from. I refer, of course, to the strengthening of section 26 (a) of the Income Tax Assessment Act. Is the Deputy Leader of the Opposition, in opposing these amendments, actually saying that he agrees with those people who have planned and plotted to get around the intention of section 26 (a)? If so, let him say so in the House, because we are ready to fight the forthcoming election on tax avoidance. The amendment to section 26 (a) is necessary to ensure that, where it is established that the clear intention was to buy and sell property for profit, tax is paid by those people and corporations who have been getting around the provisions of section 26 (a). At present there is substantial avoidance in relation to that section. Our independent advice is that avoidance is taking place in this area, so surely it becomes our responsibility to do something about it and to strengthen this provision of the Act. If members of the Opposition wish to oppose this amendment, what is the moral justification for them doing so? Do they say that they do not want a provision of this kind in the Act? If that is the case, let them move to remove the provision altogether, not just put forward this doublespeak whereby they say: ' We accept that provision in the Act, which has been there for many years, but at the same time we intend to oppose the amendments'. It is time that we made it perfectly clear that the rorts which existed under the previous Administration will not be allowed to continue. That comment applies across the board. Those ordinary workers who are paying pay as you earn taxation are sick and tired of actions by various groups in the community to avoid their taxation responsibilities. It is time it was recognised that we need such an amendment to strengthen section 26 (a). Let me deal with a couple of other matters dealt with by speakers opposite in what has become an attempt to attack the Government again by claiming that we have some kind of opposition to the elderly and that these proposals are intended to discourage people from saving for their retirement, and various other claims of that kind. First of all, the figure of 30 per cent has been bandied about. Not for many years will anyone pay 30 per cent taxation on his or her lump sum superannuation payout. The reason for that is that any lump sum moneys received before 1 July last year will attract 5 per cent taxation, the same as before. What about payouts after 1 July? It was claimed that that is where the 30 per cent tax rate applied, but it was not mentioned that it will not apply to amounts up to $50,000. On amounts up to $50,000 the rate will be 15 per cent, and it will be 15 per cent not of the total payout but of the employers' contribution. The Deputy Leader of the Opposition said this measure is directed against the middle and lower middle classes. Mr Howard —That is right; it is too. Dr THEOPHANOUS —It is not, and you know it. Mr Howard —You are hitting your own mates, and you know it. Dr THEOPHANOUS —The honourable member said that the average payout for those people would be $30,000. If the average is $30,000 or even if it is $50,000- Mr Howard —I said that 90 per cent were below that. Dr THEOPHANOUS —The honourable member has had his go! The fact is that they will pay only 15 per cent of the employers' contribution. That is slightly different from what was claimed by the Deputy Leader of the Opposition and other speakers. This scheme is necessary because there is an inequity in the system, and the Deputy Leader of the Opposition, as my colleague the honourable member for Hunter (Mr Robert Brown) pointed out, knows that this inequity exists. Those people who have received lump sum superannuation payouts have received a large number of tax concessions over many years in respect of their contributions. Why do we have this measure in the taxation Act? Why do we have these concessions? Is it not to encourage people to get into schemes for their retirement? It certainly is. It is to enable them to go into schemes which allow them to receive payments week by week for the whole of their retirement. That is the primary purpose; that was the reason why the concessions were put into the Act in the first place. The Government will not eliminate the possibility of an employee receiving a lump sum. What it is saying is that if a person wants to take a lump sum he should pay tax at just the same rate-in fact if one works it out it is still much lower-as that paid by a person who has the money taken out week by week. Nevertheless, a person should at least pay tax at a more equitable rate than that which has been paid in the past. I have mentioned that these provisions are absolutely necessary for equity reasons. However, some speakers have said: 'Why don't we wait for the Senate inquiry to report? Why don't we introduce a more comprehensive scheme?'. There is nothing in these provisions which prohibits us from introducing a more comprehensive scheme after the Senate has reported. Mr MacKellar —Are you going to change it again? Dr THEOPHANOUS —If the honourable member had read the statement of the Treasurer (Mr Keating) he would know that the Treasurer has said that the Government already has working parties on the possibility of a national superannuation scheme. I notice that the Minister for Housing and Construction (Mr Hurford), the Minister Assisting the Treasurer, is at the table. While we were in Opposition he was responsible for drafting an excellent proposal. I hope that that proposal will be taken into consideration. I have copies of it here if the Deputy Leader of the Opposition would like to look at it. It is a proposal for a national superannuation scheme. Nothing in these proposals prohibits those sorts of developments. On the contrary we see them as stages towards such development. So the arguments that have been presented by the Opposition in relation to this matter, firstly, do not focus on the positive points that I mentioned at the beginning of my speech-they were not even mentioned by the Deputy Leader of the Opposition-and secondly, in relation to the central argument, are completely erroneous. So we are left with a situation in which all we can say is: 'If the Opposition really believes in any form of equity, it will support these proposals'. Mr WILSON(Sturt)(9.23) —I take part in this debate to express my very great concern at the attack this legislation involves upon the elderly and those hundreds and thousands of Australians who are approaching retirement and who, in the uncertain circumstances of our retirement provision, have had their expectations and aspirations thwarted by this legislation. It seems a very strange anomaly to find that in the same session of Parliament a Labor Government introduces two pieces of legislation which, on their face, appear to be totally inconsistent. On the one hand we have a situation in which the tax system has some concessions in it, concessions that were designed to give encouragement to people to provide during their working lives for their years in retirement. So a tax concession was introduced. This concession gives people an advantage if they save for their retirement whereas if they save for immediate short term expenditure they are not so encouraged. However, under this legislation when they reach retirement their efforts will not be rewarded. As a result of this legislation they will be severely penalised. They will be penalised in relation to programs of saving that they entered into in the expectation that they would receive lump sum payments on retirement that they could use to provide for dignity and comfort in their years of retirement. So on the one hand we have people who responded to this tax incentive attacked by being penalised by this tax imposed by the Income Tax Assessment Amendment Bill (No. 3) which is before the House. On the other hand we have had the announcement of legislation to impose an assets test. We have the strange situation in which some legislation encourages people to save for their retirement but at the point of retirement takes away a significant proportion of those savings. If they are successful in saving they are then penalised by the imposition of an assets test. I move: That all words after 'That' be omitted with a view to substituting the following words: 'whilst not declining to give the Bill a second reading, this House- (1) deplores the Bill's attack on the retirement aspirations of hundreds of thousands of ordinary Australians; (2) notes the blatant breach of pre and post-election commitments of the Prime Minister involved in the introduction of the Bill; (3) condemns the privileged status conferred upon trade unions in relation to deposit funds, and (4) regrets the Government's failure to produce a coherent approach to retirement security policy'. In relation to the first element of the amendment which I have just moved, I draw on the fact that the Gruen report of the Panel of Review of Proposed Income and Assets Test which recently examined this whole question of assets testing for the Government, stated: A universal age pension system, whether achieved by a national superannuation scheme or by abolition of the means test, has been a long standing aspiration of the Australian community. If one reads the full context of the Gruen report, both the words that are printed and what is implied between the lines, it seems that the Gruen committee is expressing deep disappointment at the failure of the Government to identify that aspiration of the Australian people and come forward with a policy package that fulfils and responds to that aspiration. I have been a long time advocate of the abolition of the means test. I believe that rather than imposing an assets test we should be abolishing the assets test altogether and going one step further. We should be abolishing the income test as well. The unfortunate thing is that the Gruen Panel, in its recommendations, quite clearly felt constrained by the atmospherics created by the Government, by the terms of reference that were provided to it, by letters to it from Ministers such as the Acting Minister for Social Security and others. Several times in its report the Gruen Panel referred to the fact that in its view in the short term it was not an option to suggest that universal age pensions were an available option. Again , if one reads the Gruen Panel report, one is left with the very clear impression that had the Panel felt that that was an option it would have liked to recommend the introduction of universal pensions to all the aged. The report goes on to explain that the aged have come to hold the view that through paying their taxes during their working lives they have become entitled, or should have become entitled, as of right, to a pension in retirement. The Gruen Panel talked about the cost of the total abolition of both the assets and income tests. True, the Panel says it would cost $1,100m gross, but a sustantially lower figure in net terms. One wonders, if account were taken of the side effects of the total abolition of the assets and income tests, what the actual cost would be. There is no doubt that as a consequence of the existence of the assets test and the existence of the income test, people will adjust and arrange their lifestyles and will adjust and arrange their investment patterns, both in the lead-up to retirement and during retirement, in a manner which will cost governments dearly in revenue forgone from the tax that could otherwise be collected from the proper investment of the savings of the retired members of the population. I wonder how much tax would be collected if every age pensioner with savings put his money in safe investments at market rates-instead of putting it in low interest or non-interest bearing deposits put it in at, say, the Australian Savings Bond rate-and then received that income along with the taxable pensions, added the two together and paid the taxes that were properly due. It is my view that a substantial amount of additional taxation would be collected. It would not only be collected from the new pensions that would be paid if the means test and assets test were totally abolished but also from the more efficient use of resources by people who had saved to provide for their retirement so that they could enjoy the income that those savings properly earned during their years of retirement. We have a Government coming in in a piecemeal fashion and seeking to raise revenue by imposing taxes on lump sum superannuation payments. This legislation is not part of a total Australian retirement incomes package. The superannuation legislation will result in people being dissuaded from making provision for retirement. The assets test will result in people adjusting their affairs so that they can become entitled to what I believe the Australian community at large quite properly has come to expect as of right, that is, a pension in retirement as a consequence of the payment of their taxes during their working lives. The Hancock National Superannuation Committee of Inquiry, which was set up a number of years ago, made a recommendation concerning a national superannuation scheme. The minority report of that Committee recommended the payment of universal pensions to all. I find it very strange that a government that came into office saying that it was going to introduce a national superannuation scheme has done nothing to move towards that goal. In fact, this Government is setting Australia back from the possibility of introducing such a scheme in a coherent and sensible fashion. It is saying that it does not want the present age pension, which is now nearly universal, covering more than 85 per cent of the aged population, to be extended so that we can build a retirement scheme on top of a universal flat rate pension available to all. It says: 'No, we do not want 85 per cent of the retired population of Australia to receive a universal pension from the Government. We will reduce that number by imposing an assets test in 1984'. But what sort of assets test would a Labor government, if given a second chance , introduce in 1985 or 1986? Would it then say that in the context of 1985 and 1986 its narrow definition of need, its desire to have greater numbers of people totally dependent upon tax-sourced pensions, had caused it to introduce a far more rigorous assets test? In the light of the broken promise of the Prime Minister (Mr Hawke) and his Labor Government, promises that pensioners would not lose a dollar out of their pension income, that there would be no assets test and that there would be a national superannuation scheme-which has not yet been introduced-no one could ever believe that, following an election, if given a second chance, a Labor government would not again in the future deny Australia's retirees dignity and security in retirement. Since the last Budget-indeed, since the mini-Budget in May of 1983-the retired section of the Australian community has been deeply worried as a consequence of policy decisions of the Labor Government, decisions of the Labor government, decisions contrary to firm commitments given at the time it was elected to office. Therefore, how could any person now in receipt of or expecting to be in receipt of an age pension or a lump sum superannuation payment because of involvement in a superannuation scheme believe that the legislation before the House of Representatives tonight is the end of the story so far as the Labor Party is concerned given the way in which it wants to discourage people from saving for retirement by either taxing lump sum superannuation or depriving them of their pensions by the imposition of the assets test? Mr Robert Brown —That is just fearmongering, and you know it. Mr WILSON —It is not fearmongering at all. The Government is changing the law in a way which has worried the Australian community as a whole. As a nation we need to look coolly, calmly and sensitively at the whole question of Australia's retirement income strategy. During the period we were in office we encouraged people to provide for retirement, abolished the assets test and moved towards recognition of the aspiration of the Australian people to have a more sensible and self-reliant retirement income strategy. A lot of concern is expressed about the growing number of the aged. That is true, although I was interested to observe in the Gruen Panel's report that the Panel does not believe that it will be as severe a problem for Australia in the immediate future as it may be for countries that have older populations. Nevertheless, it is still a problem. We are a population that is slowly ageing. We are a population that has improving mortality rates in that people have longer expectations of life. Sometimes this whole question is looked at upon the following basis: 'Oh, isn't this terrible. It is going to impose a great burden on the taxpayer'. But if a community, a nation, has a large number of people who are in the retirement age bracket they have to be provided for somehow. They have to be provided for, and totally provided for by government, or by private means, or by a joint operation. Australia has had a mixture-government support and the encouragement of private means. Where we have gone wrong is that we have not clearly understood the interface between private and public sector provision . As a country we, like so many other countries with ageing populations, have to develop a coherent method whereby resources in the form of income can be transferred from the working population to the retired population. It does not really make any difference whether the public sector or the private sector provides that or a sensible mix of the two. It is my view that in today's age it is the responsibility of the Government to provide a guaranteed minimum age pension for every retiree and a framework in which people can exercise a choice during their working lives. Whether they are satisfied to face retirement on that guaranteed minimum pension, whether it be the present rate or 25 per cent of average weekly earnings, is another question. Over and above that basic minimum pension, Australians should be entitled and encouraged to do better if they wish. So they have a choice. But the Labor Government is denying people that choice because, having exercised the right to go into a superannuation scheme with their employers or on their own and having been given a concession in the first place they are then going to be taxed in a punitive way when they take out that lump sum. Even if they accumulate a lump sum net of that punitive tax, they will then be subject to an assets test and deprived of the pension. Yet all these proposals come from a government that says it believes in a national superannuation scheme. Surely a national superannuation scheme should be a universal scheme? We are living in a country where Liberal governments, through their encouragement of private provision and through the way in which they relaxed the income test and removed the assets test, enabled a large proportion of the Australian people to have available to them a secure pension in retirement. Mr Hand —To look after your mates-tax avoiders and rip off merchants. Mr WILSON —The honourable member talks about looking after mates. My concern is that every Australian, poor or rich, should know where he stands in relation to a national superannuation scheme. The imposition of punitive taxes, the introduction of assets tests in circumstances in which they could be made more severe by a government whose promises cannot be kept, are not the way to achieve a fair and sensible national superannuation scheme which enables the effective transfer of resources to Australia's retired in a way which is equitable, compassionate and sensitive to the needs of all Australians, both the taxpayers and the retirees. Earlier in this debate I moved an amendment in relation to the legislation before the House. Again, I draw the terms of that amendment to the attention of members of the House and urge them to support it. Madam DEPUTY SPEAKER(Mrs Darling) —Is the amendment seconded? Mr Howard —I second the amendment. Mr RONALD EDWARDS(Stirling)(9.43) —Because of the pressure of time, I will be brief in my comments. It was notable that the honourable member for Sturt (Mr Wilson) actually spoke about superannuation towards the end of his address. Unfortunately, the honourable member for McPherson (Mr White) spent most of his time talking about the assets test and it is necessary to clarify that. I acknowledge that the honourable member for Sturt did speak about superannuation. That is what we are talking about here. I acknowledge that one of the points raised by the honourable member for Sturt is the mix of private and public superannuation schemes. One of the things that we have to emphasise from this side of the House is that, whilst there are tax concessions as such for superannuation schemes, every superannuation scheme has a mix of private and public superannuation because, in effect, taxpayers are subsidising the superannuation scheme. So it is not as if there is a totally private superannuation scheme; there is a mix of schemes. Clearly, whilst there are tax concessions, the taxpayers are subsidising them. I do not think that is properly understood by members of the Opposition. That is my first point. That is why we are on about this matter in the legislation. Given the tax concessions that superannuation attracts, what we are concerned to do is to show that we want people to enter superannuation schemes. We are happy that they will attract tax concessions but, at the same time, we want them to take those superannuation payments as a pension payment and not take them as a lump sum and thereby get all that tax minimisation. We could get right into tax minimisation, but we will not in this discussion; we can save that for an election. What I can say is that what we have tried to do here, and what Opposition members did not do when they were in government, is to make a proper structural approach to retirement arrangements with respect to superannuation and certainly with respect to income and assets testing. The income and assets testing is a matter for another debate. In this debate we are talking about superannuation arrangements. Opposition members did not address that point. They certainly did not address what we call the cherry-picker arrangements either. That is really something that they should have dealt with properly because it was a form of tax minimisation. It is very clear, if one looks at the court records, that that the was case. In order to be expeditious in terms of time, what we have attempted to do in this legislation is recognise certain aspects. First of all, as a consequence of the ageing of the population we will have fewer resources to distribute amongst retirees. Therefore, it follows logically that we want to have a superannuation arrangement in which people take pensions rather than lump sum payments, and that is what this legislation is about. On the other hand, we are also concerned with trying to put a ceiling on the total number of payments that go out in pensions, hence our assets test. In purely logical terms, we are saying that, with an ageing population, we are trying to ensure that resources are used most effectively for those most in need. That is the first observation I make. I do not think that matter has been brought out properly in discussion by Opposition members. Certainly speakers on this side of the House have addressed that matter effectively. I know the honourable member for Hunter (Mr Robert Brown) has done that. We have an ageing population, so much so that by the year 2020 about 23 per cent of the population will be over 65 years of age. We are trying to circumvent the impact of that ageing on the national Budget. We are trying to get people to take superannuation payments as pension payments. That issue can be dealt with more fully in the debate on our assets test. We also need to move towards a comprehensive national superannuation scheme. This legislation is part of that manoeuvre. As was pointed out by the Asprey Taxation Review Committee, the report of the Hancock National Superannuation Committee of Inquiry and the Campbell Committee of Inquiry into the Australian Financial System, it is necessary to have a comprehensive national superannuation scheme. This legislation is the first manoeuvre towards that. I will say something briefly about that in a moment. We are saying that members of the Opposition, in their term in government, should have addressed that matter but did not. This is the first step towards that. One does not suddenly turn round and rebuild Rome overnight, but what we are doing is starting to lay some of those foundations towards that comprehensive approach. The line of thought common in all of those inquiries was that it ought to be possible to encourage people to take superannuation payments as pension payments rather than as lump sums. That was a common line of thought in the Asprey report , the Hancock report and the Campbell report. The reason for that is purely to use the national resources most efficiently and, secondly, more equitably. There is nothing sinister about it. I do say to honourable members opposite that they are trying to misrepresent the position because these reports have said that it is important to begin to use the superannuation funds as pension funds. We have provided for that. I will talk about that in just a moment. The scheme is not retrospective. This was something we said in statements made last year. It is not a point I propose to labour at this stage. Honourable members have talked about the 30 per cent rate. We want to make it very clear that the first $50,000 that is taken as a lump sum by someone who is aged 55 years and over will be taxed at 15 per cent and not at 30 per cent. That has not been brought out by honourable members opposite; they should have done that. Honourable members on this side of the House are doing so because we are trying to get the record straight. If people do roll over their superannuation entitlements into another superannuation fund or into an approved deposit fund, it will not be attracting tax at all. Honourable members opposite should have said that. We are saying that because we need to get the record straight. I believe that is a very important issue that should be pointed out. I have another point to make on our approach to industrial relations in the area of what I would call bona fide termination payments. In certain industries, as a result of the seasonal and structural nature of those industries, it is necessary as part of the agreements to negotiate bona fide termination payments. Those payments will be taxed under the same 5 per cent arrangement as previously existed. So we are not scapegoating anyone, despite the rhetoric we have heard from honourable members opposite. The problem with honourable members opposite is that they shout, scream and pontificate. All that happens is that that noise echoes around the empty shell of the Liberal Party. We, on this side of the chamber, are concerned to put together some substantial propositions. These are some substantial propositions. I will have to close soon because of the time but I make two final points: The honourable member for Burke (Dr Theophanous) has talked about management and investment companies. We have said that investment in those companies ought to attract tax concessions. That is part of our national approach to investment and venture capital. That is what we are saying with respect to superannuation. If superannuation arrangements are rolled over into management and investment company arrangements, they can attract those tax concessions we have already referred to. The final point I make-this is a matter that deserves further debate-concerns the issuing by the Government of indexed government securities. I believe that is an important step towards the establishment of a national superannuation arrangement. In brief terms, either the capital value of the security or the interest rate is indexed to the consumer price index. There are all sorts of equity arguments that one could go into but, because of the time, I will not. Our approach towards this superannuation arrangement is quite comprehensive. What we on this side are suggesting-it is said with care and consideration despite the rhetoric we hear from honourable members opposite-is the establishment of a national superannuation scheme down the track. This is one of the first steps towards that. Importantly, we are recognising some structural changes in the Australian economy. We are recognising also that there was neglect by honourable members opposite, that decisions should have been taken which honourable members opposite did not take. They neglected those major decisions. It is no good them coming into this place pontificating now when they had a chance to do something for seven years. They muffed it and the electorate knows that they muffed it. We are saying very quietly and firmly: 'We are doing things you should have been able to do. The electorate knows you did not have the courage to do it'. When we look at the approach with respect to this national superannuation scheme, we see that it is being negotiated through the union movement. There has been a series of consultations. We have come up with an approach to national superannuation and occupational superannuation which will result in a fairer and more equitable arrangement for pension payments. With those comments I commend the Bills to the House. Mr HURFORD(Adelaide-Minister for Housing and Construction and Minister Assisting the Treasurer)(9.54) —As is the usual tradition, I thank all honourable members who took part in this debate. I close this second reading debate by saying first of all that we must be thankful for small mercies. The Opposition is not opposing the motion that the Bill be read a second time, nor should it, because this is good legislation. Mr Howard —Do not push your luck. Mr Carlton —Come off it! Mr HURFORD —Honourable members have already stated in the debate that they will not oppose the second reading. Mr Howard —Do not push your luck. Mr HURFORD —If honourable members opposite are going to oppose the second reading I suggest that it will be another example of the ragbag lot that they are. It is time they got their act together; it is time that they knew what they were doing. We have had six speakers from the Opposition on this legislation. We had to get to the sixth speaker before we suddenly learnt that there has been a palace revolution and indeed there will be a second reading amendment-- Opposition members interjecting- Madam DEPUTY SPEAKER(Mrs Darling) —Order! The Minister will resume his seat. I ask members of the Opposition to stop interjecting. I ask the Minister to address his remarks to the Chair. I call the Minister. Mr HURFORD —Madam Deputy Speaker, you will find when you look at Hansard that every remark of mine in this debate has been directed through the Chair. Through you, I say once again: It is no wonder that members of the Opposition are such a ragbag lot and are seen to be so. They have not go their act together whatsoever . We had to get to the sixth speaker before we learnt that the Opposition was going to move a second reading amendment to the Income Tax Assessment Amendment Bill (No. 3) 1984. I understand that there was an interesting debate in the Opposition Party room. It was originally an exception to the general rule that principle rather than expediency was going to prevail in relation to this legislation. Of course principle should prevail with this legislation because it is good legislation. At this eleventh hour we have the honourable member for Sturt (Mr Wilson) sermonising to us. He was a supporter of the Fraser Government for seven years. Before that he and his family had been supporters of the Menzies and Holt governments, their legislation and so on. I remind the House and the people of this country that Sir Robert Menzies resigned from a particular Ministry of the government of this country back in 1939 on the subject of national superannuation. For the 33 or 34 years that the former Governments governed this country it has not introduced a coherent retirement package for the people of this country. Yet, in a debate such as the one we have had tonight, we have to put up with this sort of sermonising about what the Australian Labor Party should have done in the one year it has had to do it. We have started on the task of a coherent retirement benefit package. This legislation is part of a coherent scheme to bring security to the old people of this country. This is a part of the fundamental reform. This legislation, which brings equity into the taxation system, is a precondition to the future reform of retirement income policies. We will be bringing that retirement income policy coherently to this Parliament and to the people. The Government places high priority on developing a national retirement incomes package. I repeat: This is an integral part of that coherent package. The major reason for change is to achieve taxation equity. This legislation is promoting equity. There is no group of people, other than honourable members who are cackling on the Opposition benches, the mealy-mouthed people that we have to put up with from the Liberal- National Party in this Parliament that would not recognise when it was being objective, that this is not part of that policy of bringing coherence. There has been a glaring inequity between those who receive lump sum superannuation payments and those who receive remuneration on their retirement as part of an income stream. We will, by this legislation, as the honourable member for Stirling (Mr Ronald Edwards) has so eloquently just told this House, encourage people to provide for their retirement in a proper way through annuities and other means rather than through lump sum superannuation payments. A succession of committees of inquiry has argued for this reform. We have had the Hancock National Superannuation Committee of Inquiry, the Asprey Taxation Review Committee and the Campbell Committee of Inquiry into the Australian Financial System. They have all argued for the major reform that is before this Parliament in the legislation that we are debating right now. Mr Cadman —You know that-- Madam DEPUTY SPEAKER —Order! I ask the honourable member for Mitchell to cease interjecting. I suggest that he look at standing orders 55 and 77. Mr Groom —You should be objective. Mr HURFORD —I recognise the contribution from the Deputy Leader of the Opposition (Mr Howard), the person who should have been leading for the Opposition in this debate. I am sorry to see that the sixth speaker on his list has undermined the sort of coherent approach that he gave on behalf of the Opposition in this debate, but I recognise his leadership role. I want to say something about a couple of the points that he made during this debate. He was concerned that trade unions could not be trusted, he alleged, to operate approved deposit funds. Mr Howard —No, I did not say that. Mr HURFORD —He was concerned about the trade unions getting a privileged position in relation to this matter. I deny that they have any privileged position whatsoever. Mr Howard —What prudential requirement do they have? Mr HURFORD —The proper rules of debate in this Parliament-- Madam DEPUTY SPEAKER —Order! I ask the Minister to resume his seat. Members of the Opposition will cease interjecting and will take note of what the Chair has to say. I ask the honourable member for Braddon not to reflect on the rulings of the Chair as he did a little earlier. I let that remark pass at the time because I am aware that, as a result of the late sittings of the House, nerves are frazzled. I ask honourable members to restore a bit of dignity to this chamber and to be quiet while the Minister is speaking. I call the Minister. Mr HURFORD —The trade unions have long operated superannuation funds on behalf of their members. It is simply ideological bigotry to argue that trade unions are not capable of operating these approved deposit funds. They have a long record of proper prudential control over superannuation funds. I ask the Deputy Leader of the Opposition to look at the definitions of 'approved rules' in sub- paragraphs (b) and (j) of proposed new section 27A (1). Those sub-paragraphs require that a registered auditor be appointed and that proper books of account be kept so as to enable 'the account of the fund to be . . . properly audited'. If this does not represent proper control over these approved deposits funds-no matter who operates them-I do not know what is. In other words, there are practical controls in the Act and in the regulations. I repeat that it is ideological bigotry to say otherwise. The Deputy Leader of the Opposition also was concerned about section 26 (a). I make the point that he referred to certain provisions of the Bill which depend for their operation on the exercise of a discretion by the Commissioner of Taxation. The Deputy Leader of the Opposition said, and he is well aware of this , that there are many provisions of the income tax law which vest in the Commissioner a discretion for the purpose of their application. If I had time to check, no doubt I would find that the Deputy Leader of the Opposition, when he was Treasurer of this nation, was responsible for many of these inclusions in the Act where the Commissioner of Taxation has this discretion. As the honourable member also well knows, most examples show that the Commissioner has exercised his discretion in a very reasonable manner. I do not know of any examples where he has not exercised his discretion in a reasonable manner. There are so many examples where the Deputy Leader of the Opposition himself specifically included, I allege, the discretion of the Commissioner. I point out to the Deputy Leader of the Opposition the provisions contained in the amendments to section 26 (a) of the Act. The measure concerned deals with situations in which a taxpayer effectively realises a profit on property acquired for profit-making purposes by disposing, for example, of shares in the company which holds that property rather than by disposing of the property itself. I remind the Deputy Leader of the Opposition that this provision is, as indicated by the Treasurer (Mr Keating) on Budget night last year, similar to those parts of the legislation introduced by him in 1982 in relation to section 26AAA of the income tax law, which imposes tax on profits in short term property transactions. In other words, section 26 (a) as it is amended by this Bill is very little different from those provisions that related to section 26AAA when the Deputy Leader of the Opposition introduced that legislation into Parliament. Next I refer to the speech made in this debate by the honourable member for Berowra (Dr Harry Edwards). He cited the example of a Commonwealth driver intending to retire on 1 July 1987 after, as I understand, 17 years employment with the Commonwealth. He suggested that the additional amount of tax payable under the new superannuation arrangements will be some $4,500. I believe his calculations are totally erroneous. Making fairly conservative assumptions as to the likely contribution rate by the employee in question over the period 1 July 1983 to 1 July 1987, the extra tax that the employee can expect to pay would be, if he is over 55 years of age on retirement, about $1,350, not $4,500. If he is under 55 years of age on retirement and does not roll over the amount into an approved deposit fund, the most he would have to pay is about $3,000. Although we have made assumptions in this case, I believe that the honourable member for Berowra is giving an example that is, on every indication, completely erroneous. I believe my case rests there. The honourable member also suggested in the course of his speech that any profits on the sale of shares in a management and investment company should not be assessable if the shares are held for at least two years. Although there are to be no special rules for investors in MICs compared with investors in any other forms of investment as to when profits are assessable, shareholders in MICs who satisfy what is known as the 'patient investor' criteria implicit in the new incentive scheme-that is, the four year holding period and the maximum benefit-are no more likely to be assessed on any profit than is say, an investor in blue chip shares. Whether the shares were acquired for the taxable purpose of profit making by sale is a question to be decided on the facts of the case. An investor who sells shares in an MIC after two years and loses 50 per cent of the tax deduction provided under the new scheme, under the claw-back rules for sales within four years would by and large be less likely to have had the subjective taxable purpose at the time of his investment than would a general investor who sells shares after two years. In other words, once again the argument used by the honourable member for Berowra is erroneous. Indeed, when it comes to MIC shares there will not be any rules applied which do not apply in the general course of events to any other purchase for resale at a profit. If the asset is bought for resale at a profit then indeed there is tax on the surplus. Mr Howard —That is the present law. Mr HURFORD —Yes, that is the present law. Unlike the honourable member for Berowra, we are suggesting that the present law would apply to the MICs, as it does to any other asset which is bought and sold. Once again I deplore the fact that the Opposition at the eleventh hour has moved an amendment to the second reading motion. I believe that in the ordinary course of events the Deputy Leader of the Opposition, the former Treasurer, should have given some notice of intention to move that amendment. I am sorry that he has been rolled in his Party room. Of course, the amendment will be opposed by the Government. The amendment first of all suggests that the Bill should be deplored on the unlikely grounds that it is an attack on the retirement aspirations of ordinary Australians. I state again, as I stated earlier in my contribution to this debate, that this is part of a coherent approach to the retirement of Australians. Secondly, the amendment states that there has been some breaking of a commitment. The commitment of this Government is in an overriding way, to equity and justice in the taxation system, and that is what the Bill does. Thirdly, the amendment suggests that a privileged status is conferred on trade unions. I have already stated categorically that there is no such privileged status in this legislation, and I have proved how that is so. Fourthly, the amendment talks about a coherent approach to retirement security policy. The legislation is the first step in such a coherent approach. We have waited for 40 years for such an approach-since a former great leader of the once great Liberal Party, Sir Robert Menzies, retired, indeed resigned, from the Liberal Government on this issue. Now at last we will get a coherent approach to retirement incomes. It is because of this that I suggest that this amendment of the Opposition ought to be treated with the contempt it deserves. Question put: That the words proposed to be omitted (Mr Wilson's amendment) stand part of the question. The House divided. (Madam Deputy Speaker-Mrs E. E. Darling) Ayes . . . . . . . . . . . 63 Noes . . . . . . . . . . . 42 —— Majority . . . . . . . . . 21 —— 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.Blewett, N. Klugman, R. E.Brown, John Lindsay, E. J.Brown, Robert McHugh, J.Brumby, J. M. McLeay, LeoCharles, D. E. Maher, M. J.Charlesworth, R. I. Mayer, H.Child, J. Milton, P.Cohen, B. Morris, AllanCross, M. D. Morris, PeterDawkins, J. S. Morrison, W. L.Duffy, M. J. O'Neil, L. R. T.Edwards, Ronald Punch, G. F.Everingham, D. N. Reeves, J. E.Fatin, W. F. Saunderson, J.Free, R. V. Scholes, G. G. D.Fry, K. L. Scott, J. L. (Teller)Gayler, J. Simmons, D. W.Gear, G. Snow, J. H.Griffiths, A. G. Staples, P. R.Hand, G. L. 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. Hunt, R. J. D.Andrew, J. N. Lloyd, B.Blunt, C. W. Lusher, S. A.Burr, M. A. McArthur, F. S.Cadman, A. G. McGauran, P. J.Cameron, Donald MacKellar, M. J. R.Cameron, Ewen (Teller) McVeigh, D. T.Cameron, Ian Macphee, I. M.Carlton, J. J. Millar, P. C.Coleman, W. P. Moore, J. C.Connolly, D. M. Newman, K. E.Cowan, D. B. O'Keefe, F. L.Drummond, P. H. Porter, J. R.Edwards, Harry Robinson, IanFife, W. C. Rocher, A. C.Fisher, P. S. Ruddock, P. M.Groom, R. J. Shipton, R. F.Hawker, D. P. M. Sinclair, I. McC.Hicks, N. J. (Teller) Spender, J. M.Hodgman, W. M. White, P. N. D.Howard, J. W. Wilson, I. B. C. Cunningham, B. T. Aldred, K. J.Mountford, J. G. Braithwaite, R. A.Chynoweth, R. L. Katter, R. C.Bowen, Lionel Dobie, J. D. M. Question so resolved in the affirmative. Original question resolved in the affirmative. Bill read a second time. The Bill. Mr HURFORD(Adelaide-Minister for Housing and Construction and Minister Assisting the Treasurer)(10.18) —by leave-I move: (1) Clause 15, page 21, lines 43 and 44, and page 22, lines 1 to 5 (inclusive), omit paragraph (a) of the definition of ''relevant service period'', insert the following paragraph: '(a) where- (i) the eligible termination payment accrued in whole or in part during a period or periods during which the taxpayer was in employment; and (ii) during the whole or a part of the period, or of any of the periods, referred to in sub-paragraph (i), the taxpayer was a member of a superannuation fund in relation to that employment, the period, or the aggregate of the periods, of the employment to which the eligible termination payment relates;'. (2) Clause 60, page 57, lines 38 to 40 (inclusive), omit sub-clause (12), insert the following sub-clauses: ''(12) The amendments made by sections 9 and 27 apply to eligible termination payments made on or after 1 July 1983. ''(12A) The amendment made by section 15, insofar as it relates to eligible termination payments and annuities, applies to eligible termination payments made, and annuities derived, on or after 1 July 1983. ''(12B) The amendment made by section 15, insofar as it relates to payments of a supplement to an annuity (not being payments of an annuity), applies to payments made after 30 May 1984.''. (3) Clause 61, page 58, line 10, insert '', subject to sub-section (2) of this section,'' after ''annuity and''. (4) Clause 61, page 58, at the end of the clause add the following sub-clause: ''(2) Nothing in sub-section (1) affects the application of section 27H of the Principal Act as amended by this Act to a payment of a supplement to an annuity, being a payment that is not a payment of an annuity.''. The first of the amendments replaces paragraph (a) of the definition of ' relevant service period' in proposed new subdivision AA of Division 2 of Part III of the Income Tax Assessment Act which contains a new system for the taxation of retirement and kindred payments made on or after 1 July 1983. The amendment relates to the application of the before-after transitional formula. It is designed to make it clear that where a payment is made to a person from a superannuation scheme that has at some stage been supported by the person's employer, whether the scheme is funded or unfunded, the new taxing rules will take account of the whole of the period of employment to which the payment relates. This amended formulation of the paragraph will put it beyond doubt that in cases where the period of employment exceeds the period of superannuation coverage or, where relevant, the period during which the employer contributed to a superannuation scheme, the period of employment will be the one adopted. The other three amendments are interrelated and together have the effect that a particular aspect of the changes proposed by the Bill to the rules for taxing annuities will apply only from the introduction of the Bill and not from the generally applicable date of 1 July 1983. In proposing improvements to the law governing the taxing of annuity income, the Government took the opportunity in this Bill to remedy a deficiency in the existing law revealed in the case of the Federal Commissioner of Taxation versus Harris. In that case, the Federal Court of Australia held that a gratuitous payment to a retired employee by a former employer as a supplement to compensate for the erosion of a pension by inflation was not assessable income. Some employers make a regular practice of making such supplementary payments. The Bill provides that payments of this kind, like indexation increases to pensions, will now be made subject to tax. Clause 60 sets out the various dates from which the amendments made by the Bill are to take effect. It is proposed by the second of the amendments to replace sub-clause 12, which relates to application of the amendments proposed by clauses 9, 15 and 27, with three sub-clauses which will ensure that annuity supplements which were, by oversight, not specifically dealt with by sub-clause 12 will be treated as assessable income only if paid after the date of introduction of the Bill, which is 30 May 1984. The final two amendments, which are consequential upon the second amendment, would ensure that the transitional provision in clause 61, which preserves the operation of the existing law in the case of annuities that commenced before 1 July 1983, does not prevent the inclusion in assessable income after 30 May 1984 of annuity supplements that are paid in connection with an annuity that commenced before 1 July 1983. I commend the amendments to the Committee. Amendments agreed to. Mr HOWARD(Bennelong)(10.22) —I wish to address some brief remarks to clauses 8 and 10. Clause 8 deals with approved deposit funds. I listened with some interest to the explanation given by the Minister Assisting the Treasurer (Mr Hurford) in response to my remarks about what I saw to be the privileged position of trade unions. I do not think that the Minister satisfied the House during the second reading debate that in the absence of general prudential requirements on the holding of funds by trade unions, those bodies were not being given a privileged position. The point that I made during that debate was that in respect of every other authorised body there was a controlling Act which contained some regulations and some prudential requirements, but in the case of a trade union or an employee organisation the relevant statute or charter which regulates the operations of the trade union or employee organisation does not contain any prudential requirements. That is the basis of the Opposition's concern about this matter. I am not arguing for one moment that a trade union, provided that it observes the same prudential requirements as the other bodies, should not take deposits of funds. I am not suggesting for a moment that a trade union should not have the same right to do that. I just want to be satisfied that when all the other bodies are subject to prudential requirements, the same applies to a trade union or employee organisation. That is a legitimate concern of the Opposition. It ought to be a legitimate concern of the community. That is the only reason why this matter has been raised. It has not been raised out of some kind of ideological bigotry, as my friend has alleged. Of course I do not object to members of the trade union movement having the custody of funds deposited with them, provided that they are subject to the same rules as apply to anyone else. That is all that I am arguing. I should like the honourable gentleman to satisfy the Committee that the Opposition's concerns about this matter are without foundation. The second matter I wish to mention concerns clause 10. During the second reading debate I mentioned that the Opposition is worried about the amendments to section 26 (a). I think that they go too far. I agree that many discretions were given to the Commissioner of Taxation whilst I was Treasurer, and that the Income Tax Assessment Act is unworkable without discretions being given to him. I would be the first to agree with that. But we are talking here about the fundamental evidentiary question of whether something was purchased for the purpose of resale at a profit. With great respect, I fail to understand how one can give that matter totally to the caprice of the Commissioner's discretion, because something is either purchased for resale at a profit or it is not. I do not accept that one can preserve that basic principle, as the Minister argued the Government was doing during the second reading debate, if one is leaving it to the Commissioner to determine whether something has been purchased for the purpose of resale at a profit, when that is a subjective test according to the behaviour of the person involved. That is why the Opposition has worried about using the Commissioner's discretion on this clause. I know that the Government has a problem with the clause because it is a very hard section to run. It is probably the most litigated section in the Act. As I said during the second reading debate, I do not think that one can take this section any further without introducing a capital gains tax. The honourable member for Hawker (Mr Jacobi), who knows a lot about the Income Tax Assessment Act, is nodding approval. That is the problem and that is our worry, because in reality one either introduces a capital gains tax or one leaves section 26 (a) exactly as it is. The way in which the Government is trying to escape that choice is by introducing an absurdly large discretion for the Commissioner. It will not work. One cannot, on the one hand, say that it is simply a question of whether it was, in reality, bought for resale at a profit, and then, in the next breath, say that that is entirely a matter for the discretion of the Commissioner. I have to give notice to the Government that the Opposition, after taking further advice and having further time to study the operation of clause 10, may well move an amendment to clause 10 in another place. That may not be necessary. It may be possible, from discussion between the honourable gentleman and his officers, to satisfy me. If he can, I am happy to indicate on the Opposition's behalf that we shall not move such an amendment. We do not want any abuse of section 26 (a); but equally, we shall not agree to a proposition that substitutes the total caprice of the Commissioner for a proper analysis of the facts according to the conduct and behaviour of the parties involved. Mr HURFORD(Adelaide-Minister for Housing and Construction and Minister Assisting the Treasurer)(10.27) —I understand the points raised by the Deputy Leader of the Opposition (Mr Howard), and I respect his contribution on this occasion. I assure him that the prudential requirements which apply to every other fund will also apply to the trade union funds. On the second point that he raised, relating to section 26 (a), as he knows, officers of the Treasury and the Taxation Office will be available to meet him and others, I understand, tomorrow morning to give certain information about section 26 (a) and the Commissioner's discretion. What I can tell the honourable gentleman is that decisions are not totally left-to use his phrase-to the caprice of the Commissioner's discretion. There are appeals to the boards of review around this country and appeals to the courts. So there are tests of the Commissioner's discretion. I hope that this and other points which will be raised with him and others privately tomorrow will give him the assurance that he seeks. Mr WILSON(Sturt)(10.28) —During the second reading debate the Minister for Housing and Construction and Assisting the Treasurer (Mr Hurford) referred several times to the fact that this was part of a coherent approach on the part of the Government. I do not want to canvass all aspects of it, but I wonder whether the Minister, in this debate, will indicate when the Government will be revealing how this legislation fits into its coherent approach. In relation to tax and current superannuation funds, will the Government be looking at questions raised by my friend the honourable member for Bradfield (Mr Connolly) on vesting, portability and preservation to ensure that the tax concessions result in the provision of resources at retirement? Will the Government be looking at the difference between the great concessions that go through public sector superannuation schemes where the public sector is the employer and is contributing at a rate of 20 per cent to 25 per cent of salary towards the funding of these schemes under a pay-as-you-go arrangement? That is one set of questions in relation to the superannuation element of Australia's present retirement provisions. Is the Government going to pick up-- The CHAIRMAN —I point out to the honourable member that his remarks at the moment are not relevant to the Committee stage. I ask him to wind up. Mr WILSON —I wind up by asking whether in relation to this taxation provision the Government will seek to integrate these tax provisions for superannuation funds with a tax-sourced social security system in the way that was identified by the Gruen Panel. It said that in achieving a coherent approach it was necessary to look at what one did in the tax area as well as what one did in the social welfare area. The Minister raised this question. He said the Government had a coherent approach. It is all very well to say that, but what needs to be done is to identify that approach. Mr Hurford —Madam Chairman, I raise a point of order. If I answered the honourable member, I would be out of order. This is a continuation of the second reading debate. It has nothing to do with the amendments that are before the Committee. I do not intend to be ruled out of order by answering the honourable member. The CHAIRMAN —The point of order is upheld. Bill, as amended, agreed to. Bill reported with amendments; report-by leave-adopted. Bill (on motion by Mr Hurford)-by leave-read a third time. Consideration resumed from 30 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. Debate resumed from 10 May, on motion by Mr Barry Jones: That the Bill be now read a second time. Mr CARLTON(Mackellar)(10.34) —I respond to the motion for the second reading of the Social Security and Repatriation Legislation Amendment Bill 1984, a Bill which seeks to amend seven Acts of the Commonwealth, including, as it is most important, the Social Security Act. A number of amendments will be proposed to that by the Government. The Opposition has looked at the Bill in its various parts and has found it deficient in some respects. But overall, I indicate our principal concern by moving an amendment to the motion for the second reading of the Bill. I move: That all words after ''That'' be omitted with a view to substituting the following words: ''whilst not declining to give the Bill a second reading, the House expresses its concern at the plight of pensioners and beneficiaries whose incomes will be reduced as a consequence of the artificial reduction in the Consumer Price Index caused by the introduction of Medicare''. This amendment will be seconded by the honourable member for Denison (Mr Hodgman ). This Government came into office on the promise of bringing Australians together. It was said that Australians of all ages from all parts of the country and from all occupations would somehow be raised in their national aspirations and be made to work more happily for the future of Australia under a Hawke labor government. When legislation relating to social security and repatriation comes into the House we are able to judge the performance of this Government in bringing Australians together. We are also able to judge the Government on one aspect of what it claims as its stock in trade-that is, compassion for the underprivileged, and particularly for the elderly. In this case I must say that the people of Australia have been astonished at the determined attack by this Government on the elderly citizens of Australia. I have a particular concern about this matter. I recall during the election campaign visiting meetings held by various pensioner groups not only in my own electorate but also throughout Australia. The meetings were held by the Combined Pensioners Association, the Voice of the Elderly, various pensioner groups, senior citizens centres and the like. On every platform that I shared with an Australian Labor Party candidate, I was pilloried by the Labor candidate at the supposed intransigence of the then Fraser Government in its approach to social security matters. Labor candidates promised the earth to all those who were present at the meetings. I must report that in general those who were present at the meetings supported the Labor candidates, cheered them on and expected something extraordinary from the Labor Government, even though in my view-- Mr Hunt —They must be disappointed. Mr CARLTON —Even though as my colleague the Deputy Leader of the National Party of Australia says, they must be disappointed. In a moment I will refer to the kinds of disappointments the elderly have suffered under this Government. But I must say that when I have campaigned on behalf of the coalition parties in Federal by-elections and attended similar meetings of the Combined Pensioners Association, Voice of the Elderly and the like, there has been a totally different response. There is a very deep disenchantment in the community amongst the elderly about the performance of the Hawke Government. I merely have to catalogue what has happened to the elderly under the Government to indicate the depth of concern and the depth of disappointment of this group in the community, a group which is least able to change its affairs, which is least able to be flexible and mobile and, in many cases, which is becoming frail and less able to handle its affairs. Certainly the elderly, in the evening of their lives, should be able to rely on security within a firm framework of agreed government policy. What has happened to this large group of people in the community? The first thing we heard was that the over-70s were to have their pensions cut. Their pensions were to be income tested again. The second thing in the Budget was that the tax threshold was not be be increased. In other words, the elderly would have to pay more tax if they earned a little more than the pension. They were promised that the threshold would be increased during the 1983 election campaign , and that was not done. The next thing we heard was that lump sum superannuation payments were to be taxed at a higher rate. That was the subject of a Bill which was passed through this House this evening with minor amendments and, of course, it has been the subject of enormous uncertainty over some 12 months. We also had the announcement that an assets test is to be introduced. It was not a clear cut announcement but one on which there has been backing and filling of a most extraordinary kind. We now have this announcement by the Government that all pensioners who have any assets of $10,000 over and above their home, which is a fairly miserable sum for a lifetime's possessions, will have to submit statements of their assets to the Government and run the risk of an inspection of their premises to see whether those statements are correct. If their assets exceed certain limits they will lose some of their pensions. Mr Maher —Oh! Mr CARLTON —The honourable member for Lowe interjects. The honourable member was prominent in a by-election campaign which was supposed to be a campaign about the needs of the elderly. The honourable member for Lowe stands in this House in dishonour because the Government that he supports, and certainly the Party that supported him in that by-election has let him down and has let down the pensioners in his electorate. Mr Maher —That is rubbish. Mr CARLTON —The honourable member for Lowe says that it is rubbish. We will see exactly in the next election campaign the judgment of the elderly citizens of Lowe on the honourable member. However much he might want to polish up his bus stops, he will not be able to explain the way in which this Government has let him and his constituents down. The assets test has been announced and the Minister opposite, the Minister for Health (Dr Blewett), who has the misfortune to represent the Minister for Social Security (Senator Grimes) in this House, has been struggling day by day to try to explain to the people of Australia at Question Time exactly how the miserable conditions of this test will be applied by an army of 1,500 inspectors, at a total cost of $30m to the taxpayer in the forthcoming financial year. In the following financial year the application of this test will gain a net $45m in savings for the Australian community, which if distributed to all the pensioners in Australia would mean that they would get no more than 36c a week each. This extraordinary intrusion into the privacy of the elderly in Australia has been introduced by a government which has claimed that it has a compassionate approach to the elderly. What will happen under the assets test to those who have farms? We are told that anybody who has a farm will be able to claim as an exclusion from the assets test the home on the farm including the curtilage. When we look up the meaning of the word 'curtilage' we find that it includes the immediate garden-- Mr Maher —Mr Speaker, I take a point of order. I ask you to direct the honourable member to deal with the legislation before the House. The legislation has nothing to do with the Government's assets test. That legislation has not been brought before the House. This is entirely different legislation. It is an omnibus Bill, and I ask that you bring the honourable member back to the Bill. Mr SPEAKER —There is substance in the point of order of the honourable member for Lowe. It is usual to allow passing reference to some of these matters. I ask the honourable member to get on to the subject of the Bill. Mr CARLTON —I can certainly understand the concern of the honourable member for Lowe. This Bill is an omnibus Bill dealing with many social security and repatriation matters. It also deals with the plight of the elderly in a number of ways and I need to refer to in a fairly broad sense. Also, since I have moved an amendment relating to a deficiency in the Bill, I believe I must address myself to the overall plight of the elderly so that we can get a complete picture of what it is all about. I was talking about farms. I will speak only briefly on that matter, merely to say that farms will be assets tested in respect of everything but the home and the surrounding garden. 'Curtilage' is the rather quaint word used by the Prime Minister (Mr Hawke) in order to skate over the enormity of this provision relating to farms. So everything outside the immediate periphery of the farm household, which will include the barns, the farm machinery, the water supplies and everything else in the farm, will be subject to the assets test. People may borrow against the value of the farm if they wish to have income, but that is a backward way of introducing death duties. In effect, this Government has reintroduced death duties for farmers, and they will have-- Dr Blewett — Ha, ha! Mr CARLTON —The Minister disputes-- Mr SPEAKER —Order! I have given a ruling on a point of order. I have indicated that the honourable member is allowed a little indulgence in scouting the issue, but I ask him to get back to the Bill. Mr CARLTON —I am sorry, Mr Speaker. I was being provoked by the Minister. Mr SPEAKER —I ask the honourable member to ignore the provocation. I am often provoked. I have to ignore provocation. Mr CARLTON —I will soldier on, Mr Speaker. I will pass over the other attacks on the elderly, such as the 35-day rule introduced for insured hospital patients, which requires them to leave a hospital after 35 days if they are still in acute care. I will refer to the freezing of the number of nursing home beds approvals so that people will have nowhere to go if they are turned out of a hospital after 35 days, and the changes in the hostel subsidy so that people over 80 in a hostel are subject to assessment for that benefit to be paid. This has resulted in the reduction in the hostel subsidies in some cases by as much as $7,000 per annum for one hostel that I visited in the electorate of Richmond. All these things indicate that this Government has for some extraordinary reason made a concerted attack on the elderly of Australia. The Government has indicated a total lack of compassion for those least able to look after their interests. I think it is all being done in the interests of the prices and incomes accord, and it is being done in preparation for a Budget which is being crafted by the Australian Council of Trade Unions. The link here is very clear. The strategy of the Government is being dictated by Mr Dolan, Mr Crean and Mr Kelty and all those other people who are privy to the secrets of the Budget of this Government. Therefore all these things which can be done to the most helpless group in our community, the aged and the frail, are the things this Government will do in order to try to meet its compact with the ACTU under the notorious accord. The amendment I have moved relates to the question of the medifiddle-the 2.5 percentage point fiddling in the consumer price index. What is the effect of this medifiddling on pensioners and welfare beneficiaries? The free health care that was available to pensioners before Medicare is still available to them after Medicare. So pensioners, before and after Medicare, and also unemployment beneficiaries on indexed welfare payments and indexed unemployment benefits received free health care. As a result of the Medicare fiddle-that is taking the cost of Medicare out of the private basket of goods which goes to make up the consumer price index and putting it into the tax basket-the consumer price index is artificially reduced by 2.5 percentage points. Pensioners and unemployment beneficiaries will still be subjected to price increases in the general community. In other words, the price of goods will go up regardless of what is being done under Medicare to the consumer price index. Pensions are linked to the consumer price index. They automatically rise in May and November with the consumer price index for the previous six months. So next November, unless the Government does something about it, the pension increase due to pensioners will be 2.5 percentage points less than the real increase in prices. Thus the pensioners will lose by that amount. They will lose by that amount because prices will have risen by a certain percentage. Because of the medifiddle, the consumer price index as published will be artificially 2.7 percentage points less. Therefore, the pensions will go up by less than they should and the pensioners will be robbed of certain amounts, which I shall cite. According to calculations done by the Parliamentary Library, not by me, the amounts by which pensioners will be robbed, which they will not get in November because of medifiddle, will be $2.15 a week for single pensioners, $3.58 a week for married pensioners, and $1.89 a week for an unemployment beneficiary over 18 years without dependants, to take one example. By May 1985, if no adjustment is made by the Government, this effect will be compounded. These losses will have gone up to $2.22 per week for a single pensioner; $3.70 per week for a married pensioner couple; and $1.95 per week for unemployment beneficiaries over 18 with no dependants. We have asked the Government on many occasions in this House and in the other place to give an unequivocal undertaking to pensioners in Australia that there will be a special adjustment for pensioners to offset the effect of medifiddle. The Minister for Health, the Treasurer (Mr Keating), and Senator Grimes in the upper House, have refused consistently to make any commitment to these people, yet at the same time accuse us of scaremongering amongst them and causing rumour and difficulty. All they have to do is give a clear indication that they will do the decent thing and make this adjustment to pensions so that the pensioners will not be robbed. Why do they not make this commitment? It is a very simple commitment to make. It certainly is not in line with what else they have done to pensioners, because they have cheated pensioners in no fewer than the seven other ways I listed earlier tonight. I can only suspect that they cannot make this commitment because they have not yet received permission from the Australian Council of Trade Unions and do not know how much in the way of fake tax cuts they are proposing to give as a result of the demands of Messrs Dolan, Crean and Kelty. Over a full financial year the cost of the loss of pensions because of the medifiddle is $213m, which means that those in the community least able to look after themselves will be contributing $213m towards the subsidy of Medicare for others in the community who can well afford to insure privately. That is absolutely disgraceful. That $213m excludes certain repatriation and service pensions which the Library found too hard to calculate. Pensioners will contribute $213m per annum to the cost of Medicare. The Bill does nothing to correct the situation, which is why I moved the amendment. The second point I want to mention is the postponement or cancellation of unemployment benefit in certain cases. Clause 41 of this amendment Bill amends sub-sections 120 (1) and (2) of the Social Security Act, which provide for unemployment benefit to be postponed for a minimum period of six to 12 weeks in certain circumstances. In other words, if a person's unemployment is due either directly or indirectly to his voluntary act which, in the opinion of the Director-General, was without good and sufficient reason; or if that person's unemployment is due to his misconduct as a worker; or if that person has refused or failed without good and sufficient reason to accept an offer of employment which the Director-General considers suitable; in other words, if that person has failed to accept an offer of reasonable work; or if, in the opinion of the Director-General, that person is a seasonal or intermittent worker whose income is sufficient for the maintenance of himself and persons ordinarily maintained by him, notwithstanding a period of temporary unemployment, the Director-General or the agent of the Director-General can have benefits postponed for a minimum period of six to 12 weeks under the present Act. Clause 41 of this Bill would effectively dispense with the minimum period of postponement. In other words, under the present arrangement there has to be at least a six-week postponement of the payment of unemployment benefits if those perfectly reasonable conditions apply. In other words, if the person left a job voluntarily, left a job because of misconduct, will not accept a reasonable offer of another job, or is a seasonal worker and normally works seasonally- perfectly reasonable conditions-the Director-General cannot provide unemployment benefits before at least six weeks are up. This amendment removes that requirement so that at the discretion of the Director-General or his agent these unemployment benefits can be given immediately. Really, the Opposition believes that if this requirement to wait six weeks is removed and made discretionary, the purpose of this section of the Act is really eliminated. We believe there has to be some tightness in this situation. There has to be some penalty of some kind if people leave employment for some reason which is not reasonable or will not accept a job that is reasonably offered. We believe that a six weeks waiting period is perfectly reasonable for that and that, if officials are placed in a position of being able to reduce the period of six weeks to nothing, inevitably pressures will occur to remove altogether the strength of this proposition, this section. We think that that is a weakening of the whole condition on which unemployment benefit is paid. We believe it is something that the general public and the taxpayer would not want. We believe there is a balance in these situations. The balance has already been drawn correctly and, therefore, in Committee we will be seeking to eliminate that clause from the amendment Bill. The third and final matter I wish to refer to is clause 74 of the Bill on respite care. I hope that the Minister in responding will explain something which we honestly cannot understand. It is already possible for the frail and the elderly to be placed in nursing homes for periods while carers go on holiday and have a necessary rest. We are in favour of providing a respite care subsidy for those who have to care for the frail and elderly who can be placed in hostels. We believe it is a sound proposition and we certainly support it. But we cannot understand the nature of the subsidy. Under this provision, where a respite care bed is occupied by an eligible person for not more than 14 days each 28 days, the subsidy is $10 a week. Where the respite care bed is occupied by such a person for more than 14 days each 28 days the subsidy is $50 a week. Those subsidies relate to present levels of subsidy for hostels. A care subsidy of $10 a week is paid for anybody in a hostel who is not subject to personal care assessment, but for anybody who is assessed and found to need an exceptional level of personal care, according to certain criteria laid down, the total personal care and hostel care subsidy is $50 a week. In other words, there is a $10 a week subsidy for the general inhabitants of hostels and a $50 a week subsidy for those who are found on assessment to require very special personal care. That is quite a reasonable arrangement and one can see that it relates to the particular needs of the people. It has caused difficulty in particular hospitals where, under the old situation, there was a $30 a week flat subsidy for everybody over 80; and in the changeover a number of hospitals found themselves badly out of pocket. I pass over that concern to look at this respite care subsidy. I cannot see why there should be a $10 a week subsidy if a person is in for 14 days and a $50 a week subsidy if that person is in for more than 14 days when the element of assessment does not come into it. One would have thought that there would be a higher cost to the establishment if a person came in for a shorter period, with changes of bed linen and various other things and the possible absence of somebody from a bed or a room during the period of changeover. In other words, with more frequent changeovers one would think that there would be a case for a slightly higher subsidy than the normal $10 a week. If a bed is occupied for more than 14 days one would assume that, if the person did not require special personal care, he or she would do with $10 a week. For some unexplained reason when that person occupies a bed for more than 14 days the subsidy goes to $50 a week as if he or she requires this personal care, although we do not know whether or not it is required. I would welcome from the Minister an explanation of the reasons for these apparently inexplicable provisions. I leave it to other speakers in the debate to look at the various other proposals within this Bill, and there are many of them as they cover seven Acts. The Opposition does not propose to make any other amendments other than the general second reading amendment and also to challenge clause 41 on the postponement or cancellation of the unemployment benefit in certain cases. Overall, I think a Bill of this kind presents an opportunity to bring this Government to account on its claim to be a compassionate government, a compassionate carer for the sick, the elderly and the underprivileged in our society. It is one of the sad things about Labor governments, and it is one of the things that has been historically true, that they come in with all these claims but because of the various sums they do or the deals they have done or because of incompetence in the way they go about it, they bring into the Parliament and pass into legislation measures which have either an intended effect which is harsh or, more likely, an unintended effect which is extremely harsh on those who are subject to it. This has happened in the case of the elderly to an extraordinary degree under the Hawke Government. In fact there has been no other government in the history of Australia that one can remember, and certainly since Federation most of the governments of Australia have been Liberal governments under which the elderly have been treated very well, that has brought in more measures which have had direct personal effect on the elderly and frail in Australia. That is the main point I want to leave with the House tonight. It is getting late and I will not keep the House any longer but we, as an Opposition, certainly have a duty to bring this matter to the attention of the general public. We will not be deterred by suggestions that we are trying to cause worry to the elderly because, heaven forbid, it is an old tactic for those who are the aggressors, the predators, to claim that those who defend those who are being attacked are the ones who are attacking. In this case every time the Government has come in with one of these predatory proposals, one of these proposals which cause grave disquiet-disquiet which is caused long before the Opposition says anything-the Minister for Health, who represents the Minister for Social Security, or the Prime Minister, who parades before us every day at Question Time thinking he is God and representing no one, or the Minister for Social Security claim that we in the Opposition- Mr Reeves —You ought to be careful what you say about the Prime Minister. Mr SPEAKER —Order! The honourable member should return to the Bill and ignore the interjection. Mr CARLTON —The honourable member for the Northern Territory should be careful about what he says in this House. After the next election he will not have the capacity to interject in the House, Mr Speaker, so I suppose he may as well interject now. All I am saying is this: The Opposition certainly rejects any charges that it causes disaffection, difficulty and worry among the elderly. That worry comes through loud and clear from the greatest communicator, according to his own description, that we have in Australia, the person who is said to have this great rapport with all of the public. Why is it that every time he makes an announcement on something relating to the elderly they become frightened and concerned? If he is such a great communicator, will he explain to them why there is no problem? In moving the amendment to the motion for the second reading of this Bill, the Opposition expresses it grave concern at the overall approach of this Government towards the elderly in this country. Mr SPEAKER —Is the amendment seconded? Mr Hodgman —Mr Speaker, on behalf of the pensioners of Australia I second the amendment and seek leave to deliver my remarks at a later stage in the debate. Debate (on motion by Mr Milton) adjourned. Motion (by Dr Blewett) proposed: That the House do now adjourn. Mr ROCHER(Curtin)(11.05) —Mr Speaker- Motion (by Dr Blewett) agreed to: That the question be now put. Original question resolved in the affirmative. House adjourned at 11.06 p.m. The following notices were given: Mr Young to move- (1) That, in accordance with paragraph 8 (1) (d) of the Public Accounts Committee Act 1951, this House refers to the Joint Committee of Public Accounts for investigation and report as necessary from time to time, the proposed purchase of Automatic data Processing facilities by the Commonwealth, or any Department or Authority of the Commonwealth staffed under the Public Service Act 1922; notification of intention of which is to be conveyed to the Committee by the Minister responsible for the intending purchaser. (2) That a message be sent to the Senate acquainting it of this resolution and requesting its concurrence. Mr Kerin to present a Bill for an Act to make provision for the biological control of pests in the Australian Capital Territory, and for related purposes. Mr Young to move- That the following orders of the day, government business, be discharged: Medical Benefits and Hospital Benefits Organisations-Paper-Motion to take note of the paper: Resumption of debate. Australian Water Resources Council-Papers-Motion to take note of the papers: Resumption of debate. Commonwealth Tertiary Education Commission-Triennium 1985-87-Papers-Motion to take note of the papers: Resumption of debate. Special Broadcasting Service-Report-Motion to take note of paper: Resumption of debate. National Occupational Health and Safety-Interim Commission-Report and Ministerial Statement-Motion to take note of papers: Resumption of debate. Budget Reform-Paper-Motion to take note of paper: Resumption of debate. ACT Self-Government-Implementation-Report of Task Force-Ministerial statement and Paper-Motion to take note of papers: Resumption of debate. Williamstown Dockyard-Commitment to Constitution of Reforms-Papers-Motion to take note of papers: Resumption of debate. Homelessness-A Capital Problem-Report of Committee of Inquiry-Publication of paper-Motion to take note of paper; Resumption of debate. Commonwealth Schools Commission-Reports-Motion to take note of papers: Resumption of debate. Middle East-Ministerial Statement-Motion to take note of paper: Resumption of debate. Road Safety-Standing Commitee-Report on the Impact of Advertising standards on Road Safety-Government Response-Ministerial Statement-Motion to take note of paper: Resumption of debate. Committee on Overseas Professional Qualifications-Report-Motion to take note of paper: Resumption of debate. Telecommunications (Interception) Act-Information communicated to Mr Justice Cross-Papers-Motion to take note of papers: Resumption of debate. Aviation Industry-Outlook-Paper-Motion to take note of paper: Resumption of debate. Attributable Aviation Costs: Review of Valuation Methods-Report-Motion to take note of paper: Resumption of debate. Trade Practices Act-Proposals for Change-Papers-Motion to take note of papers: Resumption of debate. Migration Program 1983-84-Progress and Developments-Ministerial Statement- Motion to take note of paper: Resumption of debate. Australian Citizenship-Annual Return-Motion to take note of paper: Resumption of debate. Special Funds for Government Programs-Papers-Motion to take note of papers: Resumption of debate. Printing and Publishing Responsibilities-Charter-Papers-Motion to take note of papers: Resumption of debate. Commonwealth Laboratories-Report of Independent Committee of Inquiry-Papers and Ministerial Statement-Motion to take note of papers: Resumption of debate. Transport Services to the Northern Territory-Report of Independent Economic Inquiry-Motion to take note of paper: Resumption of debate. Drug Trafficking-Royal Commission Report-Government Response-Motion to take note of paper: Resumption of debate. Foreign Policy-CHOGM Meeting-Ministerial Statement-Motion to take note of paper : Resumption of debate. Environment Protection (Alligator Rivers Region) Act-Radiation Safety for Uranium Mill Operations, Jabiru, NT-Report-Motion to take note of paper: Resumption of debate. Advance to the Minister for Finance 1982-83-Statement of Expenditure: Consideration in committee. Broadcasting and Television-Supplementary Licence Scheme-Ministerial Statement and Paper-Motion to take note of papers: Resumption of debate. Broadcasting System-Development of Satellite-related Services-Ministerial Statement-Motion to take note of paper: Resumption of debate. Schools for the ACT-Report of the Committee of Review into the Impact of Radford College-Motion to take note of paper: Resumption of debate. Grain Harvesters-Report by Industries Assistance Commission-Motion to take note of paper: Resumption of debate. The following papers were deemed to have been presented on 5 June 1984: Archives Act-Regulations-Statutory Rules 1984, No. 100. Conciliation and Arbitration Act-Regulations-Statutory Rules 1984, No. 101. Customs Act-Regulations-Statutory Rules 1984, Nos. 102, 103, Remuneration Tribunals Act-Remuneration Tribunal- Determination-1984/12-Holders of public office on the Panel of Review of Proposed Income Assets Test. Seat of Government (Administration) Act- Ordinance-1984-No. 16-Court of Petty Sessions (Amendment) (No. 3). Regulations-1984-No. 11 (Classification of Publications Ordinance). Telecommunications Act-Australian Telecommunications Commission-By-laws- Telecommunications (Charging Zones and Charging Districts)-Amendment No. 45. Telecommunications (Community Calls)-Amendment No. 37. Telecommunications (Digital Data Charging)-Amendment No. 2. Telecommunications (General)-Amendment No. 40. The following answers to questions were circulated: (Question No. 129) Mr Jacobi asked the Treasurer, upon notice, on 12 May 1983: (1) Further to the former Treasurer's answer to my question No. 5458 concerning action against merchant banks in relation to any role they may have played in handling cheques that were part of round robin tax avoidance schemes, will he take any action. (2) What action has the Commissioner of Taxation taken under sections 263 and 264 of the Income Tax Assessment Act to gain information and evidence in relation to this matter. (3) Following the recent High Court judgment on the test case involving the Commissioner of Taxation and the State Bank of Victoria, what action will he take to ensure that the Commissioner has effective and sufficient powers to obtain information and evidence in tax avoidance cases. Mr Keating —The answer to the honourable member's question is as follows: I refer the honourable member to my answer to question No. 305. (Question No. 305) Mr Jacobi asked the Treasurer, upon notice, on 23 August 1983: (1) What action has been taken against merchant banks in relation to any role they may have played in handling cheques that were part of round robin tax avoidance schemes. (2) What action has the Commissioner of Taxation taken under sections 263 and 264 of the Income Tax Assessment Act to require those suspected of being involved in tax avoidance schemes to deliver information and evidence to the Commissioner; if no action has been taken, what is the reason. (3) Has the Commissioner acted under section 263 of the Act to gain access to the premises and records of those suspected of being involved in tax avoidance; if so, what are the details of these actions; if no action has been taken, what is the reason. Mr Keating —The answer to the honourable member's question is as follows: (1) Any specific allegations that merchant banks may have played a role in handling cheques as part of round robin tax avoidance schemes and which may involve possible breaches of the Commonwealth legislation are investigated by the appropriate authorities. For example, a case of possible taxation fraud involving a merchant bank which engaged in tax avoidance activity is presently being investigated by the Commissioner of Taxation, the Special Prosecutor, Mr Redlich, and the Australian Federal Police. (2) The Commissioner of Taxation confirms that his powers under sections 263 and 264 of the Income Tax Assessment Act have been used extensively to gain information and evidence from merchant banks and others regarding transactions used in tax avoidance schemes. However the secrecy provisions of the income tax law preclude the Commissioner from supplying details of any action taken in specific cases. (3) The Commissioner of Taxation advises that the recent High Court judgment in the case of O'Reilly and Others v the Commissioners of the State Bank of Victoria has provided clarification of the Commissioner's powers to obtain information and evidence from banks pursuant to sections 263 and 264. The Commissioner considers his powers not to have been seriously diminished by that decision and his officers have continued to rely on them to obtain information and evidence in tax avoidance cases. Nevertheless, the question whether legislative action is required to strengthen or further clarify those powers is presently being examined. (Question No. 310) Mr Jacobi asked the Treasurer, upon notice, on 23 August 1983: (1) Further to the former Treasurer's answer to my question on notice No. 5019, will he reconsider the request I made in the Committee stage consideration of the Income Tax Assessment Amendment Bill 1982 to enable the Government to act effectively against transfer price manipulations. (2) Will he set up a task force on similar lines to that adopted by the Papua New Guinea Government following a recommendation of the Law Reform Commission in its Report No. 12 of November 1982, structured on the lines of a small number of permanent core staff located in Government who, with appropriate government officers and consultants, would conduct specialised investigations into areas where transfer pricing manipulations are suspected; for example, in the area of certain freight, fuel, capital equipment and bulk supply contracts, to the validity of particular management services, consultancy fees, loan arrangements and the licensing of technology. (3) Does he recognise that this task force would provide an overall co- ordinating role for the Government and provide Government agencies with an early warning of changes in the areas of all transfer price manipulation, particularly after the most obvious forms have been brought under control, and finally enable a natural focus for liaison with international agencies and other governments concerned with transfer pricing manipulation by transnational corporations. Mr Keating —The answer to the honourable member's question is as follows: (1) to (3) The need for the establishment in Australia of a task force of the kind envisaged for Papua New Guinea by its Law Reform Commission has been examined again. In carrying out this examination it was noted that the Papua New Guinea Law Reform Commission's report was prepared and recommendations made in the context of the particular circumstances existing in Papua New Guinea. The Commission report noted that Papua New Guinea agencies 'lack information, expertise and staff to carry out detailed studies' of transfer pricing manipulations. The establishment of the task force as recommended by the Commission was seen as a means of overcoming these shortcomings and of providing a natural focus for liaison with international agencies and other governments concerned with these practices. The situation in Australia is different from that applying in Papua New Guinea. Here the responsibility for the administration of the income tax law is vested in the Commissioner of Taxation. Within the Australian Taxation Office that he heads there are specialist units which monitor international transactions and other arrangements by transnational enterprises to detect and to counter profit- shifting arrangements. In doing so the Commissioner's officers have available to them extensive powers to obtain information from a range of sources including government departments and agencies. Unlike his Papua New Guinea counterpart, the Commissioner also has access to information from overseas revenue authorities pursuant to the exchange of information articles of Australia's comprehensive double taxation agreements, where such information is necessary for the purposes of carrying out the provisions of the agreement or the domestic law. It is relevant that, in accordance with internationally accepted practice, information received under the exchange of information provisions of a double taxation agreement may only be disclosed to persons or authorities involved in the administration of the income tax law. A task force established in Australia along the lines of the Papua New Guinea proposal would not be entitled to access to such information obtained by the Commissioner from another country. In short, the Australian Taxation Office already performs functions that the Papua New Guinea task force was set up to carry out and is a natural focus for liaison with overseas authorities along lines similar to that proposed by the Papua New Guinea Law Reform Commission. In the circumstances, I am satisfied that there is not, at present, the need for the establishment in Australia of a task force of the kind envisaged for Papua New Guinea. (Question No. 621) Mr Lloyd asked the Treasurer, upon notice, on 13 October 1983: (1) Is it a fact that video recorders used by television stations in their programming are taxed at a lower general sales tax rate than tape recorders being used by radio stations in a similar manner that are taxed at the rate of 32.5 per cent. (2) Will this anomaly be corrected to ensure that audio recorders will be taxed in line with video recorders at the lower rate. Mr Keating —The answers to the honourable member's questions are as follows: (1) Video recorders of a kind used exclusively, or primarily and principally, in, or in connection with, the conduct of television services authorised by or under the Broadcasting and Television Act 1942 are taxable at the general rate of 20 per cent. Sound tape recorders used by radio stations are taxable at the rate of 32.5 per cent. (2) The Commissioner of Taxation has advised that video recording equipment used by television stations is of a particular kind which is distinguishable from the kind of video recording equipment used by the public. In these circumstances, it was possible for provisions to be made in the sales tax law for a concessional rate to be applied to video recording equipment used by television stations, the then Government having decided that. In the case of sound tape recorders, when inquiries were last made by the Commissioner, there was no particular kind of recorder used by radio stations which is distinguishable from the kinds of recorders used by the general public. There was, therefore, no similar basis for providing any concession for sound tape recorders used by radio stations. However, the matter is being reviewed to ascertain whether there has been any change in circumstances which should lead to the Government giving further consideration to the matter. (Question No. 652) Mr Reeves asked the Treasurer, upon notice, on 1 November 1983: What amount of sales tax was raised on the sales of goods in the Northern Territory for each of the years 1980-81 to 1982-83. Mr Keating —The answer to the honourable member's question is as follows: Sales tax raised on sales of goods in the Northern Territory is not recorded. However, sales tax payable in respect of returns lodged by persons registered in the Northern Territory was as follows: 1980-81 $5,861,000 1981-82 $7,796,000 1982-83 $8,835,000 (Question No. 705) Dr Everingham asked the Treasurer, upon notice, on 3 November 1983: (1) Is he able to say whether a pioneer producer of non-grape wines at North Bundaberg, Queensland, has been unfairly discriminated against for several years and obliged to work long hours for a pittance because of an unfair penalty on his precariously viable enterprise for reasons referred to in general business notice of motion No. 133. (2) Will he make a firm decision before the next Budget on the tax anomaly causing this situation. Mr Keating —The answer to the honourable member's question is as follows: (1) The Commissioner of Taxation has advised that Australian wine is exempt from sales tax under sub-item 36 (4) in the First Schedule to the Sales Tax ( Exemptions and Classifications) Act. The term 'wine' is not defined in the sales tax law but the exemption has been interpreted as applying only to wine derived from the fermented juice of grapes. Various beverages made from other fruits are often referred to as wine but prefixed by the name of the variety of fruit, e.g. pear wine-commonly known as perry-apricot wine, blackberry wine and so on. Some varieties are not made from fruit, for example, honey wine-usually referred to as mead-and rice wine, known as saki. These beverages are taxable at the general rate of 20 per cent. The term wine without any qualifying prefix has been taken to mean grape wine. This view is supported by trade opinion. It has been followed for many years and there is ample justification for it. (2) An amendment of the law would be necessary to exempt non-grape wines from sales tax. It would be necessary to take into account the non-discrimination provisions of the General Agreement on Tariffs and Trade-GATT. Imported wines are taxable but the existing differentiation in the law between imported wine and Australian wine does not offend against the non-discrimination provisions of the GATT because that position existed prior to Australia becoming a party to the GATT. However, if the non-grape wines to which the honourable member refers are perry, mead, saki and other fruit wines, and if these are to be exempted, the exemption would have to apply to both the imported and local product to avoid infringing the GATT. This could have repercussions in relation to the existing discrimination between local wine and imported wine and also the existing sales tax discrimination between beer and cider of local and overseas origin. The matter of the taxation arrangements applying to non-grape wines will, however, be again reviewed prior to the 1984-85 Budget. (Question No. 748) Mr Brumby asked the Treasurer, upon notice, on 16 November 1983: (1) Has his attention been drawn to the report of the Victorian Department of Economic Development for 1981-82, page 39, which shows that assistance provided by the Victorian Government to approved decentralised industries was $37.2m, consisting of payroll tax rebates of $28.6m, fuel and power subsidies of $2.9m, transport and associated subsidies of $4.1m, and other $1.6m. (2) If so, (a) which of these measures are taxable in the hands of the recipient by the Commonwealth, (b) what is the estimated tax recovered by the Commonwealth for each of the measures and (c) what is the rationale for taxation of these State Government decentralisation incentives. Mr Keating —The answer to the honourable member's question is as follows: (1) Yes. (2) (a) The Commissioner of Taxation has advised that the various forms of assistance provided to approved decentralised industries would generally be taxed in the hands of the recipient in the year of receipt. (b) On the basis that the recipients of the assistance were taxable in the relevant year and that they would have paid the average rate of tax of 46c in the dollar, the amount of tax that would have been recovered by the Commonwealth would have been about $17m. (c) It is a basic principle of the Australian income tax system that liability to tax be based on capacity to pay. Subsidies, whether in the form of direct grants, rebates of tax or reductions in the prices of inputs, have the effect of increasing the net income of the recipients and thus their capacity to pay income tax. It would be both anomalous and undesirable if, as a matter of general practice, taxpayers in receipt of particular classes of subsidy were given special taxation treatment. I note also that taxpayers' liability to Commonwealth tax can be raised or lowered as a result of action by State governments. The former situation can occur when, for example, a State gives a subsidy or lowers its charges or taxes and the 'saving' at State level enters into the calculation of income for purposes of Commonwealth tax. The converse can occur when a State subsidy is abolished or reduced or State charges and taxes are increased. The Commonwealth would place itself in an untenable position if it accepted the argument that it should refrain from applying normal taxation principles where liability to Commonwealth tax is increased because of action taken at State level, but not in the reverse case. (Question No. 787) Mr Rocher asked the Treasurer, upon notice, on 16 November 1983: (1) What amount of tax was collected in each State and Territory in (a) September and (b) October 1983, under the provisions of the Income Tax Assessment Amendment Act 1983. (2) How many additional staff (a) have been and (b) will be, engaged to administer collections in each State and Territory. Mr Keating —The answer to the honourable member's question is as follows: (1) Collections in each State and Territory in September and October 1983, under the provisions of the Income Tax Assessment Amendment Act 1983 relating to certain prescribed payments are set out in the following table: September October $ $ New South Wales 24,041.16 8,514,462.45 Victoria 39,101.86 4,776,115.10 Queensland 24,672.56 3,507,076.77 South Australia 7,951.08 1,905,816.61 Western Australia 14,303.50 2,178,762.01 Tasmania 2,874.79 392,259.26 Northern Territory 1,238.82 256,478.59 Australian Capital Territory 4,159.39 568,802.48 Total 118,343.16 22,099,773.27 (2) The numbers of additional positions provided in each State and Territory in connection with the prescribed payments system are set out in the following table: No. New South Wales 282 Victoria 249 Queensland 148 South Australia, including Northern Territory 93 Western Australia 95 Tasmania 26 Australian Capital Territory 28 Total 921 The number of positions provided for this purpose may be adjusted from time to time depending on the volume and complexity of future workloads. (Question No. 953) Mr Lloyd asked the Treasurer, upon notice, on 7 December 1983: Is it a fact that farmers who buy a computer to assist them in their management problems have to pay sales tax of 20 per cent, while businessmen in other professions can buy computers for their office use free of sales tax; if so, (a) is this an unfair anomaly for rural people and (b) will he review the situation and correct the anomaly. Mr Keating —The answer to the honourable member's question is as follows: Farmers who purchase computers to assist in their management problems are required to pay sales tax on the computers. Other businessmen who purchase computers for office use are also required to pay sales tax. There is not any anomaly in the sales tax treatment of computers as between farmers and other businessmen. There is a limited conditional exemption from sales tax available to manufacturers in respect of computers. The exemption applies where a computer is used primarily and principally, and directly, in the operations by which goods are manufactured from other goods. (Question No. 1017) Dr Klugman asked the Minister for Home Affairs and Environment, upon notice, on 28 February 1984: (1) Has his attention been drawn to a propaganda film made in Vietnam in 1981 entitled 'Changing the Needle' shown on Australian Broadcasting Corporation television on 2 February 1984 at 9.15 p.m. (2) Apart from its showing by the ABC, what other Government subsidies did the film receive. (3) Is it claimed by the distributors that the film was made by three Australian women, of whom at least one is a full time official of the Communist Party of Australia. Mr Cohen —The answer to the honourable member's question is as follows: (1) I am advised that a documentary film titled 'Changing the Needle' was screened on ABC television on 2 February 1984 as part of a science documentary series called 'Discovery'. (2) The ABC is a statutory authority which is independent of Government in its programming policies and consequently the screening of a film on ABC television does not constitute a government subsidy to that film. The Australian Film Commission has advised that it invested $16,000 in the production of the film and provided a marketing loan of $3,000. This assistance was provided under standard Creative Development Branch arrangements. (3) I am not aware of any claims made by the distributors of the film. (Question No. 1048) Mr Spender asked the Minister for Employment and Industrial Relations, upon notice, on 29 February 1984: (1) Have he and his Department adopted the practice of advising members of parliament by telegram of the approval of grants to projects under the community employment program; if so, what are the reasons. (2) Why is the expenditure on telegrams considered necessary, when a letter would suffice, and what are the costs to date under the present government. Mr Willis —The answer to the honourable member's question is as follows: (1) and (2) Members are notified of CEP project approvals in their electorate by telegram, telex, letter or courier-delivered letter. Members are given information on project approvals on an embargoed basis prior to the Commonwealth /State ministerial announcement to allow them to prepare local publicity activities to coincide with the joint ministerial announcement. The cost is not an identifiable element of the Department's overall communications costs. (Question No. 1089) Mr Simmons asked the Minister for Finance, upon notice, on 5 March 1984. Is it a fact that when cheques issued by Government departments, particularly the Department of Social Security, are cashed by storekeepers, there is a delay of up to 12 months before the person cashing the cheque receives advice indicating possible fraudulent behaviour; if so, can this period be shortened; if not, why not. Mr Dawkins —The answer to the honourable member's question is as follows: Despite the implicit warning in the 'Not Negotiable' crossing on all of its cheques, it is a common and widespread practice for storekeepers to cash Government cheques for their customers. Usually, however, storekeepers accept cheques only from customers who are well known to them and, in that way, largely protect themselves from becoming victims of fraudulent behaviour. But where a cheque is fraudulently negotiated with a storekeeper by a person who has stolen it or otherwise holds a defective title to the cheque, the storekeeper in turn does not gain good title and normally becomes liable to refund to the Commonwealth the proceeds he or she receives from the cheque's subsequent presentation to the Government's banker. In the latter instances, the department issuing the cheque does not become aware of the fraud and the identity of the storekeeper involved until: (i) The intended payee advises that the cheque has not been received; (ii) If the cheque had already passed through the banking system and been paid by the Commonwealth, a copy of the original cheque is obtained and forwarded to the payee to confirm in writing-usually by statutory declaration-that he or she did not receive or negotiate it or authorise any other person to do so; and (iii) when the payee's confirming evidence is received, the branch of the bank at which the cheque was deposited is approached with the request to refund the value to the Commonwealth or, alternatively, to advise, where the cheque was deposited through a customer's account in the normal course of the banking business, the name and address of that customer. Each of these steps may involve delays beyond the Commonwealth's control. In some cases, it can be difficult to locate the original payee who may have changed addresses, or a payee may not be prompt in co-operating by furnishing the necessary statutory declaration. Where a combination of such delays occurs in a particular case, it can extend significantly the time it takes to finally learn the identity of the storekeeper involved and inform him of the likelihood of fraud. Departments are aware of the need to avoid delays within their own administrations in dealing with suspected frauds. I should also draw the honourable member's attention to the current inquiry by the Joint Committee of Public Accounts into arrangements for dealing with fraudulently negotiated Commonwealth cheques. It would be fair to say, however, that storekeepers negotiate Commonwealth cheques-despite the 'Not Negotiable' crossing-to oblige a customer or otherwise further their business. Storekeepers should be well aware of the risk of fraud and its financial consequences if they fail to establish the true identity of the person claiming to be the rightful owner of the cheque. Greater prudence by storekeepers at the time a cheque is proffered would lessen their chances of becoming victims of fraud. (Question No. 1121) Mr Ruddock asked the Prime Minister, upon notice, on 5 March 1984: (1) What consultants have been engaged to work for the Minister or the Minister 's Department since 1 April 1983. (2) What is the name of each consultant or, if a company or partnership, the name of the corporation or partnership. (3) For how long was each consultant engaged. (4) What fee is to be or has been paid to each consultant. (5) What special background and experience does each consultant possess to enable the consultant to undertake the engagement. (6) Was the merit principle applied in each case; if so, in what manner. Mr Hawke —The answer to the honourable member's question is as follows: (1) to (6) Further to the answer provided previously (Hansard, 2 May 1984 page 1708) I have been informed that details of one consultant engaged after 1 April 1983 were omitted from the reply published on 2 May 1984. Mr D. Tasker, occupational physiotherapist, of David Tasker and Associates, on the recommendation of the Commonwealth Institute of Health, was engaged at an estimated cost of $800 to advise on the ergonomic suitability of the tendered equipment for the Department's new computer installation. The engagement of Mr Tasker was approved by the Department under the Public Service Board's delegation to Departments to approve engagements costing not more than $1000. (Question No. 1160) Dr Everingham asked the Treasurer, upon notice, on 6 March 1984: Is North Bundaberg's tropical wines enterprise paying sales tax from which a strawberry wine maker in Wodonga has been exempt for nine years and another in Queensland exempt for eight years and several meaderies exempt for several years at the discretion of the Commissioner of Taxation; if so, will he take prompt action to remove this anomaly and other anomalies admitted for years by his predecessors in respect of Gianduzzi's winery. Mr Keating —The answer to the honourable member's question is as follows: The Commissioner of Taxation has advised that Australian wine is exempt from sales tax under sub-item 36 (4) in the first schedule to the Sales Tax ( Exemptions and Classifications) Act. The term 'wine' is not defined in the sales tax law but the exemption has been administered by the Taxation Office for many years as applying only to wine derived from the fermented juice of grapes. Various beverages made from other fruits are often referred to as wine but prefixed by the name of the variety of fruit, for example tropical fruit wine, strawberry wine, pear wine, commonly known as perry, apricot wine, blackberry wine and so on. Some varieties are not made from fruit, for example honey wine, usually referred to as mead, and rice wine, known as saki. These beverages are all taxable at the general rate of 20 per cent. The Commissioner added that some wines made from grapes are flavoured by the addition of essences and sold under the name of the fruit flavour. Grape wines which are flavoured in this way and sold as, say, strawberry flavoured wine are exempt under sub-item 36 (4). These wines, however, remain grape wines. While they may be flavoured to taste like a fruit wine, they are not fruit wines. Express provisions of the sales tax legislation prevent the Commissioner from discussing the affairs of particular taxpayers. However, the Commissioner has assured me that every effort is made to ensure that the requirements of the sales tax law are fulfilled. The Commissioner stated that the only provision under which non-grade wines could qualify for exemption is sub-item 100 (1) in the first schedule which exempts goods manufactured and sold by a person if the Commissioner is of the opinion that the average annual value of that person's sales of all goods is not , or would not be, in excess of $12,000. This exemption provision is not restricted to wine makers but refers to all small businesses. The question of whether the law should be amended will be reviewed in the context of the 1984-85 Budget deliberations. (Question No. 1199) Mr Lloyd asked the Treasurer, upon notice, on 27 March 1984: (1) When will the Government review the application of voluntary non-profit organisations for exemption from the bank account debits tax? (2) Is it still the intention of the Government to exempt these organisations from this tax. Mr Keating —The answers to the honourable member's questions are as follows: (1) The Government announced when the date of 1 April 1983 fixed by the former Government for commencement of the bank account debits tax was confirmed that the operation of the tax-including the appropriateness or otherwise of exemptions available-would be reviewed after it had been in effect for about six months. That period having elapsed, the review is now being carried out and includes an examination of the question of whether or not voluntary non-profit organisations should be exempt from the tax. A report on the review is expected to be in the hands of the Government shortly. When the Government has received and considered the report decisions arising from it, it will be the subject of an announcement. (2) The Government has not made any decision on the question of whether voluntary non-profit organisations should be exempt from the tax. That question is one for consideration in the course of taking decisions on the abovementioned report on the review of the tax. (Question No. 1243) Mr Burr asked the Minister for Transport, upon notice, on 3 April 1984: Is he able to say whether a private organisation known as Tasmanian Rail Tours is presently running tourist trains in Tasmania; if so, (a) does Tasmanian Rail Tours plan to run a train on 8 April 1984 from Hobart to the Mount Field National Park and return, (b) did Australian National-AN-agree to this trip in December 1983 and quote the price of $1,675, (c) has Tasmanian Rail Tours now been quoted $2,921 for the same trip, (d) what has caused this discrepancy in costing, (e) does the original contract between AN and Tasmanian Rail Tours state that actual costs shall be charged, (f) is the present pricing policy within that guideline and (g) what costs are incurred to reach the figure of $2, 921. Mr Peter Morris —The answer to the honourable member's question is as follows: A private organisation, Tasmanian Rail Tours, from time to time operates tourist trains in Tasmania using AN's staff and right of way. (a) Tasmanian Rail Tours did undertake a tour between Derwent Park and National Park on 8 April 1984. (b) I am advised that Australian National agreed in December 1983 to give consideration to permitting Tasmanian Rail Tours to undertake a tour between Derwent Park and National Park on Saturday 7 April 1984 between the approximate hours of 1900 to 2300. The AN's initial estimate of the cost in December 1983 was $1,675. (c) The AN advises that Tasmanian Rail Tours were not quoted $2,921 for the same trip-see answer to question (d) below. In March 1984, AN estimated the cost of the proposed tour for Sunday 8 April 1984 at $2,921 and for Saturday, 7 April 1984 at $2,526. The difference between the estimated cost for the Saturday and Sunday tours of $2,526 and $2,921 respectively involved penalty rates. However, AN agreed to reduce its quote to $2,075 for the Sunday, 8 April tour as a once-off special concession for the National Trust during National Heritage Week activities. It should also be noted that AN stores free of charge all rolling stock owned by Tasmanian Rail Tours. (d) I am advised by AN that the difference in estimated costs between December 1983 and March 1984 was due to a reassessment of the costs involved and to the changes in Tasmanian Rail Tours' requirements. Factors contributing to the increase in costs included: (i) the need for two additional passenger cars resulting in a requirement for extra train control staff and extra safety checks prior to departure and en route, (ii) the requirement for train crew and terminal staff to work additional hours . (e) No contracts were concluded prior to the provision of the revised estimates in March 1984. (f) and (g) The estimates provided in March 1984 allowed for full recovery of operating costs together with a contribution towards fixed overhead costs. This is in accordance with AN's present pricing policy guidelines. (Question No. 1338) Mr Peacock asked the Treasurer, upon notice, on 5 April 1984: Has his Department (a) called for, or received, any submissions concerning the introduction of a capital transfer tax, (b) undertaken any examination of the way in which a capital transfer tax operates in the United Kingdom and, if so, what amount has the United Kingdom Government raised in revenue, adjusted into 1984 Australian dollar terms, in each of the last 10 years, (c) received any information from the United Kingdom Government as to the cost involved in implementation and administration of this tax, (d) made an evaluation of what the cost of implementing and administering this tax would be in Australia and, if so, what is the cost and (e) made any forward estimates of likely revenue from such a tax in Australia and if so, what are they. Mr Keating —The answer to the honourable member's question is as follows: The British capital transfer tax is a tax on all transfers of value, whether during lifetime or death, which reduce the transferor's estate. In effect, it is a form of combined estate and gift duty and, with differences of detail, has much in common with the gift and death duties once applicable-at both Commonwealth and State levels-in Australia. The Government has received representations on the general idea of estate and gift duties but has not put in hand any study of the application to Australia of the particular form of capital transfer tax which applies in the United Kingdom. (Question No. 1346) Mr Peacock asked the Minister for Science and Technology, upon notice, on 5 April 1984: Has he reached a decision on the request from the Tasmanian Government that an office of the Technology Transfer Council be established in Tasmania. Mr Barry Jones —The answer to the honourable member's question is as follows: The Technology Transfer Council-TTC-founded in 1980, is a private, non-profit, public interest company, whose primary mission is to help Australian manufacturers access, assess and implement the best available technology. Part of its responsibility is to accurately assess the major needs of manufacturers and to develop the most appropriate best technology solutions and mechanisms for ensuring active and effective technology transfer. The government recognises the vital role played by the TTC in expanding industry technology base, and in restructuring industry. Increased funding was provided in the 1983-84 budget to allow expansion of TTC's activities. The request by the Tasmanian Government is a matter for the TTC Board. Detailed discussions have taken place between the TTC and senior officers of the former State Department of Industrial Development and the new Tasmanian Development Authority and a number of proposals have been submitted to the Tasmanian Government. Included in these proposals is a major project which aims to identify long term opportunities for manufacturing industry in particular regions in Tasmania and to assess the potential and directions for growth of existing industry. The TTC will assess the feasibility and nature of its long term presence in Tasmania in the light of experience gained from projects which are currently being considered by the Tasmanian Government. I am awaiting advice from the State Government on these proposals. (Question No. 1358) Mr Lloyd asked the Minister for Primary Industry, upon notice, on 1 May 1984: (1) Did the Australian Dairy Corporation early in 1984 sell to Japan, by tender , approximately 2,300 tonnes of cheese previously purchased by the Corporation from Australian dairy companies; if so, what was the successful tender price. (2) Is this cheese being sold in Australia at a price which is less than the equalisation pool price. Mr Kerin —The answer to the honourable member's question is as follows: (1) and (2) The Australian Dairy Corporation-ADC-has for some years been selling bulk cheese to Japan on behalf of the Australian dairy industry. I am advised that in 1982-83, due to marketing difficulties, the ADC was left with a considerable volume of uncommitted stock originally purchased for the Japanese market. This stock was repurchased by its manufacturers or disposed of on the export market, except for a residual 2,300 tonnes. I am advised by the ADC that after obtaining the agreement of the industry, this 2,300 tonnes was tendered for sale on the domestic market, and was sold to the company which bid the highest price. A subsequent reassessment of the quality of the cheese was carried out and a portion of the quantity sold downgraded in quality and hence price. The ADC agreed to the request of the purchasing company that the details of the sale would remain confidential so that the company could undertake a detailed strategy for placement of the cheese without undue disruption to the market. The ADC advises that it is not aware of the retail selling price of this cheese. (Question No. 1416) Mr McVeigh asked the Minister for Primary Industry, upon notice, on 9 May 1984: (1) What stage has been reached in the preparation of plant variety rights legislation. (2) Does he recall indicating to horticulturists that he was preparing to develop legislation in this area for horticultural crops if other industries did not wish to proceed with legislation; if so, when does he intend to proceed with the legislation. Mr Kerin —The answer to the honourable member's question is as follows: (1) and (2) The Senate Standing Committee on National Resources which had been examining the need for the implications of Plant Variety Rights-PVR-for this country tabled its report in the Senate on 3 May 1984. The Committee concluded that PVR is the most appropriate means of improving access to overseas varieties and stimulating plant breeding in Australia. A minority report recommended that any PVR scheme be restricted to ornamentals. Although the Government is not implacably opposed to a PVR scheme for Australia , we would not introduce such a scheme without careful consideration of its likely effects on public plant breeding and society's broader interests. I note that the report canvasses these issues but considers that further study on public plant breeding is necessary. The Government's attitude on PVR will be developed in the light of consideration of the issues, and in particular of the Senate Committee Report, both by the Australian Labor Party Conference and by the States through the Australian Agricultural Council. (Question No. 1423) Mr Lloyd asked the Minister for Primary Industry, upon notice, on 9 May 1984: (1) Is he able to say on what grounds a State government is able to impose a tax on cartons of flavoured milk. (2) Is he also able to say whether the Victorian Government is planning to introduce such a tax next year. Mr Kerin —The answer to the honourable member's question is as follows: (1) The details of any impost on cartons of flavoured milk would need to be known before I could comment on its legality. (2) This would appear to be a matter for the Victorian Government.