Tuesday, 7 May 1985 The House met at 2 p.m. The Clerk-I inform the House of the unavoidable absence of the Speaker due to illness. In accordance with standing order 14, the Chairman of Committees, as Acting Speaker, will take the Chair. Madam ACTING SPEAKER (Mrs Child) thereupon took the chair, and read prayers. Madam ACTING SPEAKER —I inform the House that we have present in the Gallery this afternoon a delegation from the Association of South East Asian Nations Inter-Parliamentary Organisation led by the Honourable Kharis Suhud, Deputy Chairman of the Indonesian Parliament. On behalf of the House, I extend to the delegation a very warm welcome. Honourable members-Hear, hear! Mr HAWKE(Wills-Prime Minister) —I move: That this House expresses its deep regret at the death of the Hon. Sir Percy Claude Spender, KCVO, KBE, QC, a former Minister and member for the division of Warringah, who died on Friday, 3 May 1985, places on record its appreciation of his long and meritorious public service and tenders its profound sympathy to his wife and family. Sir Percy Spender was born above his father's locksmith shop in Darlinghurst in 1897 and spent his boyhood in Sydney. His academic career, as a young man, was distinguished by a university medal and first class honours in law at Sydney University. After only 11 years at the Bar after his graduation he became a King's Counsel, at the age of 37. He was elected to Parliament in 1937, reputedly as the result of a challenge to put his vigorous views to the test. He was elected for the seat of Warringah and served in this chamber for 14 years. He rose quickly to the Ministry and served in the War Cabinet in the dark years from 1939 to 1941. He was at different times Treasurer, Minister for the Army and Minister for External Affairs and External Territories. It was perhaps in this last portfolio that Sir Percy made his greatest contribution to Australian public life. As Australia's Foreign Minister, he appreciated the importance to Australia of Asia and the Pacific region and he understood the fundamental necessity of the Australian-American alliance. Through his belief in and commitment to this alliance he played a central role in the conclusion of the ANZUS Treaty. History has honoured this commitment. ANZUS became and has remained the cornerstone of Australia's defence arrangements. It has served Australia well for over 30 years now and continues to serve it well. Sir Percy's service to his country did not end with his retirement from this House in 1951. In that year he was appointed Australia's Ambassador to the United States of America where he continued for seven years to build on the ties formally established under the ANZUS Treaty. In 1958 he was appointed to the International Court of Justice at The Hague and in 1964 he was elected as its President. Within the Court he was regarded with the highest respect. Even in retirement, Sir Percy continued to contribute to public and political life in this country. Sir Percy Spender's life was marked by achievement at the Bar, against many of the sharpest minds of his time, in this Parliament, where he met the challenges of domestic and foreign policy, and on the world stage in the International Court of Justice. It was a life dedicated to the service of his country and one without which Australians would be demonstrably poorer. Madam Acting Speaker, on behalf of the Government I extend to his widow and to his family, including his son John, who carries on the family tradition in this House, our sincerest sympathy and our regret at the passing of a distinguished Australian. Mr PEACOCK(Kooyong-Leader of the Opposition) —I support the remarks of the Prime Minister (Mr Hawke). This is, in many ways, a rare and difficult occasion when we pay tribute to a great Australian whose son is with us in the Parliament today. We know of the achievements of the father of the honourable member for North Sydney (Mr Spender)-some of us knew his father-but, for all we may say, the honourable member, who knew his father only too well, will think of him as a loving son would think of a father whose death he is mourning. I warmly support what the Prime Minister said for the late Sir Percy Spender certainly fits into the category of an extraordinarily distinguished Australian. He was a jurist, a parliamentarian and a diplomat of the highest standing. His achievements were not only notable but also enduring. It falls to very few to be able to play a role in this Parliament and to even fewer to be able to forge for their nation policies that endure for decades. The Prime Minister correctly referred to the central role that Sir Percy forged in the ANZUS alliance, and endorsed that alliance today. Sir Percy also played an extraordinarily significant role in the formation of the Colombo Plan which, with his advocacy being so strong, was known for a short time as the Spender Plan. Today we have a number of principal elements in our foreign policy. Two elements are the alliance with the United States of America and our relationship with Asia. Both of these elements were forged by Sir Percy, and they endure today. If we could steer through some legislation that lasted for the term of a parliament, we would think it a significant contribution. These two elements of our foreign policy have endured through three and a half decades, beyond the life of the man who forged them, and that in itself is an extraordinarily high tribute to the work and the ability of Sir Percy. The Prime Minister correctly referred to Sir Percy's humble background. I recall him on one occasion cheerfully admitting to me that in his school days he was no outstanding scholar; yet he went on, as was recounted by the Prime Minister, from being a boy who at first had failed to matriculate to finally graduating with first class honours and the University Medal for Law. Sir Percy entered this Parliament in 1937, making his mark in the portfolios that the Prime Minister mentioned. He served as Treasurer and as Minister for the Army before the Second World War, playing a major role in the creation of the Second Australian Imperial Force, having been a member of the First AIF. In opposition, he served for a time on the Advisory War Council and, on the return of the Menzies Government in 1949, he brought his knowledge of international affairs and the law to bear in creating a new stature and a new influence for Australia in the conduct of its international policies. There is no doubt that Sir Percy Spender was a man of diverse interests, with the service of his life to the community in the international and domestic scenes and the writing of major books on law and politics. We mourn the passing of a very great Australian. I have spoken personally to John Spender and my Party feels as deeply as I do that the nation has lost a great Australian. We appreciate his courage in being with us in the House today during this extremely difficult time for him and his family. Mr SINCLAIR(New England-Leader of the National Party of Australia) —There are few who have contributed more over the course of 84 years since Federation to the development and growth of this nation of ours than the late Sir Percy Spender. He was a great Australian. The motion of the Prime Minister (Mr Hawke), supported by the Leader of the Opposition (Mr Peacock), properly identifies the character, history and traditions of the man whom today we mourn. There is no doubt that his association, within this Parliament and without, in the service of this nation brought a unique distinction to Australia. He was a prominent barrister, a Federal Minister in several portfolios, Vice-President of the General Assembly of the United Nations, Ambassador to Washington and President of the International Court of Justice. There are few in our time who have achieved greater distinction or who have worn it so ably and so well. All of us do well to remember, as my colleague the Leader of the Opposition has just remarked, that he contributed in legislative form and in diplomatic endeavour to a number of developments that still are very significant for this nation. His association with the ANZUS Treaty is perhaps the most notable, yet we all need to remember that the Colombo Plan, which rendered such tremendous service in developing relations between Australia and other countries around the world, was originally called the Spender Plan. It certainly played a tremendously significant part in the development and association of Australia and the countries of South East Asia. His achievements in law, politics and diplomacy are very much a memorial to the man, the father and, above all, the Australian. A great deal was said in the course of the remarks of the last two speakers about the way in which, from his humble origins, he achieved academic distinction and then public recognition. But we need to remember that it was at an important time in Australia's history that we had a man of his ability to perform in the way he did. It is interesting to recall that he joined the War Cabinet, becoming Treasurer and then Minister for the Army in 1940. Following the election of the Chifley Government, he became a member of the Advisory War Council. It is interesting also, to put history into perspective, to recall that he was expelled from the United Australia Party in 1944 when he decided to remain on the Council after the departure of his UAP colleagues. Of course, he was later invited to join the then newly created Liberal Party and he became Minister for External Affairs and External Territories when the Liberal-Country Party Government came to office in 1949. This was the period in which the foundation of modern Australia was laid. Sir Percy played a prominent part in that work. Sir Percy is perhaps best remembered for his role in the birth of the ANZUS Treaty. When he became Minister for External Affairs he threw himself into the task of securing the United States-Australian pact in the Pacific. He forged personally a close relationship with President Truman and the then Secretary of State John Foster Dulles. Those efforts were crowned in 1951 when Sir Percy represented Australia at the signing of the ANZUS Treaty in San Francisco. Of course, it was shortly after that that he left political life and became Ambassador to Washington. It was in that capacity that he attended the inaugural ANZUS Conference in Honolulu in 1952. He helped see the ANZUS Conference through its infancy and in his seven years as Ambassador to Washington saw it reach a strong and admired maturity. This was a very important achievement for which alone he would be remembered with respect by this House and by all Australians. However, even after Sir Percy stepped down as Ambassador, his public life was to continue. He was knighted in 1952 and, in 1958, he was appointed to the International Court of Justice in The Hague. In 1964, he was appointed to a three-year term as President of that Court. In 1966, he led the Australian delegation to the second Suez conference; and, in 1967, he retired from the Bench. In almost 20 years of retirement, which ended with his death on 3 May at the age of 87, Sir Percy remained active. He wrote books on politics, diplomacy and the law. He had an extensive speaking program and, amongst other activities, he chaired a board to form a national index of Australian birds. Sir Percy was well known to many on both sides of the House. His influence on successive Australian governments and on the individuals who were part of those governments was profound. On behalf of the National Party, I extend to John, the honourable member for North Sydney, to his brother Peter, to their families and to Sir Percy's widow, the deepest personal sympathy. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —I, too, wish to join in supporting the motion of condolence to the family of the late Sir Percy Spender, who was one of the most significant Australians to have been a member of this Parliament. I do so in the context of his being a distinguished member of the legal profession and also a very worthy representative of Australia in foreign policy. In foreign affairs and defence, he foresaw threats and dangers that nobody else did at that time. He was the first to alert Australians to the fact that they were virtually on their own should any aggression take place in the Pacific-which it did. He foreshadowed that aggression. Coming from a very poor beginning, Sir Percy was a man who had no special advantages but achieved eminence in the fields of politics, law and international statesmanship. Obviously, he will long be remembered, as has already been said, because of his efforts in respect of the Colombo Plan and the ANZUS Treaty, but also for his efforts on behalf of Australia in times of war. It is said with some humour that he never really supported Labor, and that he admitted that he was elected to Parliament on Australian Labor Party preferences. He endeared himself to Labor members of Parliament because they were very mindful of his nationalism. He was a great colleague and friend of the late Dr Evatt, because they were at Fort Street High School at the same time and had much in common. Also, he was a great friend and colleague of the late John Curtin of famous memory, and Sir Percy supported Curtin in his most anxious moments of ensuring that Australia might survive in that period of World War II. Apart from those particular matters, however, Sir Percy had a broader vision that would bring Australia to the achievement of its identity as a nation. Not only was he the President of the International Court of Justice, in which he performed outstanding work on an international basis, but, subsequent to his retirement, he continued to take a keen interest in international affairs. He delivered an historic paper on the Great Barrier Reef and its legal aspects at the Australian Conservation Foundation Symposium on 3 May 1969. The submissions made in that paper by Sir Percy were subsequently approved in toto by the High Court of Australia in what is called the seas and submerged lands case, decided in 1973, in which the High Court recognised and declared that sovereignty and sovereign rights in the off-shore areas lie with the national government. Sir Percy was a man much before his time, who was much loved by those who opposed him but who respected his humanity and skill. I place on record my support for the motion which expresses condolences to his widow and to his family-particularly to John, who is with us today. Mr MACPHEE(Goldstein) —I wish briefly to concur with the motion and the remarks placed on record by the other speakers. Apart from his being so greatly respected in international legal circles and in the United States of America, Sir Percy is still remembered most fondly in Sri Lanka. This point was made to me by the President of Sri Lanka when I went to his home some years ago as a Minister of the previous Government. The first thing we did was to go down the hallway to his sitting room to see on the wall a photograph of those Ministers who signed the Colombo Plan. The President, who was a Minister in the Sri Lankan Government at that time, pointed to Sir Percy's photograph with affection as well as great respect. I found in my subsequent consultations with younger members of the current Sri Lankan Government that one of the reasons for their strong feelings of affinity with Australia was Sir Percy and the Colombo Plan. There are a number of stories of Sir Percy, some of which are perhaps apocryphal now, which have done Australia a power of good, in addition to the actions which the speakers before me have mentioned which show him to have been an extraordinarily distinguished representative of this country. Mr COHEN(Robertson-Minister for Arts, Heritage and Environment) —I would like to add my support to this condolence motion. Naturally, like everybody else in this House, I did not serve with Sir Percy. I had the pleasure of meeting him on only a couple of occasions. When I did I drew his attention to a speech that he made in this House in 1938 which I think was an outstanding one. Honourable members will recall that, in 1938, the Jewish people were going through one of the most difficult periods in their history. At that time a conference was called at Avion in France to decide what would be done about the Jews of Europe, and in particular of Germany. Australia was represented at that conference and decided to take 7,000 Jews as refugees. When the motion to do that was debated in this House a particularly virulent anti-Semitic speech was made by the then member for Kalgoorlie, regrettably a member of my Party. That in itself is not unusual. It reflected, in a sense, the attitudes of the time. It was quite common for people to be anti-Semitic. What was appalling was that only two members of this House took the opportunity to dissociate themselves from the speech. One was the then member for Melbourne, Dr Maloney, and the other was Sir Percy Spender. He made what I considered to be an outstanding contribution in condemning the speech that had been made and in showing understanding and compassion for the problems of the Jewish people. For that reason I have always had a very soft spot for him. I took the opportunity of congratulating him on what I thought was an outstanding contribution. The Jewish people can be grateful that, at that time, one of the few friends they had was in this House. I take this opportunity to add my sympathy and to pay my respects to his family. Mr MacKELLAR(Warringah) —The people of Warringah remember Sir Percy Spender with a great deal of affection. As we have already heard, he was the member for Warringah from 1937 to 1951. He won that seat as an independent. There are still stories of the campaign that was waged in 1937. He was up against Sir Archdale Parkhill, who was a Minister at the time. Sir Percy, as characterised his entire life, was absolutely indefatigable in his campaigning. The chief method of campaigning that he used to great effect in those days was the barbecue. The electorate of Warringah in those days stretched from Mosman to Palm Beach and barbecues were held frequently all along the peninsula. Sir Percy enjoyed a party. He enjoyed the barbecues and he made a great impression on those who attended them. He also made a special of street corner meetings, and the ones he held opposite the hotel at Spit Junction are still spoken about to these days. There is another story about Sir Percy's success in that election which relates not so much to his strength and ability but to the fact that Sir Archdale Parkhill wore spats to the surf lifesaving carnivals of the day and thereby lost a very great number of votes. During Sir Percy's time as member for Warringah he was assisted very greatly by his wife. He is remembered, as I have said, as a man with the common touch, who mixed very well with the people-a busy, practical man, but a man with a light touch, a man with a considerable range of talents as a public figure. We have heard some of the details of those. At the national level he undoubtedly was a man of very effective decisiveness. I think it is absolutely true to say that he was one of Australia's great Foreign Ministers. He had a large, intellectual capacity and exceptional political insights. That is nowhere better demonstrated than in the speed with which he moved to commit Australian support to defend South Korea. We know that historically this was a major factor in the stabilisation of the Pacific at a time when Japan was beginning to come to terms with the new relationship with the West. Failure to act decisively in Korea would have exposed Japan to a very uncertain future. As I have already said, Sir Percy was a man of great decisiveness. It was his insight which demonstrated the simple truth that an independent foreign policy is the capacity to make independent judgments about the issues of the day. Nobody could say that he ever acted other than from the inner resources of his intellect and his political acumen. He did so with Australia's interests firmly in mind at all times. I think that it is fitting that his is the Australian signature on the ANZUS Treaty. Throughout his term as Ambassador to the United States of America, he brought to his task a vigorous independence of mind and he represented Australian perspectives with considerable dignity and distinction. He had a lively sense of humour, which is reflected in his memoirs, Politics and A Man. In it he quotes another leading politician of the time, Arthur Fadden. After Fadden's short term as Prime Minister came to an end, he said to Sir Percy, as they were walking along the Sydney railway terminal, something with which I think we all would concur. Fadden said: 'You learn as you go along, Percy. When you're out, you're bloody well out'. Sir Percy demonstrated all his life a capacity of great intellectual vigour. Bringing to bear his attention to the problems of the day never stood in his way of acceptance of the lighter side of life which meant so much to him. His life was long and well lived and an extremely valuable one for Australia. His passing leaves us with a sense of sadness. We are privileged to have with us as a member of this House the honourable member for North Sydney, his son, John. I, and all the residents of Warringah, join with this House in expressing to John, his family and all of Sir Percy's family a very great sadness at his father's passing. Mr SPENDER(North Sydney) —I should like to thank those who have spoken and perhaps trespass for a few minutes on the House's time to say something of the man because much is known of what he has done but perhaps not as much is known of the man himself. The loss of a great man is not simply an occasion for sadness, although grief is inseparable from the event; it is a time for public remembrance and thanks and for rejoicing in a life which has been richly spent. Something has been said of his early life. It was not an easy one; he did not come from privileged circumstances and he never forgot that fact. He was born on 5 October 1897. As the Prime Minister (Mr Hawke) has said, he was the son of a locksmith. His mother died when he was five, and the years after that were not easy ones. He was a sickly child and a shy child and he had a fearful stutter. That is astonishing when one thinks of the things which he went on to achieve. He was living away from home at the age of 16. He was a student at Fort Street High School and, in a marvellous final class of 1914, 40 of the 42 students matriculated and qualified for entrance to Sydney University. My father was one who failed. He failed Latin. He detested the subject. He thought it was a dead language and there was no need to revive it. So he had to go and find himself a job. He went to work at the Town Hall as a clerk. His old headmaster, a most remarkable man, Dr Kilgour, who must have seen something extraordinary in him, came and sought him out. At this time my father wanted to play football for Australia; that was his abiding passion. I think he also wanted to become an actor. God alone knows what would have happened or where I would be had that taken place. His headmaster came to him and said: 'Spender, give up your ideas of football renown. I have seen more than one young chap who wore the Australian cap, and they all finished up with the backsides out of their pants'. So he coached my father in Latin. He passed, took the State's Public Board examinations, topped those examinations and went to Sydney University as a night student in arts and law, working by day. He moved from the Town Hall to be a clerk of petty sessions at the Newtown court. He told me that his first job there was to issue dog licences, which I am sure he did with great efficiency. He was gifted with great determination of purpose, a most penetrating intellect, immense powers of concentration and a prodigious capability for work. We have heard something of his university career. Working by day and studying by night, he won a number of prizes as he went through university. As the Prime Minister has said, he won the University Medal and took first class honours. I believe he was the only part time student who had achieved that distinction. It was said to him that he could be a Rhodes Scholar if he wanted to, but he was a poor man and lacked the means; so he had to say no. He entered law without any close connections in the legal fraternity, as some people have, and was offered a very lucrative partnership with a firm of attorneys. He was not then married to my mother. He wished to marry her but he needed money and of course had he entered the partnership he could have married her more quickly. She was a person of iron will-indeed, I think her will matched his. She advised him not to enter the partnership. He paid great heed to her judgment and so he went to the Bar-without patrons, with nothing but the intellect and drive which fortune had given him and which he had nourished. He started off in a small room, he told me, with one chair for the client, one chair for himself, a desk, a few books bought on time payment and one bookcase. He never looked back. He became a King's Counsel at the age of 37, and I believe that he was then the youngest King's Counsel in the British Commonwealth. But politics was something which was tugging at him; the confines of the law were too narrow. He became deeply interested in national affairs and was trenchantly critical of the coalition government of the time and of Sir Archdale Parkhill, who was the Defence Minister. He entered politics in a way which was characteristic of him. He believed that we could not rely upon Great Britain in the event of a major war in Europe; he believed that we should direct our attention primarily to air defence, to a mechanised and mobile army, to fast and small surface vessels and to submarines. One evening in 1937 at Bowral, after dinner, a number of people were sitting around talking and he was expressing his views in his usual way, which was, I would say, with great confidence and with a fair amount of assertiveness. A friend of Parkhill's said to my father: 'You have had a hell of a lot to say, Spender, on a subject you cannot know very much about. If you really believe all that you have been saying why don't you stand against Parkhill and tell the public what you think, and see where you finish?' My father was constitutionally incapable of resisting a challenge. He took up that challenge, and had my mother as his campaign director. As the honourable member for Warringah (Mr MacKellar) has said, it was very much a barbecue and street corner kind of campaign-working by day, campaigning by night. As the Deputy Prime Minister (Mr Lionel Bowen) pointed out, he won, and he won on Australian Labor Party preferences. I hope it will not be taken as a partisan comment if I say that that does demonstrate that Labor voters cannot always be wrong. As honourable members might imagine, his reception here by the former colleagues of Archdale Parkhill was somewhat frosty. After a year he joined the United Australia Party, and his career in politics was such that one of his adversaries nick-named him 'Out Again, In Again, Back Again Spender'. His public achievements have been touched upon and I will not seek to isolate them. Perhaps I could have time to touch on four or five. He laid the groundwork for the financial planning for the war. I quote one very brief passage from the official history which refers to a memorandum that he prepared in February 1940: The memorandum from the Acting Treasurer showed the clearest appreciation of what a wartime economy involved, a clarity which was undoubtedly due to Spender's willingness, already noted in connection with the November budget, to seek advice and views from the Financial and Economic Committee, and his readiness to discuss with its chairman rather than to accept the traditional approach of Treasury officials. That is something which the Treasurer (Mr Keating) may have a certain sympathy for. I think he laid down much of the basis for the administration of the Army. He appointed a civilian business manager to look after such matters as the ordering and delivery of the Army's supplies and the relations of the Army with other departments. Incidentally, he came to the view that the first thing the Department sought to do to a new Minister was to snow him with paper work. When he first arrived at Victoria Barracks he was given a pile of papers which he was told he had to sign. He asked why and he was told that the regulations said so. He said: 'Very well, I will sign them, but the regulations have to be changed'. They had to be changed so he would be freed from the consideration of routine matters and no documents were to come before him that did not involve a question of policy or a matter of important military or political significance-a general guide to all Ministers. He records in his memoirs the following comment: The thought crossed my mind, that the time of the Minister was to be occupied in this way-- that is, by signing documents- so that he would have the less time to interfere with the experts. His work on the Colombo Plan and on the ANZUS Treaty has been touched on, as has his work at the International Court of Justice. If I could trespass a little longer and say something about the private man. He was a profoundly and determinedly independent man. He was a committed nationalist. He never knew what it was to be anything but Australian. He could never understand people who did not understand what it was to be an Australian. He could never subordinate his political interests to fundamental national interests, and that was illustrated by his expulsion from the UAP. The decision was made in February 1944 by the UAP to withdraw from the Advisory War Council. Mr Menzies, Mr Hughes and my father were members of that Council. My father refused and he made a public statement at the time. He said this: We are as yet a long way from victory, and much must be endured, and many thousands of lives sacrificed before we reach the end of the road. My first and over-riding obligation is to the nation. This approach, and this approach alone, particularly in time of war, must condition one's conduct. Menzies warned him that this might be the end of his political career. He was expelled and one of the headlines was 'Exit Spender', from politics, rather like the headline that greeted Truman in 1948 when it was said that Dewey had been elected President. Perhaps it was this occasion that prompted him to give me some advice about life in general and politics in particular, if I should ever enter politics. It was this: 'Never resign, John, let the bastards throw you out'. He was, Madam Acting Speaker, a formidable and unyielding political opponent, an outstanding debater with a pungent, biting and wounding tongue, yet he did not engage in personalities. He had the closest of relations, which has been pointed out, with, amongst others, John Curtin, whom he thought to be the outstanding wartime Prime Minister-of both world wars. He was by nature a generous and kind man. He never lost his capacity for moral outrage. I can recall one occasion when he was President of the Court when he came back from overseas. He always opened his mail and read it. There was a letter from an old constituent who still thought that Spender was her member. She was a pensioner and I think she had problems concerning eviction. She wanted advice. He did what was characteristic of him: He sat down and immediately wrote to her giving her such advice as he could as to what she could do. I do not think there are many people so placed who would have taken the trouble to do that. My father had a great zest for life, an absence of pomposity and a contempt for those who, having achieved some position in life, drew about them the non-existent cloak of greatness. He never forgot a friend and I think he had a fairly good memory for his enemies. I do not suggest for a moment that he was a man without faults; he was not. He had a deep contempt for those who pursued wealth, or power without principle, or who were content to let other Australians bear the burden of war. He was a very brave man. I can recall when he was 50 or more years of age he carried out a most dangerous surf lifesaving operation at Palm Beach, risking his life to save that of a friend. He was a most loving father. I have attempted to sum up his views. Far be it from me to try to claim objectivity. He could be the most difficult and pugnacious of men, exacting on himself and demanding on others. His faults were large but so were his virtues. He was in all ways a big man and, I think, a great Australian. Two stories about him best epitomise the man he was, stories which he always repeated to me and which he never forgot. When he was a young barrister he attended the farewell of a judge of the Supreme Court of New South Wales. The judge said: I have tried to do my duty; no man can do more; no man should do less. Another occasion was very early in his life, when he was a night student at the University of Sydney and was taught philosophy by Professor Francis Anderson, a man who had a very great influence on him. He recalled the story, which he repeated to me and which he has repeated in his memoirs, about how, in the night time, as the lecture was about to end, a shaft of moonlight came through the window and struck the desk at which Professor Anderson was standing. The professor held up his hands and said: 'With the soul within and the heavens above, nothing is impossible'. So it is with each one of us. So it is with our country. I thank the House. Question resolved in the affirmative, honourable members standing in their places. Madam ACTING SPEAKER —I inform the House of the death on 1 May of the Hon. Robert Wilfred Holt, member of this House for the division of Darebin from 1955 to 1958. As a mark of respect to the memory of Mr Holt, I invite honourable members to rise in their places. Honourable members having stood in their places- Madam ACTING SPEAKER —I thank the House. Madam ACTING SPEAKER —It is with deep regret that I inform the House of the death on 1 May of Sir Basil Arthur, Speaker of the House of Representatives of New Zealand. Mr Speaker has written to Lady Arthur, on behalf of the members and officers of the House, expressing sympathy on this sad occasion. Mr HAWKE(Wills-Prime Minister) —I advise the House that the Minister for Foreign Affairs (Mr Hayden) will be absent from Australia on an official visit to the Indian sub-continent until 26 May. In his absence the Minister for Resources and Energy (Senator Gareth Evans) will serve as Acting Minister for Foreign Affairs. The Attorney-General (Mr Lionel Bowen) will represent the Acting Minister in this House. Mr HAWKE(Wills-Prime Minister) —We have been informed of the absence of the Speaker because of his unfortunate illness. I am sure that all honourable members will join with me in wishing the Speaker a swift and complete recovery. Honourable members-Hear, hear! Mr PEACOCK(Kooyong-Leader of the Opposition) —Madam Acting Speaker, I endorse the remarks of the Prime Minister (Mr Hawke) and trust that you will convey to the Speaker the wishes of all honourable members. Madam ACTING SPEAKER —I thank the House. I will do so. Mr PEACOCK —I refer the Prime Minister to his commitment of 22 April to announce in May expenditure savings decisions of at least $1 billion. Will the Prime Minister assure the House that this $1 billion does not incorporate expenditure savings decisions already announced; for instance, increased charges for overseas students, road grants to the States and local government and superannuation contributions to public servants in the Northern Territory? Mr HAWKE —I made clear when I made the announcement the reality of the expenditure cuts that would be announced on 14 May. I simply content myself with saying that, if the Leader of the Opposition will contain his impatience, he will find out on the night of 14 May-Tuesday of next week-when the Treasurer makes his statement that there will be cuts in real terms of at least $1 billion. I have had cause to say before, and I repeat now, that we on this side of the House, particularly those of us who have had the onerous responsibility of operating in the Expenditure Review Committee, have been more than amused by the inferences of those on the other side of the House that some cosmetic exercise will be engaged in. I therefore expect them, after the evening of 14 May, to assure those around the country who will be complaining about the decision that they have no cause for concern; that it has been merely a cosmetic exercise in which the Government has been engaged. Mr O'NEIL —Could the Treasurer indicate whether a Press report this morning that $4 billion of tax is being evaded, because the corporate sector is not reporting all its taxable income, is correct? Mr KEATING —My attention has been drawn to a story in today's Australian Financial Review, which claims to report the contents of a confidential Australian Taxation Office document about tax evasion. Unfortunately, this story is both highly sensationalised and seriously inaccurate. It is true that the report to which the Financial Review refers has not been publicly released. Nevertheless, it is an interim report of a group which came into existence by virtue of a decision by the Commissioner of Taxation. The existence of the group was announced in the last annual report of the Tax Commissioner, so there is nothing particularly secret about the report. The most important element in today's report in the Financial Review is that it seriously misquotes the figures contained in the report. It states that the corporate sector is evading tax of between $3 billion and $4 billion each year. The report does not contain any estimate of losses in respect of the corporate sector. In fact, the report dealt with unincorporated enterprises income of the order of $3 billion to $4 billion and tax equivalent losses of the order of $1 billion on income of $3 billion to $4 billion. So, it is not $3 billion to $4 billion of company tax which is missing; in fact, we are looking at the prospect of losses of the order of $1 billion for unincorporated enterprises. As well as that, there was an inference made in the report that no adjustments were made other than that the assessors were able to yield about $21.6m per annum in assessing unincorporated enterprises. This is also incorrect. As mentioned in the Commissioner's sixty-third annual report, the Australian Taxation Office enforcement programs in 1983-84 were responsible for adjustments, following audit and investigation action, of some $510m, $201m of which relates to non-corporate tax payers. In other words, the report is sensationalised and highly inaccurate. It has been recognised as a fact in this Parliament for a long time that there is straight evasion and underreporting of income. This is a fact across the spectrum, but particularly in the area of unincorporated enterprises. One of the causes of the fact that compliance with our taxation system has broken down is the disrepute in which the tax system is held and was held through the 1970s when tax avoidance was permitted on a massive scale by the Government of the day. Underreporting of income has, indeed, become part of a very unsavoury fashion. Up until the early 1970s we had a high degree of compliance with the tax system and I am sad to say that that is not the case today. But losses in respect of the unincorporated area of taxation are of the order of $1 billion through straight evasion and underreporting. That is totally different from the $3 billion to $4 billion being described as 'loss of taxation to the corporate sector'. This report was about unincorporated enterprises and the figure was of the order of $1 billion, not $3 billion to $4 billion. Mr HOWARD —My question is addressed to the Prime Minister. Does he still adhere to the promise he made before the last election that interest rates would fall in 1985? Mr HAWKE —I would have thought that just about the last thing in the world that the honourable member for Bennelong would want to talk about would be interest rates. I do not believe that in the volatile circumstances that have occurred in Australian economic conditions since the beginning of this year it would be helpful to Australia's national interest if I were to speculate in this matter. All I will say is this: As distinct from the incoherent and disastrous economic policies that were followed under the management and direction of the honourable member who has asked the question, this Government will pursue economic policies which will ensure the best possible outcome for Australia in all areas of the economy, including the levels of interest rates. Mr RONALD EDWARDS —Can the Prime Minister inform the House of the outcome of the Government's recent bilateral talks on arms control and disarmament with the United States and the Soviet Union? Mr HAWKE —Clearly I cannot go into great detail about what were confidential discussions, but I can say that the Government regarded both series of talks as extremely useful. It goes without saying that of course our relations with the United States are so very much closer, but we believe that a credible arms control and disarmament policy required Australia to maintain a practical and effective dialogue with the Soviet Union as well. We agreed with both super-powers on the need for deep cuts in nuclear weapons and we urged that every effort be taken to avoid an arms race in space. We also emphasised the importance of the horizontal proliferation aspects of the Treaty on the Non-proliferation of Nuclear Weapons and the need for a successful outcome of the review conference of the NPT later this year. We also stressed the importance of commencing substantive work on a comprehensive test ban treaty. It should be pleasing for the House to note that we found a very substantial measure of common ground on the issue of chemical weapons, particularly with the United States of America. We agreed to co-operate with the United States in developing its proposal for reciprocal visits by both super-powers to each other's test sites, and we will be consulting further with the Americans on this subject. It is also worth noting in passing that, as agreed during the recent visits by Mr Hu Yaobang, we will shortly be consulting with the Chinese about a similar round of talks to be held with them in the near future. It is in this context that I note that last week-this must have come as a great surprise to a great number of Australians-the Liberal Party of Australia found peace. It discovered peace, very characteristically. It had done a little polling and found what we knew and what had been reflected in our policy for a very long time; namely, that the issues of peace are of importance to the people of Australia. The Liberals, having done some polling, found that issue to be important, and so they discovered peace. Characteristically, the new campaign on their newly found issue was launched on 27 April by the honourable member for Bennelong, who found a new campaign front on which to wage war on the Leader of the Opposition. It was not until a few days later, on 1 May that the Leader of the Opposition weighed in with a statement, as honourable members would have noted, regarding a video with the intriguing title of 'Peace, the Liberal Way'. If this is a case of 'you have seen the film, now read the book', the Australian public will certainly be presented with a very slim volume because the Liberal and National parties have absolutely no credibility in this area. Dr Klugman —They have been infiltrated by the SWP. Mr HAWKE —They may well have been. It is well known that during times of international tension the Opposition forces have ardently and unfailingly sought to embroil this country in confrontation and conflict for their own divisive, internal Australian domestic political purposes. Opposition members-Cheap! Mr HAWKE —It is all right for honourable members opposite to say 'cheap' but the facts speak for themselves, because ironically-- Mr Cadman —Madam Acting Speaker, I take a point of order. I wonder why the Prime Minister has taken troops out of the Sinai. Madam ACTING SPEAKER —Order! There is no point of order. Please do not raise frivolous points of order. Mr HAWKE —Ironically, the Liberal Party chose to give the Australian people the benefit of its views on the subject of peace and disarmament in the week of the tenth anniversary of the fall of Saigon. The record of the Liberal Party during the Vietnam war epitomises totally its lack of credibility and responsibility on the issues of peace and war. It should be remembered with shame that it sought at any cost to commit the United States to a land war in Asia. The Liberals cynically used young conscripted Australians, to whom they denied the vote it will be recalled, as tokens for their purpose of seeking to involve the United States in a land war in Asia. At critical junctions of the war they inevitably argued in favour of escalation and against negotiations. Never let it be forgotten that they sought to deceive the Australian people into believing the fantasy that the ultimate enemy of Australia in Vietnam was China. That was the extent of the deception to which the Liberal Party was prepared to go in this matter. The Australian people should never forget that the Leader of the Opposition and the Leader of the National Party of Australia were both Ministers who involved Australia in that deception. The Deputy Leader of the Opposition was a member of the Government involved in that exercise. None of them, in the whole period since then, have uttered a single word to suggest that they have ever had a second thought about the way they involved this country and our young people in that war. Madam Acting Speaker, when one recalls that record in those circumstances-the way they manipulated the people of Australia for those obscene purposes-is it any wonder that the people of Australia will regard with contempt this latter day discovery by these people of the cause of peace? Mr SHACK —Will the Prime Minister guarantee that the Government will support full discounting of wage indexation for the effect on the consumer price index of any indirect tax increases resulting from taxation reform? Mr HAWKE —Both the Treasurer and I have made it perfectly clear that in the conduct of the economic policy of this country we will ensure that policies are undertaken and decisions made which will guarantee the welfare of this country and will guarantee what the previous Government was never able to guarantee. What this Government has done in two years is to restore economic growth at low levels of inflation. An integral part of the capacity of this Government to rescue Australia from the economic disaster inflicted upon it by the Opposition when in government has been the accord with the trade union movement. It has served this country well. It has produced high levels of growth and has halved the levels of inflation which we inherited from the people on the other side of the House. Central to the capacity of this Government to produce those results has been our prices and incomes policy. The Deputy Leader of the Opposition has conceded that one of the reasons why the previous Government made such an indescribable mess of the Australian economy was that it did not have such a policy. That is the advantage that we on this side of the House have over those on the other side of the House. It is because of our capacity to have a sensible and relevant incomes policy that we have been able to produce the goods. We will continue to do that throughout this year and the years ahead, both in relation to general economic policy and in regard to tax policy in particular. Mr CAMPBELL —My question is addressed to the Minister for Trade. Reports in the Australian Press indicate that the Minister for Trade, during his recent visit to the Republic of Korea, received some assurances in respect of Australian raw materials trade. Can the Minister confirm this and elaborate on it? Mr DAWKINS —I thank the honourable member for Kalgoorlie for his question. It is true that there were reports in the Australian Press-not nearly enough of them as far as I am concerned-on the results of-- Mr Tuckey —You used to get better coverage, John. Madam ACTING SPEAKER —The honourable member for O'Connor will cease interjecting. Mr DAWKINS —So did the honourable member for O'Connor; he used to get editorials. Madam ACTING SPEAKER —Order! The Minister will ignore the interjections. Mr DAWKINS —The relationship between Australia and the Republic of Korea is a very important one and has the potential to become even more important as the Korean industrial expansion continues apace. Already, Korea is our fifth largest market and it has the capacity to become an even more important market for us. There have been difficulties in recent times, however, relating partly to Korea's complaints about its access to our market and various threats to disrupt the trade between us. Therefore, my visit took place against a background of an essentially strong and promising relationship which had been subject to some minor friction in recent times. As a result of the discussions that I had with my counterpart in Korea, we now have assurances both from the Government of Korea and from the major purchasers-the steelmaker POSCO and the electricity utility KEPCO-that in the future raw material contracts will be settled between Korea and Australia purely on the basis of quality and price and will not be subject to any retaliation measures. Also, the Korean Minister for Trade assured me that he would clear the way for an early resumption of negotiations on contracts for raw materials between the Korean and Australian parties. For the first time, the Koreans agreed to consult Australia on the question of beef demand and supply in Korea, which will not only pave the way for an early warning for the Australian industry of the reopening of the beef market in Korea but also ensure that the Australian industry will be the first suppliers approached by the Koreans when they decide to reopen their market for beef. There have been some difficulties confronting the Koreans in their sales to Australia, largely due, I suspect, to the depreciation of the Australian dollar, which is something that they, of course, understand. I have undertaken to look at what other matters might be affecting their trade and to accelerate the present normal values cases affecting radial tyres and steel pipes and tubes. As a result of these discussions, we have put the relationship, which is basically very firm and promising into the future, on an even firmer foundation. In order to prevent the recurrence of the kind of friction that has occurred in recent times, it has been agreed that the work of the Joint Trade Committee, which exists to look at these matters, be elevated. That Committee will meet again in September, in advance of a further meeting between the Korean Minister for Trade and me either later this year or early next year. We will thereby ensure a better understanding of the issues in this important relationship and that when difficulties arise they will be dealt with promptly and frankly. Dr HARRY EDWARDS —My question is directed to the Prime Minister. I refer him to his statement in respect of spending cuts, that the original Forward Estimates have been affected by the volatility of the currency, and the fact that they are normally subject to other non-policy changes such as the economic growth rate. Will the Prime Minister assure the House that the forthcoming statement on expenditure cuts will clearly show what part of the cuts is due to the policy changes being proposed and what part is due to non-policy change such as the depreciation of the Australian dollar? Mr HAWKE —The Forward Estimates will be released on Thursday of this week. The releasing of those Forward Estimates, in conjunction with the statements that will be made by the Treasurer on the evening of 14 May, will enable the honourable member to ascertain clearly the answer to his question. I repeat what I have said before: All members of this House and the people of Australia will be able to appreciate the reality of the more than $1 billion cuts that will be announced by the Treasurer. Mr O'KEEFE —My question is addressed to the Minister for Transport. I refer to the announcement of the Australian land transport program. I ask the Minister: First, does the program provide a co-ordinated approach to the development of future land transport networks? Secondly, does the program confirm the strong commitment of the Federal Government to main road development as outlined in the pre-election commitment of the Government? Thirdly, does the development of the Australian land transport program tie in with the commitment of the Government to developing closer relationships with local government in the implementation of its programs and policies? Mr PETER MORRIS —I thank the honourable member for his question. The Australian land transport program legislation to be introduced tomorrow will show the Parliament the co-ordinated approach that this Government is taking to the funding of all forms of land transport. By that I mean the building and maintenance of roads, road safety promotion and road safety research and the provision of a limited amount of money for the upgrading of interstate main line rail networks. That approach is something which has long been lacking in this nation. It also provides a basis for a proper cost recovery approach to land transport in the country. I am pleased to be able to say that that legislation also confirms our commitment to the development of our road and rail systems in a co-ordinated, complementary fashion, rather than a straight-out alternative fashion. It is not a matter of road or rail transport; it is a matter of road and rail transport, each form of transport carrying out the task to which it is economically, socially and technically best suited. In that way we will get the most efficient transport system. With the most efficient transport system we will be better able to exploit market opportunities abroad and we will be better able to exploit our manufacturing and economic opportunities and we will be able to provide more jobs at a faster rate in this nation. We have made special provisions for local government in the Australian land transport program. As the honourable member properly mentioned in regard to the very effective role he foreshadowed for local government, we are ensuring that the level of Federal expenditure on roads for local government will be maintained in real terms. Next year's provision will maintain this year's expenditure in real terms. From there on, the indexation of the funds provided under the legislation will ensure that local government's interests are protected. We have taken the view that local government has a narrower financial base. It has growing burdens placed upon it and is the least able of the three levels of government to expand that revenue base to carry out the tasks which it is called upon to perform. If we look at the legislation we see that next year we will be providing $258m for work on local council roads. For New South Wales that is an increase of 5 per cent, for Victoria an increase of more than 6 per cent, for Queensland an increase of almost 6 per cent, for Western Australia an increase of 5.6 per cent, for South Australia an increase of 6 per cent and for Tasmania an increase of 4 per cent. In total that $258m is a 60 per cent increase of Federal expenditure on local roads on the last full year's Budget of the Fraser Government. I commend the honourable member for the work that he is doing and for the representations he makes on behalf of local government. I say again to the House that the Australian land transport program fulfils the major election promise of the Prime Minister to maintain the greatest road building and road construction program ever undertaken in this nation. Mr McGAURAN —Can the Minister for Communications give an assurance to non-metropolitan Australians that on the introduction of Aussat Pty Ltd television services regionalism on a State and local basis will not be subjugated to centralised interests? Mr DUFFY —I thank the honourable member for Gippsland for his question. As the honourable member and other honourable members will be aware, last year the policy of the Government on this matter was announced in this Parliament. The Government remains committed to existing policies concerning the provision of commercial radio and television to the remote areas of Australia and, in particular, the remote commercial television service known as RCTS. However, unlike governments in the past, we are also concerned to see that those areas receive an extension of services beyond RCTS. For that reason the Forward Development Unit was set up within the Department of Communications to look at the first steps in the equalisation of services. One of the most important steps in moving towards equalisation will be the supplementary licence scheme. That has to move more quickly than was expected and this Government has a commitment to do that. But in answer to the first part of the question, the Government remains committed to existing policies. Mr CHARLES —I draw the attention of the Minister for Arts, Heritage and Environment to recent Press reports casting doubts on the Government's continued support and, in particular, its taxation support for the film industry. Are the reports correct? What is the Government's policy in regard to the continuation of support, in particular taxation support, for the Australian film industry? Can he cite any recent successes of that support for the industry? Mr COHEN —First of all, I am surprised at the way in which this issue has surfaced over the past few months because I do not think there is another issue upon which both the Prime Minister and I have repeatedly stated or reaffirmed the Government's position regarding Division 10BA of the Income Tax Assessment Act. It has been one of the resounding successes that this Government has had. I am very proud to say that in the last 18 months expenditure on television and film production has increased from $55m to $130m. We are now making approximately 27 to 30 feature films per year, about seven or eight television movies and about 80 documentaries. I see no reason, on the indications that I have available to me, why we will not continue at that rate in the future. I pay tribute to members of the Opposition for the work that they did in the Australian film industry when they were in government. It is now going through the most stable period in its history. The Prime Minister has reaffirmed his commitment to the 10BA provisions for the life of the Parliament and we have reaffirmed it; yet we are constantly being asked to reaffirm the situation. The honourable member also asked about the successes in the film industry. At the Cannes film festival, Australia had two films in the final 14 nominations-Bliss and The Coca Cola Kid. Mr Dawkins —Are you going? Mr COHEN —I would like to go to Cannes, but the Prime Minister thought that I was needed more here. My predecessor went. This is an outstanding performance by the film industry. We can only hope that the two nominations are successful. If not, it is still a great honour to have two films in the final 14 films at Cannes. If the opportunity presents itself, I hope to show those films to honourable members in the foreseeable future. Mr IAN ROBINSON —I direct my question to the Minister for Primary Industry. Will the Government's proposed dairy industry plan encourage the State governments to impose additional regulations on the industry unlike the proposals of the Australian Dairy Farmers Federation, which would avoid this difficulty? How does the Minister propose to implement his dairy marketing plan if any State government refuses to collect the all milk levy? What aspects of the Minister's dairy plan will be discussed at the announced meeting on Thursday with the Victorian Minister for Agriculture and Rural Affairs and Victorian dairy industry officials? Mr KERIN —The honourable member should not worry about the dairy industry, by golly, because we know what we are doing. He should just wait to see. He should take our word on this. We are not going to be stood over by thugs and bullies, these people putting on milk blockades in Victoria and now in the Australian Capital Territory; no way at all. What the honourable member should be worried about is his failure to understand the present dairy arrangements, the disastrous socialist Sinclair plan. Once he understands them-if ever he does, by gosh-perhaps he will stop asking silly questions. The honourable member is running around like a chook with two right legs. Mr LINDSAY —Is the Minister for Science able to advise the House about the prospects of collaboration between Australia and Israel in agricultural research, bearing in mind that Australia is the driest continent and that Israel is continually confronted with the problem of providing itself with an adequate water supply? Mr BARRY JONES —I had the benefit of discussions in Israel in April with President Herzog, Prime Minister Peres, Research Minister Patt, government departments, universities and the Weizmann Institute of Science about matters of common scientific interest. Inevitably, water was the dominant subject. Israel is currently using 10 per cent more water each year than the natural replenishment rate and this raises issues of national survival for Israel. Israel is working on the use of salt water crops in agriculture-asparagus is one example-and on using biotechnology to develop mutant strains of salt resistant plants, for example tomatoes. It is also working on the use of industrial and urban waste water in farming. Miniature apple trees, growing to about a metre high, have been developed. They produce large amounts of fruit and consume relatively little water-- Mr Goodluck —Big apples? Mr BARRY JONES —Yes, they have big apples, but the trees are discarded after two years. The process of converting sea water into fresh water now being developed in Saudi Arabia is not open to Israel because of the enormous cost. The Israelis are very anxious for Australian agricultural and water scientists to visit their country as a matter of urgency and the Commonwealth Scientific and Industrial Research Organisation would be eager to co-operate providing that appropriate sources of funding can be found-outside the Budget, I assure the Treasurer. I will be discussing this with my colleagues, the Minister for Resources and Energy and the Minister for Primary Industry, who have primary responsibility for water and farming. We will, of course, be anxious to promote technology transfer in this area of acute common interest. Mr HAWKER —Can the Minister for Social Security confirm that a pensioner couple on a farm who lose their pension due to the assets test can sell their farm, put all their assets into an expensive city home and qualify for a pension? If so, will the Minister alter the pensions assets test to allow these pensioners to stay on their farms? Mr HOWE —The assets test was designed in such a way as to be equitable and fair. The test must be fundamentally administered in a way that does not make distinctions between people living in rural as opposed to urban situations. Of course there are special characteristics in urban areas, just as there are special characteristics in rural areas. The Government took that into account when it designed the assets test. I believe that if there is one thing that is fundamental to any test or to any measure that the Government introduces that affects people's assets and capital, it is a commitment on the part of every member of the Parliament that the home ought to be excluded. That has been a fundamental principle which has been applied to the assets test. It is one that I believe has worked overall in terms of fairness, wherever people live. While it may be true that some people in urban areas live in very expensive homes, it is also true that some people in the country areas live in expensive homes. The valuations of homes on rural properties took into account not simply the context of their farming neighbourhoods but also the context of the urban values within that region of the country. It seems to me that underlying the honourable member's question is the suggestion not that people in rural areas ought to be treated equitably and on the same basis as people in the urban areas are treated but that people in rural areas ought to get special treatment. Of course that is fundamental to the ideology of the National Party of Australia because it is a party of special interests and it unashamedly pursues policies which suggest that people in rural areas ought to be treated in some special way. But I would not have thought the same thing would have applied to members of the Liberal Party of Australia. I would have thought that people in the Liberal Party would have sought to achieve a more rational approach than that which is implied in the honourable member's question. Mr MAHER —I direct my question to the Prime Minister. What positive economic benefit should flow for our nation following the recent devaluation of the Australian dollar? Mr HAWKE —Again I thank the honourable member for Lowe for his question. I can be brief in my answer to this question. The benefits are obvious. The people on the other side of the House representing rural Australia-we have a number of them on this side of the House and we will have more after the next election-have obviously welcomed the devaluation because it will mean that both our exporters of rural products and our exporters of mineral products will have a welcome increase in their income levels as a result. It is not so obviously and frequently recognised that the devaluation will have very significant benefits also for our manufacturing industry because it will make it more competitive both on export markets and against imports. I am able to say to the House that as a result of discussions with a number of business leaders engaged actively in the manufacturing sector, what is obviously true in theory is also being worked out in practice. I have been informed that a number of export markets are opening up for areas of our manufacturing industry which, until the devaluation, it had not regarded as being within its range. So all sectors of our economy should benefit from the devaluation. As I have said before, the challenge and responsibility for government is to ensure that these benefits are not dissipated by a secondary inflationary spiral. We are committed to ensuring that the necessary action will be taken to prevent that outcome. In the event, the devaluation of the Australian dollar should be seen as providing a very significant opportunity to enterprise in this country. I believe it is capable of rising to that challenge and we, in government, will ensure that it has every opportunity to take advantage of that challenge. Mr PEACOCK —I refer the Minister for Employment and Industrial Relations to yet another blockade to commence today. Does the Government intend to protect the people of Queensland against the trade unions' new transport blockade of that State? In particular, will it act to ensure that Commonwealth services including mail, for which this Labor Government is responsible, continue to be provided to the people of Queensland or does the Government intend again to endorse implicitly the unions' guerrilla attacks on Queenslanders; in other words, to do nothing? Mr WILLIS —There has been no endorsement by this Government of the campaign of industrial action. What we have said is that the unions should not be taking industrial action but rather should be seeking to achieve a resolution of this matter in other ways. In particular, we have sought to provide a basis by which there can be negotiations between the trade union movement and the Government to achieve that resolution. In respect of action by Australia Post, a ban on mail to Queensland yesterday led to a notification by the Government to the Australian Conciliation and Arbitration Commission of the existence of an industrial dispute. That matter will be proceeded with within the Arbitration Commission. Let me say to the Opposition that the situation remains one in which the resolution of this whole matter is very much in the hands of the Queensland Government. It is not a matter which will be resolved by actions taken by this Government against unions which are placing bans. Let me say that the most likely result of adopting the course advocated by the Opposition would be a great widening of existing bans and industrial confrontation right across this nation. The Opposition Leader knows, as an ex-Minister for Industrial Relations who used to say some reasonably sensible things in this area, that that would be the result of the action he is now advocating this Government should take. We are not going to go down that path. We will seek to resolve this matter in the way in which we have so far pursued it. We are continuing to try to achieve a situation in which negotiations can take place. I believe that steps which are in train may give us an opportunity to bring those negotiations about in the not too distant future. Mr WILLIS(Gellibrand-Minister for Employment and Industrial Relations) —Pursuant to section 58 (4) of the Trade Union Training Authority Act 1975, I present the Australian Trade Union Training Authority annual report for 1983-84. Mr YOUNG(Port Adelaide-Special Minister of State) —For the information of honourable members, I present the annual report on the administration and activities of the National Common Police Services for 1983-84. Motion (by Mr Willis) proposed: That the House take note of the paper. Debate (on motion by Mr MacKellar) adjourned. Mr KERIN(Werriwa-Minister for Primary Industry) —Pursuant to section 54 of the Wheat Marketing Act 1979, I present the Australian Wheat Board annual report for 1983-84. Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr MacKellar) adjourned. Mr KERIN(Werriwa-Minister for Primary Industry) —For the information of honourable members, I present the resolutions of the 120th (Special) meeting of the Australian Agricultural Council, held in Canberra on 27 September 1984. Mr KERIN(Werriwa-Minister for Primary Industry) —For the information of honourable members, I present the resolutions of the 121st meeting of the Australian Agricultural Council, held in Melbourne on 11 February 1985. Mr DAWKINS(Fremantle-Minister for Trade) —Pursuant to section 63M of the Audit Act 1901, I present the Australian Capital Territory Schools Authority financial statements for 1983-84. The annual report and interim financial statements of the Australian Capital Territory Schools Authority for 1983-84 were tabled in Parliament on 28 February 1985. Mr SCHOLES(Corio-Minister for Territories) —For the information of honourable members, I present the Australian Capital Territory House of Assembly (Second Assembly) publication dealing with the business of the Assembly for 1984. Mr COHEN(Robertson-Minister for Arts, Heritage and Environment) —For the information of honourable members, I present a summary record of proceedings of the sixteenth meeting of the Australian Environment Council held in Mount Cook, New Zealand, on 4 July 1984. Mr COHEN(Robertson-Minister for Arts, Heritage and Environment) —For the information of honourable members, I present a summary record of proceedings of the thirteenth meeting of the Council of Nature Conservation Ministers held in Mount Cook, New Zealand, on 5 July 1984. The Clerk-Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: National Flag 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 whereas: 1. They are completely satisified with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They 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. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that 'the existing Australian National Flag be changed only with the approval of the Nation as expressed in a Referendum'. And your petitioners as in duty bound will ever pray. by Mr Charles,Mr Peter Fisher and Mr Reith. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully showeth: That the Australian flag symbolises the continuity between Australia's past, its present and its future; That the presence of the Union Jack on the flag represents not a subservience to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression; Nonetheless recognises the rights of Australians should they wish as a people to change the design of their flag. Your petitioners humbly pray that no change be made to the Australian flag except with the consent of the people in a referendum. And your petitioners, as in duty bound, will ever pray. by Mr Drummond and Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned Citizens of Australia respectfully showeth: 1. That the overwhelming majority of Australians are completely satisfied with the existing Australian National Flag. 2. That we are totally opposed to any change in the Australian National Flag as provided in Section (3) of the Flags Act, unless such proposed change is first voted on by the people of Australia and passed by a majority of voters in a majority of States. And your petitioners as in duty bound will ever pray. by Mr Fife. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth: That in the light of the Labor Governments failure to act to correct the anomalies in the Assets Test on pensions bring to its notice and due to have effect from 21 March 1985, the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners, and calls upon the Australian Democrats to support Senator Messner's bill for the abolition of the Assets Test. Your petitioners most humbly pray that the House of Representatives in Parliament assembled should immediately seek the passage of the Social Security and Repatriation Assets Test Abolition Bill to repeal the Labor Governments iniquitous and unfair Assets Test. And your petitioners, as in duty bound, will ever pray. by Mr Cadman and Mr Drummond. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The humble petitions of certain undersigned Australian and overseas students respectfully showeth that: 1. The Overseas student program brings in a multitude of cultural, political and educational benefits as well as a net financial gain of $A5 million p.a., in foreign exchange. (Ref: Goldring Report) 2. Overseas students are under financial constraints. Most depend on their families for this financial support. The Goldring Report found 62 per cent of Overseas students come from families with annual combined parental income of less than $A15,000. 3. The imposition of high Overseas student charges will deprive many overseas students from getting a tertiary education and qualification in Australia despite their academic abilities. High charges will determine education in Australia for Overseas students on economic grounds. 4. The imposition of sudden and drastic increases in visa charges will also particularly disadvantage those current students, many of whom will be forced to discontinue their studies. 5. Overseas students do not displace local students. They represent a mere 3.4 per cent of tertiary students. (Goldring Report) 6. The fluctuations and uncertainty in Overseas students policy has led to uncertainty, stress and fear in Overseas students. Your petitioners in duty bound will ever pray that: 1. The Government re-affirm a commitment to its policy that supports the social and economic development of people and institutions in developing countries through access to Australia's education and training resources. 2. The Government formulate a consistent and considerate policy concerning Overseas students. 3. The Government reconsider, as a matter of urgency, the legislation of such a high increase in visa charges. And your petitioners as in duty bound will ever pray. by Mr Cross and Mr Hodges. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The petition of concerned people respectfully showeth their desire to have the brumby declared a protected species. Your petitioners therefore humbly pray that your Honourable House follow the example of President Nixon in the U.S.A. by declaring our wild horses protected from industry and indiscriminate slaughter. And your petitioners as in duty bound will ever pray. by Mr Gayler and Mr West. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia sheweth that they view with deep concern the desperate plight of famine victims caught in Eritrea and Tigre between the now-closed Sudanese border and the escalated bombing attacks of the Ethiopian government, and the undersigned citizens beg the Australian Government with the utmost urgency to take all possible steps towards inducing the Ethiopian government to cease fire on refugees and to co-operate in facilitating aid deliveries, and the Sudanese government to re-open their border, and further that the Australian government allocate aid to the Sudan and increased aid through non-government channels to organisations engaged in relief operations in the northern regions abovementioned, and your petitioners as in duty bound will ever pray. by Mr Brumby. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully showeth: That we are greatly concerned with the extent to which serious crime including murder, major drug financing and massive tax frauds have penetrated into the highest levels of Australian society as shown by the investigations of various Royal Commissioners and in particular by Mr Frank Costigan Q.C. That we are concerned that the National Crime Authority has too many restrictions and possible lines of veto placed upon it for it to be an effective successor to the Costigan Enquiry and that this will allow major criminals to avoid prosecution. And your petitioners humbly pray that the Federal Government negotiate urgently with the Victorian Government on the reactivation of the Costigan Commission and to extend its term to at least the 31st March 1985 and also to provide the Costigan Commission with whatever resources it may need to successfully conclude its investigations into organised crime in Australia. Further we believe that the issue of organised crime in Australia is so important that the Parliament should not be dissolved until at least the interim Costigan Report has been received and fully debated in both Houses of Parliament. 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. Your petitioners humbly pray that the House of Representatives should disallow the new Customs and Objectionable Publications Ordinance and that the Attorney-General should introduce laws to: 1. Prevent the importation and sale of hard-core pornography 2. Prevent the importation and sale of grossly obscene publications 3. Register imported pornographic video tapes for non-commercial use with the Film Censorship Board 4. Require the Censor to more appropriately reflect responsible community attitudes 5. Protect Australians, particularly women and children from exploitation; and Your petitioners also request that, because of the importance of this issue to society, a conscience vote be permitted to all Members of Parliament. And your petitioners as in duty bound will ever pray. by Mr Cowan. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The petition of the undersigned citizens respectfully showeth: 1. We are completely dissatisfied with the pricing policy of petrol in this country. 2. We are aware that it has an adverse affect on the living standards of the average wage earner of this country. Your petitioners therefore pray that your Honourable House will: Propose and pass a motion that the price of petrol be reduced by 3c a litre in line with a commitment given by the now Prime Minister of Australia during the 1983 election campaign. And your petitioners as in duty bound will ever pray. by Mr Goodluck. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned respectfully showeth: 1. That they are disturbed that the proposed Museum of Australia for Canberra omits any reference to the British role in the nation's development. 2. That as three quarters of Australians are of British stock, this deletion does a great disservice to the heritage of the majority. 3. That the proposed museum should give adequate mention, show appreciation and give floor space to the role that the British did give in the development of this nation. 4. That the many institutions still prevailing in this country, such as Constitutional Monarchy, Common Law, the National Flag, the Church, the traditions of the military forces and semi-military forces, combined with the spoken language of Australia which is English give testimony of this great British influence. Your petitioners humbly pray that the members of the House of Representatives in Parliament assembled will ensure that the British presence and early influence in the development of Australia will be included in a justified and sufficient manner in the proposed museum of Australia which will be erected at taxpayers expense in Canberra and your petitioners as in duty bound will ever pray. by Mr Goodluck. 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: 1. They call on the House of Representatives and the Government of the Commonwealth to reject the recommendations of the Commonwealth School Commission contained in 'Funding Policies for Australian Schools', concerning proposed increases in State aid to private schools and the proposed community standard for education funding. 2. They call on the House of Representatives and the Government of the Commonwealth to declare a three year moratorium (1985-1987) on increases in State aid to private schools and on grants for new private schools and for increased private school enrolments. 3. They call on the House of Representatives and the Government of the Commonwealth to re-affirm their primary obligation to government schools and to implement all 1983 ALP election promises for increased funding to government schools. And your petitioners as in duty bound will ever pray. by Mr Hawke. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia shows that there is a need to end the current discriminatory application of sales tax on confectionery and the other anomalies existing in sales tax law. Your petitioners therefore humbly pray that this tax should be replaced by a broad-based consumption tax with a uniform ad valorem rate, without any exemptions whatsoever. by Mr Holding. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned electors of Australia respectfully showeth- That in the light of the Government's failure to act to correct the anomalies in the Assets Test on pensions, all relative legislation should be repealed before it has an unduly unfair impact on pensioners. And your petitioners as in duty bound will ever pray. by Mr Jull. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia shows- That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the U.S. Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. 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 pray that members and the House assembled will close Omega. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of concerned people of Australia respectfully show their desire that Your Honourable House (the Government) act to implement more equitable guidelines for payment of independence allowance to enable young Australians who have been employed in the work force to be eligible for Tertiary Education Assistance allowances where that employment has been undertaken while still at school. And your petitioners as in duty bound will ever pray. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The petition of concerned people respectfully showeth their desire to have the wild horses of Queensland and the Northern Territory declared a protected species. Your petitioners therefore humbly pray that your Honourable House will set aside a National Park for these horses and ensure that killing of feral animals be undertaken in a humane manner with proper legislation and enforcement. And your petitioners as in duty bound ever pray. by Mr Lindsay. To the Honourable the Speaker of the House of Representatives in the Parliament assembled. The petition of concerned people respectfully showeth their desire to have the koala declared an endangered species and given the proper protection of the Commonwealth. Your petitioners therefore humbly pray that your Honourable House declare that the koala may not be exported from this country and that urgent re-vegetation of their habitats be carried out. Your petitioners also humbly pray that Commonwealth Government funds will be made available for research into the disease Chlamydia Psittaci which is killing the koala. And your petitioners and in duty bound will ever pray. by Mr Maher. 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 objection to the Metric system and request the Government to restore the Imperial system. And your petitioners as in duty bound will ever pray. by Mr Millar. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned residents in South Australia showeth: 1. That we are concerned with the gross lack of good television reception in Pinnaroo and adjacent areas. 2. That the present, the privately owned Television Towers, which range up to 30 metres in height, are not sufficient to achieve a satisfactory Commercial Television picture. 3. That the currently received Commercial Television service is grossly inferior compared to the Metropolitan and near Metropolitan areas. 4. That the most reliable television service is only received from ABC Regional Service based at Loxton which is 110km from the Pinnaroo Township. 5. That the residents of Pinnaroo and the adjoining areas consider that we are disadvantaged as we do not receive a clear Commercial Television Reception. Your Petitioners therefore pray that the Honourable House will ensure that the Department of Communications will upgrade the Commercial Television reception in Pinnaroo and in the adjacent areas. 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: This petition of certain citizens respectfully showeth: That it is proposed Australia Post's Post Office Agency on the corner of Green and London Streets, Joondanna, Western Australia will be closed down on 30 June, 1985. Your petitioners therefore pray that this Agency be kept operating for the benefit of the many people who avail themselves of its services and who appreciate the convenience of its location. And your petitioners as in duty bound will ever pray. by Mr Rocher. To the Honourable the Speaker and Members of the House of Representatives of Federal Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that we the undersigned request Commonwealth and State co-operation and financial commitment to- (a) Providing an infrastructure and making aircraft available for the fighting of bushfires in New South Wales; (b) Further, we request the Commonwealth Government to retain the surplus Grumman Tracker Aircraft (approximately 17) and associated spares, for the purpose of conversion to firefighting aircraft for use on the above project. And your petitioners humbly pray that your Honourable House will respond to our plea. And your petitioners as in duty bound will ever pray. by Mr Sharp. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully shows: 1. That the functions of local government involve assessing local demand for services and either providing, or facilitating the provision of, those services; 2. That a transfer of responsibility for the provision of services from one level of government to another must be accompanied by a corresponding transfer of funds; 3. That local government in Victoria is becoming increasingly involved in the planning and provision of human services in particular; 4. That the level of services currently provided by or through local government cannot be maintained, and certainly cannot be increased, if the funds made available to local government through the personal income tax-sharing arrangement are not maintained at the present level; 5. That we are totally opposed to any reduction in the percentage of personal income tax allocated to local government. Your petitioners humbly pray that no change be made to the funding of local government without the consent of representatives of local government. And your petitioners as in duty bound will ever pray. by Mr Uren. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned Australian citizens respectfully showeth that: (i) During his employment as Spanish speaking officer of the CEP funded Ethnic Liaison Project of the South Coast Labour Council, Mr. Ivan Estraube has worked on a large number of cases of disadvantaged Spanish speaking migrant workers in the Illawarra region of the State of New South Wales. (ii) Those migrant workers are disadvantaged because of the lack of knowledge of the English language, and consequently by the ignorance of their civil and industrial rights and privileges, as well as their obligations. (iii) Mr. Ivan Estraube's term expires in June 1985. This will leave a large number of Illawarra's Spanish speaking migrants workers without help. Your petitioners therefore pray that: Funds are made available, enabling Mr. Ivan Estraube to continue helping the underprivileged people in the community. by Mr West. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: That the Hawke Socialist Government be called upon to remove the unjust and cruel Assets Test; That the Assets Test discriminates grossly against those people living on acreage blocks or in rural areas; That the introduction of the Government's grab for the assets of senior citizens is condemned as un-Australian; That the Government is requested to reconsider the Assets Test. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They 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. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore 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 Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the State of Queensland respectfully showeth: That the Hawke Socialist Government be called upon to remove the unjust and cruel Assets Test; that the Assets Test discriminates grossly against those people living on acreage blocks or in rural areas; that the introduction of the Government's grab for the assets of senior citizens is condemned as un-Australian; that the Government is requested to reconsider the Assets Test. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the State of Queensland respectfully showeth: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They 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. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore 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 Slipper. Petitions received. Mr DEPUTY SPEAKER(Mr Mountford) —Madam Acting Speaker has received a letter from the honourable member for Tangney (Mr Shack) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The adverse implications for the Australian economy of the trade union dominance of the Hawke Labor Government. 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 SHACK(Tangney)(3.42) —There can be no more serious matter for a nation than the dominance of a government-any government-by sectional interests. It results in weak government, corrupt government, government for the benefit of the few instead of the whole; that is, all the people. This Government is guilty of weakness, vacillation and proneness to influence. It is guilty of that moral shortcoming for governments-dependence on, and dominance by, a special interest group. It has been derelict in its responsibility to the Australian community. It is refusing to champion and implement economic policy in the best interest of all Australians-employed and unemployed, unionists and non-unionists alike. This Government is run by the leadership clique of the Australian Council of Trade Unions. The puppeteers of this play are the ACTU leadership who have their own aims, separate from the aims of what is best for the country and even for their own membership. Attention is riveted in Australia at the moment on those three vital instruments of economic management: Monetary policy, budgetary policy and wages policy. Therein lies our economic future and, therefore, the future of our country. The Government's monetary policy, or lack of it, has been widely condemned. Next week we will have the opportunity to examine the Government's budgetary gymnastics. This afternoon I want to focus on the Government's wages policy. The members of the Government are the only ones left who believe that an effective wages policy is operating now. The market has passed judgment by selling Australian dollars hand over fist. No trader wants to be caught with the currency of a doubtful economy. Who would have thought we would have seen this day? It is rubbish to argue that the economic fundamentals are sound. The market disagrees; we disagree. The fundamentals are not sound and the statistics are beginning to confirm the market's judgment. In March there was a 0.5 per cent hike in unemployment. The Government has not made any significant dent in unemployment. It is now only 1.2 per cent better than when this Government took office. This Government is torn between two totally conflicting policy thrusts. It has achieved significant deregulation of the financial system, which we roundly applaud, but it is now trying to reconcile that with an approach to the labour market which makes the Government's wages policy totally incredible. The business community has remained unmoved after the pep talk of the Prime Minister (Mr Hawke) last month because it understands that conflict. It knows the benefits which can flow from deregulation and which can be frustrated when other sectors of the economy remain regulated to the hilt. It will take more than warm words from the Prime Minister. It requires a change of policy and the devising of a consistent set of policies for the financial system, the labour market, and indeed every economic sphere. Until this fundamental conflict between financial policy and labour market policy is resolved, we cannot expect the money market or any other sector of business to show confidence in the Government's handling of the economy. This confidence is vital for genuine economic recovery and generating genuine new jobs in a revitalised private sector. What of the much-vaunted prices and incomes accord? The more the Government points to the accord, the less credible its wages policy appears. When the Government wakes up to the community's lack of confidence and justifiable scepticism about the accord, hopefully this Government will cease mouthing the virtues and get on with the job of designing an effective wages policy which corresponds with economic reality and does not require a fiddle here or a fiddle there or a policy contortion over this wage claim or that dispute in order to hold together the appearance of the accord. The accord is now like tissue paper bound over a wire frame. The economic winds are blowing through it and this Government and its Ministers are seeking desperately to stick it back together; yet they cannot do so. I now turn to discounting. It is absurd for the Government to say that it might use increased revenues from the decline of the dollar to compensate business for the devaluation's potentially damaging effect on wages under our present wage fixation system. This reflects the absolute absurdity of the present system. Why does the Government not directly address and resolve the wages devaluation question, instead of coming up with elaborate and unwieldy attempts to patch up the problem-a fiddle here and a fiddle there? The need for discounting highlights the deep structural flaws within the accord. If the Government's wages policy is profoundly flawed, it is also deeply corrupt, for under the accord anything goes. Public servants wanted a pay rise over and above consumer price index-based wage increases and outside the wage fixation guidelines. Despite the accord, the Government supports a pay rise for public servants. The Government, despite the accord, tolerates regular outbursts of militant union action in the building and maritime industries. Despite the accord and its much-touted mutual responsibilities, the Government allows Queensland to be blockaded. Once again today in this chamber we heard the absolute non-answer by the Minister for Employment and Industrial Relations (Mr Willis) and an explanation of his response on how to handle this problem: Sit on your hands and do nothing. If all this can be fitted in under the umbrella of the accord, what else could be in the future? No wonder our Australian dollar has plummeted. No wonder the international and domestic business communities have grave doubts about Australia's economy. They understand the state of the fundamentals and they are reacting accordingly. Much of the crisis of confidence can be pinned directly on this weakness-a rubbery and ineffective wages policy with all the burden and uncertainty borne by employers. Many wins over the Government have been chalked up by the ACTU and some unions. Let me look at the productivity case expected in the future. The debacle over the forthcoming ACTU productivity case has reinforced perceptions of Government confusion and proneness to ACTU influence. The Press has summed it up. I quote from the Sydney Morning Herald of 12 April: 'Wages: Hawke Bows to the ACTU'. It might have gone on to say 'Hawke Bows and Scrapes'. From the Australian of the same day: 'Hawke and the Accord: Fading Together?'. Fading fast, very fast indeed. If there was any doubt at all left in people's minds about who is in control of Government policy making-the Government or the ACTU-it has been dispelled over the course of the last week. In relation to tax reform, there have been headlines day after day after day about what Simon says, what Bill says, what half the ACTU and assorted Trades Hall councils have to say and how the Government is hanging on their every word. What has happened to government? What has happened to leadership? I read in the paper today that all 27 members of the Executive of the ACTU are to be invited to the tax summit. They have already been party to some of the background paperwork preceding the summit. Where will they sit, all 27 of them? Both Ministers and ACTU representatives cannot sit on the front bench. The Minister for Employment and Industrial Relations will have to sit behind. He can lean over the back of the chair and say: 'Excuse me, Mr Crean; excuse me, will you tell me what is going on?' That is the reality we face. Government members are back seat boys and some one else is pulling the string. For the sake of us all I ask: What has happened to policy making by governments in the best interests of all Australians? Where has it gone? We can forget about that. This Government cannot even blow its nose without consulting the ACTU, without asking its permission first: 'May we do this? Will it be all right?'. Is it any wonder that economists are concerned about wages policy? With the Government locked into a relationship of utter dependency and subservience to the ACTU, it is extremely unlikely that the Government could revise its wages policy in the manner necessary to improve this country's economic prospects. Revision of wages policy is vital; it is vitally necessary for the Government to revise its policy. I quote the opinion of one very respected economic forecaster, Syntec, which said in its April bulletin: Unless there is more direct action to hold wage costs, the Hawke Government's reliance on the accord as the basis for policy will, within 18 months, turn out to have been a strategy for economic disaster. This subservient relationship the Government has with the ACTU Executive is not a special relationship which has benefits for the Australian community; it is a subservient relationship which will lead to economic disaster and impose upon the Australian community horrendous economic costs. Under the present arrangements the fact is that a reasonable scenario for us all to expect, given this subservience, is that in the next full year we will see a full wage indexation increase of up to 4 per cent in September and a further increase of up to 4 per cent in March 1986. On top of this there could well be a continuation of the current wages drift, independent of award wage increases. Contrast this most likely scenario for Australia with that for Japan, where the spring wage offensive appears likely to result in an annual wage increase of only 4 per cent. This Government must break its dependence on the ACTU and its subservience to sectional interests. It must do so because it needs a sound wages policy, one which protects the opportunities which have been presented to us by devaluation rather than negating them. We can use devaluation to good effect-to very good effect. It could be the springboard for a new era of economic growth and prosperity in Australia and could provide the break necessary to get our economy back on to an internationally competitive footing. That is the opportunity, that is the chance we have within our grasp. If only the Government would break out from underneath the control which this ACTU leadership exerts over it. The Prime Minister and his Government must not squander that chance. They must not allow full indexation-based wage fixing to kill their positive potential; they must not allow union influence to sway them away from the task of government to govern for everyone. Now is the time for the Government to replace its vacillation and dependency with one simple, undervalued commodity in the Australian political scene today-that is, leadership. The Government was elected to govern; it should exercise its leadership for the benefit of all the people. With respect to wages policy and economic policy in general, it should exercise leadership. If this Government truly has a special relationship with the trade union movement, let us see evidence of it now. The Government's task next Tuesday is not only to announce the $1 billion expenditure cuts but also to take an essential complementary step, to revise the Government's present wages policy, which is pathetically cosy, corrupt and completely compromised. I challenge the Minister for Employment and Industrial Relations and the Government to deal firmly with the ACTU to achieve the wages policy revisions that are necessary to stir up economic revitalisation in Australia; namely, the discounting of the next national wage case rise for the devaluation of the dollar-or, preferably, the abandonment of wage indexation altogether-and the indefinite postponement of the ACTU productivity case. Australia's economic future is hanging in the balance. This is not merely of concern to business men and women; more and more Australians, unionists and non-unionists, understand the consequences of an ailing economy in human terms-high unemployment, declining standards of living and the prospect of another inflationary spiral. The Government must act now. It must begin to govern. It has the opportunity, the ball is at its feet. The Government must exert its leadership, pick the ball up and run with it. Mr WILLIS(Gellibrand-Minister for Employment and Industrial Relations)(3.57) —The honourable member for Tangney (Mr Shack) must have been absent from this country for the last couple of years because from what he was saying one would have thought that this Government had no runs on the board. This Government, in the two years that it has been in office, has shown great leadership to the country-leadership that was totally lacking under the previous Government. It led this country into an abysmal mess, the worst recession for 50 years. This situation was current when we came to office. That was the point from which we had to take up the leadership of this country and show the way out of the mess created by the previous Government's policies. We had to try to give this country something like the prosperity to which it had become accustomed in the post-war period. Given the state of the mess that this country was in when we came into office, we found that that was not a task that could be performed or achieved in a short time. We faced the worst recession for 50 years with both inflation and unemployment in double figures and negative economic growth. These circumstances cannot be rearranged or totally overcome in no time, or even in two, three or four years. However, it is a situation that can be gradually redressed and in the period this Government has been in office it has redressed it dramatically. By the policies we have pursued-budgetary, monetary, wages and industrial relations-we have led this country to the strongest economic recovery that it has ever seen. There has been a dramatic increase in employment along with-this is something the previous Government could never achieve-a simultaneous strong increase in employment and a concurrent reduction in inflation. Inflation is now down to 5 per cent, which is less than half what it was when we came to office. Those achievements have come about through the leadership of this Government, through policies which have led this country to a remarkable economic recovery, better than that of any other country in the Western world in the last couple of years and one which provides the basis for continuing prosperity. It is a nonsense for the honourable member for Tangney to argue that there has been a lack of success, a lack of achievement and a lack of leadership in this country. All those things have been here, par excellence, in the past couple of years. This is in dramatic contrast to the situation that applied in this country in the preceding seven years of the Fraser Government. It is an absurdity to argue, as does the wording of this matter of public importance, that this Government is subject to trade union dominance. That is a lie. It is totally untrue in every respect. The Government has a close co-operative relationship with the trade union movement and that relationship has been used for the great benefit of all the people of this country. Mr Peacock —Like wage indexation. Mr WILLIS —Wage earners are not the only beneficiaries; all people have benefited-particularly those who were so badly let down by the previous Government, such as those who receive income from shares. The proportion of total income going to shareholders has increased considerably, as it always does in times of strong economic recovery. That is what we have been able to achieve. Those people are doing much better in the present circumstances than they did under the previous Government. It has not been a recovery only for the wage earners or for the employed but a recovery for all people, which has meant, in particular, a strong growth of employment. That growth of employment has been the very basis of the Government's economic strategy. Our number one objective was a strong recovery of employment. We set ourselves the task of getting a growth in employment of 500,000 in three years and we have achieved 340,000 in less than two years. So we are more than on track in achieving that growth of 500,000. Growth in employment is extremely important to us and we are sure it will continue. It has been associated with a reduction in the level of unemployment. Certainly, the reduction in the level of unemployment has not been as dramatic as the increase in the level of employment, because each year jobs have to be found for about 120,000 people who come on to the labour market, just with the normal growth of the labour force. Increases in the participation rate also occur as the economy strengthens. Nevertheless, we have been able to knock the unemployment rate back from its peak of about 10.4 per cent in September 1983 to the current rate of 8.8 per cent. The rate jumps around a bit month by month. We expect it to continue to track down over the rest of this year. So in our basic objective of creating employment growth and reducing unemployment, we have achieved substantial success. This success has been associated with the strongest economic growth that this country has ever seen. The strong economic growth has had much to do with the fact that we have pursued the right policies, including the right wages policy. Our wages policy has done a tremendous amount for this country. Because of our association with the trade union movement and with the prices and incomes accord we have been able to pursue a wages policy in the context of strong economic growth, which has restrained wage growth and has also meant that we have been able to continue to reduce the rate of inflation. All of those things would not have been possible had there not been a prices and incomes accord. When the people of this country listen to the propaganda from the honourable member for Tangney and from the other honourable members on the other side of the House they would do well to bear in mind the fact that, on all precedents in this country, without the prices and incomes accord there would have been no prospects of having strong economic growth associated with declining inflation. Rather, as the economy picked up income claims would have picked up all round, and that would have been associated with increased inflation. Of course, sooner or later, with continually rising inflation, the recovery would have to stop because of reduced international competitiveness and/or the fact that the Government would have to take restraining action on its budgetary and monetary policies to keep that inflation in check. That was entirely the situation we were seeking to avoid through the prices and incomes accord. The very thrust and basis of the accord was to provide the fundamental wages and incomes policy which would mean that we would not have to check inflation through budgetary and monetary policies which would destroy growth and create unemployment. We saw that occur time and again under the previous Government. Time and again under the Fraser Government, when the economy looked as though it might be going to struggle onto its feet, inflation soon took off and the previous Government knocked the recovery on the head with budgetary and monetary policies. Inflation was certainly contained to some degree, but unemployment went up to a new plateau. We saw unemployment going up and up under the previous Government because of its failure to achieve non-inflationary growth. It had no policies to achieve non-inflationary growth. It had no budgetary and monetary policies, no wages policy and no industrial relations policy to achieve it. The accord has as its essence the need for governments to be able to achieve non-inflationary growth, and we have achieved it. It has worked. It has been an astonishing success-astonishing not so much to us, because we believed in it, but to the cynics and the critics among the Opposition who thought it could never possibly work. But it did work and it will continue to work because of the overwhelming support it has had and will continue to have from the trade union movement. That has meant not only that we have been able to get the fundamentals right in getting inflation down but also that we have reduced real unit labour costs. The index published by Treasury is back to the level it was in the late 1960s and early 1970s, which indicates that the imbalances which were created in the mid-1970s have now been eradicated. We have seen profit share come back to something like its normal level. We have seen international competitiveness restored. We have seen the fundamentals of this country achieved. One fundamental which has not been finally restored is the imbalance on our current account. But that imbalance is not something which can be attributed to us-we have done everything possible to improve international competitiveness-this problem goes back to the policies pursued by governments over the years, which left us with a fundamental imbalance on the current account. With the strong recovery of the economy and the pickup in imports, and the fact that though our exports greatly increased in volume they did not increase in price because they mainly were based on prices determined in the international quality markets, the current account imbalance yawned and the dollar was then subject to devaluation. It is absurd to argue, as did the honourable member for Tangney, that the devaluation occurred because of our wages policy. That is an absolute and total nonsense. Mr Shack —I did not argue that. Mr WILLIS —The honourable member seemed to be arguing that. The devaluation of the dollar had nothing to do with any adverse view of the wages policy; rather it had to do with the view that there was some imbalance in the Australian international account which became obvious with that strong economic recovery. However, I agree with the honourable member for Tangney on one point in his speech and that is that the devaluation provides an opportunity for this country. It provides an opportunity which should be seized. This Government has in place a wages policy which can ensure that we can seize that opportunity, that we can turn that devaluation into a very substantial positive for this nation, enabling us to increase employment considerably and to continue strong economic growth. We will be able to do that because of the existence of the prices and incomes accord. I ask the House what would have happened if the Opposition had been in government, as it was in the Fraser Government years, and there had been a big devaluation of the dollar? What do honourable members opposite say should happen then? What conventional economic policy says a government should do in those circumstances is that it should ensure that wages are restrained, that they do not take off with the increase in inflation which comes about through devaluation. It says that that should be achieved by government toughening up on its budgetary and monetary policies to the point where economic growth is compressed and some unemployment is created, but inflation is kept down and the international competitiveness gained from devaluation is not taken away by an increase in inflation. That is the policy which the Opposition, if it were still in government, would have been forced to pursue. That is the kind of policy which traditional economic policy says one should apply. It would mean increased unemployment and greatly reduced economic growth, at least for the time being. There may be some recovery later but the Opposition would not have the policies to enable economic growth to continue in the longer term because it would not be able to contain inflation. What our wages policy does through the accord, through the system of wage indexation which has been adopted by the Australian Conciliation and Arbitration Commission and the associated elements of the productivity case, is to provide a basis on which we can make the necessary adjustment. We have said continually that devaluation certainly means that this country has to tighten its belt slightly because devaluation of itself means a reduction of the real income of a country, but that if we handle the matter correctly that can become a basis for considerable increased growth in the future. We will handle it appropriately through the wages policy. It means that some increases in wage costs which could have occurred without devaluation can now not occur. That is what we have acknowledged from the outset, and that is still our position. The precise way in which wage cost increases which could have occurred will not occur is something which we will negotiate with the Australian Council of Trade Unions. That is the most appropriate way. That is something which the accord enables us to do. We do not have to clobber the economy with increased unemployment and reduced economic growth to retain the international competitiveness gained from the devaluation; we can use the accord to achieve that, and that is what we are in the process of doing. We heard from the honourable member for Tangney absurd tripe about corruption, a total lack of leadership and so on. He showed a total lack of understanding of the whole basis of this Government's policies and of the benefits that the wages policy brings. Perhaps if he does understand them he feels a sort of envy that he will never be able to apply any such policies in the mischance that he and his Party get into government. Of course, the Opposition's policy of total confrontation with the trade union movement means that it would have to go back to all the failed traditional policies of the past-the policies of despair, of increased unemployment, of continuing high levels of inflation and unemployment and of low economic growth-with no excitement, no vision, no achievement and a disaster for the Australian people. The Australian people are not fooled by anything that Opposition members say in this respect. The Australian people can see the tremendous gains that have been made by this Government. The basis for continuing strong growth remains. The wages policy enables us to turn the devaluation into a big plus for this country. Mr CARLTON(Mackellar)(4.11) —In case honourable members, or those listening over the radio, are somewhat bewildered as to what this is all about following the speech by the Minister for Employment and Industrial Relations (Mr Willis), I remind the House that the matter of public importance this afternoon states: The adverse implications for the Australian economy of the trade union dominance of the Hawke Labor Government. In response to the charge by the honourable member for Tangney (Mr Shack) that this is a trade union dominated Government, the Minister said that this is a lie. Actually, I almost agree with the Minister. In fact what the honourable member for Tangney said was an understatement. The whole of the Australian Labor Party is dominated by the trade union movement-in all its councils through its constitution and, most obviously, through the mechanism of the wages and incomes accord which was a deal signed between the then Opposition and the Australian Council of Trade Unions as the basis for ACTU support in the 1983 election and as a continuing requirement for the support of the trade union movement for this Government. There is absolutely no doubt in anybody's mind that, if this Government were to deviate at any time in its life from the minimum requirements of the trade union movement, it would be finished. Everybody knows that and, of course, the Government knows that too. The Minister went through his usual routine of blaming the previous Government for many of this Government's current difficulties. This excuse, two years on, is simply running out of time. Some of us now have a different perspective of things, having been out of office for two years. It is, of course, a sobering experience, as the Minister will find in a couple of years time. It is good to look back and see exactly what was the objective analysis of the situation at that time. The Government came into office with the benefit of the breaking of the drought and of the economic recovery in the United States of America. I do not believe that anybody in Australia thinks that the Government had any real control over those two events. The Government also had the benefit of the Fraser Government's wage freeze and of the 1982 Budget stimulus of the Fraser Government which was brought in during a period of deep recession. Thus, it had four big pluses going for it when it took over government. It then called the National Economic Summit Conference which was nothing but a formal public manifestation of the deal done before the election between the Australian Labor Party and the ACTU. Everybody who came, apart from those two principal players, sat in this venerable chamber in a charade designed purely to suggest that the accord was something other than what it really was. Of course, as the Minister said, what was facing the Australian economy at that time was an unemployment rate of some 10 per cent, born of the recession, and a youth unemployment rate of about 25 per cent. The summit, had it been genuine, could have looked at the underlying structural problems in our economy and at some of the ways in which the Government could tackle imaginatively some of those underlying structural problems which, admittedly, our Government had not got to the bottom of. But what did the Summit do? It absolutely missed this opportunity. It sets itself miserably low objectives. It adopted a scenario which called for a minimal reduction, over a three-year period, of those levels of unemployment. Unemployment was at 10 per cent and, under that scenario, it was projected to go down to about 8 per cent after three years of effort and three years of intended sacrifice. The projections on youth unemployment were miserable in the extreme in that they showed very little prospect of a decrease-a decrease to one quarter of our youth out of jobs. But the actual possible solutions to those problems-- Mr Punch —What's this got to do with it? Mr CARLTON —The possible solutions, the honourable member for Barton may be interested to know, could not be examined at the Summit because the ACTU would not allow them to be examined. In the papers that were put to the Summit, the various possibilities of changing the industrial structure, which goes to the heart of union power in Australia and its adverse consequences, could not be examined because it was 'industrially unrealistic' to do so. Mr Braithwaite —But the Premier of Queensland is doing it now. Mr CARLTON —It was considered industrially unrealistic to do so although, as my friend says, the Premier of Queensland is giving us a little exercise in what is or is not industrially unrealistic. The ACTU is starting to learn that lesson. But what really came out of the Summit? What came out of the Summit was a framework which the Minister has just described in the most glowing terms as the Government's most important instrument of economic policy. All of the various things that the Government would like to do are governed by the accord and by what came out of the Summit. I suggest to the House that, if this Government is to go its full run of another two and a half years, that framework-which has been called by the Minister the crowning achievement of this Government and the instrument of its economic progress-will become the hook on which this Government will squirm over the next two and a half years. Let me give some illustrations of how that will happen. Let us bear in mind that, if at any point the Government wishes to deviate from the terms of that accord in order to meet the real requirements for fixing the Australian economy, it will not be allowed to do so because Crean, Kelty and others will certainly not allow it to do so. What does this Government have to face up to immediately? Firstly, there is the question of the devaluation of the Australian dollar. We support the floating of the exchange rate. We acknowledge that the devaluation that has occurred is a real reflection of two things. The first is the lack of competitiveness of the Australian economy and the second, in terms of some of the more gross runnings down of the exchange rate, is the uncertainty of the leadership of this Government as seen by overseas investors. Let us take just the first part of that-the fact that we are not competitive on world markets. The devaluation of the dollar is a clear indication of that. The value of the dollar shows to the world what the world thinks Australia is worth. Of course, it can also buy time for our exporters to improve their competitive situation. With the devalued dollar, they can get into markets which they could not previously get into, as the Prime Minister (Mr Hawke) mentioned during Question Time. But they will lose every advantage that they get from this drastic action if the additional costs that come into the economy through imports lead to an increase in the consumer price index and that increase in the CPI leads automatically to increased wages and therefore a further spiralling of costs. The Government is on this hook at the moment: The devaluation has given our exporters a chance to sell more goods abroad under more favourable conditions. They will continue to do that unless their wage costs go up because of an automatic increase to the full levy of the inflationary effects of the devaluation. The Government has no guarantee whatsoever that the trade union movement will discount the terms of the accord to enable that advantage to be retained. That is one major step about which the Government should be concerned, and it looks as though the Government will flunk that test. The other extraordinarily difficult task that the Government faces is its tax package. It is saying that it would like to have an increase in indirect taxes offset by cuts in income tax. We support that package and believe that it is a sensible way for the Australian tax system to go. But again, if indirect taxes are increased, they will lead under the present system to an increase in the CPI and, under the terms of the accord as now written, that will lead automatically to an increase in wages which would have a disastrous effect on our international competitiveness. The Government has given no indication whatsoever that it has any guarantee from the bosses of the trade union movement who control the Government that those bosses will allow these inflationary effects to be discounted in the wage structure. The whole country is waiting to see whether the unions will agree to a tax package of the kind that we have suggested without imposing impossible conditions politically, and then, if they do agree to a sensible tax package, whether they also agree to modify the terms of the accord and automatic wage indexation to make sure that there is not a massive upward movement in costs, further subjecting us to loss of international competitiveness. Those are just two examples of the way in which this Government is in the grip of the trade union movement. We will observe, over the next two and a half miserable years of its existence, whether this accord is a releasing instrument or whether, indeed, it will be the means of strangulation of this Government. We believe that it will be the latter. Mr PUNCH(Barton)(4.21) —To get back to the point of the debate, unlike the honourable member for Mackellar (Mr Carlton), this Government stands accused by the Opposition, in this matter of public importance, of being dominated by the Australian Council of Trade Unions, that domination supposedly having 'adverse implications' for the economy. Today, the honourable member for Tangney (Mr Shack) and the honourable member for Mackellar had the opportunity to put up or shut up. What has been the total foundation for the charge in the MPI? The only foundation that the honourable member for Tangney could cite to support this very weak MPI is two nebulous headlines from a newspaper some months ago, one right wing newsletter, and his own unqualified economic doomsaying. Let us just look at the wording of the MPI. The word used is 'adverse', not the word 'serious'. We note that 'consequences' is not the word used, just 'implications'. In other words, the Opposition does not even have the faith in its own predictions to use language stronger than that which one might hear in a kindergarten yard. What has been the whole basis of the Opposition's critique today? At the bottom line, its analysis of what this Government has done wrong is that we have been guilty of talking to the ACTU. The Minister for Employment and Industrial Relations (Mr Willis), the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) are guilty of holding consultations with ACTU officials. What a heinous crime that is. In Queensland, where industrial relations policies are similar to those of Opposition members, there is a new crime. If a person has more than three kids, it is a crime to walk down the street together; or, if one is a journalist who wants to take a photograph of a picket line, one will go to gaol for that. But the Federal Opposition has invented a new crime. That is the crime of talking to trade union officials-punishable by death, no doubt, the Opposition will add soon. Where is the concern which is supposedly in the Australian community about this issue? Where does it manifest itself? Is it in the Press? I cannot see anything in today's Press. Are the offices of members of parliament being deluged by people complaining about trade union dominated government? No. Has the Government handed over anything to trade unions? No. What about the economy? The Opposition talks about it in this MPI. Are the supposedly 'adverse implications' to be found in the economy? Let us look at economic growth. Non-farm gross domestic product in 1984 grew at 5.1 per cent. The 1985 target, which is completely on line at the moment and will remain so, is for a further non-farm GDP growth of 5 per cent. So the Opposition could not possibly mean that these 'adverse implications' are in the area of economic growth. Surely not-because in 1982, under the honourable member for Tangney's Government, non-farm GDP rose only 0.9 per cent. He would not be so hypocritical, so pompous or so afflicted by amnesia to have the bald-faced hide to say that. Perhaps the honourable member for Tangney is talking about unemployment. That has fallen from 10.4 per cent under his Government to 8.8 per cent under ours. Perhaps he is talking of inflation, which fell from 11.5 per cent, under Opposition members, to 5.3 per cent under us. Where are these 'adverse implications' of our industrial relations policy? Where is the domination by the unions? Perhaps the honourable member wants to talk about real private business fixed investment. We now have the situation that the private sector is growing faster than the public sector. That is big news on the opposite side of the fence. It is a pity that those opposite could not do it. Perhaps the honourable member is talking about the survey of expectations which now shows a projected 24 per cent increase in real private business fixed investment for the ensuing year. Perhaps, at the bottom line, the real crunch of the issue, he might want to talk about real labour unit costs. It might be interesting for those listening to these proceedings to know that real unit labour costs have, under this Government, returned to levels commensurate with those in the late 1960s and early 1970s, from an index position of 108.4 under the previous Liberal Government to 101.6 in the December quarter 1984. Real labour unit costs have fallen and fallen dramatically while standards of living have begun to rise again, because of the policies of this Government. Those opposite have yet to match that. It might also be of interest to those opposite to know that industrial disputation is at its lowest ebb for 17 years. They do not mention that. They do not want to mention that. The reality is that consultation with the ACTU and the unions-as with business-and not confrontation as we saw under their Government, has produced these economic results. Our record, using consultation, is success. Their record, using confrontation, is abject failure. The policies that the honourable member for Tangney now advocates are failed policies of the past. They are failed, used policies. He has gone from selling used cars in Perth to selling used policies. The problem is that his used policies do not even carry a warranty. So where are the 'adverse implications' in what the honourable member said? Perhaps he is guilty of simple empty rhetoric. Perhaps he is guilty of not being able to substantiate his position. It might just be the case that he has failed miserably today. The honourable member talked of wages policy. To this date those opposite still do not have a coherent wages policy. All they can do is to prophesy and hope to smash the accord by undermining it. But let us be charitable. When the honourable member talks of adverse economic implications, perhaps he is talking about Queensland, which practises what he preaches, which has confrontation and which gaols unionists and gaols members of the clergy for supporting workers on strike, and where this week it will destroy the tourist industry. Queensland has the highest rate of unemployment in Australia, and the highest ratio of unemployed to job vacancies. It has an industrial situation completely out of step with the rest of Australia. Industrial disputes last year fell by 15.6 per cent nationally, but in Queensland they rose by a massive 83.9 per cent. Queensland practices what Opposition members preach and look at the result. Bankruptcies on a national level have fallen by 8.2 per cent. In Queensland, they have risen 26.4 per cent. While fixed capital expenditure nationally has risen by 2.3 per cent, in Queensland it has fallen by 20.6 per cent. One thing is for sure: Those policies of confrontation advocated by Opposition members are failed policies of the past. They have failed time and time again in this nation's history and they will continue to fail in the future whenever they are advocated. I could go on and on with figures that show how out of step Queensland is with the rest of this country, how out of step are those policies, and how badly Queensland is doing in its economic performance. To be charitable, however, I conclude by saying that Queensland still has the best government that money can buy; one can bet on that-provided that one does not do it at the local TAB, because one would lose one's money for sure. Mr DEPUTY SPEAKER(Mr Mountford) —Order! The discussion is concluded. Debate resumed from 17 April, on motion by Mr Keating: That the Bill be now read a second time. Mr HOWARD(Bennelong)(4.30) —The legislation now before the Parliament is the first legislative part of the mechanism which is required to give effect to the Government's decision announced some weeks ago to license the entry into Australia of some 16 foreign banks. It is, therefore, a piece of legislation of very considerable historical interest as far as the Australian financial system is concerned. This is also an opportunity for this House to debate briefly aspects of deregulation of the financial system which have occurred over the last few years. I take the opportunity at the commencement of this debate to say on behalf of the Opposition that we unreservedly support the Banks (Shareholdings) Amendment Bill, as we have unreservedly supported the decision of the Government to admit into Australia some 16 foreign banks-a decision which has quite properly and quite deservedly drawn considerable praise and credit for the present Government and the present Treasurer (Mr Keating) from many different sections of the Australian community. I take this opportunity, at a parliamentary level, of saying again that, whilst there are many things that this Government has done that the Opposition disapproves of and will continue to disapprove of-and the debate on the matter of public importance which has just concluded very amply indicated that there are many aspects of the Government's economic policies that we disapprove of-the Government has embraced quite a number of things in the area of deregulation of the financial system which have been of very considerable importance. To the extent that the Australian Labor Party, in office, has put aside the foolish opposition to deregulation of the financial system that it exhibited in opposition, we welcome that change of attitude and we welcome the substantive decisions which have flowed from that change of attitude. On that note, this debate is also an opportunity to reflect for a moment upon the change of attitude that has come over, I suspect, not all but, to be charitable, I guess a fairly large number of people who now sit on the Government benches. It is perhaps ironic that sitting opposite me is the Minister for Employment and Industrial Relations, the honourable member for Gellibrand (Mr Willis), because he was the spokesman on economic matters for the Australian Labor Party when the report of the Campbell Committee of Inquiry into the Australian Financial System was actually brought into the Parliament in 1981. When I brought the Campbell report into the Parliament in 1981 I think it would be no exaggeration to say that it was not greeted with unanimous joy and relief. There was a cry of almost collective horror from members of the Labor Party when I brought the Campbell report in. The Minister for Employment and Industrial Relations, who now sits on the Government front bench, was then the Labor Party spokesman on economic matters and shadow Treasurer. On 17 November 1981 he said quite categorically on behalf of the then Labor Opposition that the report was one of those reports that, under no circumstances, the Labor Party or a Labor government could ever accept. If one goes through the Press reports of that time and analyses the statements that were made by the then spokesman for the Labor Party on economic matters, one finds that those reports are absolutely replete with references by the honourable member for Gellibrand. He described the Committee as 'having been possessed of social blindness', he complained about its naive recommendations on interest rates, and his then Leader said that higher costs were going to follow acceptance. One headline in the Australian Financial Review of 19 November stated 'Willis Lashes Committee Over Interest Rates'. On the same date a headline in the Canberra Times stated 'Some Proposals Nonsense Says Willis'. If one goes through all the reactions of the Labor Party at that time one finds a blind, obstructive hostility. In the interests of objective debate I would have to be fair and acknowledge that, at that time, one or two people on my side of politics were not terribly enamoured of the recommendations of the Campbell report. I would have to reflect that, in November 1981, the cause of deregulating the financial system in Australia was far from the most popular thing around. Deregulation has become very fashionable now. Everybody is on to it. I know that there are some people in the Labor Party who are not really on to deregulation and I do not think that the honourable member for Gellibrand is all that rip-roaringly happy about the Government's decision on letting in foreign banks or floating the dollar. But the Government has taken those decisions and one has to accept that he fully supports decisions that have been taken by the Government. But back in November 1981 financial deregulation was not nearly as fashionable as it is now. There were plenty of people who looked back on the experience of the 1950s and 1960s and came to the rather simplistic conclusion that that period of 20 years had given us unrivalled and quite remarkable prosperity-a fact that was acknowledged at the National Economic Summit Conference in 1983 by the present Treasurer when he said that the 1950s and 1960s were periods of great prosperity. In fact the honourable member for Barton (Mr Punch), who spoke to the matter of public importance, said that we now have profit levels back to what they were in the 1950s and 1960s, as though the 1950s and 1960s were the great decades of economic endeavour and achievement in Australia. Coming back to November 1981, I think the problem was that a lot of people opposed financial deregulation and a lot of people were scared of financial deregulation because they thought that the reason why the 1950s and 1960s had been periods of great prosperity was that they were years in which governments intervened, governments regulated and governments controlled our financial and economic sectors. The fact is that they were periods of economic prosperity and growth irrespective of government intervention, despite government intervention in many areas and despite government controls. In November 1981 there were not too many people who were very interested in the cause of financial deregulation. There were plenty of people-certainly all the members of the Labor Party and, to be fair, a number of people on the coalition side of politics-who were willing to argue that the whole idea of significant deregulation of the Australian financial system was something that ought to be put completely aside and something that ought to be completely forgotten. Circumstances have now changed although the change in the attitude of members of the Labor Party did not occur until they came into government. I think it is worth recording that not only did the then shadow Treasurer, the present Minister for Employment and Industrial Relations, the honourable member for Gellibrand, express very strong opposition to the whole philosophic and ideological basis of the Campbell report and say that it was guilty of social blindness and insensitivity, that it was naive and that it was talking nonsense but also, when the present Treasurer, the honourable member for Blaxland, replaced him as shadow Treasurer in late January 1983, he immediately picked up the same rhetoric. I know that, to many who have read over the last few months of the contribution of the present Treasurer and praise that he deservedly got in that time for his work in deregulating the financial system, it is a matter of some interest to reflect on what he had to say on 24 January 1983. It really is thoroughly ironic that on that date, just after he had become the shadow Treasurer, he had this to say: And once the foreign banks are here they will not be interested in retail banking, they won't be interested in small business or farm finance or housing finance, indeed they won't even have a branch structure where one would facilitate the arrangement of such finance, so the likelihood is they will be looking after the large slabs of wholesale banking to the top echelon to the corporate sector, and it would be very soon thereafter that our Trading banks require the Australian Government to free it of the controls, the regulations which now provide this finance to the retail end of the market at deferential rates. That is almost a museum piece of the troglodytal thinking that used to dominate the Australian Labor Party on that issue. That sort of sentiment was not expressed in New York a couple of weeks ago when the Treasurer was there. It is to the national good that he has put away the foolish notions of this political childhood on that particular issue and that he has now adopted more sane and more sensible attitudes. It is interesting to reflect once again, as we on this side of the House have had occasion to reflect, that one of the judgments that are made in the long term about the political contribution of people in this Parliament to political life in Australia is the extent to which they demonstrate responsible behaviour both in government and in opposition. It is all very well for the Treasurer, the Prime Minister (Mr Hawke) and others in the present Government to run around patting themselves on the back and saying: 'Aren't we terrific because we have let in all of these banks and we have done all of these marvellous things'. When it was not so fashionable to support deregulation and when it was a lot harder politically, where were they? They were in with the best of them stirring up all the primeval opposition and all the old community suspicions about these things. This is not a time to be uncharitable because the Opposition and I are very pleased that we are to have a more open and more competitive banking sector as a result of the decision that was announced by the Treasurer a few weeks ago. For the record, I remind the House that the entry of foreign banks into Australia has in fact been delayed for over two years by the action of this Government. It appears to have been forgotten by many people that the former Government announced a definitive decision to admit foreign banks into Australia early in 1983. Predictably, as I indicated earlier, that decision was denounced and lambasted as being in the interest of wicked overseas capitalist and monetary interests and to the detriment of little Australians and all that was good and pure about Australian commercial, corporate and, I dare say, family life as well. It was roundly denounced by the present Treasurer but, of course, the Damascus road has got very crowded indeed when it comes to financial deregulation. I am very happy to say that the present Treasurer has now adopted the policies that I supported both in government and in opposition and has put aside his rather old fashioned hostility to foreign banks. Responding to that old adage that imitation is the sincerest form of flattery, I should be mightily impressed and flattered that a policy that was called social blindness by the present Minister for Employment and Industrial Relations and denounced by the present Treasurer when he was in opposition has now been adopted. Mr Hunt —You have a lot of disciples. Mr HOWARD —They have gone out and multiplied, if one can pursue that biblical analogy, quite a lot over the last couple of years. It is very interesting that they have only gone out and multiplied since it became a little more fashionable to believe in financial deregulation. Two or three years ago nobody wanted it. Mr Hand —Don't get too carried away. Mr HOWARD —The honourable member for Melbourne says that I should not get carried away about the fashionability of deregulation. That is a marvellously interesting statement. These debates would be no good without the contributions of the honourable member for Melbourne. A couple of other things about the very interesting history of this issue ought to be said in this debate. This gives me an opportunity to say something about the committee whose recommendations ultimately led to the decision that we are now debating. I refer to the Campbell Committee of Inquiry. Many famous committees have been established by governments of both political persuasions in Australia over the years, such as the Campbell Committee, the Asprey Taxation Review Committee, the Vernon Committee of Economic Inquiry established by the Menzies Government and the royal commission into banking that was established in 1936. One could go on and on. We are going to have the report of another quite important committee in the next couple of days, the Hancock Committee of Review into the Australian Industrial Relations Law and Systems. I do not think that will be too replete with deregulation but we will wait to see whether there has been a Damascus road conversion on the subject of labour market deregulation, because if there has that would be very remarkable. Going back to the Campbell Committee, I think one thing can truthfully be said-this is no reflection on the calibre of the people who sat on other great committees of inquiry in Australia-that is, that the Campbell inquiry has probably turned out to be the most successful of all the great committees of inquiry that have been established by any Australian government in our history. Now that we look back on what has been done in this area, we find that just about all of the major recommendations either have been substantially implemented or are on the path to being implemented. It is a matter of some pride on this side of the House that a committee that was set up in the face of sniping and of criticism that it was unbalanced, one-sided and that it was too ideologically pure and too committed to free market principles-a reflection on the judgment that was made by the former Government at the time that this Committee was set up in 1979-has been so outstandingly successful in having its recommendations implemented. In that context, it is very interesting to reflect, if I may for a moment, on an editorial that was written, no doubt, by that well known political and economic commentator, Maximilian Walsh, who was then the Managing Editor of the Australian Financial Review, on 19 January 1979, the day after I had announced the establishment of the Campbell inquiry. Mr Walsh reflected on the composition of the Committee. After welcoming it and writing quite a generous editorial about the then Government's decision, he lamented the fact that I had not put, as he called it, a Ben Chifley on the Committee of Inquiry. Mr Walsh took me to task for not having diluted the Committee, so to speak, with a representative of the trade union movement or a representative of, as he called it, the other point of view or the other side of politics. I do not in any way denigrate the memory of Ben Chifley; he occupies a very honoured place not only in Labor Party history in Australia but in Australian political history generally. What has come out of the Campbell report and the fact that so much of it has been accepted is perhaps a lesson to all of us that the idea that when a committee is established every point of view should be put on it is not such a sound idea after all. To get the best results we first of all ought to have a clear idea of the general direction we want to go. Having done that, we pick four or five people who really believe in going in that general direction. Governments on both sides have made the mistake, having identified a problem, of appointing a committee while not having a clear idea of where they wanted to end up. They appoint a representative of every point of view to the committee and they think that out of that they are going to get some marvellous solutions that will satisfy everybody. The reality is that often out of that process we get a solution that does not really satisfy anybody at all. Having made that reflection, I also take the opportunity, as I have done in the past, of acknowledging on behalf of the coalition parties the enormous contribution that was made by the late Sir Keith Campbell. From my personal acquaintance with him I can say that he was one of the finest members of the Australian business community I have ever met. He was a very hard working man. He never said no to doing another job for the community or for the Government. I have not the slightest doubt that one of the reasons for his premature death not long after the change of government in 1983, after his attendance at the National Economic Summit Conference, was in fact the enormous work load he undertook. But of all the things that he did in his public career none will be a more enduring monument to him than the report that bears his name and which has been the philosophical mainspring for so much of what has happened in this area over the last few years. This debate is therefore an opportunity to reflect a little on the way in which attitudes have changed within large sections of the Labor Party on this issue. That change is a very good thing. I have not the slightest doubt that ultimately the final interest rate controls-that is, interest rate controls on housing loans-will go. It is only a matter of time. It is appropriate that the Minister for Housing and Construction (Mr West) is at the table. Although he and some of his mates in the Left grin as much to say 'That is what you think', it is interesting to note that the other day when the Treasurer announced the abolition of controls on small business loans under $100,000 he used the argument-a very sound argument, I might say-to justify their removal which is precisely the argument that ultimately will be used by him to justify the removal of interest rate controls on housing loans. That argument is that if, when we have upward pressure on interest rates, we control the rate at which banks can charge interest on money they lend out we will impair their capacity to get money in the first place, so we will have the old scarcity problem arising and the only way we can solve that, of course, is to decontrol interest rates. It is only a matter of time before that occurs. Let me say on behalf of the Opposition that if the Government moves in that direction it will not be the subject of criticism from us; we would support such a move. Having said a couple of complimentary things about the Government and having acknowledged the change of heart that has occurred on the part of the Treasurer and many others as far as financial deregulation is concerned, let me get on to one other area of deregulation. As this Bill largely concerns deregulatory matters, it is appropriate that I say something about it. I refer to the next area, in fact the new frontier, of deregulation in Australia-that is, deregulation of the labour market. We have talked a bit about going out and multiplying, but I will believe in miracles if the Australian Labor Party ever embraces deregulation of the labor market. If there is one great blot on the economic escutcheon in Australia at present it is our highly centralised labour market. Just as I am ready to acknowledge the good sense of the Government in moving towards deregulation of the financial system, as it has done over the last two years, I am equally critical of the way in which during that same period it has regulated and made far more rigid and controlled the labour market in Australia. I am not the only person to say that there is some incompatibility between a regulated labour market and a deregulated financial system. I say to the honourable members who sit opposite that this will not be the last time they hear about that dichotomy. There are two remarkable things about the Hawke Government's decision in December 1983 to float the Australian dollar. Firstly, given Labor's long history of interventionist attitudes towards the financial system, it is remarkable that the Hawke Government, to its credit, took that decision. The other remarkable thing is that I do not think many people in the Government or in the Australian Labor Party's rank and file realise the implications of that decision. A floating exchange rate exposes the economy of a country, in a far more direct, immediate and brutal manner, to the economic judgments of the rest of the world. Those judgments are evident now. Incidentally, this would still happen under an administered exchange rate but it would happen in a more indirect manner. We have experienced for the first time over the last few months the volatility that comes from a floating exchange rate. Mr West —The former Prime Minister would not let you float the dollar. Mr HOWARD —I am not expressing the views of any member of the last Government other than myself on this subject. All I can say to the Minister and to others opposite is that over the last few months we have seen the effects of that volatility, and many people in the Labor Party who watched the decision of the Government to float the dollar in December 1983 and who said that it seemed like a good idea are now starting to realise what it all means. It is now sinking in. That is why the Government is in such a terrible bind over the question of the discounting of wages. What it cannot explain away in economic terms is that if we have a depreciation of our currency the country is made poorer whether we like it or not, and if one section of the community says that despite that national impoverishment it wants real wage maintenance, it is saying to the rest of the community that they have to cop an even greater reduction in their living standards to maintain the living standards of that particular section. That is what Simon Crean and Bill Kelty are saying at present, and that is why the Government has been hooked on this dilemma right from the beginning of this session, when the Prime Minister was asked a question on this subject and said: 'You are right economically but I cannot do it industrially'. Then the Treasurer said: 'Hang on, Bob, we might have to do it or the business community will not like us any more'. They have been backing and filling and dodging and squirming on this issue ever since because they cannot face that reality. As the honourable member for Mackellar (Mr Carlton) said in the matter of public importance debate that has just concluded, the strength of the trade union movement on that particular issue makes it impossible for them. I return to my theme of a moment ago. I will really believe in miracles if the Labor Party can embrace deregulation of the labour market. Now that deregulation of the financial system is substantially completed-the Labor Party has played a significant, proper and creditworthy role in that-we must ask whether it really does believe in deregulation. It does not. My friend the honourable member for Charlton (Mr Robert Brown) shakes his head and indicates that no, they do not really believe in it. What he is really saying is: 'Financial deregulation is all right provided it does not cause any ripples, letting these foreign banks in is probably okay now because everybody seems to go along with letting in some foreign banks and we do not really like the Australian banks anyway'. That is the attitude of the Labor Party. The Treasurer made that fairly clear at the New South Wales ALP Conference a couple of years ago, when he had a few choice things to say about the existing trading banks in Australia. Let us really see how good members of the Labor Party are on deregulation, see how they react to deregulation of the labour market, because that is the new frontier of deregulation. If they really believe in deregulation, if they really want to peel away some of the restrictions, particularly on the small business sector, if they really want to ask themselves why it is that over the last couple of years eight million to nine million new jobs have been created in the United States while in the whole of western Europe, with an equivalent population, no new jobs have been generated, if they want to ask themselves why it is that the growth potential that exists in the small business and service sector of Australia is not being fully realised, if they want to find out why it is that there are renewed concerns about the impact of a system of rigid full wage indexation in Australia, they have to recognise the one very obvious answer, which is that we have a highly centralised, rigidified, over-regulated labour market in Australia. It has been made infinitely worse by the actions of this Government and, although it has taken off certain controls in the financial area, it has confounded the effectiveness of that by adding still further controls in the labour market area. Until such time as the Labor Party embraces the need for deregulation of the labour market it has absolutely no right to lay claim to any really full-blooded commitment to the deregulation of the Australian economy. I believe that over the next couple of years this will be the area of great debate in discussions on economic management in Australia. Once again, it is an area that it was not terribly fashionable to talk about a short while ago but it is amazing that over the last six or nine months a great many more people have started to take up the cause of deregulation of the labour market. It will become a far more popular cause to espouse. There is a very obvious reason for that, and that is that people have looked at what has happened in other countries. They have observed the astonishing vitality of the economy of the United States which draws in large measure from the great flexibility of the American labour market. That is the new frontier of deregulation in Australia. It is a cause that we on this side of the House full-bloodedly espouse. I wonder whether the Labor Party might, in the fullness of time, as it did on the question of the financial system, go along the Damascus road on the deregulation of the labour market. Madam DEPUTY SPEAKER(Mrs Darling) -Order! The honourable member's time has expired. Mr O'KEEFE(Burke)(5.01) —There are in this place from time to time no doubt some moments when the luck of the draw brings honourable members into a debate after the person they would most like to follow, and in my case the luck of the draw has come up today because I am delighted to follow the honourable member for Bennelong (Mr Howard), who is now the Deputy Leader of the Opposition. The first point I make is that the reason he is the Deputy Leader of the Opposition is that he was the Treasurer and he failed. His policies failed. That was why our Government was elected and that is why we are now in the position of implementing some of these practical reforms in our society. That is the reason why he is now being compared with our Treasurer (Mr Keating), the world's best Treasurer. If the honourable member for Bennelong would like to listen for a while I might outline for him some of the mechanics of the financial sector in Australia so that if he does have another chance he might get it right. The Banks (Shareholdings) Amendment Bill 1985 culminates several years of consideration, as the honourable member for Bennelong said, of major reforms to the Australian financial system. It follows, as he said, the Campbell Committee of Inquiry into the Australian Financial System and it also follows, in my view very significantly, the report of the Martin Review of the Australian Financial System which followed the inquiry carried out by Campbell. The Bill forms part of the Government's overall economic strategy to restructure and reform a number of our major industries. It is a consistent and coherent approach to deregulation, which has impacted in several industries. It is now working through the agriculture industry, the steel industry and the motor vehicle industry, our relationships between Commonwealth and State governments and, of course, in terms of the subject of this debate, the finance and banking sectors. I take this opportunity to mention a couple of points that were outlined by the Treasurer on the impact that this Bill will make because it encourages the establishment of new banks in Australia. These are expected by the Government to bring substantial benefits to the Australian community through the development of a more innovative, efficient and competitive financial sector. That will lead to a higher rate of economic growth and a higher standard of living for the people of Australia. They are the benefits that we perceive through the introduction of this Bill. It comes from a broader perspective and it relates above all to an understanding of the principles of economic management, not just rhetoric and philosophy. In my maiden speech in this place I made reference to the fact that so many of the policies of honourable members opposite failed because they were bereft of expertise. Nothing that I have heard from the Deputy Leader of the Opposition in this debate in any way changes my view. As the Deputy Leader of the Opposition said, the concept of this Bill goes back to the establishment of the Campbell inquiry. He made mention of the fact that this legislation could be several years-I believe two, three or four-behind its time. The reason for that is a mistake that he made when the original Campbell inquiry was established in 1979 because at the heart of the terms of reference are the following words: . . . the importance of the efficiency of the financial system for the Government's free enterprise objectives and broad goals for national economic prosperity . . . The problem with that term of reference was that it espoused a free enterprise objective, but it was tied up in a net of mumbo jumbo and regulation. The honourable member did not have a practical approach to unravelling the Australian economy and placed the Campbell inquiry in a position of having to analyse in a framework of pure competition. If honourable members understand the meaning of that they would then understand that the findings of the Campbell inquiry had to come down within the terms of a pure supply and demand financial sector with no real reference to the social implications of various changes. At that time, just after the Hawke Labor Government was elected, the Australian Financial Review commented on the decision of the Government to establish the Martin committee to carry out an investigation into the social implications of the findings of the Campbell inquiry. The Australian Financial Review at that time did not quite have it right. Its editorial said that the task force will not do: . . . much more than provide a . . . forum for the regulators to express their opposition to the deregulation proposed by the Campbell Report. It is likely to be a mere political exercise rather than a useful contribution to our understanding of the matters- I was moved at that time to write to the editor of the Financial Review and in my letter I said: . . . the Enquiry-- that is, the Campbell inquiry-- chose to adopt a 'pure competition' model as the key assumption. In doing so it rendered many of its conclusions invalid from the point of view of practical government. In a rare moment of perspicacity I went on: . . . the proposals favouring the introduction of foreign banking licences assume that our banking sector can withstand foreign competition- That referred to 1982 and 1983. I continued: Our banking people may even believe this themselves. However, if it were not to be the case and our banking sector found itself in the predicament now faced by the manufacturing sector there would be cold comfort in knowing that 'true market factors were at work'. Given that the banking sector is a major employer . . . this is a risk we are not yet prepared to take. I do not support the concept of indefinite propping up and protection. However, there are lessons to be learned from our recent experiences-- of the Australian economy-- and the government needs to be given time to absorb them. That was the point of the Martin committee. Its work, in taking the Campbell Committee's findings and turning them into a social perspective that this Government could make workable, is the real reason why we are now able to introduce this legislation and successfully make these sorts of advances in deregulation. That leads to our present position. In the introduction of the Bill and the introduction of foreign banking licences in Australia the Government has had to satisfy a number of concerns and we are pleased that they are being satisfied. We wanted to be satisfied that these changes would enhance employment opportunities. We wanted to be sure that there would be consultation with the unions on technological change, that the impact of new technology would cover health and safety issues, that there would be equal opportunity for women in the banking sector, that we would train Australians and give them skills in foreign banking expertise. These were all requirements that we made of banks that wanted to move into our sector. We did not want to open up the door and let them go for their lives and wipe out the Australian industry. We wanted to cover a number of key considerations. We were concerned that the corporate structure should fit our own structure and objectives, that Australian equity in these banks should be maintained and that the size of shareholdings provided for in the Bill should prevent foreign takeover or control-the sorts of things that the previous Government failed to provide for in its legislation. I believe that the Bill is a major innovation and will be commended widely. I believe that the efforts of the Government in turning the rhetoric of pure competition into a practical working model within our community will be acknowledged in the future. The future of our financial markets and economy has much going for it as a result of the Government's initiatives. I make special mention of the application by the Bank of China to be one of the new banks to be established in Australia. Its process of re-establishing its operations here follows from the initiatives of our Labor Government. I had the pleasure of attending the reception for the Secretary-General of the Chinese Communist Party, Mr Hu, and noticed that there is more and more talk and development now of the implications of foreign trade with China. In the early 1970s, when the previous Labor Government was looking at opening up initiatives with China, the benefits that would accrue to our economy from such a move were not something that those on the other side of the House could foresee. Through this Bill, the Bank of China will establish itself in Australia, and more trade initiatives will be opened up. Again, we will see great benefits from that in the future. I believe that as a result of the impact of this legislation we will see increases in capital investment. These new banks will bring with them-they are required to bring with them-an injection of foreign capital that will lead to building industry stimulation as the banks build their new headquarters and branches. They will bring with them technology and infrastructure. They will create employment opportunities. They will assist us in developing ourselves as the major finance sector in the South West Pacific region. We will be nationally poised to take up this sort of role as a result of the initiatives of this Bill. What I like most about the Bill is that it means that we are bringing the Australian economy into its own in the world and in our own region. Through this Bill and through the things that will develop from it we are securing our independence, we are improving our sophistication and, above all, we are improving our skills and professionalism. The benefits of that will be seen in the latter part of this year and beyond. The Bill will provide substantial new benefits within the community. It will mean that we will now have banking of sufficient size and expertise to offer effective competition with existing institutions. Through the national payments council we have ensured that the non-bank finance intermediaries in Australia now have access to wholesale banking arrangements. In other words, the monopoly and restrictive trade practices carried out by trading banks in Australia over many years have now been broken down. Services are being expanded. My credit union sent me a letter the other day telling me about a new plastic card and the sorts of things it now has access to, things that were denied such institutions for decades. They were not even allowed to operate cheque accounts because of a regulated, protected finance sector built up by those opposite under the Deputy Leader of the Opposition when he was Treasurer. As I said when I started my speech, it is a rare moment when one gets the opportunity to follow exactly the person one would like to follow in a debate. I have welcomed that opportunity. I commend the Bill to the House. Mr DOWNER(Mayo)(5.14) —I notice the desire of the honourable member for Burke (Mr O'Keefe) to follow the Deputy Leader of the Opposition (Mr Howard) in this debate. Of course, he is following the Deputy Leader of the Opposition because the Labor Government, in introducing the Banks (Shareholdings) Amendment Bill 1985, is following the very important lead given by the Fraser Government, and by the Deputy Leader of the Opposition when he was Treasurer. It gives me particular pleasure to support this Bill and to follow my colleague the Deputy Leader of the Opposition. The Bill facilitates the establishment of new banks in Australia and puts into practice the statement made by the Treasurer (Mr Keating) on 27 February this year. The establishment of the new banks will lead to the development of one of the service industries in our country. At a time when a number of manufacturing and other industries are suffering from a lack of competitiveness, it is good to see that some new industries are developing-developing in this case because of the Government's decision to move towards deregulation. It is a pity, however, that in so many respects the Government is inconsistent and cannot see the interconnections between different policy areas. The Government's decision, good as it may be, is an ad hoc decision. As the Deputy Leader of the Opposition has pointed out, it does not flow through into a whole range of other policy areas, in particular, into the labour market. The Government appears to have been going down the road to Damascus and to have received some inspiration along that road which has shown it what the national interest truly is in some respects. However, suddenly, on the side of that road, the Government has seen its friends in the special interest groups waving from amongst the bushes and, particularly in respect of the labour market, threatening it. So, instead of continuing down the road to Damascus, as the Government should have been doing, it has walked off into the scrub and lost its way. However, as I have said earlier, in this legislation the Government is certainly heading in the right direction. It has certainly taken the right decision. I particularly applaud the way the Government has decided to grant 16 licences to foreign banks instead of following the recommendation of the report of the Martin Review of the Australian Financial System to grant, if I recall correctly, four to six licences. At the time of the publication of the Martin report, when I was the Director of the Australian Chamber of Commerce, I put out a statement urging the Treasurer to disregard that recommendation of the Martin report and move towards the granting of many more licences. I am glad to say that the Treasurer was able to follow the recommendations that I, a number of other people in the business community and the Opposition gave him. It is particularly pleasing to see that the Government, a Labor Government, has agreed to allow the entry of foreign banks to Australia with relatively flexible equity arrangements. Initially it appeared that the Government might take a contrary view and discriminate against foreign banking interests simply on the grounds that they were foreign. The decision to allow foreign banks into Australia, as the Deputy Leader of the Opposition pointed out, follows not only the lead of the Fraser Government but also the very excellent report of the Campbell Committee of Inquiry into the Australian Financial System. That report was historic and led to at least the first stages of the revolutionising of the Australian financial system. As I said earlier, it is very pleasing to see that, instead of following the recommendations of the Martin report, the Government has opted for the broader thrust of the Campbell report. Of course, as the Deputy Leader of the Opposition pointed out, it is extremely surprising that a Labor Government should have made these decisions when we recall the position it took when in opposition, a position not only of total opposition in those days to the recommendations of the Campbell report but also of total antagonism to the entry of foreign banks. I recall, for example, that in February 1983 the present Treasurer (Mr Keating), when he was persuading his own Party to oppose foreign bank entry, said that foreign bank entry would 'link Australia to the general instability of the international banking system'; it would 'lessen the federal government's control over domestic monetary policy'. He did not point out that that would be a good thing but suggested that it would not be a good thing. He went on to say that it would 'disadvantage large sections of the Australian community' and that it would 'bring a loss of national autonomy over interest rates, the money supply and the exchange rate, which would all become more unstable, and we have fairly decent controls over the money supply and the exchange rate at present'. It is quite extraordinary that the Labor Party has reversed its position on this important issue. Coming back to the comments I made about the road to Damascus, it is reminiscent of the miracle of turning water into wine. The water of the Labor Party's policies in opposition has, at least in this respect, become a rather rich and wholesome wine. The consequences of the decision of the Government will be extremely beneficial, as other speakers in this debate have pointed out. In the first place, the decision will have the effect of improving the services provided by the big four Australian banks which have for so long dominated our banking system. In order to demonstrate that, I quote from the Westpac Banking Corporation Review of March 1985, which states: . . . the existing banks have done much to prepare themselves for the new competition. For instance, some of the banks have redesigned their branch networks in order to handle the business of commercial and personal customers more efficiently. . . . . Banks have also moved to form closer links with their corporate customers by introducing sophisticated cash management systems and appointing ''relationship managers'' to look after the total financial relationship with these customers. The balance of these considerations suggests that, while existing banks will relinquish some business to the new banks, the loss may not be as great as some would expect. It is interesting to note that a domestic bank such as Westpac has given general support to the thrust of what the Government and the Treasurer have been about in this legislation. More generally, I do not think there is any doubt that by introducing the 16 new banks and liberalising the banking system in general-we should not forget that additional banking licences are being granted to new Australian banks-this competition will lead to a much more innovative banking sector. In Australia, because of the rigid regulation of our banking sector, we have had a fairly unimaginative banking system, and that has disadvantaged to a considerable extent our economy and our financial system. Elsewhere, where there has been deregulation and a free flow of money in banks, there has been a much more innovative system and more services have been developed. There is no doubt that in the past the banking systems in both the United Kingdom and the United States have been much more innovative than the banks in Australia. Recently, with the threat of foreign banks arriving in Australia, the Australian banks have become considerably more innovative. It is also encouraging to see that the new foreign banks will bring with them considerable capital which will in some respects flow through into our economy. The figure the Treasurer quoted in his statement of 27 February was that these banks would bring with them capital of about $1.5 billion. At a time of very high unemployment we should never forget the employment impact of any measure the Government may introduce. In this case the Government estimates that the 16 new banks will create approximately 8,000 jobs. That is extremely encouraging. As a South Australian- I crave the indulgence of the House to be a little parochial-I say that there are specific advantages for my State, which until now has had a very limited involvement in both the domestic financial system and the global financial system as a whole. As a result of this decision the Standard Chartered Bank will be established in Adelaide. That will help to drag Adelaide from being a parochial money market into the mainstream of the international financial system. That is obviously a very good thing, particularly, at a time when the Federal Government in so many other respects is both ignoring South Australia and taking decisions which are contrary to the best interests of my State. For example, none of us will forget the decisions it has taken which have, in effect, closed down both the Honeymoon and Beverley uranium mines. The other beneficial impact of the decision to allow in the foreign banks is the element of reciprocity. I congratulate the Treasurer and the Government on not only granting the licences but also negotiating with countries from which the new banks will come to our shores to allow Australian banks to establish and operate under similar circumstances in those countries. I refer again to the Westpac Banking Corporation Review of March 1985, which makes this very point: . . . the entry of foreign banks will enable existing Australian banks to strengthen their operations in the major regional financial centres of Hong Kong and Singapore and to open branches in Japan. Of course, these banks will also be able to develop their activities in the United States, where their activities have been somewhat restricted in the past. They will also be able to develop their activities in the United Kingdom, where up until now they have had much greater liberty. The end result of this decision is that in many ways it will help drag Australia into the mainstream of the international financial community. By doing that it will make a genuine contribution to economic growth. It will provide greater services to Australian industry and greater access to capital for Australian industry-things that are very badly needed in our country. It will also introduce a greater degree of competitiveness, not just in the financial sector itself but also for Australian industry, because it will provide more efficient services and possibly money at lower rates. The upshot of that will be that industry will be able to invest more cheaply and efficiently than has been the case. This decision will give Australia the opportunity to take steps towards becoming a more important financial centre for the Asia-Pacific region. There are enormous opportunities at the moment for Australia to develop as a financial centre for our region. In the first place, there is the uncertainty about the future of Hong Kong after 1997. A large amount of capital has flowed out of Hong Kong in recent years and little of it has come to Australia. Most of the capital has gone to countries with more deregulated financial systems and more open immigration policies. There are still great opportunities for our country to take some of the business away from Hong Kong, which has been until now such an important regional financial centre. Secondly, Australia is conveniently placed as a time zone. Honourable members will appreciate that time zones are very important in international financial markets. Australia is unique in the time zone factor and we should be able to take advantage of that. With a highly regulated system, we obviously have not taken advantage of that fact. Thirdly, even though this country has a Labor Government, it has a great deal of political stability. In terms of attracting funds to our country and developing Australia as an international financial centre, political stability is a major factor. It is the threat of instability that is driving some money away from Hong Kong, and I hope that in the future we will be able to attract that money, partly because of our political stability. Other decisions the Government has made, in addition to the decision on new banks, will assist in developing our country as a financial centre. The decisions to float the dollar, to free up exchange controls and to grant foreign exchange licences are all factors which will be important. Of course, those decisions go only some of the way. The trouble with this Government is that it goes only part of the way down the road to Damascus and then it wanders off into the bushes with its friends from the special interest groups. As far as the international financial community is concerned, one decision that I regret the Government has not taken is the decision to pursue recommendations to establish off-shore banking units in our country. The Whitlam report and the Hamley report which were produced respectively by the New South Wales and Victorian governments pointed to the tremendous advantages that would be available from off-shore banking units in our country. The Whitlam report has pointed out that in the Asia-Pacific area the Asia dollar market has grown from about $400m in 1970 to $100 billion in 1983. We could get more of that action and a larger share of that market if we were to move towards the establishment of off-shore banking units in our country, as well as doing these other things which I note the Government has already done. The Whitlam report estimates that, in terms of expenditure, off-shore banking units would outlay in the region of $300m-that would clearly be to the advantage of our economy-and that, in terms of tax receipts, they would provide the Government with about $4m, a fairly small amount. The Whitlam report also estimates that off-shore banking units in this country would create between 2,800 and 3,500 jobs. Clearly, there are very important direct benefits to be gained from moving towards off-shore banking units, but there is also the indirect benefit of contributing to Australia being an important international financial market in the world, instead of the highly protected and virtually irrelevant market that its has been in years gone by. As the Deputy Leader of the Opposition pointed out, it is a shame that this whole process of deregulation has not been followed through in a number of other areas where it should have been. For example, we have seen the Government recently move to free up small business and personal finance. I welcome the decision that the Government has made in that respect. That decision is in line with coalition policy which was put forward at the last election. However, it is regrettable that the Government has not taken the opportunity also to deregulate housing interest rates. For the past 18 months the Government has had a golden opportunity to remove housing interest rate controls simply because those housing interest rates have been below the administered ceilings. As interest rate pressures rise, as they have been in recent weeks, the market rates approach the administered ceilings and, clearly, once the market pressures move-or tend to create forces which should move-those rates above the administered ceilings, the decision to deregulate becomes politically all the more difficult. It is a shame that the Government has not had the courage to follow through logically its decision to deregulate small business and personal finance and go ahead and deregulate housing finance as well. That regulation is only holding back funds that might otherwise go to people who want them. That is indeed disappointing. Finally, the decision to float the Australian dollar, which has been an important contribution to bringing Australia into the international financial markets, has had its effects somewhat diminished by the fact that, as the Deputy Leader of the Opposition pointed out, the Government has been so reluctant to carry its decisions logically through to the labour market and take steps to deregulate that market. The reason that it will not deregulate the labour market is not because it does not think that that is intellectually the right thing to do, but because of its passionate fear of special interest groups and, above all, the Australian Council of Trade Unions. The devaluation of the Australian dollar has added between 2 and 3 per cent to the consumer price index, according to a couple of the major business groups in this country. That assumes that the Australian dollar remains at its present rate. The effect of that devaluation and its contribution to the CPI will, because of our wage fixing system, lead to an additional $4 billion wages bill for employers in Australia, both public and private sector. The Government has refused to discount wages for the effect of devaluation. The same will apply in the case of taxation reform. If the Government follows the indicative proposals put forward by the Treasurer to the ACTU, we will find that the 12 per cent consumption tax will add 5 to 6 per cent to inflation and without wage discounting we will end up with a $9 billion wages bill on top of the $4 billion that we already have as a result of devaluation. I look forward to the Government's total policy being more consistent and coherent than it has been in the past. I hope the Government can understand the interconnection between policies and the need for intellectual consistency in all fields of policy, not just in financial markets. It is no wonder that those international financial markets have reacted so badly against Australia, which has led to the enormous devaluation of the dollar, when there are so many rigidities that the Government has built into the economic structure which are undermining our competitiveness and our scope for the future. Mr BALDWIN(Sydney)(5.37) —This debate has largely taken the form of a discussion of the merits or otherwise of deregulation in economic policies and there has been talk about the virtue of deregulation in the financial system. The Opposition has said that to be intellectually consistent that should be followed through by deregulation of the labour market. I think that is a non-sequitur but I do not propose to go into that at this stage. As the Treasurer (Mr Keating) pointed out in his second reading speech on the Banks (Shareholdings) Amendment Bill, this legislation facilitates the admission of the 16 new banks which are to be admitted pursuant to the statement made on 27 February. It makes a number of amendments to the Banks (Shareholdings) Act. It increases from 10 to 15 per cent the maximum holding by an individual or an association of individuals and it also specifies the grounds on which an exemption to that limit can be granted. It states that if the Governor-General is satisfied that to grant an exemption is in the national interests such an exemption can be granted. The legislation is linked in to the deregulation of the banking system which has taken place. As a result of these new entries into the banking system, we hope to see an improved competitive environment in the Australian financial system, the creation of new jobs, and the creation of more innovative banking services and, flowing from that, an increase in economic growth. Hopefully, those are the benefits that will flow from this decision. Furthermore, as the Treasurer pointed out in his second reading speech, if exemptions are to be granted the bank will have to have an extensive record of undoubted financial strength and stability and clearly have the financial resources to maintain the bank's viability in the longer term, and give an unqualified commitment to the prudent development of the bank. Presumably, if these requirements are met, we will see, hopefully, some improvement in the functioning of the Australian financial system. I want to sound a couple of cautionary notes. In doing so, I refer in the first instance to the recommendations in the report of the Martin Review of the Australian Financial System. The point has already been made that Martin, who was given the task of interpreting the report of the Campbell Committee of Inquiry into the Australian Financial system in the light of the Government's social and economic objectives, proposed that the number of new entrants should be limited to four to six and that there should be a maximum foreign equity limit of 50 per cent. Obviously the Government has decided not to follow that recommendation. I also refer back to the Campbell Committee report which, while it favoured a very liberal approach to new bank entries, emphasised one restriction and that was the need to limit in the first instance the numbers of new entrants. It cited a number of grounds for that, including: It could lead to a period of over-aggressive competition which may have the effect of discouraging potential domestic entrants; there may be some danger of a socially unacceptable loss of resident ownership and control. It also talked about the potential dangers involved in excessive fragmentation of the financial system and that leading to a loss of scale economies and consequently increased costs within the system. The Campbell Committee report, which was obviously extremely deregulatory in its broad thrust, nonetheless sounded a number of cautions about too large a number of new entrants in the first instance. We really have to wait and see whether the fears expressed by Campbell and Martin will be operative in the relation to the permits that have been granted to the 16 new entrants. It is by no means obvious that 16 would be an excessive number, and I am sure that the Treasurer has made a careful evaluation of that, taking into account a variety of considerations such as possible market specialisation, reciprocity arrangements, the need to get an adequate geographical spread of new entrants and so on. Bearing those factors in mind, it is to be hoped that we will not see the manifestation of the sort of problem that Martin and Campbell thought may have arisen in the event of too large a number of new entrants being allowed into the country in the first instance. The other facet I wish to talk about relates to the problems of exercising control over multinational banks. I do not believe that one has to be a believer in multinational demonology to acknowledge that there are some potentially significant problems. In pursuance of that point, I refer to a series of hearings held by a committee of the Unites States Congress. I refer to the Sub-committee on Oversight and Investigations of the Committee on Energy and Commerce of the House of Representatives. Between 13 September and 17 September 1972 that sub-committee held a number of hearings on Citibank. The evidence that was presented to that inquiry makes for some sobering reading. A number of distinguished experts in the financial system gave evidence. What are most significant are the sorts of inferences that were drawn from the evidence that was presented. These things need to be taken careful account of when the Government faces the task of actually administering the financial system after the new entries have taken place. I will quote from the evidence of Richard S. Dale of the Rockefeller Foundation, who was also an international relations fellow at the Brookings Institution. Referring to Citibank's activities and a number of its malpractices, he stated: The evidence before you shows that Citibank has used its multinational banking network, including off-shore operations in Nassau, Monaco, the Channel Islands, and Panama, to engage in what one of its officers has described as 'rinky-dink deals' designed explicitly to circumvent the following kinds of bank regulations: First, monetary regulations in the form of minimum reserve requirements; second, exchange controls designed to limit capital outflows and capital inflows; third, tax laws applicable both to the bank itself and to its clients, and fourth, prudential controls designed to safeguard depositors and the banking system as a whole. Included under this last heading are prudential limits on overnight foreign exchange positions, minimum capital adequacy and liquidity requirements, and official surveillance of maturity mismatching or 'gapping'. At the outset, I would like to stress that the present framework for regulating and supervising international banking invites circumvention of the kind practised by Citibank. The ease with which deals can be booked to any part of the globe that happens to be convenient has in recent years encouraged a mushroom growth of off-shore financial centres. I emphasise in this context that in discussing these problems we are talking not just about branches of Citibank but also about fully-owned subsidiaries. I could give a number of other quotations which would basically reinforce that point, but time does not permit that. I will quote from a working paper prepared for that sub-committee, which drew a number of conclusions about this situation. Under the heading 'Some Wider Implications of Citicorp's Evasive Strategies' the final paragraph states: Perhaps these problems are inevitable given that regulation and disclosure in all countries tends to focus exclusively on activities in the national market. And, given the capacity for evasion inherent in off-shore operations as revealed in the Citicorp records, the narrowness of this focus and the differences in regulatory procedures that result enhance the motivations and opportunities for devising evasive strategies. Thus it could be argued that, as off-shore operations have proliferated in the 1970s, effectiveness in achieving government regulatory objectives has diminished. Reconstituting a regulatory environment that ensures that current objectives relating to the safety of depositors and investors and effective monetary control can be set will require considerably more knowledge than is currently available about the off-shore operations of multinational banks. I conclude by making the observation that in a deregulated environment a number of significant problems are quite likely. Some will arise from the specific nature of multinational banks. In an environment where, for example, we have seen the removal of most exchange controls those sorts of matters will clearly require very close attention by government. I am sure that that attention will by given and appropriate sorts of prudential and regulatory requirements will be developed to fit into the new environment in the financial system resulting from large scale entry of foreign banks. Mr KEATING(Blaxland-Treasurer)(5.45) -in reply-First of all, I thank the honourable members who participated in the debate on this very important measure and I am also grateful for those kind expressions which have come from the Opposition as well as honourable members on the Government side in respect of the real portent of this legislation which is to allow flexibility in terms of shareholding in Australian banks under the Banking Act, to permit competition in the Australian banks under the Banking Act, to permit competition in the Australian banking sector and to provide for the entry of banks owned abroad to operate and to be licensed as trading banks. These banks are to be licensed in such a way, as a number of honourable members have observed, that they will be flexible in terms of their equity so that many of them will be 100 per cent owned by their parent banks and, with those which are partly owned, they can provide effective and early competition in the Australian banking system. This has been the Government's objective in moving down this path. I might add that in the area of deregulation of the banking system the Government has in fact embarked upon a whole raft of deregulatory changes, the extent of which is almost unprecedented in the rest of the world and not just in this country. I will repeat, for the moment, some of those changes. Firstly, there was the floating of the Australian dollar which, in terms of deregulation, is the most fundamental of all the Government's decisions and, secondly there was the abolition of exchange controls. Other changes included the abolition, for trading banks, of deposit maturities for deposits of under 14 days. That change was made to allow trading banks to compete again with other non-bank financial institutions in the short end of the money market. The savings banks were deregulated so that they could accept from corporations deposits in excess of $100,000 and they could issue cheques when formerly they could not. The issuing of foreign exchange dealing rights to non-bank financial institutions, which formerly was the preserve of trading banks alone, was another change. I refer also to the abolition of the 30/20 rule in respect of superannuation funds. That is the requirement that they hold a certain proportion of assets in government securities. Other changes included the abolition of the control on the overdraft rate for advances under $100,000 and the reconstruction of the Commonwealth Banking Corporation. It is now a tax paying institution but, importantly, the Government subscribed the equivalent of $150m of capital to its capital base-its first major capital subscription-to give that bank a future and to allow it to compete on the same kind of prudential ratios with the other privately owned trading banks in Australia. Macquarie Bank Ltd has been admitted to the stock of trading banks in this country and the NSW Permanent Building Society has been licensed as a savings bank. I have named most of the major changes, but there are other associated changes. These constitute an enormous raft of changes and they have certainly come about by virtue of a very committed view held within the Government on the need to free up the arteries of the Australian financial system to make it and, therefore, the economy more dynamic. I certainly applaud the role of all those people associated with the course of deregulation in this country. I refer particularly to the late Sir Keith Campbell, whom I admired very much, and also to my colleague the former Treasurer, the honourable member for Bennelong (Mr Howard), who also played a very important role in that process. I might add for the record, nevertheless, seeing that he took my name in vain earlier in the debate, that as far as my view is concerned he may recall the night I became shadow Treasurer was the night he announced that his Government was prepared to license foreign banks. I did the only thing that I could do at that time and that was to propagate the current prevailing view of the Australian Labor Party which, I might add, was not my own view. In fact, I will go so far as to say that the Prime Minister (Mr Hawke) and I argued in the shadow executive of the time, when the report of the Campbell Committee of Inquiry into the Australian Financial System was presented, that we should allow the entry of foreign banks into Australia. I say even further that at a meeting of the Committee for Economic Development of Australia I had an exchange with Mr Hamley of the National Australia Bank before even Professor Rose proposed the Campbell Committee to the former Government. I argued the need for more competition in the Australian banking sector. In fact at that time Mr Hamley was quite put out by my attack upon the existing banking structure, which I am sure he thought was unwarranted. Nevertheless, I was keen to see changes take place in the Australian banking system. I applauded the development of the Campbell Committee, the role played in that by Professor Rose and by other members of the Committee and of course the staff work which was undertaken by Mr Argy of the Treasury. It has been the blueprint document for financial deregulation. But, of course, it is much easier to write blueprints than it is to introduce the changes. That is the most important point to be drawn from this. Whilst I do not for a moment diminish the role of the former Treasurer in this, I observe that the great changes in deregulation have really occurred under this Government. Of course, the former Treasurer did announce that he would invite applications from 10 foreign banks. But it was one thing to invite applications and another to run the gauntlet of the National Party of Australia and his Government. One could never have been sure of what would have emerged at the end. What has emerged here is a definite 16 banks-major world banks-a large proportion of which are 100 per cent foreign owned. Deregulation of the exchange rate is a policy which the former Treasurer and others were unable to get through a coalition government. The coalition Government did not follow through its own view about deregulation. In fact, it never really had a view about anything of substance in economic policy, including the financial markets. It is all very well now for the honourable member for Mayo (Mr Downer) and the honourable member for Bennelong to try to rationalise away a coalition view. There was no coherent coalition view on financial deregulation. That is why the exchange rate was never floated. In fact, it was very interesting to read the other day the former Prime Minister, Mr Fraser, admitting that his Government had overvalued the exchange rate as a crude anti-inflation device-obviously because under his Government anti-inflation monetary and wages policies did not exist. That Government's policies were a failure and it relied upon that particular device. Mr Fraser was quite happy to admit that the dollar was overvalued. In fact, he considered it a virtuous statement, saying: 'I told you so; you should not have floated the dollar'. I submit that that was the significant view at the time and the reason why there was never any coherence in coalition strategy in respect of financial deregulation. The honourable member for Mayo made some remarks about the Government being inconsistent and not following its policies through, and how the business community reacts to things. Let me say that he was drawing upon what businessmen think. Without sounding too disparaging of him, I do not think that undercover Libs working in the secretariats of business organisations are businessmen; they are not the businessmen to whom I respond; a decent entrepreneur would have them for breakfast. Lest he think he comes into this Parliament receiving any respect or awe from me for him as a businessman, I just say to him that I am glad he has finally flushed himself out into the Liberal Party instead of masquerading as a business commentator for the Australian Chamber of Commerce, as he did during the first couple of years of this Government Mr Downer —I supported you on these issues. Mr KEATING —I know he supports this measure but he also, in a mealy-mouthed way, attacked the way in which it was undertaken. Let me make a couple of points about financial deregulation in respect of wages. It is a nonsense to argue that one can equate in some simple way financial deregulation with deregulation of the labour market. The point is that the former Government tried it and failed. I would not mind if it at least learned something of the lessons of its history. It tried an approach of not having an incomes policy; the wage explosion of 1979-80 was the express result of its failure in that policy. The reason why one cannot make the simple analogy about deregulation of the labour market is that our labour market is not organised on an industry or enterprise basis. For a start, union organisation in this country is very high; it is over 60 per cent. It is organised on the craft union structure; it transcends industries. Anybody who thinks he can get flexibility between industries in this kind of environment simply by saying 'We are going to deregulate' or 'We are going to walk away from the accord' is very foolish. The likelihood is that any increases which go to what may be termed the high points of the economy would, on the basis of the current institutional arrangements in our labour market, flow right through the economy, as we have seen over and over again. That is why this Government has chosen a different policy in respect of the labour market from that chosen by the coalition Government. That is why we have succeeded in bringing down inflation. That is why we now have an exchange rate which is reflecting our lack of competitiveness following a period of high inflation and the overvaluation of the exchange rate by the former Government. That is why I put to Opposition members that it is just nonsense to try to make the simple analogy between labour market deregulation and deregulation of the financial system. Of course, the other view is that, if one deregulates the financial system, there is some problem about the lack of so-called deregulation of the labour market. To put the argument in reverse, if one does not deregulate the labour market, there should be a constipated financial market. That makes no sense. Mr Downer —Oh! Mr KEATING —I was not ascribing that policy to the honourable member for Mayo, but it is a view which has been put about. My view is that one takes the best from the financial market, makes it as free and responsive as possible and, in the institutional constraints of the Australian labour market, one responds with the most appropriate policy. The most appropriate policy approach in which my Party believes is that of the prices and incomes accord, which has already delivered a diminishing rate of inflation, high growth and high employment growth in a short time. Notwithstanding that indiscretion on the Opposition's part, I do nevertheless appreciate its support of the measure that the Government has taken. I appreciate the forthright comments of the Deputy Leader of the Opposition and the generous comments which he has made from time to time about the Government's changes. I also appreciate the generous comments the honourable member for Mayo made about the Government's policy in this direction. I believe that some structural changes in this country go beyond the particular views or nuances of a party and that, when big changes are afoot, those which deserve broad support should get it. That has been the case. From the Government's point of view, we certainly welcome the Opposition's support for this measure. I suppose one can reach the point where the deregulatory agenda is simply expelled or expunged. But there is still more to be done and I suppose, in a sense, governments will need to continue to be vigilant in keeping markets as free and open as is possible. That is something to which I certainly subscribe. I use this opportunity to say to honourable members opposite and to the former Prime Minister that this Government has been entirely pleased with the floating of the Australian dollar. If we could have our time over again, we would do nothing other than what we have done with the exchange rate. It is a good long-standing change in policy for this country. I conclude by saying that the passage of the Banks (Shareholdings) Amendment Bill will provide for that flexibility in the ownership structure of banks outside the normal constraints of the Australian Bank (Shareholdings) Act, which formerly allowed an interest of only 10 per cent. Now, in the normal case, it will be 15 per cent. The exemption whereby the Treasurer of the day can recommend to the Governor-General-in-Council that the Governor-General exercise his discretion under the Act to permit a shareholding in excess of 15 per cent will mean that banks will be allowed to operate in this country with an equity structure very much different from that with which they have operated in the past. We now have the cream of the world's banks about to enter the Australian financial system. Like the Deputy Leader of the Opposition and the honourable member for Mayo, I sincerely believe that Australia has the opportunity of becoming an important international financial centre. We have a politically stable country. It is an English-speaking country. It is in the right time zone to play a useful role in the world's capital markets. Therefore, the changes which we have seen in the advent of these major international institutions can, over time, build Australia into an important financial centre. All countries sell what they have to sell. What Australia has to sell is its stability, its good name and the sensible management of its economic and national affairs. That is an environment that is very conducive to major institutions establishing themselves here, looking at the Asia-Pacific area. With that in mind, the Government is still looking at the question of off-shore banking units. If, on balance, it decides that the benefits of accommodating such institutions are not outweighed by the costs-in other words, that we are not forgoing too much in terms of the revenue which now comes by way of, for instance, withholding tax and other such matters-and that we would be advantaged in moving to trading in currencies other than our own in off-shore banking units, then we would have yet another dimension to the prospect of Australia as an international financial centre. I again thank honourable members on both sides for their contribution. This is an historic piece of legislation. These are historic changes, and it is good that they are accompanied by unanimity in the Parliament. The Government is very grateful for this. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Keating) read a third time. Mr YOUNG(Port Adelaide-Leader of the House)(6.03) —I move: That so much of standing order 48A, as amended by sessional order, be suspended as would prevent (a) Mr Speaker proposing the question-That the House do now adjourn-at 10.15 p.m.; (b) Mr Speaker interrupting the debate at 11 p.m., and (c) a Minister requiring that the debate be extended until 11.10 p.m., on each Wednesday, for the remainder of this period of sittings. The passing of this motion will mean that the Parliament will, if necessary, sit on Wednesday evenings for the next three weeks. It is not unusual, following an election, for the legislative program to get busier towards the end of the first session of Parliament. That is exactly what has happened on this occasion. This is the best of the options open to the Government, particularly, as I have explained to the shadow Leader of the House, as there are three major statements that have to be made. The other option would be to sit longer into the night, to which, I think, all of us are opposed. It is not possible for the Parliament to sit beyond the third week, because of the Premiers Conference that must be held. The Government obviously will be involved in that. So, in order to give honourable members an opportunity to debate the Bills which will come before the House over the next three weeks, we move merely to take advantage of the Wednesday evenings, which previously in this session have been free, and, if necessary, we will sit on those evenings for the purpose of getting legislation through. Mr SINCLAIR(New England-Leader of the National Party of Australia)(6.04) —In this place there would be as many views about the preferable hours and days of sitting as there are members, but there is little doubt that the motion moved by the Leader of the House (Mr Young) is sensible in the circumstances of the program that he has outlined. For that reason, the Opposition will not oppose it. However, it is worth commenting that the Procedure Committee is examining this general question at the moment, I understand, as one of its references, and I should like to make a couple of points in talking to this motion. The first point is that it worries me that the hours of sitting still allow inadequate time for committees to meet properly. Whilst in this instance there is to be a 6.30 p.m. to 8 p.m. dinner break, those who look at the time of the dinner break should not believe that the hour and a half, or whatever it might be is accorded for the purpose only of eating and drinking. There is a real advantage in allowing reasonable meal times so that the committees can meet and function properly. I suggest that, in considering this whole question, the Procedure Committee might look at whether that 6.30 p.m. to 8 p.m. period is adequate. The old time, as many honourable members will recall, was 6 p.m. until 8 p.m. I believe that that additional half an hour provided a little more reasonable opportunity to invite people into this place and for them to talk to us and present their point of view. I think the current dinner break is barely sufficient to do so. I come to my second point. I was delighted to hear the Minister say that nobody wants to sit late. It is very necessary that in any extension of sitting hours there is an acceptance that the 11 o'clock closure is something that most honourable members regard as sacrosanct. It is important that the Government does not legislate by exhaustion. I trust that the 11 o'clock closure can be maintained with the reasonable provision of the 10.15 p.m. to 11 p.m. adjournment debate, which enables the private member to make an individual contribution on matters which might be of major importance to him but which otherwise he would not reasonably be able to canvass within the normal procedures of the business of the House. I believe that the Broadcasting of Parliamentary Proceedings Committee also should consider the adjournment debate. There have been some general comments about some possible change to our sessional orders to permit the broadcasting of excerpts of parliamentary proceedings. That is a procedure which the Opposition endorses, although we suggest that it be on a trial basis to give us an opportunity to ensure that there is a balance between the sides of the House. I suggest that that Committee might also consider the broadcasting of the adjournment debate. Many honourable members speak during the adjournment debate on matters that are of real significance to them. It is a pity that, just because it is private members' business, it is excluded from the broadcast proceedings. If there are troubles with parliamentary privilege-I do not believe that there are-they can be examined separately. But there would be an advantage for everyone in this place if the adjournment debate were broadcast. If it is the Broadcasting of Parliamentary Proceedings Committee rather than the Procedure Committee that is examining those matters, this might be another matter that it could bring up and hopefully change. Of course, we would not expect this in the next three weeks of sitting, but it is something that we might expect to come in by sessional order at the commencement of the Budget sittings. It is also important that we realise that, after these next three weeks, the Government intends to get up and run. While we can understand that its present practices justify its running, the Australian public is a little concerned that the Government will be removed from public scrutiny throughout that long period from the end of these May sittings until the presentation of the Budget late in August. I know that it has been a practice of governments not to sit any longer than necessary for the introduction and passage of their legislation, but I am one of those who believe that it is important that the Parliament sit longer than it now does. By 'longer', I do not mean later at night; I mean over a greater period of the year than is now the case. If we wish to establish ourselves as the major parliament in Australia and if we want to try to make sure that people regard this Parliament as having relevance to issues that are of consequence in the running of the nation, the one way of meeting that responsibility is to be here. We do not do it by absenting ourselves for months on end. I know that there are reasons for having a break in the middle of the year, but I believe that it would be far more satisfactory if we had a sitting period that ran until at least towards the end of June. That would still give the Government an opportunity to consider its Budget preparation and then to introduce the Budget after a period of about a month and a half during which the Parliament would not be sitting. There is reason for us to re-examine the period of the year during which the Parliament sits. I would certainly support an extension and I believe that many other members of the Opposition think it is necessary. I might add that I put that point of view forward when we were in government and I was sitting in the chair that the Minister now occupies. That point of view did not always receive unanimous support from the members of the Government of which I was a part, but I believe that it is necessary. It is something that I put to all honourable members of this place as being a necessary consequence of what I see as the added complexity of government and, I believe, the increased responsibility of this place. Obviously a number of questions arise regarding particular issues that could emerge during the winter recess. We are not debating an adjournment motion at this moment but I say to the Leader of the House that we in the Parliament would expect the Government to recall the House if matters such as that should arise. One matter that particularly concerns us is the fact that the Minister for Foreign Affairs (Mr Hayden) seems to have gone off in this instance on what I would suggest is little more than a jaunt. He has done so in circumstances in which the Prime Minister (Mr Hawke) was called on today to respond to a question about the disarmament talks that are being undertaken with representatives of the Soviet Union and the United States of America. That is a major issue of concern to this Parliament and to the people of Australia. This Government cannot meaningfully address the question of disarmament if its Foreign Minister absents himself for the whole of the balance of the sittings of the Federal Parliament. For that reason alone we are most concerned that the Parliament is to rise in three weeks. I see justification not only in the Parliament sitting on those Wednesday evenings but also in added opportunities being provided for us all to hear the Foreign Minister make a statement in this place about the disarmament talks which he has pursued. Let us have a debate to see whether there is any sincerity in the Government's approach to this very vital and critical issue which affects us all. With that little bit of a background, the Opposition will support the measure proposed by the Leader of the House. Mr TIM FISCHER(Farrer)(6.12) —I rise to support the remarks made by the Leader of the National Party, the right honourable member for New England (Mr Sinclair), and to support reluctantly the motion before the House. I will not detain the House at any great length in so doing but I would like to point out for the record that this is the Parliament's twenty-first day of sitting since the election on 1 December last year. We have had 21 days of sitting out of the 158 days which have elapsed since that time. I guess that, on face value, the public at large would say that we have been sitting for three weeks, in their semblance of 21 days, when in fact five months have passed and the House should have been sitting a whole lot more, given all the issues that abound and all the problems which are faced by the community at large. I realise fully that there are severe scheduling problems with Cabinet and ministerial commitments and with the structure of the sitting of Parliament. This House is locked into a program of sitting four days back to back, which has some merit and some non-merit if I might put it that way, and it is a matter which is before the Standing Committee on Procedure at the moment. But I put it to the House and perhaps to the nation that 21 days of sitting out of 158 days or five months is totally inadequate in terms of the very real problems that are facing so many in the nation. I refer, for example, to the drought which is rapidly re-establishing itself over so much of eastern Australia-in the western parts of the electorate of Farrer, in the electorate of my colleague the honourable member for Mallee (Mr Peter Fisher), south of the Murray River and in the electorate of Maranoa. Many other electorates are rapidly having pasture protection board areas re-declared drought areas with the attendant problems associated with that. If honourable members want to be brought right up to date, I refer more particularly to the issue of the Army base. The honourable member for Hunter (Mr Fitzgibbon) has lost a battle for his electorate and Singleton is to lose the Army base. It is to be shifted to the Orange-Bathurst area, which will have great and important ramifications. Notwithstanding the three extra Wednesday nights of sitting conferred by this motion, I doubt that we will have time, even allowing for those three extra Wednesday nights, to discuss issues of that nature. Some of the legislation which will be rushed through the Parliament during the next three weeks concerns such vital areas as the land transport program-a massive piece of legislation which we have not yet seen copies of-which deserves detailed examination if local government is to be protected, if our road construction authorities at the State level are to be protected and if this country is to get value out of the dollars expended on local, State and Federal road programs. In the passage of the next three weeks that legislation will suddenly enter the statute book and lay down at a Federal level a program of roads construction in this nation, for better or worse, for the next five years. There is a huge package of rural legislation on the Notice Paper. Many troubled areas are deserving of very detailed consideration, including the restructuring of the Australian Wheat Board, alterations to the dried fruits industry, the dairy industry situation, the sugar industry and many other areas which are in dire straits and which should be the subject of proper discussion. However, I realise that this motion deals specifically with extending the sittings for the next three Wednesday nights. Frankly, I am delighted that we will not have to go to a certain movie which was scheduled to be shown tomorrow night subject to the acceptance of some honourable members. I am happy to serve my electorate in this House as often as it sits. I make the point that 21 sitting days out of five months since the election on 1 December is inadequate. At the end of the autumn session we will have totalled 32 days of sitting in a six-month period, which I believe is absolutely inadequate. I support strongly the comments of the right honourable member for New England and Leader of the National Party that we in this nation must steadily mature in terms of the sittings of our Parliament and move towards a concept of sittings throughout the year with a reasonable continuity of legislation and not this log-jam rush at the end of the session. Finally, I take this opportunity to put it to the House that if we are to have these four-day back-to-back sittings, which are the delight of certain Western Australians-other Western Australians assure me that they hate them because they like to get home even on the short weekends and there is no real saving for the taxpayer in the four-day back-to-back sittings-I have submitted to the Procedure Committee and I commend to the House that there is a better way to do it. Rather than having the four-day sittings we should permanently set in concrete that the sittings be from Monday lunchtime through to Thursday evening. That would at least allow Ministers and others to schedule their Fridays well ahead. At the moment we have a situation in which, even allowing for the courtesy of the Special Minister of State (Mr Young) in circulating the Budget sitting dates-I very much appreciate that action-we still have that area of doubt about when and where Ministers and others can schedule Fridays for commitments in their electorates and elsewhere. It becomes a real problem. If we are to have four-day sittings into the next year and beyond, let them be looked at on the basis of always being from a Monday lunchtime through to a Thursday evening, which is what will apply for the next two weeks in any case. The precedent is there and it is followed to some extent now. At least then we would know that our Fridays were clear for scheduling away from the Parliament. But, of course, some of us would prefer the other system of a three-day, three-week approach. Next Tuesday night this nation is to be presented with an economic mini-Budget of $1 billion in cutbacks. We were assured at Question Time this afternoon that this is fair dinkum, that it will involve $1 billion and perhaps a great deal more than $1 billion. I just make the point that we need time to consider carefully the statement that is to be made next Tuesday night. We need time and it is our duty to spend time considering on the floor of this House of Representatives and in the other place the issues of real concern in the community at large. We will get that time only if the sittings of this Parliament are extended, if there are more days of sitting and a more proper scheduling of the proceedings of this House. Mr YOUNG(Port Adelaide-Leader of the House)(6.18) —in reply-I did not want to open up all the avenues that have been debated. I wish firstly to reply to the right honourable member for New England (Mr Sinclair), who was critical of the Minister for Foreign Affairs (Mr Hayden). The right honourable member for New England knows as well as I do the responsibility of the Foreign Minister to accept invitations. If we compare the trips of the honourable member for Oxley with the trips of the honourable member for Kooyong (Mr Peacock) when he was Foreign Minister we see that the honourable member for Oxley looks like a stay-at-home. He is in the Parliament far more than the honourable member for Kooyong used to be. But we have to accept in the Parliament that the Foreign Minister will be overseas a good deal of the time. I suggest to those honourable members who raised some of these questions that they take the Standing Committee of Procedure seriously. I have appeared before it briefly and I intend to go back to elaborate on a number of questions. When honourable members talk about the necessity for the Parliament to sit, what business it has and the responsibilities of the various people playing a role in the Parliament, they might like to have a look at the annual report of the Department of the Prime Minister and Cabinet which will outline the number of Cabinet and ministerial meetings and Cabinet committee meetings. These meetings run into some hundreds per annum, not just in the period of this Government but also in the period of the previous Government. Honourable members have to take account of the fact that the business of the House does not get here until it has been through these procedures. So obviously we have to take into account the Procedure Committee. There is at least one ex-Minister on the Committee, that is the honourable member for Denison (Mr Hodgman). He was not a very good Minister, nevertheless he is on the Committee. Hopefully he will be able to bring to that Committee the experiences of Ministers in terms of carrying out their role not only in that area but also as private members. The previous speaker, the honourable member for Farrer (Mr Tim Fischer), said that we have to get back to our electorates and do the normal things. In Australia members of the opposing political party do not say: 'Now that you have won your seat we are going to leave you alone for the next 10 to 15 years'. They say: 'How soon can we get rid of you?'. So members have to get home as often as they can in order to maintain their political support in their electorates. There are those problems. I have not done any recent comparisons with the various parliaments, but I think this Parliament stands up pretty well against any of the State parliaments in terms of the number of days and weeks it sits. We do not find the Parliament up north sitting very often at all, but I would not take it as an example of how often the Parliament should sit. Nevertheless, all this motion will do is, if necessary, allow us an extra eight or nine hours for debate on matters that come before the Parliament in the next three weeks. Question resolved in the affirmative. Debate resumed from 17 April, on motion by Mr Kerin: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Mountford) —I understand that it is the wish of the House to debate the Rural Industries Research Bill 1985 concurrently with the Rural Industries Research (Transitional Provisions and Consequential Amendments) Bill 1985, the Tobacco Charge (No. 1) Amendment Bill 1985, the Tobacco Charge (No. 2) Amendment Bill 1985, the Tobacco Charge (No. 3) Amendment Bill 1985, the Poultry Industry Levy Amendment Bill 1985 and the Poultry Industry Assistance Amendment Bill 1985. If there is no objection, I will allow that course to be followed. Mr HUNT(Gwydir)(6.22) —Mr Deputy Speaker, the Opposition will move, after the suspension of the sitting for dinner, the following amendment to the motion for the second reading of the Rural Industries Research Bill to highlight the inadequate effort of the Hawke Labor Government to liaise with the primary industries over its legislative program: That all words after 'That' be omitted with a view to substituting the following words: 'whilst not declining to give the Bill a second reading, the House is of the opinion that the Minister for Primary Industry has failed to adequately consult with a number of rural industries about certain aspects of this legislation, and calls upon him to consult with those industries about their concerns as a matter of urgency'. The legislation is drafted to amalgamate the existing rural industry research legislation and provide one Act for the administration of rural industry research funds. It revamps the Commonwealth special research grants scheme and gives a compact basis for future funding needs. There is much sense in attempting to consolidate most of the 14 trust accounts covering the barley, chicken meat, cotton, dried fruits, dairy, fish, honey, oil seeds, pigs, poultry, tobacco, wheat, wine and wool industries. In foreshadowing this amendment, I draw attention to an anomalous situation affecting the Australian pork producers and the serious reservations held by the poultry, dairy, honey and tobacco industries. The Australian Pork Producers Federation is opposed to the inflexible way in which the Minister for Primary Industry (Mr Kerin) has constructed the core committee of the Research Councils Selection Committee to appoint people to the industry research councils. Although concern has been widely expressed over the lack of a producer majority on the Selection Committee, the Bill provides for the establishment of a Research Councils Selection Committee to select additional members with special qualifications and expertise for the research councils. The Selection Committee will comprise a core committee and industry representation. The core committee will comprise an independent chairperson to be appointed by the Minister, one nominee from the National Farmers Federation, one nominee from the Australian Agricultural Council and one member with knowledge and expertise in scientific matters, research and development and/or marketing to be appointed by the Minister. The specific industry concerned shall have up to three industry representatives, the actual number to be determined by the Minister after consultation with relevant industry organisations. I do hope the Minister on this occasion, to accord with the intention that is expressed in the legislation, actually consults the organisations in a manner in which he does not seem to have consulted a number of organisations that have brought their concerns and worries to me as the shadow Minister. The Minister will make the appointments after they have been nominated by the relevant industry organisations. The Pork Producers Federation, in discussion with the Minister, sought changes in this legislation to the structure of the Selection Committee core committee. The Federation quite rightly points out that it is not an affiliated member of the National Farmers Federation; Therefore the representative from the NFF on the core committee should be replaced by a member of the Australian Pork Producers Federation when matters relating to the pork producers are being decided. The Federation submitted a reasonable case to the Minister, who has reacted in a negative and unco-operative way. Unfortunately the Minister seems unable to accept that he is capable of making a mistake. Clearly, he was not aware that the APPF was not an affiliate of the NFF. If he was aware, he is totally insensitive, if not arrogant. He has placed the pig industry in a position where it will have a minority representation of three in a committee of seven, which does not meet the spirit or the intention that the Minister purports to espouse. The Pork Producers Federation case has been treated with contempt by the Minister. I do not think it is fair to treat a non-affiliate of the NFF as though it is an affiliate. The dairy industry also holds deep reservations about this legislation. This reservation has only recently been brought to my attention. There are a number of reasons why the industry believes it should be afforded the same treatment as the wool and the wine industries, which were allowed to continue research under the existing arrangements. Firstly, the industry has an excellent track record, with the dairy research scheme having been successfully administered by the Australian Dairy Corporation to the benefit of dairy farmers and consumers alike. Secondly, the dairy farmers' marketing arrangements are likely to change in the immediate future. It is grossly inconsistent for the Minister to justify the continuation of current wine research because an inquiry into the industry is under way, yet on the other hand to force the dairy research program to change when such a change is actively opposed by the industry. The dairy farmers are being treated as second class citizens. Mr McGauran —Hear, hear! Mr HUNT —I know that the very dutiful honourable member for Gippsland, where some of the most efficient dairy farmers produce their product, knows how distressed these people are and under what difficulties they are labouring at present. Another reason for their exclusion from the Bill is the contempt with which their requests to the Minister have been treated. Mr Cobb —No consultation. Mr HUNT —There has been no consultation whatsoever with the Australian Dairy Farmers Federation. This Federation outlined its concern over this Bill in a letter dated 29 March and sought to discuss the provisions with the Minister for Primary Industry. To date there has been no response to the industry's approach. Currently the cost of the administration and direction of the scheme, including the new charges made by the Department of Primary Industry for investment management and financial administration governed by clause 9 (1) (e) of the Rural Industries Research Bill, amounts to some 10 per cent of the value of the program. The complex administrative requirement of this Bill with respect to the provisions for five-year research and development plans and yearly programs, together with the selection procedure for the Research Council members, will probably double these costs. For the dairy industry at least, current procedures achieve much the same goals but at a lower cost. It is noteworthy that the Research Council will be unable to completely control efficiency and its administrative costs. At present expenditure from the research trust fund may only be approved following a recommendation from the Research Committee. Sitting suspended from 6.30 to 8 p.m. Mr HUNT —Prior to the suspension of the sitting for dinner and our celebration of the Japanese Emperor's eighty-fifth birthday, I was talking about rural research in Australia and about the Rural Industries Research Bill which is designed to amalgamate a number of Acts under one umbrella piece of legislation in order to simplify the procedures for rural research. I had referred to the dairying industry. Of course the dairy industry has expressed some concern that there was inadequate consultation with it in respect of aspects of this legislation. It is noteworthy, Madam Deputy Speaker-- Madam ACTING SPEAKER —Madam Acting Speaker, not Madam Deputy Speaker. Mr HUNT —I am sorry; I think so much of you that I would hate to say the wrong thing. I think you are the best of them, I must say. It is noteworthy that the Special Rural Research Council would be unable to control completely efficiency and its administrative costs. At present expenditure from the special rural research fund may be approved only following a recommendation from the Research Council. The provisions of the Rural Industries Research Bill permit expenditure under clause 9 (1) (e) without reference to the Research Council. In addition, under clause 46, the proposal to distance the Research Council from the industry through the appointment of members who have qualifications relevant to, or have expertise in, a number of fields rather than having industry representation could be very counter-productive. Amongst other things, it will threaten the close links established between the industry and the Australian Dairy Research Committee. I stress that the present arrangements have been of enormous benefit not only to the industry-I think that is very important-but also to the end users, the consumers in Australia. Unless these links are maintained there will be considerable reluctance at the farm level to contribute to dairying research. That would be a great pity. The Opposition recognises that these Bills increase the maximum contribution by the Government to industry research but is concerned that the response of the dairy industry has been ignored. The matter is of very great importance to an industry which makes a considerable financial contribution to its own research programs and which stands to benefit greatly from research efforts. At present there is an oversupply of milk of about 10 per cent and research could provide vital avenues for the disposal of this surplus of protein without the need for such drastic measures as those to be imposed under the current Government's marketing scheme. I do make that plea quite sincerely because Australia has a very serious problem in regard to its overproduction and market availability. I know that the Minister has tried to grapple with this problem in his own way, and in the Government's way, and the industry itself has also endeavoured to come up with a proposal. I hope that somewhere along the line some sensible resolution can be achieved to overcome what is a very difficult economic problem and, more importantly, a very difficult social problem. There is a perception around that farmers are well to do and that people need not to be concerned about their situation. We now live in a cash economy. At one time, for instance when I was born on to the land, people were envious of those who owned property because they had capital assets and capital backing, but the situation has become quite reversed because we do live in a cash economy and unless a person has a well paid job or is involved in an industry with a good cash flow his economic security is not assured. I say that in all sincerity and I do hope that members of the Government recognise that great poverty is looming in the rural areas of Australia. So many young people are deciding to leave the farm; they are wanting to get away into some other area of activity, and that is sad for Australia because the time will come when we will not have enough people engaged in farming unless we go back to those vast farm acreages that used to exist in the last century. I would hate to see the movement accelerate to the extent where we have ghost towns and large corporate-type operations with all sorts of measures to try to reduce labour. I dare say that this is a trend that is taking place in many areas, but it will be a sad thing for Australia if people lose their interest in the great heritage of this vast continent, which is not well settled away from the coastline. The Hawke Labor Government should take the initiative and consult with the industry over the changes needed to this legislation. If necessary the Government should take the initiative and defer the Bills-at least in relation to the dairying industry, which could be subject to other legislation in the budget Session. The subsequent legislation could still be operative by the same time as these Bills are to take effect, that is, from 1 January 1986. I can understand why the Minister is trying to do this. Basically I think the Minister is on the right track. He is trying to reduce the number of Acts and trying to consolidate a lot of legislation which probably should have been consolidated many years ago. I give him some credit for that but in his rush and under the burden of trying to get all that legislation together-as a former Minister I know what sorts of pressures one can be under-he should be careful that he does not at the same time ignore the people whom the legislation is likely to affect; ignore consultation and lose touch. I think that is one of the problems of government in modern society. I do not know what sorts of measures one can take to avoid it but one needs at least to be aware of it. Ultimately, a government that ignores this consultation process suffers and fails in the longer term. The dairy industry is in a difficult position. It does not agree that the provisions of these Bills are best for the industry. However, the Government holds the purse strings because it is a dollar for dollar contribution and without the Commonwealth dollar the effort would be rather meagre. The industry, therefore, will have to try to co-operate in the best way it can. In essence, this Government has a chance to practise consensus. It would help to restore some of the credibility that the Government seems to have lost amongst farmers in recent months if the provisions that apply to dairying were taken out of this legislation and discussed with a view to introducing separate legislation in the next session. I call upon the Government to take this initiative. I do no more than that because I believe that in the final analysis it is the responsibility of the Government to take action and I do not think it is the job of the Opposition to hold up a piece of legislation of this importance. The Minister would be doing no more than he is doing for the honey industry if he were to defer the provisions of this Bill which apply to the dairy industry and then use the regulations provisions in the Bill at a later stage when a reasonable arrangement has been made with the industry. For smaller scale industries such as the honey and poultry industries the administrative charges under the rural industry research Bills will be a heavy burden. In the case of the larger wool research effort, the Department of Primary Industry administrative charges represent about 5 per cent of the annual budget for research. In contrast, these charges swallow about 20 per cent of the poultry industry's research budget and 17 per cent of the honey industry's research funds. As I mentioned earlier, dairying faces a doubling of its administrative costs to 20 per cent. For the honey research fund the 17 per cent administrative cost amounts to $14,846. Of this, $7,824 is paid in salaries, but the on-costs are set at 84 per cent of salaries, that is, $6,527. The on-costs of 84 per cent seem extraordinarily high to me. It seems reasonable to ask the Minister to review this figure as it is quite possible his review could lead to a scaling down of the administrative costs with a resulting increase in the actual research effort. Additionally, were grant recipients to ask for on-cost provision of 84 per cent themselves, the number of projects would inevitably have to fall. The alternative would be to raise the levy closer to the 0.5 per cent of gross value of production level, a move which would be strongly resisted by the industry. It would be a great pity if excessive cost recovery were to jeopardise the actual research work. In addition to administrative costs, while larger industries can more easily justify the costs of core committees, the burden on smaller industries is relatively high. The smaller industries also rely more heavily on specialist expertise on their committees, yet these Bills may reduce the contribution of those directly engaged in a broad range of industry activity. The three Tobacco Charge Bills repeal the Tobacco Industry Act of 1965 but essentially continue arrangements already in place for funding tobacco research and the expenses of the Australia Tobacco Board. Levies for industry research already exceed the 0.5 per cent of the gross value of production limit set in the other Bills before the House. In February this year the levy rose from 2.5c per kilogram to 3.5c. The Government has agreed to continue to match this funding level, and this is formalised in clause 7 (3) (b) of the Rural Industries Research Bill. The declining level of production had meant that the overall research program was in jeopardy unless additional funds could be raised. It is of concern that a further increase may be needed in two or three years, but the commitment of the Government to match these increased levy funds is not clear. It would be helpful to the industry if the Government could spell out in more detail its commitment to continued matching of these funds. I would point out that the industry is relatively small, and already contributes more than others to its research. In a declining market scenario this research becomes even more important. In relation to the five-year plans to be introduced, the Opposition is concerned to ensure that this time span does not compromise the flexibility of research programs. Committees will need to be on guard against an attitude that projects not in the five-year plan cannot be undertaken. Our primary industries are dynamic, not static. Their needs can change quite rapidly, and it would be most unfortunate if urgent works could not be tackled in response to urgent market challenges. Turning to poultry research, I hold a number of reservations about the changes made although I do note that the Australian Egg Marketing Council fully supports the Minister's aims and objectives for research. As I mentioned, administrative costs will take about 20 per cent of the research moneys. I think it is quite unacceptable for any research program to find that 20 per cent of its funds have been taken up by administration. It seems to me to be an extraordinary burden. The Poultry Research Advisory Committee, a non-statutory body, is one of the smaller research funds with a total budget of some $400,000. In recent years the Committee has made a commendable effort to become more cost-effective, and the industry had understood that changes to rural industry research funds as a result of the joint management review would not apply in its case. After advice from the Department seven months ago that PRAC would become statutory, the industry considered its position and in February advised the Minister that it wished to remain non-statutory. This view has been rejected, and now the industry will lose 20 per cent of its research funds in administration costs alone. Beyond the cost problem, I know the industry is concerned about losing control over the direction of its research and about the Committee no longer being fully accountable to the industry. There is also a degree of anger among poultry producers that they have had little time to study the new system. The first details were advised to rural research funds chairmen in late December. This has left little time for industries, including the poultry producers, to discuss the new regulations and come to a common view. It is a pity the Government and the Minister for Primary Industry seem to be abandoning their much-vaunted consensus. The Minister ought to realise that he is making few friends and a lot of enemies with his approach to these industries, in regard to consultation. An interesting aspect of this legislation is that it makes maximum provision for an increased Commonwealth funding up to a maximum-and I stress that-contribution of 0.5 per cent of the annual gross value of production for each of the industries concerned. At the present time the contribution averages out at about 0.25 per cent. This Bill therefore provides for a doubling of the Commonwealth's funding should the industries make an increased contribution. The funding will, of course, be on a dollar for dollar basis. At the present time there is no Commonwealth limit-and I stress that-on its financial contribution with the exception of poultry industry research, which currently has a limit of $150,000 per financial year. The former Government was also mindful of the importance of research. Indeed, it treated the Commonwealth Scientific and Industrial Research Organisation with much more generosity than does the current Government. While the Hawke Labor Government makes a maximum provision of Commonwealth funds for rural research, subject to industry contribution on a dollar for dollar basis, the same Government has diverted funds from the agricultural sector of the CSIRO to other sectors. I am sorry the Minister for Science (Mr Barry Jones) has done this because I think he is one of the better Ministers. I think that horse in Melbourne really sorted him out the other day when it gave him a good old nudge, a kick and a side swipe. I think the horse was acting on behalf of the animals of Australia when it did that, so I hope the Minister will take note and give more serious consideration to the important problems of research in this area. All this Bill really achieves is to place a maximum on the amount of research money the Commonwealth will extend to rural research, establish a selection committee and consolidate several pieces of legislation into one larger Bill. So let us not get carried away with the notion that the Bill will necessarily give a generous lift to Commonwealth research funds. It will not necessarily increase funds for rural research. It provides for a maximum contribution from the Commonwealth Government and maintains the dollar for dollar principle in rural research. The Bill really ensures that there will be a limit to the amount of funds the Minister will have available for rural industries research. The Treasurer (Mr Keating) must be laughing all the way to the Treasury. If an industry wishes to put more than the Government's maximum contribution, it does so on its own. Under the existing arrangement the Government and the industry each contribute about $32m to industry research. I seek leave to table a list of research programs for each of the industries that are being supported by the funds. Leave granted. Mr HUNT —Research and development are of vital importance to the efficiency, productivity and profitability of rural industries. Nowhere is this more apparent than in the plant breeding, soil, technology, genetic technology and management technology areas. There has always been an enormous response in all these areas to the great breakthroughs that have been made as a result of the application of the benefits of research. Although the Prime Minister (Mr Hawke), said during the election campaign that the Government would increase its financial contribution to rural research, no doubt to counter the complaints coming out of the CSIRO about the cutback in research, this Bill does not guarantee his undertaking. This Bill in fact places two limiting factors on the amount of funds available for rural research. Firstly, it places a limit on what the Hawke Labor Government is prepared to give. The other limiting factor is what the rural industries can afford to give, and I underline the word 'afford'. In the current depressed economic circumstances of the farm industries this in itself is a major limiting factor. The Bill has a double effect. It limits the Commonwealth contribution by a defined ceiling and by what the rural industries can afford up to an amount equal to that ceiling. If a rural industry decides to put any further funds into research beyond that ceiling it does so on its own. So let us not get carried away. This Bill does not necessarily involve the Government in more funding for research to make up for the CSIRO cuts. It also has another qualification to the Hawke Labor Government's contribution which is spelt out in the second reading speech where the Minister says: 'The Government will seek to increase its funding to a maximum rate over a five-year period', dependent, of course, on the industry contributions. Only tobacco will be exempted from the Government's maximum limitation. But even the tobacco growers are concerned. I have heaps of telexes and letters in my office from them. Insofar as the intention is to obtain the greatest value for the dollars spent on research and full accountability for the funds spent, the Opposition parties are in complete accord. I make that clear. We fully support the objective to increase the commercial returns to the industries concerned through research and development of the production, processing, storage, transport and marketing of agricultural commodities. I hope that the wool research program will not be covered later by this legislation because I believe that it is one of the best research programs. I give some credit to the Minister for Arts, Heritage and Environment (Mr Cohen), who is at the table, for having taken a great interest in the need for promotion and research in the wool industry. I must say that the Minister is a mercer with great clothing and a great sense of judgment. If honourable members want a good suit they should go to Barry Cohen. I can assure them that his suits are good. I want a cut on my suit! The wool research program should not, therefore, be disrupted by changed arrangements simply to put all research under a tidy legislative roof. Wine industry research has also been left out of the program at this stage due to the inquiry presently being undertaken. The meat, livestock and fishing industries are also exempt from the provisions of this Bill. No doubt when the fisheries have finalised their organisational and administrative arrangements for research the Minister for Primary Industry will act on this matter. We support the provisions for each research council to develop five-year strategic research and development plans for the research projects. It will, of course, be necessary for there to be full consideration with the industries concerned to ensure that research activities are directed towards industry objectives. The councils will also have an important role in evaluating all projects submitted for funding. I stress that the Opposition sees much sense in the attempt to consolidate most of the rural research trust accounts in providing one Act for the administration of rural industry research funds. We therefore support the Bill. However, I move the following amendment: That all words after 'That' be omitted with a view to substituting the following words: 'Whilst not declining to give the Bill a second reading, the House is of the opinion that the Minister for Primary Industry has failed to adequately consult with a number of rural industries about certain aspects of this legislation, and calls upon him to consult with those industries about their concerns as a matter of urgency'. Madam ACTING SPEAKER —Is the amendment seconded? Mr Andrew —Madam Acting Speaker, I second the amendment and reserve my right to speak. Mr O'NEIL(Grey)(8.24) —Let me say from the outset that I am sure that the Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt), was being flippant in moving this amendment. Nobody in this House would argue that it is not the case that the present Minister for Primary Industry (Mr Kerin) consults on a regular basis with all areas of primary industry and is regarded by primary industry people in particular as being a very caring and concerned Minister. Obviously, we reject the amendment. The Minister is prepared to speak with the industry on a regular basis and will continue to do so. As the Deputy Leader of the National Party is one of the more amicable people opposite, I do not intend to add any more insult. The Rural Industries Research Bill 1985 puts into effect an undertaking given by the Prime Minister (Mr Hawke) last November when he announced that the Government's contribution to rural research would be increased. To complement this larger funding commitment, the Bill also provides for major organisational changes in the administration of research funding. The keynote of these changes is deregulation. As in any co-operative effort between government and industry, there has from time to time been conflict of opinion as to levels of contribution and participation. This legislation recognises the very substantial obligation of government to ensure that research continues and is adequately financed. At the same time, it recognises that producers must be given full opportunity for representation in decision-making areas where funds are allocated and projects determined. As the Minister for Primary Industry (Mr Kerin) said in his second reading speech, attention has been paid also to ensuring that the greatest possible returns are achieved from each dollar spent and that those who administer and undertake research are fully accountable to the providers of funds. The Government's part in this revitalisation begins with the provision for Commonwealth funding to be increased to about double its present average rate, or up to 5 per cent of the annual gross value of production of each industry, depending on the level of contribution by that industry. The Government will contribute on a dollar-for-dollar basis and will seek to encourage industry investment in research up to the maximum of 5 per cent of GVP over a five-year period. At present, the average Government research funding level in all industries receiving it is about 26 per cent of GVP. Other measures will be taken to remove any obstacles in the way of approval for any industry wishing to increase its own funding for further research beyond that covered by the 5 per cent of GVP that is subject to matching by Government. The rural industry research councils, which will replace the former research committees in the role of administering funds, may well see the new emphasis on greater independence reflected first in the composition of their membership. This will be decided by a selection committee which will have substantial industry involvement. Each council will comprise five to nine members, including a chairperson and one Government member, both appointed by the Minister. The criteria to be adopted by the selection committee will be aimed solely at producing the best possible blend of individual expertise and experience in the relevant fields, rather than being subject to requirements of representation of selected organisations. There will be less ministerial involvement than formerly in the day to day running of the councils' research efforts, which will be determined by them in the production of annual research and development programs. Overall guidelines for these annual programs will be set in a five-year strategic research and development plan which each council will be required to produce in consultation with industry and submit for the Minister's approval. All these adjustments reflect this Government's aim of fostering a more autonomous and decisive role by councils in the selection and attainment of research and development goals that have been endorsed by producers in consultation with the industry concerned. The Government wants to see the councils equipped to get on with the job and free to do so without being hamstrung by regulations. Accountability of research councils has been designed to include a planning and consultative mechanism that will remove any need for the Minister to approve funding of individual research projects and minor alterations to approved budgets. The chief vehicle for this accountability will continue to be the annual report which will be tabled in Parliament. This will be expected to compare performance with the stated aims of the strategic plan. The council chairperson will be responsible for presenting the report to the executive of the most relevant industry organisation and discussing performance and plans. When the report is subsequently presented to industry it will contain the comments of the executive. The terms outlined will apply to 11 major rural industries from 1 January 1986. Others, for a variety of reasons, have not yet been included in the reorganisation. As the representative of an electorate which takes in vast areas of agricultural land, I find the decisions to greatly increase both funding to and consultation with industry very satisfying indeed. Quite apart from this, I must say that I cannot think of a more deserving recipient of an expanded effective research effort than rural industry, for the following reasons. Rural exports generate a high proportion of export earnings-about 40 per cent by value-with a significant effect on the national economy. Rural products have a high potential for downstream processing, creating further industrial and economic benefits. There is a relatively low level of general government assistance to rural industry compared to that given the manufacturing sector, largely in the form of tariffs, which add to costs of rural producers. Australian ownership in the rural sector is high compared to that in the manufacturing and mining sectors. These reasons are basic. They have always applied. But future indications suggest that winning gains from research will be an ever more demanding task as rural production and environmental problems become ever more complex and subtle. Research into subjects such as plant genetics and molecular biology, with the aim of producing more disease-resistant, higher yielding and drought-resistant plant varieties, and increasingly serious problems such as soil erosion, salinity and biological control of pests and weeds, will become increasingly necessary to maintain the competitiveness of Australian agriculture and its significant contribution to the national economy. The structure of the agricultural industry is the reason why it would be unlikely to be capable of producing an adequate program if left to its own resources. Australian agriculture is an amalgam of independent businesses, comprising some 176,000 commercial holdings and nearly 80,000 holdings rated as unproductive. Individual businesses on this scale lack the resources for their own effective research programs and there is not much prospect of worthwhile returns for private investors in the field. By contrast, the potential rewards on a national level for a soundly planned, government backed research and development program constitute a very worthwhile investment. Apart from its provision for increased funding, the main changes brought about by this Bill concern bringing together separate avenues of rural research under one Act, where at present possible, and improving efficiency in the process. Financing is at present carried out through 14 trust accounts, known as rural industry trust funds, or RITFs, administered through research committees under separate legislation. The 14 existing trust accounts cover barley, chicken meat, cotton, dried fruits, dairy, fish, honey, oilseeds, pigs, poultry, wheat, wine, wool and tobacco. Fund administration and planning will become the responsibility of the new research councils in the case of 11 major industries. Poultry, wool and wine are currently excluded from the provisions of the Bill. Poultry research is subject to special arrangements. The wool industry for many years has been setting a good example to others with its Wool Research Trust Fund. Both the industry and the community have derived considerable benefit from the research achievements stemming from this Fund. Under the new legislation, the Australian Wool Corporation will be left free to adopt administrative arrangements, where these will be of benefit. The grape and wine industries will be consulted on new arrangements for wine research when the current inquiry is completed and a report is issued. Fisheries research is also subject to consultations, which are now under way. The tobacco industry will be subject to a special arrangement. It is already funded for research to a higher level than the new maximum of 0.5 per cent of GVP by an agreement reached with the Government in 1984, and this will continue to apply. Further scope for common interest is given in the Bill's provision for an annual co-ordination meeting of all chairpersons of research councils for discussion of topics of concern to all. These meetings will also include the Australian Special Rural Research Council, the Australian Meat and Livestock Research and Development Corporation, and the Wool Research Trust Fund. The common objective of all these organisations will be to increase commercial returns to their industries by improving production, processing, storage, transport and marketing of their respective products. They will be responsible for identifying research targets and determining priorities for funding and promotion of research and development programs to meet these objectives. For smaller and emerging industries the present arrangements for funding will continue under the Commonwealth special research grants scheme. Government and industry currently contribute about $32m each to this scheme. The special grants scheme will be strengthened in view of its other intended role of interdisciplinary research. This could take the form of a research project that would benefit a number of rural industries, but which is not sufficiently important to any one of them for inclusion in its own program. Funds could also be made available for research undertaken in the national interest. The CSRG scheme will be given statutory status under the Bill and renamed the Australian Special Rural Research Council. It will embody the same principles as apply to the rural industry research councils and will have its funding increased. A salient feature of the Rural Industries Research Bill is the emphasis it gives in a number of ways to getting active participation from industry, rather than the relatively passive role industry has played in research planning up to now. This will apply all the way from the early stage of selection of research council members, through to all aspects of research programming of the annual accountability and assessment process. The make-up of the Research Councils Selection Committee is a fair example of the care that has gone into giving industry its full share of influence. A core group of three on the Selection Committee, who will take part in selecting all council members, will include two people nominated by agricultural industry bodies. A second selection group of up to three members, chosen by consultation with each specific industry, will share in selection of council members for that industry. The Rural Industries Research (Transitional Provisions and Consequent Amendments) Bill 1985 is complementary to the Rural Industries Research Bill. Its purpose is to amend or repeal existing legislation, where necessary, for the enactment of the Rural Industries Research Bill, and to provide the necessary transitional arrangements for the changeover. It will also provide for transfer of assets to the new research funds, and will minimise disruption to current research programs by maintaining present agreements until the new Bill comes into effect. I commend the Bills to the House. Mr ANDREW(Wakefield)(8.37) —It seems to have fallen to my lot, in debate on the last two rural Bills which have come before this House, to speak after my neighbouring colleague, the honourable member for Grey (Mr O'Neil). There are a number of points that have been made by the honourable member for Grey that I must utterly refute as I stand to address the House tonight. The honourable member for Grey suggests, incredibly, that the Rural Industries Research Bill will result in greatly increased funding for rural research in Australia. My survey of the Bill reveals no such increase at all. Furthermore-I will expand on this later in my remarks-the honourable member for Grey has commended the Minister for Primary Industry (Mr Kerin) for the level of consultation he has shown, when only today I was approached by the major horticultural group in Australia, which has had no consultation at all. The amendment before the House focuses on rural research. The history of Australian agriculture is the history of innovative research that has kept us competitive. It has been in fact the only tool we have had, along with industrious farmers, to provide us with some sort of shield against the inequitable trading arrangements we have had to face overseas. Nineteen eighty-eight will mark 200 years of agricultural resourcefulness. Almost 200 years ago, when the first people started tilling this land, things had changed very little from biblical days. It was still very much a case of 'the sower went forth to sow'. It has only been the agricultural enterprise, the agricultural innovation and the research input of Australian farmers that have changed the face of Australian agriculture as drastically as we have seen it changed today. It is a sad reflection on the unreality of this House that if I were to stand here and talk about a stripper, the first thing most people in the House would think about would be that sort of sensual act that sadly exploits womanhood. The reality is that it was the development of the stripper by Australian farmers that took us forward from the biblical times of farming when we talked about harvesting with a sickle and a scythe into stooks that were subsequently hand winnowed. It was the development of this sort of mechanisation of agriculture that took Australia forward. I could illustrate it by referring to the stump-jump plough which similarly was a mechanical development resulting from research in Australian agriculture. Look at what has happened in the last two decades as the application of chemicals in agriculture has taken soil preparation from what was once a totally worked, totally ploughed and totally tilled scene into an area where chemicals are applied-chemicals which, incredibly, are toxic to weeds but tolerant of crops. All this has happened as a result of applied research in Australian agriculture. It is sobering to consider that it is only 80 years since Gregor Mendel made the first tentative steps in discovering what genetics was all about. Only in those 80 years have we understood what plant breeding is all about and only in that time have we been able to apply those same lessons to animal breeding. Our feeding regimes have changed in order to maximise the fertility of our animals and all our plant breeding regimes have changed as a result of this applied agricultural research in order to maximise our plant breeding potential. Sadly, this legislation, which provides some opportunity to reassess agricultural research in Australia, does not in any way address our most desperately needed research, that is, research that Gregor Mendel would have applauded, into plant variety rights. By applying the very techniques that he developed 80 years ago we would be able to bring into Australian agriculture those measures of drought tolerance and salt tolerance that are so desperately needed. Is this essential role of agricultural research addressed in this legislation? Sadly, no. Not only is there no mention of plant variety rights, but in addition, only last week this report came from The Country Hour. I quote from it: A Senate Committee recommended that the Commonwealth considered the introduction of a PVR scheme but in response the Commonwealth has said it is committed to an inquiry before a PVR scheme is introduced. Mr Hawker —Not another one. Mr ANDREW —Well may the honourable member for Wannon cry out: 'Not another one'. Never has an agricultural initiative been so plagued with inquiries as has the role of PVR and never has there been an area of rural research as desperately needed by Australian agriculturalists. Yet all we have is another inquiry. It does not matter where we look in Australian agriculture, whether it is at the tiniest area of genetic development or the broad area of the bulk handling of our crops, there is a great opportunity for increased rural research. We see it happening. We see such research being initiated by some of the major chemical companies which have produced not only the pesticides and weedicides that can now be safely applied to our crops, but have also developed pour-on lice control chemicals which have enabled as to change our attitude to livestock and particularly to sheep handling. This Bill should have been designed to redress some of the shortcomings in agricultural research in Australia. In fact, because it takes some shuffling steps in that direction, the Bill is not being opposed by the Opposition. But because the Bill fails to address many of those desperate needs of farmers, we have taken the only course open to us and moved this amendment. The amendment echoes a rural industry plea for a little more room to move and some more assurance of resources being made available. As the honourable member for Gwydir (Mr Hunt) has already pointed out in his contribution, among the dilemmas facing producers is the fact that they still await an assurance from the Minister that the core committee of up to three members will in fact include three members of the specific commodity likely to be researched. Without those three, the producers will fail to have an adequate voice and adequate voting rights on that committee. The other major concern for all areas of rural research and particularly for those areas of lower agricultural production and immediate economic significance is the area of administrative costs. The on-costs of salaries for these research committees are calculated at 84 per cent. These charges will swallow up 20 per cent of the budget allocated to poultry research and 17 per cent of the budget allocated to honey funds. In fact, it is an anomaly in the poultry industry in that the chicken meat people in my State tell me that administration will cost their segment of the poultry industry $44,000 while the eggs segment will be charged $62,000 for administrative costs. They can find no good reason for this strange anomaly. The point is that the administration of the scheme as proposed by this Government will cost some of the smaller industries 10 to 20 per cent of their available resources while it will cost the larger industries as little as 0.4 per cent. There should be no commendation about the 0.4 per cent either, as that may well be a larger sum than can be justified. It suits the Government to create the impression that it is exercising some sort of concern about rural industries. It suits the Government to create the impression in rural Australia that this is an expansionary role designed to insulate rural industries against further erosion in the market-place and make them more competitive as a result of the research that takes place. I must point out, as I pointed out to the honourable member for Grey, that there has not been any real increase in funding for research. All the Rural Industries Research Bill does is to place a ceiling on the amount of money that will be made available, to establish selection committees and to consolidate rural research under one Act. It is worth remembering that this ceiling comes in place on rural research and it is the first time there has been a ceiling on the amount of money that the Government is prepared to commit to rural research. That matter was all too conveniently overlooked by the honourable member for Grey. The Government has committed itself only to spending $32m over the next five years in the area of rural research. Above that sum of money the industry must find its own costs. The sobering thought is that those small industries in rural Australia which most need additional money spent on research may well be the very industries which can ill afford to find that money and which will therefore receive the least. The amount is $32m. One of the major chemical companies in Australia alone spends $27m on research and development and much of that is related to agriculture. Let us not be uncharitable in our approach to this Bill tonight. Let me concede that it may well be that the Minister for Primary Industry is doing all he can and has delivered as complete a package as he is able to present in the House. What cannot be escaped is the fact that the Minister's colleagues have not always been as supportive of rural Australia as they would like rural Australia to believe. I quote from a statement made by the present Minister for Trade (Mr Dawkins) who, as the Minister for Finance, was at a time last year fiddling in research matters. The present Minister for Trade is in fact a diplomate from Roseworthy College, the most prestigious agriculture college in Australia, proudly located, may I add, in the electorate of Wakefield. In a submission to a joint working party of the CSIRO and the Department of Finance, the CSIRO complained that its funds were not coping with inflation to which Mr Dawkins made the following salient opposing point: CSIRO should redirect its resources away from the agricultural sector, and generally demonstrate its ability to change direction. That is bad enough, but to add insult to injury the Minister's colleague the Minister for Industry, Technology and Commerce (Senator Button) made the point in his contribution to a meeting of the CSIRO Officers Association that the CSIRO was spending more of its resources on agriculture than he felt was justified. He said: . . . and in particular the wish for CSIRO to be more involved in the practical problems of manufacturing . . . While the Minister for Primary Industry may present this legislation with the best intention in the world, the majority of his colleagues have treated agriculture with contempt. I conclude by making the point that I made in response to the honourable member for Grey. It was only this afternoon that the President of the Horticultural Council of Australia telephoned my office to say that if we were dealing tonight with the research Bills we ought at least be aware of the fact that at no time had he been consulted about the future of agricultural research alternatives and, furthermore, in another capacity as the President of the Australian Citrus Growers Federation he had submitted two years ago a proposal to the Government for research for the citrus industry and that proposal had been met with a deathly hush. I am aware, Mr Deputy Speaker, that we have been asked to confine our remarks tonight. For that reason, I will draw my remarks to a conclusion by reminding the House that the history of this nation and of agricultural expansion in this nation has been that of farmers being innovative and applying research to their individual crops. The Bill before the House does not address the problem of innovation as actively as it could. There is a desperate need for farmers to be encouraged to be innovative and for agricultural industry to be innovative if we are to survive in an increasingly cold trading climate. Mr CLEELAND(McEwen)(8.51) —I have never before had the privilege of following the honourable member for Wakefield (Mr Andrew) in a debate but I am glad that I now do because, quite frankly, he spent over 15 minutes discussing nothing. He forgot to mention the point that there has been a real increase in Commonwealth funding of 0.25 per cent. After listening to his speech one would have thought that the Government was neglecting and running away from our rural industry. The fact is that the Rural Industries Research Bill provides for another 0.25 per cent in funding, which is an increase, not a decrease. These Bills represent yet another important commitment by the Hawke Labor Government to agricultural industry. They will bring about improvements in the organisation and administration of existing rural industry research funds. In addition to the administrative and organisational improvements, the Bills provide for research funds on a matching basis up to a maximum contribution of 0.5 per cent of the gross value of production for each of the industries concerned. I have already indicated that there is an increase of 0.25 per cent over the miserly allocation which those opposite would offer if in government. So I find it very hard to stand here tonight as part of the Government, having listened to the shallow criticisms coming from the opposite side of the House. Mr Millar —You have the option of sitting down. Mr CLEELAND —The honourable members in cockies corner always spout forth. They are like a chook with no head. The proposed increase is an expression of faith by the Hawke Government in the future of Australia's farmers. We do not denigrate them at all. It is the recognition of the value of our rural industries to the Australian economy. For the second successive year Australian farmers have experienced good seasonal conditions. Livestock numbers, particularly sheep, are increasing and the wheat crop this year is the second largest on record. At the same time there has been an upturn in world economic activity. One would have thought that under these favourable conditions the rural sector would be looking at a very rosy future. This, unfortunately, is not the case; the aggregate net value of rural production in this financial year, after adjustment for inflation, is likely to be around 17 per cent below that of 1983-84. This places the index of the real net value of rural production some 8 per cent below the long term trend. There are three principal reasons for the decline in the net value of rural production. The first, and probably the most important, is the agricultural policies of Australia's major trading nations. The European Economic Community's protectionist policies and subsidisation of inefficient European agricultural industries have led to a glut of agricultural products on world markets. Much of our present rural industry was built on the premise that we would be the food bowl of the world, particularly of Great Britain, and Europe. The close bonds felt by most Australians to Great Britain led us to Gallipoli, where the cream of our youth bled for the glory of the Empire. In the Second World War our troops were again utilised to the advantage of Great Britain in a conflict of European origin. Our farmers were very active in keeping Great Britain alive during those terrible years. One would have thought that our sacrifices as a nation would have led to reciprocity and that our loyalty would have guaranteed our farmers a market in Europe, particularly in Great Britain, and that, indeed, loyalty and sacrifice were a two-way deal. Australia knows the history of what its sacrifice and loyalty to Europe and Great Britain in the past have produced. It has been found that our produce is denied access to European markets. Australia and New Zealand were again sacrificed to the glory of the Empire. Some glory, and some Empire! It is not as though our agricultural production is uncompetitive. Our farmers can produce cost effective goods and can compete fairly in any world market. Attempts in the past week to reopen discussions on the General Agreement on Tariffs and Trade have been blocked by the French. Surely there is a no more singular and isolationist nation than France, a nation where our war dead lie in their thousands, a nation which ignores the world and which, in the Pacific region, still acts in contempt of indigenous inhabitants' rights and wishes. The colonial mentality lives on in Europe and exacts a heavy toll from our farmers. The first problem I mentioned is the direct course of the second major problem; that is the high levels of accumulated stocks in nearly all major rural commodities. I refer to commodities which are being dumped at well below realistic cost in world markets. The third major problem concerns the increased costs of production. In the face of these difficulties farmers in Australia have demonstrated their capacity for change-not change for change's sake but change in response to economic reasons. Farmers are constantly reappraising their methods in response to economic circumstances. Many changes are quite small but in aggregate they represent the means by which farmers continually increase productivity in the face of adverse trends which have confronted them. Dalgety Farmers Ltd recently conducted market research which examined, among other things, farmer aspirations, productivity measures, input expenditure intentions, the type of service likely to be in demand in the future, and the availability of funds to meet the various demands of the farming community. Some 1,222 farmers were interviewed in all States except Tasmania. They were involved mainly in the beef, sheep and grain industries. Some of the results are of interest and, indeed, pertinent to this debate. More than 46 per cent of respondents expressed a positive interest in diversification, with grain producers more interested than sheep or beef producers. Fifty-three per cent of respondents under 50 years of age expressed a positive interest, compared with only 35 per cent over 50 years. Around 70 per cent of all beef, sheep, wheat and grain producers estimated that in the future they would be involved in more intensive farming methods. The availability of diversification and more intensive farming methods is in turn tied to rural research and the dissemination of research information to farmers. As the Minister for Primary Industry (Mr Kerin) indicated in his second reading speech, three recent inquiries into the role of the Commonwealth in rural research all recommended substantial changes. It is of interest to listen to those opposite who say that there has been no consultation. They have forgotten those three inquiries and the intensive consultation which was carried on with rural industry in the course of those inquiries. Changes recommended by those inquiries are now being recognised in the Bills before the House, particularly in regard to research conducted through the rural industry research funds. There was evidence to suggest that the funding of rural research has been declining in real terms in recent years, particularly the producers' and the Commonwealth's contributions, in spite of the 1976 recommendations by the Industries Assistance Commission that funding be maintained in real terms at the 1976 levels. There also appears to be scope for the more effective use of scarce resources in agricultural research. In a recent review of pasture, crop and animal systems initiated by the Standing Committee on Agriculture, it was concluded that greater integration and co-ordination and co-operation both within and between research organisations was needed. The review stated: The view of the working party is that currently there is too much fragmented single-objective research . . . There is a need to ensure that expenditure on research activities is rationalised in order to ensure that physical, biological and economic restraints to increasing the efficiency of agricultural production and marketing are approached in a co-ordinated manner. I believe it is a truism that if substantially more resources are to be devoted to rural research most will have to come from producers through an expanded rural industry research levy system. They are ultimately the beneficiaries of such research. For producers to be convinced that it is in their own interests to expand rural research funding through an expanded levy system they must be convinced, first, that those funds will be used effectively, implying a possible review of the organisation and the setting of priorities for research. Second, they must be convinced that expanded producer contributions will not just be offset by lower direct government contributions. The challenges for Australian agriculture are not short term. There is no panacea for immediately improving the current situation of low farm income levels. To improve the income situation of farmers, there will need to be progress in all areas where policies have a bearing. There is no short term pick-up in sight in the world trading environment but the longer term is more promising. This Government recognises the necessity of a more coherent, integrated national approach to rural research. Agriculture has shown that it can battle and adjust to fluctuating economic fortunes. In that battle it has the support of the Government. The Government is serious about attacking farm costs, improving farm productivity and taking the tension out of the cost-price squeeze. This Bill represents a significant expansion in research expenditure and at the same time rationalises expenditure on research activities. I commend the Bill to the House. Mr HAWKER(Wannon)(9.02) —In commencing my speech tonight, I will take up a couple of the points made by the honourable member for McEwen (Mr Cleeland). The first point, which I think he completely missed, related to the issue of Commonwealth funding. Under this legislation as proposed there will in fact be a ceiling on the funding- Mr Cleeland —An increase. Mr HAWKER —No, a ceiling. Under the former Government's arrangements there was no ceiling and there was generally funding on a one to one basis to the level that the industry could match. Therefore, to talk about increases is really rather spurious. The point is that under this legislation there will be a ceiling and, once that ceiling is reached, as the Minister for Primary Industry (Mr Kerin) pointed out in his second reading speech, it is up to the industry to supply all the funding over that amount. I must admit that in listening to his speech I was fascinated to find that World War I and World War II came into rural research. He may explain that to us one day. He also talked about the Government being serious about attacking farm costs. The National Farmers Federation has given the Government a very good little booklet which explains how to attack farm costs and points out why they are making agriculture so uncompetitive on world markets. I understand that, despite at least two meetings with the executive of the NFF, senior members of the Government, including the Minister for Primary Industry and the Prime Minister (Mr Hawke), have rejected the basic arguments put in that farm costs document. I therefore find it hard to understand how the Minister can suggest that this Government is serious about trying to help primary industries to tackle the farm costs problem. In speaking to these Bills tonight, I will confine my remarks to the Rural Industries Research Bill. In so doing, I support the Deputy Leader of the National Party of Australia, the honourable member for Gwydir (Mr Hunt), and the honourable member for Wakefield (Mr Andrew) in their comments. It is interesting to note that the Minister in his second reading speech when introducing these Bills summed up the position rather eloquently when, concerning research, he said: It is necessary . . . that rural research is organised in a way which will ensure that there is adequate research investment, that the greatest possible returns are achieved from each dollar spent, and that those who administer and undertake research are fully accountable to the providers of funds. That is an excellent aim and I certainly hope that these Bills will achieve that. However, he went on to talk about the funding levels. I have already mentioned this in response to what the honourable member for McEwen said. I suggest that as the current annual gross value of primary production in Australia is about $14 billion, 0.5 per cent of which is $70m, the Government does in fact have a bit of a commitment to match. Although I know it is over five years, $70m is much more than the $32.6m mentioned in the second reading speech. Of course, the Minister states that under these arrangements wool is at present excluded. But I just draw the attention of the House to some comments about wool research made at the annual meeting of the Wool Council of Australia and reported tonight as follows: Wool industry leaders called on the Federal Government today to stop diverting funds for vital rural industry research into other areas of research. This was stated by the Chairman of the Australian Wool Corporation, Mr Asimus, and other wool growers. Mr Asimus is also reported as saying: Budget pressure on the CSIRO in recent years had gone far enough and it was time for the wool industry to 'stand up and start beating the drum' to stop a drift of funding from rural research. Also at the meeting one of the members of the Board of the Corporation, Mr Silcock, said that 'an example of CSIRO fund cutting was a cut over two years of $500,000, or about half, in funds for the biological de-fleecing program'. I suggest that if we are to make a serious attack on the costs facing wool growers in particular these are the sorts of research projects that are urgently needed to help cut the costs. On the subject of the Commonwealth Scientific and Industrial Research Organisation, which has already been mentioned by my colleagues, I refer honourable members to a question on notice to the Minister for Science (Mr Barry Jones) from the honourable member for Gwydir. In answer to whether CSIRO had been given a direction to change the emphasis of its funding, the Minister said: No formal instruction has been given to CSIRO to alter the proportion of its funds devoted to agricultural research but I have suggested-- I like the way he puts it- to CSIRO that it should work towards deploying resources away from agriculture, mineral, energy and water resource research-- In fact, he cites the figure for the current percentage of the CSIRO's funds going to rural industries as 31.6 per cent. Under his proposal, that will be cut back to 29 per cent. The Government should look again when it talks about how serious it is in supporting the rural industries. The importance of rural research is found if one reads various reports that have already been alluded to. The Balderstone Working Group report to the Minister for Primary Industry in September 1982 entitled 'Agricultural Policy-Issues and options for the 1980s' touched on a number of matters of rural research and in particular the question of government funding and who should actually pay for research. In its report it is stated: The Group considers there are a number of valid arguments in support of public funding: These arguments are summed up in four points as follows: Individual farms are too small to carry out advanced agricultural research since the expenditure threshold for scientists and equipment is beyond the capacity of the individual farm. The community, by taking a longer term and sometimes different perspective on potential research benefits, is often prepared to fund research activities which would not be considered 'economic' by private firms. Private firms often cannot capture the gains from research, especially if the new knowledge cannot be incorporated in a patent . . . I take the point made by the honourable member for Wakefield about plant variety rights. We have had one inquiry after another into this matter. The former Government introduced some legislation for plant variety rights back in about 1982, but still there has been no action. I understand from what the honourable member has said tonight that there is to be another inquiry. The Minister stated, even before he was a member of the Government, that he believed that plant variety rights were worthwhile, certainly in some areas. I hope that the Minister will take this point on board and have another go at the question and that he will not keep putting it into the too hard basket. The matter has been inquired into over and again. If the answers are not known now, they never will be known. The fourth argument which the Balderstone report put in favour of public funding was: Externalities justify public funding. That is, publicly funded research is needed in the areas of health, safety and 'quality of life' . . . The group said: Overall, the Group believes that agricultural research funding should be increased and that increased expenditure should be concentrated on applied research. The benefits producers derive from research justify an increase in their proportionate contribution to research funding. The Commonwealth should also significantly increase its overall funding of agricultural research. The Group considers that research is an appropriate area for providing assistance to raise farmer incomes on the grounds discussed . . . in another part of the report. I think that is very important, because we have mentioned farm costs and this is very much in line with how the Federal Government can assist in alleviating farm costs. There have been several reports in a similar vein on this matter. As time is rather limited, I will not go into too much detail. However, the October 1982 report of the Senate Standing Committee on National Resources says quite a bit about the importance of agricultural research, mentioning some of the successes in the past and how it is important to continue with it. When looking at the question of economic analysis of whether research can be justified, one should look at the Industries Assistance Commission report in 1976 called 'Financing Rural Research'. It states: Economic analyses in a number of countries point to agricultural research being highly profitable and having a significant effect on the rate of productivity increase. So there are very good grounds for the Commonwealth and the States to continue assisting in rural research. We have seen some excellent innovations over the years and as the honourable member for Wakefield pointed out, many of those innovations were at the initiative of individual farmers. There are a couple of important parts of this Bill that I hope the Minister for Primary Industry will take on board. The first is that in order for this legislation to achieve what he really wants it to and what we hope it will do, it is vitally important that the best people possible be selected for the positions on the research councils. I am sure that the Minister is conscious of this, but I hope that he can really achieve it. If it is not achieved, a lot of the effort involved in this legislative change will be wasted. There is no doubt that Australia's primary industry can have a great future, but that future will depend to a very large extent on the success of current and future agricultural research. Whilst supporting this Bill, I also support the amendment moved by the Deputy Leader of the National Party. I realise that the Minister has been very busy with a number of matters but, nonetheless, I think he ought to consider how he approaches his legislative program and give himself enough time so that he can consult the industries that will be affected by this legislation. Mr SNOW(Eden-Monaro)(9.13) —A cynic has said that life is extinct on other planets because their scientists were more advanced than ours. Tonight, we are talking of science and development which are creative rather than destructive. The Minister for Primary Industry (Mr Kerin) has introduced these seven Bills which are being debated cognately. I wish to talk in particular on the Rural Industries Research Bill 1985. As with many other useful rural industry Bills introduced by this Minister, the Bill aims to rationalise administration and organisation of a government facility, in this case, the rural industries research trust funds. It aims to reduce administrative costs for both industry and government. The present legislation, covering 11 rural industry research funds, will be replaced by one Act. This will reduce the volume of research fund legislation and will mean that new research funds can be added if industries seek them and the Government agrees. This single Act will clearly specify the objectives for rural industry research funds and there will be a broader definition of research which can be funded. New selection arrangements will be adopted to make sure that the best available people are nominated for appointment to research fund councils. In order that these rural research funds are made more responsive to their industries, the chairpersons will, in future, formally present the fund's annual report to the executive of the relevant industry body. They will have to account directly for their performance. There will also be an annual co-ordination meeting for all research fund chairpersons so that matters of common interest can be discussed. Government and industry presently each contribute about $32m to industry research. In addition, the Government provides further rural research funds through the Commonwealth Scientific and Industrial Research Organisation, universities and colleges, and the Bureau of Agricultural Economics. There have been a series of reviews, papers and discussions in recent years about whether there is enough rural research in Australia. They all agree that research and development are needed if rural industries are to be profitable. They agree that many benefits flow to rural industries and the community from rural research. Successful programs in the past, such as the control of rabbit numbers and of some other rural pests, such as prickly pear, give dramatic and highly visible evidence of the benefits of research. An example of the cost benefits of research to rural industry is research on the control of feral animals. Feral animal populations are increasing dramatically. The introduction of the exotic disease foot and mouth into presently uncontrollable feral animal populations would have disastrous economic consequences for the entire country. In addition to the dangers from these exotic diseases, farmers are suffering heavy stock losses from dog, fox and pig attacks, and the community as a whole is already affected by these losses in rural income and by the loss of many areas of natural flora and fauna as a result of feral pig rootings and the decimation of native wildlife. A recent search conference which I convened at Snowy Station, Dalgety, has recommended species plans for each feral animal threat. This sort of plan requires a clear statement of the threat and a proposal for action. The conference sought the co-operation and financial involvement not only of the Government, but also of primary industries-industries which have a vested interest in feral animal control. The Bill allows for such a partnership. Berenice Walters of the Australian Native Dog Training Society has estimated, for instance, that the pure dingo will eventually disappear due to cross breeding in the wild with the feral dog. Some farmers are saying that this has already happened. Mr Kerin —Feral goats are a big problem. Mr SNOW —As the Minister said, feral goats are developing into a real problem. Mr Ian Cameron —Especially in here. Mr SNOW —Not only in this place. Feral goats and wild boars are to be found in this region. They are causing a lot of damage to not only our native flora and fauna but also our livestock. Research into such subjects as plant genetics and molecular biology-aimed at producing more disease resistant plant varieties, higher yielding and drought resistant plants-soil erosion, salinity and biological control of pests and weeds will have to happen if the significant contribution of agriculture to the national economy is to be maintained. The report of the Senate Standing Committee on National Resources, issued in October 1982, points to the obvious gains to be made from rural research and development. This Bill will mean that more dollars will be gained from each dollar spent. It will also mean that those who administer and undertake research will be fully accountable to the provider of funds. The Senate Committee was alarmed to find that, despite the continuing need for rural research, Commonwealth support for research was declining in real terms. The money available to rural industry research funds fell, under the previous Liberal Government, by a staggering $10.1m between 1975 and 1980. I am pleased that the present Government recognises the importance of rural research to rural industry and, accordingly, has increased research funding in the last Budget. Subject to Budget circumstances, there is scope in this Bill for government contributions to rural research councils to be doubled over the next five years. This means that industries concerned with rural research will be able to seek matched levy increases of up to 0.5 per cent of the gross value of the production of their industries. Dairy farmers have told me recently that although they fully recognise the need for reduced production, this does not take away the need for research from which our export and domestic markets can benefit. The Bill does not apply to fisheries at this stage as discussions with the fishing industry on the necessary organisational and administrative arrangements are still under way. Under the Bill research committees will be replaced by research councils and the councils will aim to increase commercial returns to the industries concerned by improving the production, processing, storage, transport or marketing of relevant agricultural commodities. When agreement is reached with the fishing industry for its inclusion in these new arrangements, major advantages could result from research on preservation of the resource, catch methods, development of new fisheries and marketing techniques. The largest trawl fishery in Australia is located in Eden-Monaro. Suggestions by the Trawler Owners Association to introduce the new viatel system of Telecom Australia to provide increased efficiency and cost savings in the marketing of fresh fish would greatly benefit trawl fishermen who are presently suffering from economic distress. In addition to this new idea conceived by members of the Trawler Owners Association for viatel marketing of fresh fish, fishermen in my electorate have already led the industry in many areas of research and development. Jo Greco of the Ulladulla Fishermen's Co-operative is managing one of the most highly developed tuna sashimi industries in Australia. Les Warren of Eden, a tuna fisherman, is attempting to develop the skipjack fishery as an alternative to the southern bluefin tuna fishery. Peter Bell of the Ulladulla Fishermen's Co-operative is developing the technique of handling and marketing the royal red prawn. All these ventures in Eden-Monaro will gain substantial export income for Australia and research money will have been well spent. This Government has developed the new arrangements for rural research following calls over many years for improvements in the operation of rural industry research funds. These calls have come from industry organisations such as the National Farmers Federation. I commend the Minister for introducing this Bill and I support it. Mr IAN CAMERON(Maranoa)(9.24) —It is my pleasure tonight to speak to the legislation before the House. Before I get into the debate on the legislation I congratulate the honourable member for Eden-Monaro (Mr Snow) for bringing up the problem of the wild pigs-feral animals- that we have in this country. This is a matter that he continues to bring up and I support him one hundred per cent in his efforts to have research programs set up so that we might start to spend money on eradicating some of these unwanted animals in Australia. A program has recently been established near Rockhampton in Queensland to look at ways and means of eradicating the wild pig. In the area where I live wild pigs are a tremendous problem. Their numbers continue to multiply and they continue to move further and further north. They are now to be found practically across the length and breadth of Australia. This is certainly one of those areas that needs close attention. I just hope that while the Minister for Primary Industry (Mr Kerin) has his present portfolio he will give very serious consideration to allocating some funds to that. The previous Minister was in the process of doing that and I would just like to think the present Minister might allocate some funds at least in an attempt to eradicate some of these feral animals. The legislation before us covers a very important aspect of farming in the 1980s. It is tremendously important for us to have funds for research. I always think it is a pity that governments have to get involved in this area. Unfortunately, levies have to be compulsory. None of us likes paying these things and, when levies are payable voluntarily, governments never seem able to collect enough funds to run research programs. But governments do get involved and, once they are involved, they start setting up committees and appointing all sorts of people. To my mind, that just creates unnecessary bureaucracy and it costs industry quite a deal of money to run these research councils. I congratulate the Minister. He is prepared to consolidate and look at streamlining the committees that apparently we must have. This legislation covers a whole range of industries, most of which are represented in the great electorate of Maranoa. We have enormous beef production, wool production, cotton production, wine production and tobacco production. We even have fisheries, although separate legislation for fisheries is to be brought in. There is tremendous interest in Australia now in re-stocking our inland waterways. Even the Murray cod can now be purchased in small plastic bags and delivered to isolated properties and water holes throughout Maranoa. I am hopeful that, in the future, people with properties will take up the offers that the Commonwealth Scientific and Industrial Research Organisation and others are now making and purchase some of these fish and put them in the dams and streams of inland Australia to see whether we cannot witness a resurgence and have the enormous amounts of stock that used to be there. As time goes by I think we will see a tremendous increase in stock in that area. The Cattle Council of Australia, which met in Canberra yesterday and today, is to spend at least $12.3m on meat research. The great beef industry of this country is continually looking towards trying to improve production methods. I was fortunate enough to see today Mr Dougal Cameron from the Aronui feedlot at Dalby in my electorate and also John Moore, one of the managers of Beef City. These are the two major feedlots on the Downs. These people spend quite a deal of private money on research and people within the Department of Primary Industry play a tremendous role in this area. As a farmer I have always believed that we probably do not pay enough attention to the individual farmer who carries out enormous basic research and comes forward with many improved techniques for farming. Going right back to the Sunshine header, the first header was developed in Australia by a farmer without any government assistance and the stump jump plough was also developed by an individual. We continue to see an enormous range of new and improved specialised machinery that is developed by private individuals coming on to the market. I often think it is a pity that they are not given a bit more encouragement and even some government help at times. Of course, we must praise fully those people employed in research because they devote an enormous amount of time and effort and they are dedicated workers. An enormous amount of follow-through work is involved in research to achieve some improvements in wheat, barley, tobacco or grape varieties. Researchers have to spend probably 10 years researching one variety to get an improvement. It is also important to note that State Department of Primary Industries advisers play a role in this area. There is not much point in spending millions on research if we cannot get through to the farmer exactly what innovations are available to him. This area is probably the most important, because there is an enormous range of computerised products and new types of plant and machinery available to us to increase production and unless the farmers are educated in their use those products are really of no assistance to us whatever. I turn now to another important aspect. Because Australia is very much an exporting country in the primary field-that includes mining as well as agriculture-I believe that there is still a lot of room for us to encourage the research and development of new markets. Honourable members spoke about this matter a few weeks ago. I think the Government ought to be spending a lot more money than it is in these areas. People in industries such as the pork industry have not been consulted on these new Bills. It is a pity that the Minister for Primary Industry for some strange reason has seen fit to rush them into the House. Some of the producer bodies have not been satisfied with the new arrangements. The pork producers, who are not members of the National Farmers Federation, feel they have been left out. Of course, the National Farmers Federation plays an important part in the structure of agriculture today. This matter has been mentioned by previous speakers. I hope that the Minister picks up some of the problems of these industries and attempts to correct them. I will mention some other matters. Unfortunately the Labor Government has not adequately financed the Commonwealth Scientific and Industrial Research Organisation. The Minister for Science (Mr Barry Jones) has just returned from an extensive tour of Israel. I do not know how many Mercedes he used, but I guess he had a decent look around. He has come back here fired with enthusiasm about irrigation and water. I do not believe any government in the history of this country has overlooked the adequate funding of water more than the Hawke socialist Government. It is a disgrace that precious little money has been allocated to irrigation. No industry in Australia today is doing more for inland Australia, its towns and their residents than the irrigation industry. It does not matter where a person goes, be it the Maranoa, Goondiwindi, St George or Emerald areas, wherever there is water there is irrigation. Many high producing farmers are growing sorghum, cotton, oil seeds and so on. Hundreds of people are employed and are supplementing these high technology farms with services, such as aerial spraying, fertilising, et cetera. What does the Labor Government do for water in this country? Absolutely nothing. It has got only one dam under construction. Fortunately it is in Queensland. It is not in my electorate; I wish it were. But at least it is in Queensland. I guess that is something. Mr Braithwaite —Fortunately the Fraser Government put that in. Mr IAN CAMERON —Yes, the last Government put that in. I guess the Labor Government has carried it on. But the only thing it seems to be interested in these days is building high tanks in some of the towns around the place and supplying local towns with water. That is the only water program the Government has. I think it is a disgrace. On behalf of the farmers in this country, I hope that the Minister for Primary Industry makes further attempts to have more water storage and dams built. I know he has some difficult arguments in Cabinet. I support the Minister for Science in his endeavours. Obviously he will be attempting to put his point forward to Cabinet. He has not had much luck yet, but no doubt he will continue to try. The Australian National Animal Health Laboratory has been established in Victoria. The high security research centre is still not under way. The taxpayers have spent $350m for this installation and we still do not see too much happening there. Some research is taking place. Mr McVeigh —Not too much. Mr IAN CAMERON —Not too much. We have seen an enormous expenditure of funds. It has cost nearly as much as the new Parliament House and it is damn near as big, but we do not see too much happening. I notice that the Minister for Primary Industry is looking a bit glum. I suggest that he crank this installation up. Surely some good must come out of it eventually. The other matter that must be mentioned is the brucellosis eradication program. This program must be commended. An enormous amount of research funds has been expended. Only about 20 or 30 very big pastoral properties are left in Queensland until the whole State is declared free. This sort of work is essential in order for us to continue to maintain our products on the world market. I conclude by mentioning an article written by Barbara Moffet of the National Geographic Society News Service. Some honourable members on the other side of the House refer to us as cockies corner. I can assure them that there are some pretty smart cockies on this side of the House. Mr McVeigh —You are one of the best. Mr IAN CAMERON —I thank the honourable member. I have been trying to convince everybody in the House about that. I find it hard. Not too many people will believe me when I tell them that. It is interesting to look at the article which appears in today's Australian in order to see what may happen in the future. It is headed 'Sci-fi miracles will feed world of 2010'. It states: The 21st century corn plant should be able to resist insects, frost, and drought, and brim with nutrition, unsullied by commercial fertilisers. It may also bear a microchip, linked to a computerised irrigation system. I emphasise the word 'irrigation', Ministers because you guys are not too keen about that. I would like to see a bit more of it, particularly in Maranoa. I would like to see a few more dams in that part of the world as it is very dry and there is a big drought on. I know that the Government has cut the funding for drought aid. We now need $9m for the State, which is three times more than the previous Government allowed. The producers in that State will find it difficult with the onset of winter. The article continues: The 21st century farmer may step out the door and aim an infrared gun at this crop to determine if it is dry, or at his animals to see if they are feverish. He may use seawater for irrigation-- that is something you guys should look at- and only the sun for power . . . data gather by orbiting satellites-- That brings me to another subject. It is a fact that the National program has had some adverse publicity of late. Those of us who live in inland Australia hope to receive all sorts of information via satellite. The Prime Minister (Mr Hawke) today had a meeting with some of the television licence holders who basically live in Sydney. Presently people who live in Western Queensland are getting New South Wales weather reports. The satellite weather pictures come to us daily which is a tremendous breakthrough for us. But what do we get in Western Queensland? We get the weather for Sydney, which is of no use to us. Mr McVeigh —We're not interested in it. Mr IAN CAMERON —We are not interested. I would like to see the Minister for Primary Industry and the Minister for Communications (Mr Duffy) make some changes in that area. How on earth can we do anything in agriculture these days if we do not get adequate weather forecasts? It is important that we also maintain the regionalisation of television from the satellite. It is important with the ever-increasing amount of information that will come off the satellite that it remain regionalised. We do not want to see the Packers and Murdochs get control of the existing satellite; we do not want to see a backyard deal done with the Prime Minister on these licences; we want to see provincial licences maintained and we want to see provincial Queensland and other States receive a signal from that area which will be picked up, transmitted and received. Mr DEPUTY SPEAKER(Mr Mountford) —Order! I ask the honourable member to come back to the content of the Bills. Mr IAN CAMERON —It is all to do with the weather and satellites. We farmers will be using satellites for transmitting all sorts of data. I conclude by quoting from the article in the Australian. In it Mr Rasmussen states: Agriculture as we know it would collapse if we lost our supply of fossil fuels . . . within 20 to 50 years, solar energy will open up the next phase-- I condemn the Hawke socialist Government for parity pricing and putting the price of fuel up by 4c to 5c a litre. There is no point in farmers spending millions of dollars on research on the one hand if on the other hand the Government is going to rip it out of us by increasing taxes on fuel and other things. I have much pleasure in supporting the amendment moved by the honourable member for Gwydir (Mr Hunt), who is the Deputy Leader of the National Party of Australia and shadow Minister for Primary Industry. I have much pleasure in supporting the amendment that he has so ably put forward. Mr EWEN CAMERON(Indi)(9.39) —Tonight we are debating the Rural Industries Research Bill, the Rural Industries Research (Transitional Provisions and Consequential Amendments) Bill, the Tobacco Charge (No. 1) Amendment Bill, the Tobacco Charge (No. 2) Amendment Bill, the Tobacco Charge (No. 3) Amendment Bill, the Poultry Industry Levy Amendment Bill and the Poultry Industry Assistance Amendment Bill. These Bills affect various primary industries. I wish to confine my remarks to the Tobacco Charge (No. 1) Amendment Bill, the Tobacco Charge (No. 2) Amendment Bill and the Tobacco Charge (No. 3) Amendment Bill. Tobacco growing is a major industry in the electorate of Indi. In fact, of the 292 Victorian tobacco quota holders, all except one are situated in this electorate. The industry in Victoria is a major employer. On 1978-79 figures, the latest available, more than 1,500 people are employed in tobacco growing and close to 90 are employed in tobacco research and engineering. The area produces approximately 37 per cent of Australia's tobacco, with a gross return of $25m. The coalition is not opposing these Bills but there are some matters of importance to tobacco growers which must be raised at this point. Because of a declining level of tobacco production, the industry's contribution to research was increased from 2.5c to 3.5c a kilogram earlier this year. The Commonwealth Government agreed to match this levy. If this step had not been taken there would have been insufficient funds to meet the research commitments of the industry. The tobacco industry is most concerned that the necessity may arise to increase the levy again and there is no provision in these Bills for the Government to continue to match this contribution beyond the present level. I quote a paragraph from a telex sent to concerned members of this House by the President of the Tobacco Growers Council of Australia: The tobacco industry warrants special consideration for research funding for two main reasons: -The industry is relatively small and already levies itself proportionately far more for research than other industries. The Government strongly supports industry research endeavours. -The Industry is currently facing very severe adjustments pressures as a result of the declining levels of assistance received. In such an environment research results are crucially important in cushioning some of the worst effects of the adjustment pressures. It is important for the Government to set to rest the industry's fears on this matter. Another area of concern in the industry is the cutback in membership of the Tobacco Research Council, with a possible imbalance resulting in representation from particular sections of the industry. Growers in my electorate are worried that they may not have a representative on the Council and thus this important growing area will suffer from a lack of communication. They feel that it is important for the people who actually contribute funds to have a significant say as to how the funds are spent. The growers would also like to have some form of assurance from the Government that cost recovery will not get out of hand. There is concern that, as the cost of the Australian Tobacco Board is deducted from the grower contribution prior to the matching grant by the Commonwealth Government, cost escalation could result in less finance being devoted to research projects. Growers are also concerned that financial management and associated costs within the Department of Primary Industry may eat away at their contribution prior to the Government matching that contribution. Late last year the Victorian Government decided to phase out funding of the Ovens Tobacco Research Station at Myrtleford over a period of three years. The decision was made despite pre-election and post-election promises and undertakings by the Australian Labor Party and the State Minister for Agriculture. The tobacco growers of Victoria wrote to the Victorian Premier pointing out the need to maintain a viable tobacco leaf industry in north-eastern Victoria. They pointed out that this was necessary to meet the needs of the market, to provide employment opportunities for hundreds of people in the region and to allow tobacco leaf growers to continue in their legitimate pursuit of earning an income. The growers pointed out that research plays a vital part in maintaining viability, just as it does with all agricultural and industrial pursuits. The Victorian State Government collects $80m a year in tobacco licensing fees and the Commonwealth Government collects $1,000m a year from excise imposed on tobacco and tobacco products. The growers quoted from a letter dated 22 March 1982 written by the endorsed Australian Labor Party candidate for the State seat of Benambra, which covers this area. The candidate said: A Labor Government will place greater emphasis upon research which it is felt is not adequately catered for at the present time. In your industry, greater amounts will be provided for research into crop damaging diseases and the improvement of productivity on a tonne/hectare basis . . . your members may be rest assured that nothing will be done by a Cain Labor Government which will jeopardise the incomes, well being and welfare of the tobacco industry as an integral part of rural production in Victoria. In view of these assurances which were made on behalf of the Victorian Government, it is difficult to accept its actions in withdrawing funding from the tobacco research area. The growers have had a number of consultations with the former State Minister for Agriculture about research funding and other matters; however, they have not had a favourable answer to their repeated requests for an opportunity to talk to Premier Cain about the situation. It is understandable that Victorian tobacco producers are deeply concerned that the Commonwealth Government may also let them down. The tobacco research team at Myrtleford is conducting several programs in 1985. These include research into the control of insect pests by the use of insecticides. Field evaluations are carried out into new insecticides as they come to hand. As well as assessment into the control of insects, a major objective of this program is to improve the elimination of residues and the reduction of hazards to users by the use of biologically active and specific materials which degrade rapidly and completely. Research is continuing into the control of black root rot, which is a major threat to the industry. The 1983 annual report of the Tobacco Board states: The soil-borne disease black root rot was identified on approximately one third of tobacco farms (in Victoria) during 1983, and was associated with some 20 per cent loss of production in lower valley areas, which were those worst affected. The disease is being combated by soil fumigation and the development of plant varieties which are not so susceptible to the rot. Another project is looking at the control of alkaloid levels and particulate matter index in tobacco. In other words, the industry is investigating plants which have lowered levels of tars and nicotines in leaf and smoke. As is the case with most research work, the findings and solutions which arise as a result of the work often have applications in industry and projects outside the immediate area of investigation. It is interesting at this point to take a brief look at reports from America, where investigations are being carried out into edible tobacco protein. The January 1979 issue of the magazine Crops and Soils carries an article about research that might eventually lead to the use of protein extracts from tobacco leaf as human food, while leaving the residue for smoking or possibly for an animal feed. The writer of the article, a former professor of biology at the University of California, Samuel Wildman, together with several of his colleagues, in 1980 entered into a joint venture with the North Carolina Farm Bureau Federation to form a company called Leaf Protein International. The firm, together with General Foods Corporation, assembled a pilot plant operation to extract and crystallise protein from young, rapidly growing tobacco plants. A patent on the process used for doing this was applied for. This protein, known as fraction I protein, is reported as having excellent nutritional value. Of enormous significance is the fact that the protein had no taste, colour or odour. Tests have shown that the product can be whipped, gelled, emulsified or heat-set readily. This means that it could be added to soft drinks-thereby giving them a food value-or it could be added to a variety of foods such as cereals, soups, frozen toppings and salad dressings, improving their nutritional value. While initially the process of extracting protein I was very expensive, further experimentation has decreased the expense and made it into a more viable proposition. If tobacco were to be grown as a food source, it would be grown in a different fashion from what it is now. The farmer would sow pelleted seed directly and establish a stand of more than 150,000 tobacco plants per acre. In about six weeks the plants would grow to a height of about 18 to 20 inches. These would then be harvested, leaving a stump to sprout a new crop of stalks and leaves which could be harvested again in about another six weeks. It is estimated that the plants would yield 66 tons of fresh tobacco leaf and shoots per acre in a growing season of six to eight months. The plants would be harvested before they had accumulated nicotine. If a food formulation is composed of 10 per cent tobacco fraction I, the possible nicotine contamination would be two parts per billion. In comparison, vegetables such as tomato, potato, capsicum and eggplant have several parts per million of nicotine in the edible parts. Comparison tests have been run to compare fraction I protein obtained from tobacco leaves with soy proteins and egg white. The fraction I material had the highest concentration of crude protein. In an article printed in the Journal of Agricultural Chemistry 1985, volume 33 No. 1, it is stated: The high purity and natural value of Fraction 1 protein also make it suitable in medical application after desalting . . . High purity also assures a long shelf life from Fraction 1 protein. The present study demonstrated that Fraction 1 protein possesses functional properties superior to egg white and soy protein isolates in the aspects examined, and could replace or supplement egg white and soy protein isolate in existing food systems. In Crops and Soils magazine of January 1979 S. G. Wildman said: Patients with aggravated kidney disease need to undergo frequent hemodialysis to wash the sodium, potassium and other materials from their blood so they can stay alive. Such patients need to severely restrict their intake of sodium and potassium. But these are present in all other protein sources. If Fraction 1 protein were to be substituted for the sources of protein kidney patients now consume, they might need hemodialysis much less frequently than the two or three times per week that is now common. Another possible use of Fraction 1 protein is as a source for artificial milk for infants that are allergic to cow's milk and who do not have a readily available source of human milk. Other research into the use of tobacco leaf as a food source is being conducted in France, Italy, Czechoslovakia and Russia. It has been suggested that it may take time to develop consumer acceptance of an edible product derived from tobacco, and its first use may come from developing countries where there is a greater need for protein sources. However, tobacco must be seen as a significant source of protein for future generations. Mr Deputy Speaker, as you can see, continued research in the tobacco growing industry is of the utmost importance. Mr KERIN(Werriwa-Minister for Primary Industry)(9.53) —I thank the honourable members who have contributed to this debate on the Rural Industries Research Bill and cognate Bills, most of which has centred on the research aspects. The previous speaker, of course, concentrated on the tobacco part of the cognate Bills we are discussing. I would like first of all to make a statement on the principles with respect to research. People often, in discussing agricultural policies, say that one of the most important things for any government to do is to find ways and means of assisting the sector across the board. This issue has arisen particularly with respect to the tariff compensation debate that has raged over the last 10 or 15 years in terms of agricultural policy making. In that context and also from any perspective I think it must be said that one of the best ways the public, the Government and the taxpayers can assist the rural sector is with respect to rural research. As honourable members have pointed out-I think the honourable member for Wannon (Mr Hawker) particularly mentioned this-an individual farmer does not have the funds to conduct his own research. Agriculture is atomistic in terms of ownership and this proposal is a very sensible and proper way for the public and the taxpayer to assist this sector overall. What the Bills relate to in terms of rural research is the fact that the Government has conducted the first major review of agricultural research in this country for about 30 years, when the first rural industry research funds were put into place. That is not to say that there has not been a lot of reviewing, but basically the Government has done nothing about it. While honourable members opposite may criticise the Government for, to quote one speaker, making shuffling steps, we have actually taken action after a lot of discussion, review and inquiry into the funding and administration of rural research. Of course, we have now moved to provide funds on a one for one basis, up to 0.5 per cent gross value of production. In the last two years, in terms of funds disbursed from my portfolio, the amount of money going to rural research has gone up by 33 per cent, which is considerably more than the increase in the consumer price index, which is what everyone seems to want to measure everything against these days, and we have been able to achieve quite a lot. If the target of 0.5 per cent GVP is achieved over five years it will substantially increase the funding going from the public to rural research. At the outset I reject the amendment put forward by the Opposition, most of which centred on consultation. The issues have been examined, reviewed and discussed with the industry over many years. As I have already said, there have been many inquiries, committee reports and criticisms raised by rural industry bodies and other interested parties, in each case with widespread discussion and consultation with the industries concerned. We reached the stage at which, after many years of coalition failure to respond to these issues, the Government had to act. It has done so, picking all these issues which have been the subject of debate over many years and which were addressed by the working party formed to examine meat industry research and which led to the development of the Australian Meat and Live-stock Research and Development Corporation. Specifically in regard to the Bills before us, there has been consultation for some months. I wrote to the President of the National Farmers Federation and the Rural Industry Research Fund Chairman on 19 December and considerable consultation has taken place with the industries affected since the latter half of 1984 on these already well aired issues. The consultation was disrupted by the 1984 election. Nevertheless, the consultation process has been considerable. I recall once on an inspection issue that the Opposition claimed there had been no consultation with the industry-the dairy industry was the case in point. When I checked I found there had been 55 consultations with the dairy industry by my Department. Often when the industry says there has been no consultation, what it is really saying is that it has not been able to get its own way on every point. I actually made concessions during consultations with the pork producers and the poultry industry with respect to reducing NFF membership on the core committee. This basically represents a non-paternal approach to industry research funding. The Commonwealth has to ensure that there is accountability because we are providing half of the funds, but by and large we are putting those people who put in the other half of the funds into the box seat. The core committee comprises one independent chairman, one NFF member, one person from the Australian Agricultural Council and one person picked for expertise in general research matters. So at least the National Farmers Federation appointee is a farmer and it is quite probable that the AAC representative will have a strong farmer-research orientation. We add up to three people from the core committee on to the selection committee who are from the industry. The honourable member for Indi (Mr Ewen Cameron) raised the problem of the tobacco industry as its membership is up to three. As tobacco is grown in three areas of the country, I see no problem in having each area represented on the selection committee. The selection committee selects the industry council of five to nine members, but the expertise, characteristics, qualifications and capabilities represented are determined by the selection committee. So at every stage in the process of setting these up there is a clear producer majority and producers will be put in the box seat in terms of directing research. For the accountability function we require that there be a strategic plan submitted to the Government and an annual research program so that we do not have the industry tearing off one year on this issue and one year on that issue and so it can see through the very basic characteristic of research; that is, that there should be ongoing research programs of more than one, two, three or four years. I think that requirement is not paternal but is sensible and disciplined. The burdens have been talked about and I think I have already covered the contributions that have been made. Opposition members have made some surprising claims about the Government's funding of agricultural research. Let me remind honourable members that over the past two years, as I have already said, the Government and the relevant industries have increased on a dollar for dollar basis the funding for research directed by the RIRFs by about $20m, up to a total of over $60m. I also draw the attention of honourable members to an address by the Chairman of the Commonwealth Scientific and Industrial Research Organisation on 12 September 1984. In this address Dr Wild estimated that over the previous seven years, six of which the honourable members opposite presided over, CSIRO operational allocations had increased by an average of 3.7 per cent per annum compared with an average CPI increase of 9 per cent per annum-a real reduction of 35 per cent in operating terms. When I was on the CSIRO Advisory Council I was well aware of what the previous Government did to the CSIRO budget. Various honourable members raised the question of the tobacco industry. The tobacco industry receives Commonwealth funds to the value of about 0.75 per cent of its GVP. In terms of what is proposed for other industries, the tobacco industry is in a favoured position. The Government has already indicated that there is no way the tobacco industry will be included in the present program because it is the one industry which stands out beyond the figure of 0.5 per cent of GVP that we will be pulling back. There was discussion about the dairy industry. At this stage, by and large, the dairy industry, in terms of the percentage of its GVP it contributes, is not a big contributor to its own research. The Bills before the House give the dairy industry its big chance. In terms of costs and cost recovery, I make a philosophical point. What I have learnt from the 50 per cent export inspection charge cost recovery question is that if one puts the people paying for a service in the position of having to account for the way procedures are carried out and administered, one certainly gets cost efficiencies very quickly. In other words, one gets a focus on costs. The costs are visible. Very quickly one gets down the level of costs of the servicing of the industry. Administrative costs are also contributed to by the Government and by taxpayers. I take one industry, about which there have been some extravagant claims, as an example-the poultry industry. It was claimed by the Opposition that the poultry industry will pay 20 per cent of the funds available for research this financial year. However, the poultry industry will not contribute to administration costs this year. It will pay for only half the costs for 1985-86. On a full year basis, administrative costs will approximate 15 per cent of funds available, half of which is contributed by the Government. Again, the big incentive is for the industry to increase its funding, which the Government will match. Thereby, the absolutely essential administrative costs will diminish further as a proportion of the funding of the scheme. By and large, what we are doing is taking a businesslike approach to financing and to the administration of funds-very much a non-paternal approach. One honourable member opposite raised the question of plant variety rights. As we all know, if we introduce plant variety rights the rivers will run blood, the streets will crack and bats will drop out of the sky! It is against that background, and as there are so many counter-ideologies concerning this issue, that I have decided that there is a legitimate need for an inquiry into plant breeding needs. This is a positive move. If we look at the ideological fantasies of the Premier of Queensland, for example, who believes that because something is private it is best, we see that we really need to get some assurances regarding continuing programs in cereals plant breeding in this country. It is a very diverse, large country. We need to have guarantees about cereals breeding, the one area in which we have true ascendancy. That is why an inquiry into plant variety rights is positive. It is about Australia's plant breeding needs. I have never dodged the issue. As far as horticulture is concerned, where we are talking about plant buying, the decision is a lot more clear cut. The honourable member for Wakefield (Mr Andrew) raised the figure of 84 per cent regarding on-costs of direct salaries. That figure is the usual Public Service figure for describing on-cost of direct salaries. I will not go into detail about the matter because, quite frankly, I do not have the time. However, I will provide the information to the honourable member. He also raised the whole question of CSIRO funding. I agree with his views on this matter. At present, about 29 per cent of CSIRO funding goes to agricultural research. It is absolutely essential that there be ongoing, pure research into primary industries by the various areas of the CSIRO. I have no objection to money being spent on manufacturing research by the CSIRO. As far as I am concerned, however, that research should be additional and should not take away from other parts of the CSIRO budget. I have made my position on this matter clear on many occasions. Finally, the honourable member for Maranoa (Mr Ian Cameron) said that it is about time the Government provided funds for research into pigs. I think it would be a good time to remind the honourable member that the Government has provided for feral pig research funding. It has provided $128,000 this year-$78,000 to New South Wales and the rest to Queensland. The Queensland program the honourable member talked of could be partly funded from this program. It is a sad fact that the previous Government was not even prepared to spend money on research into pigs in Queensland. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. Leave granted for third reading to be moved forthwith. Motion (by Mr Kerin) proposed: That the Bill be now read a third time. Mrs SULLIVAN(Moncrieff)(10.07) —I seek the indulgence of the House to seek from the Minister for Primary Industry (Mr Kerin) an explanation of a statement contained in his second reading speech on the Rural Industries Research Bill 1985. I did not speak on the second reading of that Bill. I wish to raise only one point. I have raised it with the Minister's office and I believe that he should be briefed to answer it. The second reading speech of the Minister contained a statement that any rural industry research funds for rural industry groups not presently existing but that might be proposed to exist in the future be established by regulation under the Bill. I sought advice from the Minister's office on which regulations might apply and was advised that new RIRFs would not be established by regulation but that any new industry research group that might be sought to be included and that does not presently exist would have to be included by way of a special Bill. If that is the Minister's answer, I am quite satisfied by that explanation. I raise the point because I have a concern that any new industry research undertakings that might be embarked on by the Government involve a number of things that ought to be subject to the scrutiny of Parliament as they would necessarily involve additional expenditure of public moneys and new expenditure of industry moneys. Under those circumstances it would be appropriate that any such proposal be debated by this Parliament. As I said, I rise to get from the Minister an assurance in this place that the advice I received from his office-namely, that the statement contained in his second reading speech is incorrect-will, in fact, be the course followed in the future and that any new industry research programs sought to be established will be established by way of a Bill which would come before the Parliament and not by way of regulation. Mr KERIN(Werriwa-Minister for Primary Industry)(10.09) —in reply-To make this matter quite clear-some additional sentences will be added to the second reading speech delivered in the Senate-by and large, what the honourable member for Moncrieff (Mrs Sullivan) says is true. Although other industries will now be able to avail themselves of funding on a one-to-one basis, up to 0.5 per cent of the gross value of production, because there is a requirement for a levy and for collection of funds from the industry, it is quite proper and appropriate-indeed it is essential-that legislation be introduced into the Houses of Parliament in respect of any additional research funding for other industries. Question resolved in the affirmative. Bill read a third time. Consideration resumed from 17 April, on motion by Mr Kerin: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Kerin) read a third time. Consideration resumed from 17 April, on motion by Mr Kerin: 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 Kerin) read a third time. Consideration resumed from 17 April, on motion by Mr Kerin: 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 Kerin) read a third time. Consideration resumed from 17 April, on motion by Mr Kerin: 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 Kerin) read a third time. Consideration resumed from 17 April, on motion by Mr Kerin: 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 Kerin) read a third time. Consideration resumed from 17 April, on motion by Mr Kerin: 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 Kerin) read a third time. Mr DEPUTY SPEAKER(Mr Mountford) —Order! It being 10.15 p.m., I propose the question: That the House do now adjourn. Mr Kerin-I require the question to be put forthwith without debate. Question resolved in the negative. Debate resumed from 22 April, on motion by Mr Hurford: That the Bill be now read a second time. Mrs SULLIVAN(Moncrieff)(10.15) —When last we debated Appropriation Bill (No. 3) 1984-85 and Appropriation Bill (No. 4) 1984-85 I was in the course of making a speech on the subject of proposals to limit the payment of family allowances in Australia. These proposals have been made in speculation and in the context of the proceedings of the Expenditure Review Committee. At that time I outlined that there were five diverse proposals: Firstly, that the family allowance be taxed; secondly, that it be means tested; thirdly, that it be paid at a flat rate-that is, the same rate for every child in the family, regardless of the number of children; fourthly, that it be removed for dependent student children over the age of 16; and, fifthly, that the first child not qualify for the family allowance. At that time I made a statement that the family allowance, when introduced by the Fraser Government in 1976, was not intended as a social welfare payment. I also said that that was agreed to by members of the present Government. To justify that statement, I turn to the words of the present Minister for Community Services in the Hawke Government, the former Minister for Social Security, Senator Grimes. At the time he made his speech in the Senate in 1978, he was the shadow Minister for Social Security. He said: It has never been suggested, since child endowment was introduced or since the family allowance scheme was introduced, that these payments should be considered a pension in any sense of the word and available only to those who pass a certain means test. He went on in his speech: I have pointed out, and others undoubtedly will point out, that this payment is not and never was a pension. . . . . . . . the introduction of family allowances was welcome and was not opposed by the Opposition. That is, by the present Government. The present Government welcomed the introduction of the family allowance and, through those who had responsibility for speaking on it, pointed out that it was not a social security measure. I pointed that out in my speech in this place on 22 April this year, when I commenced criticism of the suggestion that the family allowance would be reduced, taxed or means tested by the Government as a way to cut expenditure. Comments by the members of the Government in recent times have really concentrated on the issue of means testing the family allowance, as though it is something that should be paid only to lower income families. Something that is totally overlooked by members of the Government, whether acknowledged or anonymously, is that there is available for families a payment on the basis of need-that is, the family income supplement which was introduced by the Fraser Government. To those families on single incomes or low incomes who are shown to be in need, there is a welfare payment. The welfare payment is the family income supplement. The welfare payment is not the family allowance. The family allowance was and is a recognition of the value to this country of the parenting of children. In my last speech I referred to it as the mothering of children, because in most cases the mother has primary responsibility for the care of young children on a day to day basis. I do not see any conflict between those terms, and I will use them interchangeably. There are in fact some very serious welfare implications if one treats the family allowance as a welfare payment. If one moves to reduce it in any way, there are some quite profound welfare indications. Again I refer to the speech of Senator Grimes in the Senate in 1978, when he referred to the proposal to limit the payment of the family allowance on the basis of other sources of family income. He said: . . . this proposal would well force back into dependency single working parents who, without the family allowance, are better off receiving a pension. We in this community are supposed to encourage people to get away from dependency on the Government and people on both sides of the Parliament would agree with that view. Any thoroughgoing assessment of those who receive the family allowance who are in need or close to being in need will show that attempts to limit the payment of the family allowance to mothers because of income available to other members of the family has, in fact, a very severe welfare implication. It could be the factor that puts families back into the welfare category versus earning income through a job plus receiving income through the family allowance. One thing that deeply troubles me in any suggestion I have heard that family allowances should be taxed is whose income will be taxed. I have already mentioned in debate on this subject that it is possible in a large family for a woman who is receiving only the family allowance as income can by virtue solely of that family allowance receive an annual income sufficient to take her across the tax threshold. That is, in large families where a woman receives only the family allowance-and those are the families who are usually very strongly in need of the extra assistance that the family allowance gives-that alone can take her over the tax threshold if it is her only income. So taxation is a very dangerous course to follow in any event. But even putting that group of women aside for the moment, we must realise that the basic implication in proposals to tax the family allowance or to means test it that I have seen and know of suggest that the family allowance income of the mother should be assessed or limited according to the income going to some other member of the family. The common statement made is that in a family where the father earns a high income the mother should not receive the family allowance. I am aware that many women react with some hostility to this proposal for a number of reasons. One of them is that they feel the family allowance is a recognition to them of the economic contribution that they make to their family and to society. In this context it should be borne in mind that the major family allowance increase in 1976 was brought about through the abolition of the dependants' rebate, so it was a transfer of income essentially from husband to wife. Something that previously went to the father through a tax rebate was redirected to the woman in the form of a payment of a family allowance. I urge the House to consider seriously that the income of one member of the family does not necessarily measure the economic well-being of all other members of the family. To put it very bluntly, there is no guarantee that the wife of a Toorak millionaire sees one cent of her husband's income as disposable income for herself. Indeed, there are cases that I know of where that is so, not necessarily in Toorak. It is very dangerous indeed to assess a payment of this sort according to someone else's income. There is only one such government payment that comes into this category at present and that is tertiary education assistance scheme allowances, where we accept to some degree that allowances paid to students in tertiary education can be modified according to the income of their parents. But that is the only such allowance paid from the public purse which is modified according to the income of someone other than the recipient. The whole issue of whether the husband's income should be taken into account opens a Pandora's box for all manner of government payments. It re-opens the issue on which Senator Grimes was speaking in 1978-the speech from which I have quoted already-the so called 'newsboy tax' which was roundly criticised by the present Government when it was in opposition. Mr Goodluck —They will criticise anything. Mrs SULLIVAN —I criticised it too, and I also criticised some then Government members. I refer again to the statements of members of the then Opposition whose spokesman on this subject mentioned the principle of reducing the mother's income according to the income in this case of the child, another family member. He said: In some families, particularly those on benefits or on minimum wages, the children earn their own pocket money . . . by doing various jobs in the community. It is frequently the only way they can raise money for further study, for musical instruments, for field trips at school, for extra clothes, and for the extra things other children have . . . Payment of the family allowances is made to the mother. To deprive a family of the allowance on the basis of what the children earn in an effort to assist that family's income is quite wrong and may well put it back into a situation of dependency on the Government which it does not want and in which it need not be. The proposal will also affect some women in the community who sometimes find that the only income or personal money that they receive is the family allowance payment. Senator Grimes at least concurred at that time with the sentiment I expressed a few minutes ago. He went on: If these women or poor families are to be deprived of these payments in part or whole by this proposal, it is an unjust measure. The Government should bear those words in mind because there is a lot of sound common sense in the words that Senator Grimes uttered on that issue in 1978. As far as means testing is concerned, the same principles apply as for tax; in fact, taxing the family allowance would be a crude form of means test. Added to that, there would be additional expenses because there are administrative complications in any proposal to tax or means test the family allowance. One of the beauties of the family allowance is that it is comparatively an extremely simple program to administer and implement. It does not require the payment of large sums of money to the bureaucracy. In his speech in 1978 Senator Grimes said-on the basis of an estimate that the then Minister, Senator Dame Margaret Guilfoyle, had given-that it had been estimated that 400 additional staff would have been necessary in the Department in order to implement the 'newsboy tax' proposal. He went on to say: Some two million people in this community will have to be contacted on behalf of some 4 1/4 million children and they will have to answer questionnaires on how much those children earn from all sorts of sources. Those are the facts that were available to the Opposition in 1978 and which are available to the Government now in 1985. Those are the facts that must be taken into account. If the Government continues with this proposal it will rightly be branded as a government which considers child rearing work non-essential and valueless in economic terms. This is reinforced by the attitude expressed by the Minister for Education (Senator Ryan) in a paper presented to the Centre Left faction at a tax reform seminar in Canberra in which she opposed child care as a tax deduction. The availability of child care expenses as a tax deduction follows in a straight line in logic from the payment of family allowances. Far from moving to make things more difficult for families and particularly more difficult for mothers by limiting the payment of family allowances, I urge the Government to consider alternative means such as child care as a tax deduction in its future economic considerations. Mr JOHN BROWN(Parramatta-Minister for Sport, Recreation and Tourism)(10.28) —The Special Minister of State (Mr Young), who has been handling the Appropriation Bill (No. 3) and the Appropriation Bill (No. 4), is tied up in Cabinet, and has asked me to make a few closing remarks. He has asked me to thank all those who have participated in the debate. We have only had the pleasure of the wisdom of the honourable member for Moncrieff (Mrs Sullivan) tonight but other people have participated at an earlier stage. The Bills are essential for the Government's economic program and administration and in saying that I note that honourable members will have other opportunities for general debate on the course of economic policy, specifically in the debate on the Supply Bills and the economic statement. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr John Brown) read a third time. Consideration resumed from 27 March, 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 John Brown) read a third time. Bill returned from the Senate without amendment. Motion (by Mr John Brown) proposed: That the House do now adjourn. Mr SHIPTON(Higgins)(10.31) —I raise this evening the outrageous absence overseas of the Minister for Aboriginal Affairs (Mr Holding) at a time of crisis in the administration of his portfolio, namely the future of the National Aboriginal Conference. The Minister could not have left the country at a worse time. No sooner had he left the country than the Acting Minister for Aboriginal Affairs (Senator Ryan) had to freeze NAC funds, and the departmental officers were locked out by the NAC. The NAC has been acting in open defiance of the Government by continuing to spend government money when ordered not to do so. On 2 April the Minister announced that the NAC would be wound up on 30 June. He should have put in place then adequate procedures to protect government revenue. He had already dilly-dallied for many months about the future of the NAC. He added, on 2 April: The Government remains committed to the view that Aboriginal Australians ought to have a national independent representative political structure capable of advising the Government and putting forward a national perspective on Aboriginal issues. The Minister went on to say: The structure of this organisation is the subject of continuing representations and will be decided before the formal termination of the National Aboriginal Conference. He stated that the body to succeed the NAC would be designed 'after grass-roots consultation, to represent Aboriginal views'. He walked away from these consultations and left an awful mess behind him when he went on his overseas trip. The sad saga of maladministration continues and a state of great uncertainty exists. There are reports circulating today that the NAC has this very day let the locked out officers from the Department of Aboriginal Affairs into the NAC under the existing agency arrangement, but they are rumours. I call on the Government to inform the House of the present situation. I have had calls from all over Australia from NAC staff wanting to know whether they will be paid. I call on the Government to state clearly whether staff and officials will be paid. We need to know the continuing difficulties which the Acting Minister for Aboriginal Affairs referred to on 30 April. Are they administrative and financial difficulties which continue and are they in respect of a period after the time on which the Auditor-General recently reported to this House? The Acting Minister has also stated that 'no further payments by the NAC can be authorised'. I ask the Government to state clearly whether or not funds are being authorised. Are government funds being expended and, if so, on what terms? The Parliament must also be told what funds remained unexpended at the date of the Minister's announcement of termination. There was $6m in the NAC budget allocation. Is the unexpended figure $1.5m? If so, what arrangements have been made to safeguard it? The matter could not be more serious. Taxpayers' funds are at risk, and I call for a clear statement from the Government as to what is actually happening with the NAC. I also call for a clear statement from the Government as to the state of consultations being held to determine the structure of a body to replace the NAC. I ask the Government to provide details of Miss Lois O'Donoghue's appointment as an adviser to undertake consultations. Is she employed as an independent adviser and is she being paid? It is negligent of the Minister to leave the country at this time. His trip is an enormous waste of taxpayers' money. I estimate the cost of air fares of the Minister and his travelling entourage to be of the order of $50,000. If one takes into account hotel accommodation, living and transport expenses and the fall in the value of the Australian dollar, the total cost of the trip must be between $80,000 and $100,000. This is a blatant misuse of taxpayers' money and cannot be justified. Mr John Brown —How much did Andrew's last trip to New York cost? Mr SHIPTON —The Minister for Sport, Recreation and Tourism should listen. The expenditure of the Minister for Aboriginal Affairs will outgross even that of his travelling colleague, the Minister at the table, the Minister for Sport, Recreation and Tourism. The Prime Minister (Mr Hawke) has already indicated that Government expenditure must be controlled. I would advise him to look at extravagant ministerial spending and to start with the trip of the Minister for Aboriginal Affairs. Problems with the administration of Aboriginal affairs are getting worse every day the Minister stays overseas. He must return to Australia immediately and deal with the pressing problems at home. He is responsible for the NAC shambles, which is getting worse in his absence. This is intolerable. In the interests of Aboriginal and non-Aboriginal Australians this financial mess must be sorted out. The Minister should be in Australia to deal with this crisis. Mr MARTIN(Macarthur)(10.37) —Tonight I wish to raise the issue of the rights of pensioner residents in institutions established for the care of elderly and intellectually handicapped people. My attention has recently been drawn again to the operation of a halfway house cum boarding house for intellectually handicapped adults in Bargo within my electorate. I wish briefly to describe the circumstances of this establishment. Some years ago, a woman by the name of Shane Pisani started such an establishment in Bowral. After a period in which she had not received a licence or a permit, she eventually closed that establishment down and moved to Bargo. She bought out an old motel and moved into that motel 27 intellectually handicapped adults. Those 27 people, comprising 25 women and two men, occupy these motel units. The day that I attended to have a look at the place for myself, after having first contacted the owner to ask whether it would be all right if I were to do so, I was shocked to find that the units were all locked and the 27 residents of that establishment were walking around outside or sitting on the steps of the establishment. The weather in that part of the electorate has been appalling over the past two weeks. It was raining on the day I was there, yet these people were locked out of their rooms. Since my visit I have had the opportunity to discuss further the whole operation of this halfway house with both the Department of Social Security and the New South Wales Department of Youth and Community Services. I am advised that the establishment, firstly, does not have a licence; secondly, does not even have a permit; and thirdly, has been under investigation for a period of over 12 months. No decision has been made at this point; however I notice that the Minister for Youth and Community Services in New South Wales, Mr Frank Walker, has finally made a decision that certain criteria have to be met within a 30-day period by the operator of this establishment or it will be closed down. I also understand that in the last couple of days the operator of the establishment has put on her staff someone who has a nursing certificate and, I understand, has some experience in looking after intellectually handicapped people. That is a start, because when I was there the operator of this establishment told me she had five members on the staff, all of whom were only domestics or handy people. They had no experience in dealing with handicapped adults. They certainly had no experience in the nursing sense and if there were any problems they would not know what to do. My great concern about this whole issue is one that I have raised previously; it is the concern I have for the rights of people that go into similar establishments. I am speaking of circumstances where people who, because of their age-there were some fairly elderly people amongst the residents whom I interviewed-and probably because of the economic circumstances of their families, do not have the opportunity to go into better quality or more expensive institutions. I firmly believe in the findings of the Richmond report brought down in New South Wales that said that where possible these sorts of people should be integrated back into the community. I believe that that is a fair and reasonable thing. However, if they are to be integrated back into the community appropriate measures should be taken to ensure that their rights are protected and, indeed, that they are getting value for their pensioner dollar. In the case of these people at Bargo, I understand they receive about $216 per fortnight on full invalid pensions. That entire amount of money is taken by the operators of that establishment and used for the upkeep of those people. As I said, in my investigations and my personal inspection of the property I did not see any forms of therapy activity being undertaken. Therefore, the $216 multiplied by 27 gives a sizable amount of money to the operators of this establishment to use during a fortnightly period. I expected to see some further evidence of how that money was spent. My great concern is that there is a greater need for liaison and policing of these establishments between the Department of Social Security and the Department of Youth and Community Services in New South Wales. Concern has been expressed by the regional office of the Department of Social Security about the running of this place. As I have indicated, the Department of Youth and Community Services is also greatly concerned about it. I anxiously await the outcome of the 30-day report on this establishment that the Minister will receive. I intend to raise this issue with the Caucus welfare committee and I have also taken the opportunity to raise it with the Minister for Social Security (Mr Howe) and the Minister for Community Services (Senator Grimes). I hope that with the passage of time we will see the improvement of establishments such as this. Madam ACTING SPEAKER —Order! The honourable member's time has expired. Mr CONQUEST(Hinkler)(10.42) —In the adjournment debate I wish to support the speech made this evening by the honourable member for Moncrieff (Mrs Sullivan) on the Appropriation Bills. I, too, am concerned at the direction in which the Government's Expenditure Review Committee is heading in respect of its recommendation to reduce the rate of payment of family allowance. It is inconceivable that this Government is setting its sights on the family as the target of its razor gang attack. A family with children bears an inordinate share of the taxation slug now, and the size of the slug grows as the size of the family grows. It is not just a question of personal income tax; it includes those indirect taxes with which the family has to contend at progressively greater amounts of expenditure depending on the number of mouths that the taxpayer has to feed. Peter Groenewegen in his article in the Australian Financial Review of 21 February 1985 entitled 'How to Achieve Tax Equity: An Alternative View', highlights a deterioration in the relative position of the family with children vis-a-vis the single taxpayer. This has been achieved by the introduction of the tax threshold and its association with higher marginal rates in the guise of simplification of the rate scale where we now have a 32 per cent standard rate. He further notes a substantial sacrifice in horizontal equity with the elimination of concessional rebates closely allied to the actual expenditure patterns of families with children. He referred to education, chemist, doctor and dentist-type expenses. The family with dependants requires concessions in areas of tax and welfare. In this regard I refer to the Sydney Morning Herald of 27 March 1985 in which the Minister for Finance, Senator Walsh, is reported as saying that he believes that people with dependants must be given priority in the tax and social security system. In a similar vein the former Minister for Social Security, Senator Grimes, stated his position forcefully to the National Economic Summit Conference in April 1983. Arguing that family allowances had never in any strict sense been a welfare program, he said: Rather, they are designed to achieve a broad measure of equity in the tax-transfer system between those with and those without dependent children. They recognise that at any level of income those with children face higher costs than those without. This statement would seem to be an admission that horizontal tax equity has been sacrificed. However, it is of no real consequence at whose altar the ceremony was performed. The important aspect is that it highlights the necessity not to reduce the level of family allowance payments. Having said that, I would now like to suggest an increase in the allowance. Senator Grimes, in a matter of public importance debate in another place on 24 October 1984, pointed out that, if family allowance was not increased regularly or indexed, its value would quickly fall away with the rate of inflation. He further indicated that, despite increases in money terms, the real value had fallen by 22 1/2 per cent between June 1976 and March 1983. There is a real need to increase family allowance payment levels. To ensure no loss in real terms in the future, it is essential that such new levels be indexed. A final point to be covered is the question of the means testing of the family allowance. When the national child endowment scheme was introduced, the Government of the day was of the opinion that it would be expensive to administer. Former Prime Minister Scullin was of the opinion that a system of equal payments without regard to income was the optimum course to follow. The Australian of 12 July 1985 quoted the honourable member for Lilley (Mrs Darling) and the honourable member for Canberra (Mrs Kelly) as opposing the introduction of a means test. I tend to agree with that line of thinking. We have come a long way since Jack Lang introduced child endowment in 1925 for his State of New South Wales; 44 years have elapsed since it appeared nationwide. I trust the initiatives of yesteryear will not be lost by this Government. Mr LANGMORE(Fraser)(10.46) —Canberra is a classic case of a divided community. The majority of people have adequate incomes and are able to live comfortable and secure lives in this beautiful and generally well planned city. A minority of people, however, have incomes below the poverty line, are poorly housed or suffer other disabilities. Aware of this situation, in May last year the Government commissioned a comprehensive review of welfare services and policies in the Australian Capital Territory by a committee chaired by Professor Tony Vinson. The resulting report is titled 'Beyond the Image'. It draws attention to the contrast between the beauty and comfort of life in Canberra for the majority, and the deprivation of a minority. The Vinson report is certainly comprehensive. In 670 pages it covers all areas of need and services for children, youth, the aged, migrants, the unemployed, the disabled, the psychiatrically disturbed or drug addicted, services for women, emergency services, correctional services, the community health program and services in the Jervis Bay territory. Like many others, I was daunted by the length, but have at last read the report and am impressed by the contents. The report is packed with information, insight, analysis and sympathetic commentary. Anyone concerned with any aspect of community services in the Australian Capital Territory would benefit from reading at least the section that deals with the area in which they are interested. The Committee has been criticised for not complying with its terms of reference. It was asked to report in two parts, the first part being a report on ways of improving the efficiency of welfare and corrective services within existing resources. This was a virtually impossible task, however. Years of neglect of Australian Capital Territory community services by Liberal and National Party governments have left a situation in which many important types of services are not provided or are grossly underfunded. Therefore, it would have been extremely difficult, if not impossible, to find any programs which could have been cut back to make way for improvements. The Committee did, however, recommend many ways of increasing the effectiveness of existing services, which was one method of responding as requested. The Committee concentrated more attention on the second task, which was to recommend ways of removing deficiencies in welfare and corrective services which might have required additional resources. Three important organisational proposals were made. The first was to establish a Department of Community Services which would include health, welfare and housing, so as to improve the effectiveness of co-ordination in service delivery. This proposal makes sense in the context of self-government in the Australian Capital Territory. The second was to establish a statutory community services council of officials and representatives of non-government welfare services to provide formal arrangements for consultation between the Government and voluntary sectors, and to plan community services. The third was to set up an information and referral network. Information centres would be set up by the four community services in Belconnen, North Canberra, Woden and Tuggeranong. Most groups which made submissions to the Vinson committee requested that this type of service be established to help people in need to cope with the complexity of the health and welfare system. These four centres are estimated to cost a total of only $350,000 a year to operate. Other specific recommendations can be summarised as requiring either accommodation or staff. Since the Territory does not have a stock of older housing and there is a severe shortage of all types of accommodation, special needs tend to be neglected. Many types of accommodation are needed. Sixty nursing home beds, a hostel for wards of state and other children who cannot stay with their families, residential treatment for psychiatrically disturbed children, hostel and group home accommodation for ex-psychiatric hospital patients, accommodation for disabled young people, more youth hostel accommodation for homeless youth and facilities for respite care for the frail aged, the disabled and emotionally and behaviourally disturbed children are all urgently required. There are serious gaps in the continuum of housing which is required for children and adults as they move from dependence in institutional care, through being semi-autonomous, to independence. The Vinson committee also recommends increased numbers of staff in many specialised technical and professional areas. One aspect of the report which concerns me is that the cost of the proposed new capital works for the Australian Capital Territory prison system would total around $7m to $8m. Much better value could be obtained from spending those funds on accommodation and staff, as I have mentioned. Before the report had even been released, one commentator had proclaimed it as dead. This was a premature announcement. There is certainly concern about the costs of the proposals; but the way to handle that is not to reject the report but to decide on ways of phasing in the improvements. The Government has established an inter-departmental committee- Madam ACTING SPEAKER —Order! The honourable member's time has expired. Mr HODGMAN(Denison)(10.51) —As the shadow Minister responsible for veterans' affairs matters in this House, I want to read into the Hansard an article which appeared in the Melbourne Herald on Tuesday, 23 April this year: under the heading 'After 65 years, a nation forgets its heroes'. This is a most moving article and it is a great tribute to the author, Mr Ian Livingstone, who, I believe, is owed a debt of gratitude by all Australians. I shall read the article without further comment. It states: The 89-year-old widow of one of Australia's Gallipoli heroes has lost her pension under the Federal Government's controversial assets test. Only days before Australia commemorates the legend of ANZAC, the Department of Social Security has told Mrs Vilma Hatty her pension has been stopped, her telephone rental concession has ended and she is not entitled to fringe benefits. She has been advised that because she owns 40 hectares (96 acres) of dairy country at Yannathan Lower, near Lang Lang in west Gippsland, she is no longer entitled to the pension. But she is too frail to farm the property, which has been valued at $102,000 by the Department. ''I've lived here for 65 years. I don't want to leave,'' she said. The land was virgin scrub and swamp gum forests when Tom Hatty took it over at a reduced price, an act of gratitude by the nation to its returned soldiers, in 1919. Their first experiment, growing potatoes, failed and Mrs Hatty's parents gave them a few cows. Half of their income went to the Closer Settlement Board until the land was paid off and, in 1933, by which time they had a young daughter, their fortnightly income was one pound, 13 shillings and four pence. They could not afford a car until the late 1930's and electricity came through just before World War 2. After the department had written to tell Mrs Hatty she had lost her pension, her son-in-law, Mr Arthur Caldecutt, telephoned Social Security and spoke to a woman. ''She asked me to put a value on the house. How could you value this? ''The hot water service is World War 2 vintage, and she never had a television set. ''She is a lovely old lady, with a spry, twinkling air about her. But she cannot understand why it is happening to her.'' ''She's done more for the country than any bloody politician,'' he said. Tom Hatty went away to war in 1914 as a driver. He went with his horses and carts to Gallipoli, he fought in the mud and slush of French trenches and he was in hospital in England at least twice. His two brothers went to war, too. Mr Leo McLeay —Madam Acting Speaker, I take a point of order. Mr Cadman —Go back to the Lebanese Embassy. Mr Leo McLeay —I think that remark should be withdrawn, Madam Acting Speaker. Madam ACTING SPEAKER —Would the honourable member care to withdraw? Mr Cadman —I have no intention of withdrawing. Madam ACTING SPEAKER —Order! The Chair will not enter into debate. I call the honourable member for Grayndler on a point of order. Mr Leo McLeay —I should like the aspersion to be withdrawn. Madam ACTING SPEAKER —The honourable member for Mitchell is interjecting from outside his seat, which he knows is out of order. I ask him to return to his seat and withdraw his comment. Mr John Brown —And so you ought to withdraw it, you little creep. Madam ACTING SPEAKER —The honourable member for Grayndler finds it offensive. It is to be withdrawn. Mr Cadman —I think it is a mutual- Madam ACTING SPEAKER —Order! Would the honourable member please withdraw? Mr Cadman —I withdraw. Now I ask the Minister at the table to withdraw his remark. Madam ACTING SPEAKER —I am sorry. I did not hear the Minister's remark. Mr Cadman —I did, and I want it withdrawn. Madam ACTING SPEAKER —If the honourable member finds it offensive, I ask the Minister to withdraw it. Mr John Brown —I withdraw it. Madam ACTING SPEAKER —I call the honourable member for Grayndler on a point of order. Mr Leo McLeay —Thank you, Madam Acting Speaker. My point of order is that I understand that the Standing Orders provide that, if a member is quoting from a document, the member has to be able to substantiate the matter in the document. I ask: Can the honourable member substantiate the matter that is in the document from which he is quoting? Madam ACTING SPEAKER —Can the honourable member for Denison substantiate the document from which he is quoting? Mr HODGMAN —Yes, he can-and your name will be in every Returned Services League club throughout Australia. Madam ACTING SPEAKER —Order! The honourable member will continue. He has some time left. Mr HODGMAN —Thank you. The article continues: George, the younger-he was only 18-lies somewhere in a field in France. Sam, older than Tom, was badly wounded but got home. He died about 12 years later from the effects of his injuries. These are the cases about which this honourable member and those other honourable members opposite are deliberately trying to stifle debate, because- Mr Leo McLeay —I take a point of order, Madam Acting Speaker. Madam ACTING SPEAKER —Order! The honourable member for Denison will resume his seat. There is a point of order from the honourable member for Grayndler. Mr HODGMAN —Come off it, Madam Acting Speaker. Madam ACTING SPEAKER —Order! The honourable member for Denison will not speak to the Chair like that. I call the honourable member for Grayndler. Mr Leo McLeay —The honourable member for Denison does not have the right to attack me, to allege that I- Madam ACTING SPEAKER —Order! There is no point of order. The honourable member for Grayndler will resume his seat. Mr HODGMAN —Sit down. You are a disgrace to the House. It is no wonder they call you the member for Nugan Hand. Madam ACTING SPEAKER —Order! The honourable member for Denison will be quiet. His time has expired. Mr CAMPBELL(Kalgoorlie)(10.58) —This is a speech which I have been asked not to make. I make it only after a lot of soul-searching. It is with a certain amount of cowardice that I make it in the relative obscurity of the adjournment debate. I make it because I believe that something in the national interest is at stake. In the long run, our national interest is not served by the maintenance of myths and shibboleths. I think they should be debunked. Tonight, I refer to the myth of multiculturalism, a myth perpetuated by both political parties in a mistaken belief that there is such a thing as an ethnic vote. Australia is overwhelmingly an Anglo-Celtic society. Over time, it has absorbed an enormous number of immigrants from other cultures. These immigrants came of their own free will. Many of them came believing that they were seeking a better way of life. Many of them achieved that. Overwhelmingly, they came to this country to make a contribution and to be Australians. This view should be heralded and lauded by all Australians. I had a most unfortunate experience recently when there was a delegation of Vietnamese protesting outside the Parliament. I took the time to speak to these people. During my dialogue with the crowd of about 50, with whom I was exchanging views and answering questions, I thought we were getting on quite well until one of their commissars approached us and directed the crowd to move away. He turned to me and said: 'Go away. We have nothing to say to you'. He was prepared to make a collective decision for these people. For a people who desperately need to talk to Australia, it was a very sad occasion. They had a banner proclaiming that they did not pay their taxes for Hayden to go to Hanoi. The fact is that, for every dollar they pay in taxes, they collect about $3 in social security benefits. That is not an indictment of them. It is probably more an indictment of the crazy immigration policy that we in this country are pursuing. However, it is a fact. They were protesting that 22, I think it was, North Vietnamese students had been allowed into Australia to learn English. Those students were allowed in under very strict conditions, including that they take part in no political activity. I would have thought that it was in our national interest to encourage the use of English in North Vietnam so that we could have dialogue with those people and so that we could explain our culture, so that maybe, over time, they would see some benefits in our way of life. I would have thought that would be to the advantage of all Australians. It may, of course, enhance- Madam ACTING SPEAKER —Order! It being 11 p.m., the debate is interrupted. The House stands adjourned until 10 a.m. tomorrow House adjourned at 11 p.m. The following notices were given: Mr Lionel Bowen to present a Bill for an Act to amend the Companies Act 1981. Mr Lionel Bowen to present a Bill for an Act to amend the Companies (Fees) Act 1981. Mr Lionel Bowen to present a Bill for an Act to amend the Director of Public Prosecutions Act 1983 to confer additional functions on the Director, and for related purposes. Mr Keating to present a Bill for an Act to amend the Commonwealth Banks Act 1959 and for related purposes. Mr Young to present a Bill for an Act to amend the Ministers of State Act 1952. Mr Kerin to present a Bill for an Act relating to the dairy industry. Mr Kerin to present a Bill for an Act to make provision for the collection of levy imposed by the Dairy Produce Market Support Levy Act 1985 and the Dairy Products Levy Act 1977, to establish trust funds to receive and disburse money in support of the marketing of dairy produce, and for related purposes. Mr Kerin to present a Bill for an Act to amend the Wool Industry Act 1972, and for related purposes. Mr Kerin to present a Bill for an Act relating to an Agreement between the Commonwealth and one or more of the States and the Northern Territory in respect of a scheme to provide assistance to persons engaged in rural industries. Mr West to present a Bill for an Act to reconstitute the Snowy Mountains Engineering Corporation, and for related purposes. Mr Barry Jones to present a Bill for an Act to amend the Bass Strait Freight Adjustment Trust Fund Act 1984. Mr Duffy to present a Bill for an Act relating to broadcasting and television. Mr Duffy to present a Bill for an Act to amend the law relating to communications. Mr Peter Morris to present a Bill for an Act to establish a Trust Fund for the purposes of the grant of financial assistance for expenditure in relation to land transport, and for related purposes. Mr Peter Morris to present a Bill for an Act to authorise the payment of additional capital to the Australian Shipping Commission. Mr Peacock to present a Bill for an Act to prevent an assets test applying to the rates at which certain pensions, benefits and allowances under the Social Security Act 1947 or the Repatriation Act 1920 are payable. 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 acquisition of automatic data processing facilities by any Commonwealth 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 department or authority intending to acquire the facilities. (2) That this resolution will continue in force unless and until amended or rescinded by the Senate or the House of Representatives in this or a subsequent Parliament. (3) That a message be sent to the Senate acquainting it of this resolution and requesting its concurrence. Mr West to move- That, in accordance with the provisions of the Public Works Committee Act 1969 and by reason of the urgent nature of the work, it is expedient that the following proposed work be carried out without it having been referred to the Parliamentary Standing Committee on Public Works: Development of 14 Chisholm Place, Melbourne, for the Australian Wheat Board. The following papers were deemed to have been presented on 7 May 1985: Aboriginal and Torres Strait Islander Heritage (Interim Protection) Act-Regulation-Statutory Rules 1985, No. 40 Compensation (Commonwealth Government Employees) Act-Regulations-Statutory Rules 1985, No. 42 Dairy Products (Export Inspection Charge) Collection Act- Regulations-Statutory Rules 1985, No. 52. Eggs (Export Inspection Charge) Collection Act-Regulations-Statutory Rule 1985, No. 53. Export Control Act-Export Control (Orders) Regulations-Orders-1985- No. 1-Prescribed Goods (General). No. 2-Export Meat. No. 3-Game, Poultry and Rabbit Meat. No. 4-Dairy Produce. No. 5-Egg. No. 6-Grain, Plants and Plant Products. No. 7-Fish. Extradition (Commonwealth Countries) Act-Regulation-Statutory Rules 1985, No. 62. Extradition (Foreign States) Act-Regulations-Statutory Rules 1985 Nos 55, 56, 57, 58, 59, 60, 61, 63, 64. Fish (Export Inspection Charge) Act-Regulations-Statutory Rules 1985, No. 54. Fish (Export Inspection Charge) Collection Act-Regulations-Statutory Rules 1985, No. 51. Health Insurance Act-Regulation-Statutory Rules 1985, No. 50. Health Insurance Commission Act-Regulation-Statutory Rules 1985, No. 41. Interim Forces Benefits Act-Regulations-Statutory Rules 1985, No. 48. Life Insurance Act-Regulation-Statutory Rules 1985, No. 44. Public Service Act- Appointments-Department- Employment and Industrial Relations-Glenbar, W. L. Territories- Barker, P. A. R. Wallace, A. D. Veterans' Affairs-Ryan, H. L. Remuneration Tribunals Act- Remuneration Tribunal-Determination-1985/2-Managing Director, Overseas Telecommunications Commission (Australia) and part-time holders of public offices. Repatriation Act-Regulation-Statutory Rules 1985, No. 45. Repatriation (Far East Strategic Reserve) Act-Regulation-Statutory Rules 1985, No. 46. Repatriation (Special Overseas Service) Act-Regulations-Statutory Rules 1985, No. 47. Seaman's Compensation Act-Regulation-Statutory Rules 1985, No. 43. Seaman's War Pensions and Allowances Act-Regulation-Statutory Rules 1985, No. 49. States Grants (Tertiary Education Assistance) Act 1984-Statement of particulars of directions given under sub-sections 37 (1) and 41 (2), dated 22 April 1985.