Tuesday, 14 May 1985 Madam ACTING SPEAKER (Mrs Child) took the chair at 2 p.m., and read prayers. Mr HOWARD —My question is addressed to the Minister for Employment and Industrial Relations. Does the Minister recall telling this House in September 1982 that more reliance on indirect taxation meant greater inequity in the tax system and was something the Australian Labor Party deplored? Does he still hold those views? Did he express them to the Cabinet last Sunday? Does he share the confidence of Clyde Cameron that the Prime Minister still holds those views? If, however, the honourable gentleman has changed his mind and followed the Treasurer down the Damascus Road on this issue, will he lend his considerable weight to persuading the Australian Council of Trade Unions to support sensible reform of our taxation system, including the introduction of a broad-based indirect tax? Mr WILLIS —The views that I support in respect of taxation will be made known when the Government's White Paper is published. Mr MARTIN —My question is directed to the Minister for Aviation. I refer him to an article published in today's Sydney Morning Herald concerning proposals by both Ansett Airlines of Australia and Trans Australia Airlines to expand facilities at Sydney (Kingsford-Smith) Airport. Can the Minister advise what effect this decision will have on the site selection process for Sydney's second airport? Mr PETER MORRIS —I thank the honourable member for his question. I can assure the honourable member that the decisions by TAA and Ansett for the terminal development at Kingsford-Smith will have no impact on the timing of the site selection process for Sydney's second airport. The draft environmental impact statement in respect of the second site is currently with the printer. I have to advise the House that, contrary to earlier advice I gave, we have not been able to get it published as quickly as possible. That has been due to technical problems at the printer. The size of the task involved some four tonnes of paper in printing the 2,000 copies of the 630-to 640-page document. But as soon as it is available it will be released. I hope that will be in the middle of next month. At the same time a community access bus will be available to move around the localities likely to be affected so that there can be full access to information associated with both of the sites. The delay has meant that, in the meantime, I have released copies of the revised layout of both airport projects so that again the people who are involved can be fully informed on the alternatives and what the changes may mean. But I should also add that Kingsford-Smith Airport will have to handle the traffic for some years to come. That airport is the largest airport facility in this nation and it handles in excess of eight million passengers a year. The improvement of the airport's facilities is essential to meet growing public demand, particularly if one looks at the international terminal. Had we had a responsible approach to airport investment in the past under conservative governments we would not have the difficulties that we have today. The existing inadequacies, the congestion, the lack of space, the delays in luggage handling due to lack of working space and facilities which are totally unsuitable mean that the airport is unsatisfactory for Australia, particularly at a time when we are trying to develop tourism and attract more people to Australia. We are considering ways of making better use of the existing international terminal space. Design plans are being developed in association with industry for improvements to the terminal building. The actual rate at which the work can be carried out after the plans have been prepared and agreed will depend on the availability of funds. There is no doubt that with the severe constraints that we face in the coming Budget, there will be some hard decisions to be made in that area. That is a matter we shall have to face up to. In respect of the airport itself, other than the international terminal, I have approved the interim planning study to be carried out in respect of the north-east sector of the airport and that will also enable proper development of facilities there. Three of the airlines-Trans Australia Airlines, Ansett Airlines of Australia and East-West Airlines Ltd-are proposing improvements and expansions to their terminal operations. At the same time a $16m taxiway project is under consideration by the Public Works Committee to try to improve operational practice and reduce taxing times. Overall, we are taking a comprehensive, planned and responsible approach to the operation and use of the airport. Had this been done at an earlier time by our conservative predecessors, we would have far better air services for the people of Australia, particularly those of Sydney. Mr PEACOCK —My question is directed to the Minister for Science. I refer him to the Australian Book Review of April 1985 in which it is reported: At the NBC Author's Week Dinner in Canberra the guest speaker, Mr Barry Jones, Minister for Science, said he did not believe that there was any significant change that the present Government would bring in a tax on books and periodicals. Is this still the view of the Minister? Has he made representations to the Treasurer about exempting the books and periodicals relating to his portfolio from any broadly-based consumption tax? Mr BARRY JONES —I have not so far contributed to the tax debate. In the context in which I spoke, I was going back to the horrific days of the Fraser Government, which the Leader of the Opposition will remember from his unhappy period on the back bench. I said that I thought it was unthinkable that a tax on books would be imposed in isolation. In other words, if one were to have a broad-based consumption tax without exemptions, clearly one would be imposing distortions if one granted an exemption in respect of one thing and opposed it in respect of everything else. But in this case I thought-and I still think-that it would be unthinkable to isolate books and say that they would be, uniquely, the subject of tax. Ms McHUGH —Can the Minister for Health advise the House of the present situation concerning the return to normal services in the New South Wales public hospital system? Has the New South Wales Government yet advised the Commonwealth that it recommends the introduction into the Commonwealth Parliament of the Medicare legislation package? Dr BLEWETT —I thank the honourable member for Phillip for her question. I recognise that she, like many other honourable members from New South Wales, knows of numerous tragic incidents that have occurred as a result of the refusal of certain militant specialists to work in the public hospital system of New South Wales. Dr Klugman —They supported them. Dr BLEWETT —I will talk about the support of the Opposition in a moment. I am very glad to say that I received today a letter from the Minister for Health and Deputy Premier of New South Wales in which, while he recognises that there are still a few trouble spots in New South Wales, he makes the following recommendation: I believe that sufficient resignations have been withdrawn and applications for new appointments submitted to justify introduction of the legislative elements of the package into the Federal Parliament. In addition, the overwhelming rejection of the claims of the militant surgeons in New South Wales by the great majority of the medical profession throughout Australia, the even more overwhelming rejection of the effort to overthrow the President of the Australian Medical Association last weekend and the actions taken by the State AMA in New South Wales as well as the Federal AMA to resolve this dispute have led the Government, in an act of good faith and in response to what is happening in New South Wales, to decide to introduce into this House tomorrow the Medicare reform legislation. I should like to say a few things about this dispute. First of all, it is quite clear that the dispute is ending now in a whimper rather than with a bang, as I had always anticipated would happen. Anyone who has observed the actions of these militants in the last four or five weeks, since the very generous package was offered as a settlement in New South Wales, would recognise the total arrogance and intransigence of these doctors. Mr Carlton —You have a lot to answer for. Dr BLEWETT —We will come back to what the honourable member has to answer for in one moment. I recognise that some of these doctors will not return to the public hospital system in New South Wales; but those who have viewed their statements would recognise, first of all, that a number of these doctors have no commitment whatsoever to the public hospital system of New South Wales unless, of course, they can run that system by themselves and for themselves. Secondly, one has noted throughout this dispute the willingness of some of these people-only a minority of the profession-to jettison the basic ethics of their profession in order to win political points. All of us, particularly those from New South Wales, have encountered the lack of compassion that these people have displayed to their patients. In that regard, I believe that the New South Wales public hospital system will be better off without the return of some of these people. Let me now give credit to the retiring President of the Federal AMA, Dr Lindsay Thompson, and to the General Secretary of the AMA, Dr George Repin, who throughout this dispute have acted in good faith and worked with government to try to achieve a satisfactory resolution. Let me thank all those members of the medical profession who, whatever their disagreements and disputes with Medicare, believed that the action taken by the militants in New South Wales was not the way to go and who made their judgment very clear in the national plebiscite. I regret that no such credit can be applied to the honourable member for Barker and to some, though not all, of the honourable members on the Opposition benches who, to the very end, were prepared to back these militant specialists against the AMA and against, in fact, the great bulk of the medical profession. I regret finally, the great damage that has been done to the New South Wales public hospitals and, indeed, to the medical profession by the actions of a small, arrogant, militant clique. Mr PEACOCK —My question is directed to the Treasurer. I refer him to the taxation submission from the Department of Social Security to the Economic Planning Advisory Council, which indicates that a broad-based consumption tax of sufficient size to allow substantial personal income tax cuts could require compensation of more than $2 billion to be paid to low income recipients? I ask the Treasurer: Could increased outlays of this magnitude be accommodated within the trilogy commitment not to increase government outlays as a proportion of gross domestic product. Mr KEATING —The presumption in the question of the Leader of the Opposition is that there is some stated policy on the part of the Government about a consumption tax. Opposition members-Ah! Mr KEATING —No, it is before the Cabinet. While all the fiscal and tax harlots opposite jump on the boat of opportunism they will be left in the gutter of fiscal irresponsibility whence they came and where they belong. Mr BEDDALL —I ask the Minister for Sport, Recreation and Tourism whether the Government has agreed to provide $63.5m to the Brisbane City Council if it is successful with its bid to host the 1992 Olympic Games? Mr JOHN BROWN —The Government has decided to support the bid by the Brisbane City Council and the Queensland Government to stage the 1992 Olympic Games on the condition that the funds provided are returned from the revenue provided by the Games. The services provided will be those that would not be provided from other services, for instance, communications through Telecom Australia, security for visiting athletes, security for visiting heads of state, et cetera. Opposition members interjecting- Mr JOHN BROWN —It seems to me that the people opposite are at odds with the fact that this Government is supporting Brisbane's bid. I would have thought that at some bipartisan level honourable members opposite would be supporting it. It is to their own Party's discredit that when Brian Dixon, the Victorian Minister for Youth, Sport and Recreation, put up a marvellous bid for the 1988 Games honourable members opposite failed to support it. They just do not understand the value to peace and understanding of the Olympic Games, nor the credit to Australia in its bicentennial year. We happen to have a different view. I do not resile at all from the fact that we are supporting Brisbane's bid, with the full support of the Prime Minister. The Brisbane City Council has put together a very powerful group of businessmen, who will be going to Berlin in June to support the Brisbane bid. I can assure the House that they will have the full support of this Government. I think it is pertinent to suggest that Los Angeles proved that the Games do not need to be run at a loss. I am quite confident that-- Mr Porter —You should know. Mr JOHN BROWN —If the honourable member wants to get into that question he should ask his leader whether he wants to have an open debate on it. I am sure he does not. Mr Peacock —What are you talking about? Mr JOHN BROWN —There are a few cheap snipes at the cost of overseas trips. If the honourable member wants to open a debate on that I am quite happy to accommodate him. In conclusion, we are firmly behind the Brisbane bid. I can assure the public of Australia, and even the questioning Opposition, that there will be no open-ended commitment of public funds to something that could be a loss because we are quite confident that these Games, if the bid is successful, can be a success. Mr HOWARD —I ask the Treasurer: Does he share the view of the Minister for Finance that it would be quite catastrophic if an indirect tax were introduced, unless there were wage discounting for the price effects of it? Will he therefore guarantee to the House that in the Government's proposed taxation reforms there will be a full discounting for the consumer price index effects of any indirect tax rises? Mr KEATING —It is very interesting, as I said the other day when I spoke on the matter of public importance, that we will see no responsibility from the Opposition in this matter; we will see only opportunism. Opposition members were invited to the taxation summit. They have declined to come. They are obsessed with what is in the White Paper, but are unprepared to discuss it at the summit. While the Government is still considering the issue, the Opposition is trying to score a cheap political point by concentrating on some design feature of a tax which is yet to be finalised by the Government. It is very interesting that the former Treasurer keeps talking about this road to Damascus. The fact is that he was on a push bike on the road and got run over. He picked up the bike and got run over again and then he picked it up and got run over again. It is an excursion which I would have thought he would prefer to forget, rather than rekindle it in the minds of honourable members. Apparently he is interested in a bit of masochism, to go back over his own poor record. He talks about discounting for the CPI. At no stage did he propose, when speaking of indirect taxes, that his proposed indirect tax-the one he ran up the flagpole for 2 1/2 hours before he dragged it down-would in any way have an offset in respect of taxation. Mr Peacock —What you are running up the flagpole is a white flag to the unions, not a white paper. Mr KEATING —It was an add-on, an indirect tax as an add-on, because he knew that he had no prospect of ever securing the introduction of a broad-based consumption tax in this country without it having substantial inflationary effects. That is why he takes the view-and let him correct it if he feels he must-that basically only a Labor Government can do it and if this Government cannot do it, it cannot be done. No matter how much bleating there is on the part of members of the Opposition about their desire to go down the path of an indirect tax, they know that the unions would have them for breakfast because they have no framework within which to discuss the introduction of such a tax. In some of the inane interjections I am hearing from the Leader of the Opposition, he is talking about running up the white flag to the unions. That is perfectly consistent with the views he has put in the past: Do not talk to the Australian Council of Trade Unions; do not talk to the players in the Australian tax debate; do not talk to business; do not talk to the trade unions; sit and talk about it here; and then, when the grapeshot crosses the trench, dive back into it-like he did in the past. That is the policy of the Leader of the Opposition. We have a little more guts and a little more national responsibility than he has, and he can sit and watch and rot; sit and watch and laugh his silly head off as he sees these reforms move into place. Mr BLANCHARD —My question is directed to the Minister for Science. Is it a fact that the Chinese have established a base in Antarctica? What other nations are now indicating an interest in Antarctica? Mr BARRY JONES —It is a fact that the Chinese have opened a research station in the Antarctic. It is called the Great Wall Summer Research Station. It is on King George Island off the northern tip of the Antarctic peninsula. They used, rather surprisingly perhaps, logistic support from Argentina. Australia was informed by the People's Republic of China of its intention to set up a station and by Argentina of the request to provide support and its agreement to do so. Australia continues to have close ties with Chinese Antarctic research, with three Chinese scientists currently working in the Australian Antarctic territory and three working with Antarctic Division scientists in Australia. The Chinese at the end of their first full season, returned to China, having had 500 people working in the Antarctic for that season, which is more than twice the number that we have working there in any season. Mr Bilney —This is a big country. Mr BARRY JONES —It is a big country. On a population basis we are still ahead. However, there are some other developments. The Japanese are setting up an additional base. I had the benefit of talking to the people in the National Polar Research Institute in Tokyo. The Italians, who have never before exhibited interest in this area, are at the point of appropriating $US100m to set up quite a large scale polar activity in the Antarctic. I discussed this with the Minister, Senator Luigi Granelli, in Venice. The Swedes, whose interest has been confined to the North Pole, unlike the Norwegians-are now interested in trying to develop co-operation with Australia. I have invited Professor Anders Karlqvist, the Director of Polar Research, to visit the Australian bases from November throughout the summer season and he has accepted. There is a great deal of activity going on in a number of other countries that have not indicated interest in Antarctica before. Mr SHIPTON —I ask the Minister for Aboriginal Affairs a question, and I hope that he is a little less jet-lagged today than he was yesterday. I refer the Minister to part of an answer he gave me yesterday in response to a question regarding the National Aboriginal Conference. The Minister said in part: The mismanagement that took place was subject to continual supervision as soon as we were aware of it. Given that honourable members on both sides of the House will endorse that statement, I ask the Minister: Did he personally enter into a memorandum of understanding with the NAC creating an agency arrangement? Did this agency arrangement involve officers of his Department assuming a shared responsibility for the NAC's financial affairs, including the joint signature of cheques? Did the NAC operate large overdrafts in direct violation of its accounting arrangements after this agency arrangement was put in place and were his departmental officers signatories to cheques drawn on the overdraft? Mr HOLDING —Unlike certain honourable gentlemen opposite I did not bother to check the Hansard record because I think that Hansard often makes better speeches for honourable gentlemen opposite than they ever make for themselves. The agency arrangement was entered into at the request of and with the authority of the NAC. It was arranged by departmental officers and it involved the allocation of departmental officers to the NAC to provide general supervisory and administrative support for the operations of the general financing of the NAC. Mr Sinclair —Including the signing of cheques? Mr HOLDING —Yes. I am unable to tell the right honourable gentleman that every cheque was signed, but as far as I am aware that was the case. As to the particular question in respect of overdrafts, I do not have the details but I will provide them for the honourable gentleman. Mr Shipton —Later today? Mr HOLDING —I will get the information for the honourable gentleman as soon as practicable. There was from time to time some unhappiness on the part of the NAC. Its members put forward the view from time to time that they felt that they had reached a stage at which they could satisfactorily manage their affairs and that led to some difficulties a week ago. I am told that the agency arrangement is still in existence and is operating satisfactorily. I am also informed that the problems which were identified by the Auditor-General have largely been rectified. Mr GORMAN —My question is directed to the Minister for Immigration and Ethnic Affairs. Are reports that the Vietnamese Foreign Minister has expressed objections to the attacks on Vietnamese nationals in Australia correct? Is this affecting family reunions from Vietnam? Mr HURFORD —To my discomfort, sadly, the reports are correct. I had my ears pinned back in no uncertain terms by an old acquaintance of mine, the Vietnamese Foreign Minister, Nguyen Co Thach. I prefer to be on the offensive rather the defensive, but on this occasion Mr Thach had evidence that there was harassment of Vietnamese nationals in this country. They are students under the United Nations Development Program. In one or two cases there has been harassment of Vietnamese Embassy officials. I had to assure the Vietnamese Foreign Minister that these acts of violence had no sympathy, not only with the Australian Government, but also with the vast majority of the Australian community; that he was under a misapprehension. I was glad that I was able to put him straight on this matter. Since returning home I have had the chance to talk with the Foreign Minister on the telephone and with the Special Minister of State in Australia about making sure that sufficient resources are made available to prevent such violence being inflicted in future on such people in this country. I also point out to the House that the second part of the honourable member's question is also, sadly, true. Such attitudes and such violence are affecting the family reunion program concerning Vietnam. We shall have to rely heavily on the goodwill of the Vietnamese Government if we are to pursue for compassionate and humanitarian reasons family reunions from that country. We rely on the Vietnamese Government to make available the necessary exit permits. It is true that thousands of Vietnamese in this country are without their spouses and dependent children, to say nothing of non-dependent children, parents and the other categories of people who are also in a priority area. It is necessary for that reason that we should have as good a relationship as is possible to be able to get those exit permits and to arrange for our interviewing officers in Ho Chi Minh City and elsewhere to sit down and make arrangements for these people to come to Australia. Opposition members interjecting- Mr HURFORD —I cannot hear myself over the rabble of interjections. I would be interested to know whether there are honourable members on the other side of this House who do not wish people to come from Vietnam for the purpose of family reunions. Does anybody want to speak up against that? Mr Peacock —We implemented it in the first place. Fancy asking that question! How ludicrous. Mr HURFORD —The previous Government did not implement the family reunion program; it implemented the refugee program. It has been only in the current financial year only that the necessary administrative arrangements have been made for 3,500 people to come to this country. We are hoping to lift that number. In the previous financial year, only 500 such people came to this country. At no time under the previous Government were there any family reunion migrants from Vietnam coming into this country. Opposition members interjecting-- Mr HURFORD —I am not denying that honourable members opposite started making arrangements for it to happen, but there were no family reunions during their term of office, and it requires arrangements for that to be done. So, yes, unfortunately, this violence is affecting family reunion from Vietnam. I hope that, by my being there and being able to explain to Foreign Minister Thach that the elements who are perpetrating this violence do not have the sympathy of this Government and of the vast majority of the Australian people, he will facilitate the continuation of the administrative arrangements which are necessary. But, most of all, it is important for the Vietnamese community itself to make sure that those elements do not continue in the way they have. It is not good to see the incitement to violence, for instance, which appeared in one of the Vietnamese newspapers, the Bell of Saigon, and which was more than adequately responded to by the Acting Minister in my absence. That sort of thing is not good enough. It does not help the Vietnamese community. It also does not help that relationship between Vietnam and this country which is so necessary for the energetic and imaginative work of our Foreign Minister in seeking a political solution to the Indo-Chinese situation. Mr COBB —I direct my question to the Minister for Aboriginal Affairs. In light of the fact that the Minister did not answer my question yesterday, I now ask: Did the Minister for Aboriginal Affairs, as is stated in Appendix D of the Auditor-General's report, agree to the cars, acquired by the National Aboriginal Conference contrary to his direction, being purchased by 27 members of the NAC with the assistance of loans from the Aboriginal Development Commission? Also, did the Minister approve a $409,000 reduction in the NAC budget to offset the loans? How does the Minister justify this exercise of ministerial responsibility? Mr HOLDING —On the question of the purchase of cars, National Aboriginal Conference members required cars to service very large electorates. Mr Tuckey —Ah, ha! Mr HOLDING —That is true. Many NAC members have an electorate that is larger than the honourable gentleman's and, I must say, in fairness to them, that they have served their electorates better. Mr Ruddock —It is a reflection on your colleagues. Mr HOLDING —In respect of this, there was a budget allocation- Mr Ian Cameron —When will we get a motor car? Mr HOLDING —When the honourable member learns to drive. Madam ACTING SPEAKER —Order! The House will come to order. Mr HOLDING —There was a notional budget allocation for 1983-84 of about $360,000 for the NAC to purchase cars, which were necessary, and priority was to be allocated to those members who needed them, particularly those who represented remote areas. the NAC proceeded to purchase cars for all members, which took it above its budget allocation. Mr Shipton —And you approved it? Mr HOLDING —No, I did not approve it. I directed the NAC to desist and not to proceed with those purchases. I gave it two instructions in writing, and the NAC still proceeded on that course. I then had a conference with the full NAC Executive, and I told it that that practice would have to cease; that the members would have to either return the cars or purchase them individually. A number chose to return the cars, and they were returned to the Department and allocated to other Aboriginal organisations which were in need of vehicles. Those who wanted to enter into private arrangements with the Aboriginal Development Commission did so. Dr KLUGMAN —My question is directed to the Minister for Immigration and Ethnic Affairs. It follows the previous question that he answered. I preface it by saying that I dissociate myself from attacks by the Vietnamese community on the Vietnamese students in this country. At the same time, does the Minister understand that people who are refugees from brutal totalitarian regimes, whether it be Hitler's Germany, the Soviet Union or Indo-China, get upset when some naive and/or malevolent people in this country show great support for those regimes? Mr HURFORD —I do understand the emotions of the people who have been forced to leave their own countries because of their hostility to the regimes in those countries, and indeed the hostility of the regimes to these people. These matters are understandable. I have had many meetings with leaders of the Vietnamese community and I have expressed the sympathy of the Government for the predicament in which they have found themselves and for what has happened to their lives. At the same time, there is no place for any Government Minister or any spokesperson for this Hawke Labor Government to express anything but abhorrence for violence being perpetrated on other people in this country. There is nothing to stop the Vietnamese community expressing its ill will towards the present regime in Vietnam. Nobody would put any sort of censorship on that happening. People must be allowed to speak out against violence, whether it is violence perpetrated on the students from the Socialist Republic of Vietnam or, indeed, against the Embassy officials. That is what I am doing. I am pointing out that that violence is not in the interests of the Vietnamese community because it is affecting family reunions from their country. That is what I have done and that is what I will continue to do. Mr SINCLAIR —Will the Minister for Defence advise the House whether Budget economies or Australia's defence requirements will prevail in his consideration of the suggestion by his Department that Australia's F111s be scrapped? Mr BEAZLEY —There is no suggestion from my Department that the F111s be scrapped. No advice has been received by me on that matter. I do not contemplate getting any advice on it until such time as we are in receipt of a full scale review of our force structure requirements. I will approach any discussions on these matters from the point of view of the very firm commitment we have to the effective air defence of this country, with an essentially air-based maritime strike role for our Defence Force. The speculation in this regard is, to say the least, decidedly premature. To set aside that question and look overall at the budgetary requirements of the Defence Force, this will be, of course, a major problem for this Government over the next decade of its life. As we look at the structure of our Defence Force, we will confront the problems we inherited in this area, which are massive as a result of decisions taken by our predecessors. If one wonders why occasionally speculation arises out of the Defence Department as to what might or might not be done in relation to the force structure and what might or might not be dropped from it, one needs to consider the record. When the previous Government brought down its 1976 White Paper on defence, which was strongly supported by us, it assumed something like a 7 per cent real growth in defence spending over a five-year period; 2.5 per cent was achieved. After the conflict in Afghanistan we had a great performance along the front bench from the then Prime Minister and his Defence Ministers about how much we were doing. A set of guidelines was established for about a 6 per cent real increase; but 2.5 per cent was achieved. We have now in government to confront that legacy. The way we have confronted that legacy is to increase defence spending in real terms at a rate substantially above the performance of previous governments, for which, of course, we get no credit from the other side of the House. I go further on that point. We have far more realistically stuck to the guidance that we have established for ourselves than the opposition was ever capable of doing while it was in office. These problems are very substantial. They are going to be considerable problems for the Government over the next few years. It is important as we confront them that there is a thorough ongoing understanding in the public of the appalling legacy that we have been left. Opposition members are great performers at wrapping themselves in the flag when it comes to dealing with defence issues, but when it actually comes to delivering they achieve nothing. I can take out one more example of the previous Government's performance. Mr Peacock —This is the tired old Labor trait; you dump it on the other side and do nothing yourself. Mr BEAZLEY —I am not surprised that the Leader of the Opposition is upset and hurt about this because as a member of the previous Government's national security committee he bears responsibility along with the then Defence Minister and his colleagues. If it comes down to the question of capital equipment, the maximum that the previous Government achieved was 17 per cent of one year's defence expenditure. In our two Budgets so far it has been 22 per cent and 23 per cent, and it will be higher in this Budget. That is our achievement in this regard. It is in stark contrast to the previous Government's neglect. As far as the political debate in this country is concerned, over the next few years Opposition members do not need to worry; all the statistics will be on our side and all the blame will be properly sheeted home to them. Mr HAND —I direct a question to the Minister representing the Minister for Education. I draw his attention to an article in the Melbourne Age of Saturday, 11 May. The story deals with a Dr Geoff Jones who is about to take up a position at the Victoria College. I also point out to the House that Dr Jones has just completed a contract at the University in Benghazi, Libya. I ask my question on the basis that there are a large number of academics living in my electorate and a number of academic institutions. I ask: Has the Minister read the article and examined the advertisement mentioned in the story which invites academics to apply to teach at the university in Benghazi? Is the Minister able to confirm the references to mass hangings in 1978 of 12 students and the repeating of similar acts each year in April? Has the Government taken steps to warn Australian academics of the physical dangers they would face if they were to take up one of the advertised positions? Has the Government raised these issues with officials at the Libyan Information Centre in Melbourne? Mr DAWKINS —The article was drawn to my attention by the honourable member for Melbourne and there is no question that it does reveal a very sorry experience for Dr Jones and does, in fact, describe some pretty horrendous circumstances in Libya. I might say that I respond to this question as the Minister representing the Minister for Education but in my capacity as the Minister for Trade I am also keen to export educational services, although I must say on this occasion that has been singularly unsuccessful. I cannot, of course, confirm the circumstances which are recounted by Dr Jones. I can agree with the honourable member for Melbourne that it is important for academics who might be contemplating this kind of service in Libya to understand perhaps a bit more precisely what we might generally call the exigencies of life in a fundamentalist Muslim state. I might go on to say that certain Australians are either appointed or self-appointed representatives of the Libyan Government or Libya who have apparently been responsible for this recruiting exercise over the years and are apparently responsible for placing these advertisements, which are still appearing. I think if I were the Libyan Government and looking at the performance of these Australians and advising them on these matters, I would say that it had been singularly unsuccessful in its endeavours. I think it might be an opportunity for a review of this matter. It is important for those who are trying to recruit Australian academics to make sure that they are fully aware-not only in Australia but elsewhere-of the kind of situation with which they might be confronted: For example, the remuneration might not be as was held out and the courses that they end up teaching might not be those they thought they would be teaching. Perhaps there is a need to ensure that the people who are responsible for this recruiting exercise do not mislead Australian academics in the way that has obviously happened on this occasion. Certainly, I will take this matter up with the Minister for Education to ensure that Australian academics are properly apprised of the circumstances they might confront in these situations and to ensure, perhaps, that a more correct description of the circumstances is available for them. Mr MACPHEE(Goldstein) —I wish to make a personal explanation. Madam ACTING SPEAKER —Does the honourable member claim to have been misrepresented? Mr MACPHEE —I do. Madam ACTING SPEAKER —The honourable member may proceed. Mr MACPHEE —I claim to have been misrepresented by the Minister for Immigration and Ethnic Affairs (Mr Hurford). I was the Minister responsible at the time the orderly departure program was negotiated by the previous Government from Hanoi to Australia. The family reunion program which he today boasted was the work of the present Government was, in fact, begun by and was the work of the previous Government. It was hard negotiating because the Government in Hanoi was most unco-operative and disinterested in the wellbeing of the people whom we wanted to bring to Australia and who wanted to come to Australia to be reunited with their families. This Minister says he wants bipartisanship in this area, but this is not the way to go about it. This is a most important area and he has seriously misrepresented me and the previous Government. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs) —I claim to have been misrepresented. Madam ACTING SPEAKER —Does the Minister wish to make a personal explanation? Mr HURFORD —I do. Madam ACTING SPEAKER —The Minister may proceed. Mr HURFORD —First of all, I never mentioned the name of the honourable member for Goldstein (Mr Macphee) and, as will be confirmed by the honourable member for Warringah (Mr MacKellar), I acknowledged that the negotiations were commenced under the previous Government. The point I made was that not one of these people had arrived-- Mr Macphee —That is not our fault; that was the fault of the Vietnamese Government. Mr HURFORD —I was not blaming anybody-- Mr Macphee —Oh, yes, you were. You were trying to suggest it was our fault. Mr HURFORD —I will continue with my personal explanation. During my answer to a question in Question Time, I was faced with a rabble of interjections from the Opposition benches. One could come to only one conclusion and that was that Opposition members were against family reunions and were favouring the violence being perpetrated on these nationals in this country. If I drew the wrong conclusion from those interjections, I will withdraw and acknowledge that those negotiations were commenced under the previous Government. I said so in my answer, I have not misrepresented anybody. Mr MACPHEE —Madam Acting Speaker, I claim again to have been misrepresented. I wish to make a personal explanation. Madam ACTING SPEAKER —The honourable member may proceed, provided he has a personal explanation. Mr MACPHEE —I, along with my colleague, the honourable member for Warringah (Mr MacKellar), made a clear statement to the demonstrators outside Parliament House that we wanted them to abide by the peaceful democratic procedures of this country and we made it abundantly clear that they were not to engage in physical violence. We on this side support the statement made by the Minister. If he had taken the trouble to find out, he would never have embarked on this futile debate this afternoon. Mr GOODLUCK(Franklin) —Madam Acting Speaker, I wish to make a personal explanation. Madam ACTING SPEAKER —Does the honourable member claim to have been misrepresented? Mr GOODLUCK —I do. I refer to a speech by the Minister for Transport (Mr Peter Morris) on 10 May 1985, at page 2100 of Hansard, where, in reference to the concern expressed by the honourable member for Denison (Mr Hodgman), the honourable member for Lyons (Mr Burr) and me in relation to the Abel Tasman, he said: As I said earlier, their concern for this problem is new found. They have sat here mute day after day, week after week throughout the dispute-and it began several weeks ago-and there has not been a word from them. Then this afternoon they launched a cheap hit and run attack during the adjournment debate when the Prime Minister was not here to respond. That is completely untrue. I refer to a telegram that I sent the Prime Minister (Mr Hawke)-I do my homework-on 1 May 1985. It states: Am deeply concerned about the hold-up of the ferry Abel Tasman in Germany which can only be described as industrial blackmail by union stewards. To me it is an absolute disgrace that $30m of taxpayers money should be held to ransom in this way. In view of the seriousness of the present situation may I urge an immediate investigation of the dispute by your Government, and request you to support the Tasmanian Government and use your influence to have the unionists removed. I sent a copy of that telegram to my Leader. There was not a word in reply from the Prime Minister. That is the reason why I say I was misrepresented. Madam ACTING SPEAKER —Order! The honourable member will not debate the issue. He has made his explanation. Mr SHIPTON(Higgins) —I wish to make a personal explanation. Madam ACTING SPEAKER —Does the honourable member claim to have been misrepresented? Mr SHIPTON —I have been misrepresented in relation to reported comments concerning my presence outside the Parliament yesterday at a demonstration by some members of the Aboriginal community. The first matter to which I wish to refer is an Australian Broadcasting Corporation news broadcast last evening at 6 o'clock in Canberra, though, I imagine it was broadcast in other news programs around Australia. In part, that ABC broadcast said: During the demonstrations Federal Police told the Opposition spokesman on Aboriginal Affairs, Mr Roger Shipton, to leave the scene, saying he was inciting a breach of the peace. That is totally incorrect and I reject it outright. In so rejecting it, I refer to what was said subsequently in that ABC broadcast. In part, it was said that I was talking with a policeman and I had said that I believed I was entitled to be there and the policeman said: 'All right. You may stay here'. The transcript of the interview indicates that I said: 'Do you believe my safety is in jeopardy?' The policeman said: 'I believe there will be a breach of the peace'. I said: 'By whom?' He replied: 'By the whole mob'. I reject the allegation made by the ABC that I was inciting a breach of the peace. The word 'inciting' was not mentioned to me and I do not believe that it was mentioned by the policeman. The second matter relates to an article on the front page of the Canberra Times this morning. The article stated that an inspector: . . . told Mr Shipton that he feared that if he (Mr Shipton) remained he might be the cause of a breach of the peace. No policeman said that I might be the cause of a breach of the peace and the relevant part of the transcript from the ABC interview last night supports my proposition. I claim also to have been misrepresented in an article in the Melbourne Sun of today's date, which said: Federal Police asked Mr Shipton to leave. If he remained, they said, he would be in breach of the peace. As I have said in relation to other articles, the police did not say to me that I would be in breach of the peace. I have also been misrepresented in an article in today's Sydney Morning Herald. I draw attention to the headline of that article and some reported comments by the Minister for Aboriginal Affairs (Mr Holding) at a Press conference yesterday. The Minister is reported as having said of me: . . . placed himself in a situation which I think was clearly provocative and could have incited breaches of the law had it not been for intervention of the Federal Police. That is totally incorrect. The final point on which I have been misrepresented relates to comments made last evening in the adjournment debate by the honourable member for Melbourne (Mr Hand) and the Minister for Aboriginal Affairs. They stated that in a debate in this House on 17 April on the Auditor-General's report on the National Aboriginal Conference I had referred to the Chairman of the National Aboriginal Conference, Mr Riley, in my speech. If they check again, they will find that I did not refer to Mr Riley in that speech on that occasion. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth that whereas: 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 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 Beale,Mr Duffy,Mr Lamb,Mr Shipton and Mr Willis. 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 the 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 Ruddock. 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 Government's failure to act to correct the anomalies in the Assets Test on pensions bring to its notice and due to have effect from the 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 Government's 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 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. And your petitioners as in duty bound will ever pray. by Mr Kent and Mr Staples. 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 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 will ever pray. by Mr Ruddock and Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That the Prime Minister, the Hon. R. J. Hawke, answer and not ignore correspondence requesting that he as Minister for the Bicentenary not waste taxpayers money on a $500,000 subsidy for a 130 foot passenger yacht in Western Australia duplicating existing facilities and sending private charter yacht operators bankrupt; and in a time of economic restraint the Prime Minister, the Hon R. J. Hawke, spend this valuable taxpayers' money more wisely on much needed essential items not already provided and not on toys for the people of Australia. And your petitioners as in duty bound will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The 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 3 cents 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 the Parliament assembled: The petition of the undersigned Australian citizens respectfully showeth that: (i) The financial situation of students enrolled at Australia post-secondary institutions is already extremely difficult and any increase in the financial commitments of students would gravely worsen their financial difficulties. (ii) The imposition of post-secondary tuition fees of comparable levels of those imposed prior to 1971 would force many currently enrolled students to discontinue their studies and deter many persons willing and able at present to undertake post-secondary study from doing so. (iii) Those students and potential students from social groups currently under-represented and disadvantaged in the education system would be severely affected by the reintroduction of fees for post-secondary education. Your petitioners therefore pray that: 1. post-secondary tuition fees not be re-introduced for any category of students. 2. any form of Stamp Duty or similar system of the ''user pays'' principle in education not be introduced. 3. emphasis should be on increasing access to education by, among other things, increasing student financial assistance. 4. the visa charges upon private overseas students be removed immediately. 5. the Minister and Youth Affairs immediately clarify the government's attitude to the reintroduction of post-secondary tuition fees. And your petitioners as in duty bound will ever pray. by Mr Humphreys. 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 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. Your petitioners pray that Members and the House assembled will close Omega. 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 Parliament assembled: We, the undersigned, are deeply concerned that the introduction of the Federal Government plan for the dairy industry will put thousands of dairyfarmers and even more people associated with the dairy industry out of work. As Australian dairyfarmers, in particular Victorian and Tasmanian are the most efficient in the world, the loss of such an efficient industry to the Australian economy would be devastating. The undersigned humbly petition the Federal Parliament to carry out an impact study with the dairy industry before any introduction of the proposed dairy industry plan. And your petitioners as in duty bound will ever pray. by Mr Lloyd. 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. The Right Honourable the Speaker and the Honourable Members of the House of Representatives in the Parliament assembled. The humble petition of the undersigned electors of the Commonwealth of Australia respectfully showeth that: 1. We are completely satisfied with the design of the existing Australian national flag. 2. We are aware it properly reflects the immutable characteristics of Australia, namely: The Union Jack itself the creation of 3 Christian crosses represents the nation's historical origin and the source of its language and law. The Southern Cross on an azure blue background signifying its place in space. The large star depicting the advent of Federation in 1901. 3. We know the flag has been a source of inspiration to generations of Australians in peace and war. 4. We recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. We are certain that any change to the flag will produce division in the Australian community. Your petitioners therefore 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 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 Simmons. To the Honourable the Speaker and Members of the House of Representatives of Parliament assembled. The petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth: That in the light of the Labor Government's proposal to bring about a reduction in the amount payable under the present Family Allowance Scheme, that the House of Representatives assembled oppose such a move, on the evidence of its impact upon the family unit. Your petitioners most humbly pray that the House of Representatives in Parliament assembled should immediately seek to restore payments to the former level. And your petitioners as in duty bound will ever pray. by Mr Slipper and Mr Conquest. To the Honourable the Speaker and Members of the House of Representatives of 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 Schools 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 Staples. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned shows: That we condemn any form of participation by Australia in the testing of MX Peacemaker Missiles, or any similar weapons, from Australian shores. Your petitioners request that the Senate, in Parliament assembled, should reject totally any form of commitment by the Australian Government to support, or participate in, the United States' MX Peacemaker missiles and ensure that Australia's commitment to a Nuclear Free Zone in the South Pacific be maintained. And your petitioners as in duty bound will ever pray. by Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of 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 the undersigned citizens of the Federal Division of Fisher, in Queensland respectfully showeth: Introduction of any additional capital gains taxes, property or wealth taxes, death or gift duties is opposed on the grounds that: they adversely affect the small and medium size businesses in Australia, destroying incentive and discouraging investment in this important area of the economy; the Australian economy, and employment in particular, is heavily reliant on growth in small businesses; any capital gains that might result when owners of small businesses finally sell the business are not ''windfall gains'' but the result of many hard years of work and sacrifice, with very little being taken out of the business by way of salaries so that the maximum amount of money can be ploughed back into the business to create growth and jobs; the owners of small businesses often depend on a capital gain-which are simply deferred salaries-when they eventually sell their business to sustain them in retirement. the people of Australia are already being subjected to the oppressive tax policies of the highest taxing government in Australia's history-the Hawke Socialist Government. Your Petitioners request that the House of Representatives, in Parliament assembled, will protect the rights of private enterprise and reject any inequitable additional taxes. 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 Ryan (Mr Moore) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The delays, inadequacies and inefficiencies in Australia's telephone and postal services, and their impact on business and the community. 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 MOORE(Ryan)(3.03) —Not a day goes past without someone approaching me to complain about Australia's postal or telecommunications services. It must be the greatest area of disappointment in Australian folklore in terms of the whole of the Government's services in this nation. There is an enormous amount of investment in both and there has been colossal insecurity in dealing with both authorities. Because of that I decided to see what the duties of the Australian Postal Commission are. The Act states that the Commission shall perform its function in such a manner as will best meet the social, industrial and commercial needs of Australian people. That is not a bad definition, and if people can say that what they are getting today goes anywhere near meeting that, I would be surprised. After all, it is charged to administer the Act and to play a part in it. The Minister for Communications (Mr Duffy) gave a speech of anguish at Albury about how badly the post office is performing and how it would have to lift its game or the Government would do something. I can understand that. The Minister is a very personable fellow and well known around the place. He would not want to cause concern or worry in those areas. But that is not the feeling of the trade unions which are involved in those two enterprises. They stood over the Government and said: 'You must repeal the ''no work no pay'' clause'. Of course, the Government being obliging, as it is, to the trade unions in this nation, went ahead and did that-it repealed the very weapon which enabled some discipline to be brought about within those organisations. What has happened since then? In the Sydney area, which is the worst example of Australia Post, industrial disputes increased by 1,700 per cent. The people there do not have to do anything in particular, they do not have to go on strike; they just do not perform their duties. They are paid, but they do not perform their duties. Forty per cent of all mail in Australia is affected by the services meted out by the Sydney Post Office. I wonder what on earth can be going on and I wonder what on earth the Government think can be going on. This has not gone unnoticed, because in every newspaper one finds headlines such as these: The Sydney Morning Herald of 27 October 1984, 'Mail disputes soar after repeal of no-work, no-pay'-surely we did not miss that; the Canberra Times of 6 October 1984, 'ACT mail: problems of shortages, disputes, reorganisation'; the Sydney Morning Herald of 29 March 1985, 'Aust Post wary of overtime changes', and the Sunday Telegraph of 12 May 1985, ' ''Sabotage'' bid at $7m mail centre'. That is just a small collection of newspaper headlines which have been inspired by what the users of Australia Post think of the general service. Against that, we find the Government meekly complying with the requirements of the unions. Australia Post has been hampered by the trade unions of the times, which have been able to stand back and dictate their terms. Australia Post has not been able to bring into operation the new distribution centres in Sydney with any efficiency and sense of urgency, and because of that Australia Post and the Australian people suffer. Let me give you a few details in terms of what the people who use Australia Post have got out of it. Here is a sample of a Canberra user who received 206 pieces of mail in one week. Of those, 33 per cent took five days to get there; 15 per cent took six days to get there; and just on 17 per cent took three days. The vast majority of those pieces of mail arrived after the expected time. When one speaks to Australia Post, it tells you that its aspiration is to deliver mail on the next day of business. That example quite clearly indicates that a major institution in Canberra did not receive its mail in anywhere near that time. I refer to a friend of mine who has a business in Redfern. He said to me this morning: 'It is strange that you should ring'. I said: 'Why is that?' He said: 'I am complaining about Australia Post'. He had just received two letters, both posted from within Sydney. One was posted from St Leonards, marked 26 April, and arrived at his office on 8 May. The other was posted in King Street, Sydney, on 8 May, and was received at Redfern on 13 May. What an appalling performance! It is no wonder that people are going outside the system. It is worth while pointing out the effect on a particular businessman in relation to a cheque which he asked to be forwarded to him in January. It did not appear. After many phone calls, the cheque was cancelled and reissued. Fifty-nine days later, after many phone calls, and the loss of interest on that $12,000 cheque, the cheque got through. What sort of service to the business community of Australia is that? Who would bother to persist with the use of that service, when the courier services will guarantee overnight delivery on those sorts of items? It is unthinkable that Australia Post should hold a monopoly, and at the same time expect people to go ahead and use it in this manner. I put forward a solution to the problems in Australia Post. I make four simple points: Firstly, I suggest the reintroduction of the no work no pay industrial law. That in itself would arm the management of Australia Post with the simple procedures to enable it to discipline its employees. Secondly, a program of action should be designated for the management of Australia Post, which would ensure that certain goals were met, such as security of delivery and security within the post offices, and would ensure that the system itself was not open to the pilfering which is referred to in one of the articles I mentioned. Thirdly, having set a timetable for the management of Australia Post to improve its performance, a time limit should be set for that objective to be met. Fourthly, in the event of failure to meet that time limit the Government would be required to move to replace the management and move towards the privatisation of Australia Post wherever possible. It is time that Australians were given service. In the age of communication our most commonly used means of communication is in the greatest mess we have ever seen, and it is time something was done about it. I have given but a few examples of the failings of Australia Post. The second government body which most of us have to complain about because of huge delays is Telecom Australia. It is Australia's biggest business. It employs 70,000 to 80,000 people around Australia. It provides a remarkable service in some areas but it is in itself a divided kingdom which has two mainstreams. The first is the main communication trunk lines of Australia and the second is the connections between the major trunk lines and the domestic and corporate users within this nation. That is where the principles conflict. Mr Price —I think you've got it wrong, John. Mr MOORE —The honourable member can have a go. I have not heard too much from him. As I understand it, 60 per cent of all the money spent in Telecom is spent on connections to the main trunk services. At the same time, one-third of the total work force employed by Telecom is employed in this area. In the main transport of communications area-the main trunk routes-huge profits are being generated to cross-subsidise the whole of the system. By 'huge profits', I mean substantial profits in the ratio of 50 to 1 when compared with trunk services. That sort of cross-subsidisation can lead only to deteriorating services throughout the whole network because it will result in an attempt to belittle and not use appropriate areas of connections, certainly in terms of commercial use. This brings me to Aussat, and Telecom's relationship with it. There is not much doubt that if we are to use Aussat appropriately we will have to ensure greater availability to users of Aussat, probably outside the services provided by Telecom. Mr Duffy —For what? Mr MOORE —For general communications. At present, restrictions are being urged in that area, which, I believe, in the longer term will not help in its development. But it is not only the broad areas of Telecom with which we have to be concerned. If we were to look at the report of the Davidson Public Inquiry into Telecommunications in Australia we would be very concerned. The report not only gives the overall impression that Telecom covers too wide an area but also it states: Telecom has too many handicaps. They need attention with the help of Government. There is a need for inducement to reduce the number of craft unions, to encourage flexibility of staffing, to reduce concern for demarcation, to alleviate the apparent sense of insecurity and to allow contractors' staff to install, inter alia, digital exchange equipment and ducts. Without the confidence and co-operation of staff, Australian communications and hence the economy will suffer. That is the broad view from Mr Davidson. On top of that, he makes observations about the personal activities of some of the staff within Telecom, who certainly act on a dual and conflicting interest basis, and about their personal profit making while they are employees of Telecom. I do not know what the Government has done about this problem. These are but two items which are mentioned in the Davidson report which, it appears to me, cast some reflection on Telecom's management. I refer to the revelations made about Harkins of the Brisbane Telecom and his position which if correct-I have no doubt that they would have been researched because Mr Costigan put them forward-certainly reflect badly on Telecom's domestic management. In some areas, the role of Telecom has been very beneficial to Australia. It is my conclusion that its future lies in the concentration of capital work in the terrestrial services and that the connection services ought to be thrown open to private enterprise. By doing that, one will certainly encourage competition and service. It is at the service front where the greatest problems occur, and also where the greatest trade union interference and stand-overs occur. There is no doubt that the trade unions have had an enormous impact on costs in this area and, at the same time, have encouraged the high degree of moonlighting and private operation that go on. These factors are contributing very largely to areas of discontent. We are living in an age of communication. It is a time when all Australians have every right to expect a better communications service. They thoroughly deserve an up to date and efficient service. Not one person in this House could honestly claim that that is occurring in Australia Post, where I have indicated lie so many areas of disadvantage. Quite a number of people would feel that some of the services offered by Telecom are not up to scratch, particularly at Telecom's customer front. Therefore, as I say, the Opposition would certainly consider the position regarding the main trunk system and the customer connection points. Australians would be prepared to pay if they received the service. What Australians are getting today is no service, yet they have been forced to pay. It is a state of affairs with which all of us disagree and to which all of us will be looking to the Minister and the Government to respond. For far too long Australians have had to put up with a second-rate service for which they have paid first-rate fees. Mr DUFFY(Holt-Minister for Communications)(3.18) —Given that the honourable member for Ryan (Mr Moore), to use his own words, has said that not a day goes past without a complaint being received regarding Australia Post and Telecom Australia-he was referring in particular to Australia Post-it has taken him a considerable period to raise these issues. Having listened to him today, that is not surprising. Let us consider his contribution. He told us that not a day goes past without a complaint being received. He then referred to a speech I made at Albury, which was in fact, made at Wodonga. He then dealt with the industrial disputes of Australia Post. I will deal with that matter in a moment. His solution was 'no work as directed, no pay' and privatisation. That was about the extent of what the honourable member had to say about Australia Post. In regard to Telecom he talked about two streams-trunk routes and cross-subsidisation. It was very interesting to hear him talk about cross-subsidisation. We heard 'Hear, hear' from those who sat behind him. I do not know whether the honourable members in cockies' corner were saying 'Hear, hear'; however, I will spell out to them a bit later that if they were saying 'Hear, hear' in relation to that matter they were entirely selling out the people they purport to represent in this place. The honourable member for Ryan then moved on to Aussat Pty Ltd. He talked about general communications with Aussat. Aussat will be used for many communications matters. I asked the honourable member what he meant and he said that he meant general communications. I do not know whether he was talking about telephones, data transmission or whatever. However, in relation to telephones, some very remote areas will be served through Telecom's Iterra satellite service. I can assure him that the expense involved does not warrant it. If he has a discussion with someone and finds that that is so, it will mean that he will have gleaned some knowledge as a result of the debate today. Then there was an extraordinary performance when the honourable member referred to the report of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. With the greatest of respect to Commissioner Costigan, I do not think that he has ever claimed to be, nor is he, an expert in industrial relations. But we had a burst on Commissioner Costigan's views on the industrial relations problems within Australia Post. Then another matter came out, which I shall not let pass. That was a reference to activities of staff within Telecom Australia. Reference was made by the honourable member for Ryan to personal profit-making, and he talked about the Costigan report. Has the honourable member read the report of the Vincent Review of Allegations Against Telecom, or has he not? If he has not read it, it is about time he did. As a result of the Costigan report, this Government decided that the time had come to examine the allegations which had been made against great public enterprise institutions in this country for many years. They started a long while ago in relation to Telecom. Honourable members opposite sat back during all the period in which they were in office, from 1975 right through, and did nothing, because they would not care whether public enterprise was knocked around like that by allegations being made about it. So, sure, the time was ripe to look at them. A totally independent person was appointed to investigate not only the Costigan report. When the honourable member for Ryan gets time, he should look at the report of Special Prosecutor Redlich. He also had some things to say about Telecom. What happened as a result of Frank Vincent's report-he is now a judge of the Supreme Court of Victoria-was that he said that there was no evidentiary base whatsoever for the allegations. In fairness to the Telecom employees, before the honourable member or anyone else comes into this House making those sorts of allegations against employees, he should at least have the decency and fairness to read the report of Frank Vincent about these allegations. The honourable member read only the Costigan report. The fact is that those matters were examined, as were the reports made by Special Prosecutor Robert Redlich. It is about time the honourable member read them. This whole matter today is another exercise in public sector bashing by the Opposition. One of the more ugly sides of the conservative parties is their propensity to engage in attacks on public sector employees for political advantages. Analysing it, one finds that employees of these public enterprises are, in a very real way, public servants. They are not in a position to respond to political attacks upon them, as people would be able to do were they in the private sector. As I have said, it is one of the more ugly sides of the conservative parties in this place, and it is one of the areas in which they show absolute cowardice. Public Service bashing is a long and dishonourable tradition for that lot. In this area, they are also quite capable of bending the truth when it suits them. Let us look at what the Leader of the Opposition, Mr Peacock, said. The honourable member for Ryan was going on about Australia Post. I refer to the transcript of AM on 19 April 1985. At that stage, Mr Peacock was questioned about a full-page advertisement in Brisbane newspapers. The advertisement said: No flights, no mail, no telephones. You can thank Bob Hawke. The advertisement was signed by Mr Peacock. In the interview, Michael Dodd asked him what he was hoping to achieve. I quote: Peacock: Drawing attention to the fact that Mr Hawke could have intervened and intervened effectively by indicating not only that the Trade Practices Act might be used but also that the CE (EP) Act which gave him the undertaking that we would pass through the Parliament with ready co-operation enabling him to stand down public servants. Dodd: Well, your advertisements say 'No flights, no mail, no phones'. Isn't that a bit of an overstatement? Peacock: Well, I suppose it draws a fairly long bow as advertisements do because you will be able to telephone one another. There are certain phones that are not being connected, phones not being repaired, mail is interrupted, and as you know there is an endeavour to prevent flights in and out. Dodd: Well, by drawing a long bow, as you say, aren't you damaging your own credibility a bit? Peacock: No, I would like to feel that in every ad I could in fact explain everything in detail but when you put a message in say six words you have got to make the point. That is, it does not matter whether or not one tells the truth. 'Drawing a long bow' is a very polite way of putting it. That is the sort of stuff we have had here today in the allegations made, for example, against employees of Telecom, when the shadow Minister had not taken the time to investigate what this Government did about that matter. Let us look at the industrial situation, on which subject the honourable member for Ryan spent much time. His only solutions were to reintroduce the no work as directed no pay principle and to move down the track of privatisation. What is the industrial position with Australia Post and Telecom? It is a great deal better now than it was when the previous Government was in office. I will go through the record. The memorable period was the financial year 1981-82. In that year Australia Post lost 323,000 work hours because of industrial disputation-the worst year on record in the history of that organisation. The other day I referred in this place to the Sydney Morning Herald of 10 December 1981. What was the front page headline that day? It was 'Communications chaos'. What were the other headlines at that time? 'A million mail items pile up', 'long distance calls hit', 'telex exchange sit-in goes on'. On the next day, 11 December, this was the heading: 'Mail walkouts block pensions'. For the period the Opposition was in charge of Australia Post an average of more than 150,000 work hours per year were lost in industrial disputes. Let us look at our performance since we have been in Government. Since the Australian Labor Party has been in government, under the Hawke Labor Government, the average work hours lost have been a little under 20,000. That figure of 20,000 compares with the 150,000 under the previous Government. The honourable member for Ryan has the cheek to come in here and try to tell us how to run industrial relations. That was the record of his Government. The average number of working days lost in Telecom in the years 1976 to 1982 was 161.3 working days per 1,000 Telecom employees per year. In 1983 the comparable figure was 12.5 working days per 1,000 Telecom employees per year. Honourable members should think about that. That is a comparison of 161.3 to 12.5. The previous Government had an appalling record, a dreadful record. It spent all its time running around, setting up inquiries, as the honourable member for Ryan would like to do-the Davidson Public Inquiry into Telecommunication Services in Australia and the Bradley Committee of Inquiry into the Monopoly Position of the Australian Postal Commission-instead of dealing with the issues involved. The overall industrial position has improved in particular as a result of the prices and incomes accord and the consensus that has been achieved between employers and workers. In this respect, I refer particularly to morale within the authorities, which has improved enormously as a result of various Government decisions since March 1983. For example, the disposing of the Davidson and Bradley recommendations has allowed the authorities to get on with the job they have to do. This Government has encouraged Australia Post and Telecom into new areas of competition. Neither Australia Post nor Telecom is worried about competition. I refer to new areas such as the courier system, electronic mail, agency services, Viatel and personal computers. None of those things was allowed to those organisations under the previous Government. What is this Government doing to improve the situation? The matter of public importance is directed at Telecom as well as Australia Post, although the honourable member for Ryan directed most of his time to Australia Post. He presented absolutely no evidence that Telecom was doing other than a superb job of providing services at affordable prices throughout Australia. That is something that the National Party should think about. With regard to Australia Post, this Government has stated that it is not satisfied with the performance of Australia Post, particularly in New South Wales. It is up to Australia Post to improve its performance. it is not for us to stick our noses in and tell it how to operate. There are industrial problems but these can be dealt with on a case by case basis using the offices of the Australian Conciliation and Arbitration Commission, where negotiations have been successful. At the end of the day, that is the only way to succeed. The Opposition, in one of its few honest moments during 1981-the period of that tremendous industrial disputation-recognised this fact when the now Leader of the National Party (Mr Sinclair) admitted on 11 December, in the course of the worst disputes, that the then Liberal-National Party Government supported the idea of another hearing in the Conciliation and Arbitration Commission. We concede that there are some problems in Australia Post, but I believe it is time that some of the good things Australia Post has achieved were spelled out here. There are almost no postal administrations in the world that are not dependent upon subsidies from the taxpayer; virtually none. However, Australia Post is one of those that are not dependent on any subsidy from the taxpayer. It pays its own way completely and does not even have access to loan funds. How many private enterprise organisations could survive without loan funds, funding everything out of revenue? None. The performance criteria which it sets for itself by international standards are very stringent and very few overseas postal administrations are able to boast of nationwide performance figures as good as those of Australia Post. This fact is not often realised and of course it will never be said by any Opposition members. As already stated, that fine performance of Australia Post in large parts of the system is spoilt by a disappointing performance in New South Wales. The Government is confident that Australia Post is, in fact, getting on top of that problem. The honourable member for Ryan mentioned my speech at Wodonga. I want to mention one of the other aspects of Australia Post. Honourable members should bear in mind that there is a uniform charge for letters irrespective of the distance they travel. Letters from Cairns to Perth or Hobart to Darwin attract the same charge of 33c. I again remind the National Party of that. In most cases, by international standards, with the exception of New South Wales, as I have already indicated, those letters are delivered to the recipient's home and the performance of delivery is good by international standards. Suppliers of other services and commodities would be hard pressed to equal or surpass such a low cost service provided to homes nationwide. One other thing that I have mentioned briefly, but I just want to mention again, is that the previous coalition Government dismantled the post courier service. It was operating efficiently in a highly competitive field with private enterprise. Since Labor came to power that service has been reinstated. I am glad to say in relation to the industrial matters that Australia Post is trying desperately hard to rectify that situation in New South Wales. It is matter for Australia Post and by that I mean management and the unions. There has been regular consultation with union representatives and with its own employees. There has been the institution of training programs to improve industrial relations and management skills and Australia Post is implementing measures to tell the public quickly of delays in the mails and the reasons for them. Opposition members should not come in here and tell us about the industrial performance within Australia Post or Telecom. They should not come in here and go on with the nonsense that the solution to the problem is in fact again to just look at one thing, that is, no work as directed no pay and to flog off Telecom and the profitable parts of Telecom and Australia Post to private enterprise. That is absolute nonsense. Mr DEPUTY SPEAKER(Mr Mountford) —Order! The Minister's time has expired. Mr MILLAR(Wide Bay)(3.34) —It is with a touch of sadness that I join in this debate today. Some 40 years ago I started my Public Service career as a telegraph messenger in the post office. I would never have imagined that I would stand in this place to offer some criticism, albeit constructive criticism, in respect of Australia Post. I might say that I punched that 55-pound bicycle five miles out in the rain to deliver innocuous telegrams, possessed with a great conviction that the telegrams or the mail must get through. That rings rather hollow in the light of my present situation. But I comfort myself in the knowledge of all that with the fact that there seemed to be some bipartisanship in this matter. I was influenced considerably in coming to that conclusion by the remarks of the Minister for Communications (Mr Duffy), whom we have just heard. I pay tribute to him for his forthrightness and candour. I would like to quote the Minister as reported in his address of recent times to the National Press Club. He said that Australia Post would be by-passed if it did not get its house in order and that its performance was not good enough. He also said that management and the unions were doing something to improve the situation, and that whilst not for one moment denying the fact that Australia Post's performance is not good enough what the unions have to understand and what Australia Post management has to understand-and I think both are starting to understand-is that one cannot protect the monopoly position of Australia Post because it is being by-passed. The Minister went on to say that people who had problems were just not using Australia Post, and further, that if in fact Australia Post is to survive, its performance has to be lifted. I am sure the Minister did not speak with acrimony against Australia Post. He is saying, in effect, that Australia Post is its own worst enemy and if it does not lift its performance it cannot obtain those standards which are seen as desirable, if not essential, within the community. I accept that Australia Post may be making some efforts. I have no doubt that senior management of Australia Post is acutely aware of the shortfalls in the performance, but Australia Post is restricted, to a considerable extent, by being able to effect economies only on the interface, at the point of delivery of service, to maintain the expectations in the main of those who work within that system. Mr Deputy Speaker, you may recall that in speaking to the House just a few weeks ago I made the comment that the best job conditions on earth will not be worth a crumpet if one puts one's employer out of business. That is where Australia Post has been at such substantial risk. We have heard details from the honourable member for Ryan (Mr Moore) of industrial disruption not unique to Australia Post but particularly pronounced in a particular locality. One is again drawn to the fact that the best intentions of any organisation, of any firm are totally aborted if there is not a spirit existing within that organisation to achieve the goals that are consistent with their very existence. Australia Post certainly has a role in our community and always has had. Although there are strong arguments for the privatisation of Australia Post, as the Minister properly pointed out, using language not altogether appropriate to that which he may have used, cockies' corner is particularly sensitive to that. It stands to reason that Australia Post's charter to maintain a service across this sparsely populated nation of ours, of great distances, cannot be expected to operate on those strict business lines consistent with profitability unless there is a substantial degree of cross-subsidisation within that operation for which customers in densely populated areas would show little enthusiasm. The simple fact of the matter is that Australia Post has to resolve its problems and it cannot resolve them while those who work within it ignore the harsh realities of the market-place. In the ultimate, it will suffer the consequence of what the market-place dictates. We have seen substantial inroads into Australia Post by private courier services and they prosper for one reason-reliability and speed. Australia Post could do that if it so desired, but hitherto it has not measured up. I have no desire to be unfair to Australia Post because it just reflects that malaise that afflicts our country right across the board. But it is in a more critically exposed situation because at the moment its future hangs very much in doubt. I think it can measure up to it. It needs a prodding from time to time, as is taking place here today. We fall victim to the circumstances in which we live and we think threat and risk are quite remote. I am equally sure that in Queensland, in that unfortunate disputation at the moment, those who are comfortable and secure within the South East Queensland Electricity Board, with their demands, their demarcations and their self-determination of the work rate, contributed substantially to the confrontation which now confronts us. Australia Post must learn the lesson and our country must learn the lesson. Telecom is very similar to SEQEB in a way because it has literally the thumb on the nation's jugular. It has an enormous and critical role in our community. It has the capacity to attain a level of performance that would be without parallel, but it all devolves on attitudes. Unless we get our attitudes right we will not deliver the article. As members of this House we are all familiar with hearing from constituents time after time that the mails have not arrived or they have arrived late at cost. We know that with the sheer volume of mail there must be an incidence of malfunction or unavoidable delay, but the complaints are all too frequent. Similarly, we hear from time to time of Telecom undertakings to provide services by a particular date; the date comes along and the services are not provided. Telecom then says it has 'had problems', which is a fairly euphemistic term to cover a multitude of sins, and people wait longer and longer. Clearly there is something wrong with the system. I subscribe to the view that Australia Post and Telecom should be best situated to do the best job by the country, but if they fall short of that which can be reasonably expected of them, it devolves on the government of the day to address itself seriously to the shortcomings that are evident and to introduce such measures as are necessary to give the community the services that it fairly deserves, and which should be delivered. I do not know whether we can fairly hold Australia Post as an exclusive example of all the derelictions in the system, but at this juncture it is the most critically exposed. If it cannot take this opportunity, as the Minister has detailed in his remarks, to measure up, it will inevitably suffer a further erosion in services. If private courier services to the public prove to be of greater attraction, it stands to reason that potentially the most profitable area of Australia Post's activities will be denied it. Therefore, the gulf between that which is sought and that which is attained will grow greater and greater. Hopefully, I can be excused some self-interest, as I do not live in any of the great metropolitan areas of this country, when I say that a consequence will be suffered by those in greater Australia, and I use the word with all its meanings. I am sure that on reflection the Minister, notwithstanding his spirited response to the matter of public importance, will still adhere to his own professed belief that Australia Post must smarten up its act and achieve that which, no doubt, he believes is still achievable. But there is no time to waste. Australia Post must get on with the job and Telecom must take heed of the fact that, notwithstanding its strength and its seeming sense of omnipotence at the moment, the circumstances which I have described could well overtake it and it could find itself in a very similar situation. Mr SAUNDERSON(Aston)(3.43) —I rise on this matter of public importance a little amazed that the Opposition has the temerity even to produce it. Like the honourable member for Wide Bay (Mr Millar) I also have had some involvement in this industry. What amazes me is that the honourable member for Ryan (Mr Moore) talks about inefficiencies and delays. Yet there was no substance at all in his speech-a few mouthings of headlines about some problems which have been experienced, a bit of union bashing and then the old 'let us get more government interference into the way things operate'. Let us really have a look at the situation. The reference to the speech by the Minister for Communications (Mr Duffy) at Wodonga is good but, unfortunately, Opposition members have not taken the trouble to read it. The Minister made a very pertinent comment at the end when he said that no organisation could survive constant attacks on its performance standards, whether these criticisms were justified or whether they were just the mouthings of the uninformed or the politically motivated. One would have to say that Opposition members fit both these categories. Both Australia Post and Telecom are two of the most efficient communication services provided anywhere in the world. Let us look at some facts; let us take Australia Post, for instance. People recognise that there have been some problems in New South Wales but what has been the performance of Australia Post in relation to the millions of articles it carries every year? Ninety-two per cent of the articles it carries are delivered on time. That means that 8 per cent are not delivered on time but 92 per cent are on target. Mr McGauran —You have to be kidding. Mr DEPUTY SPEAKER —Order! I issue a warning to the honourable member for Gippsland. He is interjecting not from his own seat. I ask him to resume his own seat and also I issue a general warning to him. Mr SAUNDERSON —It is quite obvious that Opposition members do not want to hear the facts; they simply want to mouth their often-repeated untruths so that, hopefully, people will believe them without hearing the facts. One does not hear people complaining about delays from private courier services which do not get the stuff through because they have lost, broken or mislaid it. Of course, in any company mistakes occur. Let us have a look at the charges. Opposition members went crook when postal charges went up by three cents for a letter. But how do postal charges compare with the consumer price index? The CPI has increased by some 142 per cent since 1975 when Australia Post came into being. In the same period postal charges have increased by only 83 per cent-just over half of the CPI rate. Yet honourable members opposite talk about efficiency. Where in private industry would one match that? Let us find out how serious the Opposition is in its arguments about competition. Opposition members say they want Australia Post and Telecom to be more efficient. But when these two organisations went into the courier service they were so efficient that their private competitors complained to the Government saying 'we cannot compete, they are too good'. So the then Government interfered and stopped Australia Post from operating one of its most efficient services. It also stopped Australia Post from going into electronic mail when it could have introduced it years ago. The then Government stopped it because it did not want Australia Post services to interfere with private enterprise because private enterprise could not in any way compete with the efficiency of Australia Post. Let us look at the Opposition's comments about Telecom. The honourable member for Ryan says that the profits in Telecom are generated in the trunk area as if that were a new found fact that no one had ever heard of before. One has only to read any of Telecom Australia's reports since 1975 and one would know that for a fact anyway. Opposition members suggest that businesses subsidise other services. What is the alternative? Let us find out. It is in the report of the Davidson Public Inquiry into Telecommunication Services in Australia. The Opposition in government commissioned the report but was not game to implement it. I will tell the House and cockies corner here-perhaps some of its members will remember what was in that report-why it was not game to implement it. Davidson also came to the conclusion that there should not be any cross subsidy. What would be the result of that for people in the country, whom Opposition members are supposed to represent? It would have meant a nine- fold increase for people living more than 16 kilometres from a telephone exchange, and that was just in rental. Opposition members would have had country people, their own constituents, paying $1,000 for telephone rental. They would also have introduced timed telephone calls because that was another of Davidson's recommendations. But no, the Opposition's only interference when it was in government was Ministers deciding to advance up the list telephone services and automatic telephone exchanges for their friends on Lord Howe Island. That was the way in which honourable members opposite interfered with the efficiency of Telecom. Let us be fair dinkum about this. The Opposition has no interest at all in making any of the public enterprises efficient. Telecom Australia and Australia Post have managed to achieve an enormous performance; they are recognised around the world despite the Opposition's interference and constraints upon them. Let us look at another exercise in relation to Telecom Australia. The Opposition says that private enterprise is more efficient. Let us look at what happened when the Opposition in government decided to allow private enterprise to get into videotex. Private enterprise said it could do it more efficiently, just as Telecom Australia was about to introduce videotex. The then government decided that this was an area for private enterprise and it gave videotex to two different companies, one in Sydney and one in Melbourne. The first thing these companies did was decide to buy different systems, thus destroying any possibility of a national network. Then they found out that it was a bit more difficult than they had first thought. For two years they mucked around and could not decide what to do. In the end they decided it was a bit difficult for them so this Government gave videotex back to Telecom. Within six to 12 months Telecom has got the videotex system operating on a national basis. What did the Opposition achieve by saying that private enterprise could operate it, by listening to those people who have no concept of what communications are about? It simply delayed the videotex service in Australia for nearly three years. Let us consider other areas. Telecom's performance overall has been enormous since 1975. Eighty-three per cent of homes now have a telephone. In 1975, only 45 per cent of orders were completed within 15 working days, whereas 80 per cent of orders are completed within 10 working days of being received. Let us look at some of the productivity figures. In 1975 there were 16.9 employees per 1,000 telephones in Australia; this figure has now been reduced to 10.6. There were 40 telephone services per employee; now there are 66. Internal funding since 1975 has been lifted from 55 per cent to 71 per cent and profits from 6.5 per cent to 11.1 per cent. In all these areas one finds real productivity gains. In areas where there has been competition, such as in PABX systems, the Liberal-National Party Government had to interfere, to meddle, and to place artificial restrictions on Telecom because its competitive power was so great that private enterprise could not live with it. It is disappointing that the honourable member for Wide Bay participated in this debate because he knows that most of the National Party members in cockies corner have a soft spot for cross-subsidies. They enjoy the socialisation involved, but they like it hidden. They know deep down that the service they get from Australia Post, which delivers mail right across Australia including the sparsely populated areas, and the telephone services are available only as a result of these cross-subsidies. If they follow the advice of the honourable member for Ryan they will be advocating that their constituents should be paying far more for the services they receive. That is what he is advocating. I draw honourable members' attention to the comment made by the Minister for Communications in his speech that the utterings from those opposite are from people who do not know what they are talking about. Mr DEPUTY SPEAKER(Mr Mountford) —Order! The honourable member's time has expired. The discussion has concluded. Mrs KELLY(Canberra) —On behalf of the Joint Committee of Public Accounts, I present the 228th report of the Committee, relating to expenditure from the Advance to the Minister for Finance (Appropriation Acts 1982-83). Despite the enthusiasm of the Minister for Communications (Mr Duffy) for this report, I think that the pressure on the timetable of the House precludes me from making any further comment. Debate resumed. Mr DEPUTY SPEAKER(Mr Mountford) — I understand that it is the wish of the House to debate this Dairy Produce Market Support Levy Bill 1985 concurrently with the Dairy Legislation Amendment Bill 1985, the Dairy Produce Market Support Bill 1985 and the Dairy Industry Stablization Levy Amendment Bill 1985. There being no objection, I will allow that course to be followed. Mr KERIN(Werriwa-Minister for Primary Industry) —by leave-The Government has taken additional decisions regarding the new marketing arrangements for the dairy industry and will be moving amendments to the Bills before the House. The amendments do not change the thrust of the Government's policy but are designed to cushion the transition from the current complex, inefficient and inequitable arrangements to the more market directed, less regulated system proposed by the Government. I wish to record the Government's appreciation for the positive reactions to the dairy legislation now coming from many levels of the producing and manufacturing sectors of the industry and the State governments of Victoria, South Australia and New South Wales. But it is the Government's belief that it has been the hard decision to confront the industry with the harsh reality of the international marketing place, the instability of the present arrangements and the rigidities of domestic regulations that has caused a shift to positive attitudes by the industry. More and more people are stating that they see the wisdom in the Government's policy, that the current system could not continue and that no matter what changes, short of massive subsidisation, had been taken, 1985-86 would have been a hard year financially. This would have been so if the existing legislation had been allowed to continue or if the Australian Dairy Industry Conference's levy entitlement scheme had been adopted. The Government has made its decision and is sticking to it. It made its decision after long and comprehensive consultations and negotiations with the industry and the States. Our consideration was in keeping with our general policy of putting decisions in the hands of individuals and moving away from the stifling cloak of regulations which characterise current industry arrangements. As we have said, we are not interested in placing another two layers of socialistic regulations on an already over-regulated industry, nor are we interested in shoving up the price of manufactured products by up to 30 per cent so Australian consumers effectively pay still greater subsidies to foreign consumers with hardly any financial benefit for Australian farmers. However, the Government is interested in being flexible with respect to transitional arrangements so that the move to the new and better system does not adversely affect the industry with respect to the financial outcome in the first year beyond what would have happened, all other things being equal. Most concern being expressed in the industry is about the level of the opening price. The opening price for milk is never the final price but the end of export pooling means that there will now be a changed pattern of payments through a production year. Being aware of the farm cash flow problem and manufacturer finance problem at the start of the season, the Government has decided to advise the Australian Dairy Corporation that it will guarantee the Corporation up to $10m to be used for manufacturer finance. As well, the Government will amend the legislation to delay the collection of the 1.5c per litre all milk levy by three months. These two moves will allow a higher opening price to be struck than may have prevailed. The Government will also amend one parameter of the market support fund formula to give assurance that there need not be a disproportionate drop in support in the transition from year 1 to year 2 of the scheme. The Government has exhaustively examined and re-examined the question of the maintenance of export pooling. We cannot see the wisdom of maintaining a mechanism which is at the centre of the industry's problems and which is inducing production responses that are making the situation worse. The maintenance of export pooling for one or two years would delay the adjustments necessary if the industry is to be restored to profitability and stability, would only defer the financing problem which should now be solved by the action I have just announced and would be an invitation to industry to try to overturn the legislation one or two years down the track, and we cannot be sure that 1986-87 will be a better time to cease pooling, particularly taking into consideration our exchange rate. Finally, I inform the House that we are in active consultation with the Victorian Government and its agencies regarding an appropriate package of adjustment measures for the industry and that we are prepared to enter into such consultations and negotiations with any State, its industry and the relevant unions. Any move to a totally industry funded scheme such as herd buy-out, licence buy-out or milk diversion will need to be endorsed by the industry's national organisations but we are prepared to commence such discussions at any time. Mr HUNT(Gwydir)(3.57) —The Dairy Produce Market Support Levy Bill represents one of the sadder chapters of Australia's agricultural history. Rarely has any industry been treated with more contempt and insensitivity by a government and rarely has any industry had a more blatant political trick pulled upon it than the dairy industry had two days prior to the Victorian elections. If ever there was a chance to practice consensus, that was it. The Government had before it a blueprint fully supported by the dairy industry and, ultimately, by each State government. It was settled after two years of exhaustive negotiations. The plan had been developed with the co-operation of the Department of Primary Industry and with the full blessing of the Minister for Primary Industry (Mr Kerin). This was a basis on which the Government could have negotiated a satisfactory marketing plan to cut production and loosen the regulatory controls over the industry. Instead, the industry's blueprint went out the Cabinet window as soon as the Victorian Government had scraped back into office. There is no dispute over the basic goals for the dairy industry. The industry seeks to continue rationalising and it wants to continue loosening some of the regulatory controls under which it operates. What is in dispute is the manner and particularly the speed with which this Government has approached the crisis facing the industry. There are areas of common ground between the industry and the State's plan and the Federal plan. Both the industry and the Government endorse a levy on all milk, supporting export prices from a corrupted and distorted world market to between 130 and 140 per cent of the average export market prices. Both plans provide for a review of tariffs on imports. Both seek to give the Australian Dairy Corporation an improved capacity to finance the marketing of dairy products. There is little dispute over underwriting provisions between the two plans. I make the point very strongly that underwriting will cost no more than about $6m this year despite the low level of the world market. The goals of the new marketing arrangements are not in dispute. There are also some similarities in the way both the industry, the Opposition parties and this Government seek to approach the problem. In fact, until March the sticking point was not this Government but the Cain Labor Government in Victoria. The industry had the clear impression that the Hawke Labor Government supported its efforts. In a Press statement on 12 November the Minister said: I have not moved away from the levy/entitlement plan negotiated between me and the Australian Dairy Industry Conference and supported by the Australian Dairy Farmers Federation. I hope the Minister was sincere in his November message and was not trying to keep the lid on the real intentions of the Government prior to the 1 December Federal election. Reporting on a meeting of the Australian Agricultural Council, the Australian Financial Review stated on 2 October 1984: Mr Kerin and the other State Ministers could hardly believe their ears when the ADIC plan, which had the support of the United Dairy Farmers of Victoria, was rejected by Mr Kent at a special meeting of the Australian Agricultural Council on Thursday. Yet now the Federal and Victorian elections are over, this Government has done an about-turn and imposed a plan that, while containing a number of similarities to that of the industry, also includes some totally unnecessary and unacceptably harsh provisions which will badly destabilise the moderate, progressive steps of the industry towards rationalisation. This plan is a recipe for social and economic chaos within the dairy industry which will affect the livelihoods and the security of thousands of families. Mr Lloyd —Whole communities. Mr HUNT —Whole communities, not just those working on the farms but those who are working in the factories. The current industrial turmoil is due in large part to the farmers' concern that they have not been given enough time to plan ahead. Suddenly they have been plunged headlong into a new marketing regime of arrangements with totally inadequate notice to adjust on-farm forward planning. That is essentially the problem with the Kerin plan. The industry, the Opposition parties and the Government are pursuing similar goals, but this Bill fails to recognise that some time must be given in any adjustment proposal to enable the farmers, the factory managers and those employed in the industry to prepare themselves for a new and tough environment. I believe much of the industry unrest could be overcome if the Government were to take another look at the speed with which it is trying to achieve lower production levels. There is no point in acting like a wounded bull and charging at the gate. It takes time to reduce herd numbers and levels of production. There is an average six-month lag between the production and sale of dairy products, that is, milk used for purposes other than domestic fresh milk consumption. Breeding programs are based on a cycle of about two and a half years. We are not opposed to the thrust of this legislation but there are three areas of particular concern, each of which is the subject of an amendment that has been circulated to honourable members. There is very strong support within and outside this Parliament for these amendments, which provide some breathing space for the farmers and the factories to adjust to a new situation. No other industry in Australia has ever had such a brutal ultimatum handed to it. The steel industry, the motor vehicle industry, the footwear, clothing and textile industries, have all had a reasonable lead time in which to adjust. Should these amendments gain the approval of the Parliament, the dairy industry would at least be in a position to plan for the future. At present neither the producers nor the manufacturers can take reasoned decisions without stabbing in the dark. The first area of concern is export pooling. Under the Government's legislation equalisation of domestic and export market prices, having operated in one form or another since the 1930s-a period of 50 years-is to cease at the end of next month. Does anybody think that that is a fair go? Does anybody think that six weeks from the passage of this legislation, or four weeks, if you like, is a fair go? What other industry has had to stand up to such a challenge? Do honourable members think that the unions generally would take such an ultimatum? No way in the world; yet the dairy farmers of this country are expected to face up to that sort of tonic at short notice. The pooling of export market returns has formed an integral part of the equalisation system. By extending the pooling for two years beyond the cut-off date of 30 June the industry would have had time to adjust and respond to this changeover for the next six to 12 months. This would help to overcome the threat of sudden upheaval not only to farmers but to dozens of factory workers, especially in the co-operatives in Victoria and Tasmania, and those are the States that will cop the tonic with this sort of rushed formula. The industry plan aimed to phase out pooling over the last three years of its six-year duration. The industry sought this change. The industry, through the Australian Dairy Industry Conference, is now seeking an extension of butter and cheese pooling for two years. The industry accepts the Government's proposal to discontinue pooling on three products from 1 July. Its proposition is sensible, balanced and conciliatory. It is worth noting that when export storage and interest allowances are terminated Australia will be the only signatory country to the General Agreement on Tariffs and Trade international minimum pricing agreement for dairy products which does not have a centralised system for meeting storage costs of product when markets cannot be found above minimum prices. Mr Hawker —Why? Mr HUNT —Why are Australian farmers to be subjected to a situation, a test, to which no other country in the world is subjecting its farmers? I can understand rational, economic thinking, but I cannot understand why any government would want to impose a new regime based on economic rational thinking without adequate time to adjust, without adequate time for people to make their social plans and arrangements either to leave the industry or to find another job within the industry. I turn now to the Industries Assistance Commission report on the dairy industry, printed in March 1984. I shall quote from the report, because all we are doing is saying 'Stick to the IAC report, to its meaning and its approach to this very real problem'. At page 43 it said that the Commission 'proposes to recommend the retention of export pooling for the time being'. It did so. The report continued: Taking into account the effect of export pooling on export revenue, stability of domestic prices and producer returns and on the industry's underwriting and financing arrangements . . . I hope this is the decision of the Government and not of the Minister, the decision of the dreadful government, the collective decision of people sitting around a table who do not know what they are doing. I hope it is not the Minister who has chosen to ignore this aspect of the IAC report. In relation to finance, even under the Minister's amendment the capacity of the manufacturers to borrow funds to make advances will be reduced. The amendment circulated, from calculations we have just done appears to be worth no more than 30c a kilo opening payment. At present the Australian Dairy Corporation is able to lend with confidence against a guaranteed floor price for products backed by Commonwealth underwriting provisions. These changes under the Bills have aroused great concern amongst dairy manufacturers and farmers alike. The Corporation currently funds advance payments of up to 90 per cent of the underwritten product value. If the pool is immediately taken away, the Corporation will have to base its lending decisions on possible changes to product returns. The industry believes that this could reduce the lending from 90 per cent of the product value to between 50 and 70 per cent of a conservative valuation of that produce. The lower product loans to manufacturers, in particular the co-operatives, will in turn reduce the first advance payments, the opening milk prices to farmers. We understand that the amending legislation introduced by the Minister is designed principally to try to overcome an oversight in the original Bill in respect of the opening milk prices. I suspect that the concern now is that he has not gone far enough to overcome dropping that advanced price to probably half of that which existed two or three years ago. In practical terms, the opening prices may be about half of what they were two to three years ago. It is this uncertainty which is at least partly to blame for the crisis of confidence in the industry today. If only this Government would take the sensible course and give the industry more adequate notice of those marketing changes, much of the industry trouble and turmoil could be overcome. Production is likely to be falling by 1988-89, so there will be less surplus product to be sold on the export markets. An extension of pooling for two years would also give time for the export prices to recover to some extent from the present GATT minimum levels, although there is no certainty of that. The second proposal is that current domestic prices could be maintained for two years instead of one year as proposed. The domestic prices of leviable products have not risen since December 1982. Under this legislation domestic market prices for butter and cheese are intended to be maintained at current levels for one year and then phased down to 130 per cent of the export price. I repeat that only 5 per cent of world dairy production is sold on the export market and, of this, 60 per cent is supplied by the European Economic Community at highly subsidised prices. Total export refund and intervention payments to EEC producers reach as high as $5.8 billion per annum. The Australian industry is seeking maintenance of domestic prices at their current levels for a second year, giving the world market more time to recover from its GATT minimum levels and also giving producers and manufacturers some time to revise their forward planning schedules. Under this legislation, domestic product levies which underpin domestic pricing will be reduced after 1985-86 in accordance with a formula. Even under the amended formula proposed by the Minister, if market milk prices remain unchanged next season and milk production stays at current levels, levies on butter and cheese will drop by an estimated 50 per cent in 1986-87. To overcome this very rapid cut to butter and cheese levies under the formula and to provide a more predictable phase-out of product levies, the Opposition proposes a simple mechanism to reduce product levies in four equal steps from 1987 to 1990. The Dairy Industry Stabilisation Levy Amendment Bill, in its present form, cannot achieve its stated goals. The Minister said that he proposes to support domestic prices at their current levels for one year. He has failed to recognise that a large proportion of the product manufactured in one year is sold in the subsequent year. Conceivably, half of the production in 1985-86 will be sold in the following financial year at levy rates of up to 50 per cent below their present levels. By extending support levels to 30 June 1987, production would be covered for around 18 months, rather than six months under the Bill as it stands at present. The Minister has said that he will increase the supplementary market support levy to the level that would have applied had it been collected on a full year's production. This juggling of the supplementary market support rate and the levy on all milk will not achieve maintenance of support levels for 1985-86 production, and it is really no more than an example of robbing Peter to pay Paul. The new levy mechanism to be put to this House would overcome the inequity of the Minister's plan. The dairy industry has expressed concern about the method of establishing market support payments under the Dairy Produce Market Support Bill. While the Government claims that its proposal will eliminate market distortions in the current arrangements, unless this proposal is modified it will simply replace one set of distortions with another. The proposal as it stands will establish a market supply rate for whole milk powder which, pro rata to its milk content, is 20 per cent high than the market support levy on butter and skim milk powder. Whole milk powder is produced in the main by two multinational proprietary companies, Nestle Australia Ltd and Unigate Australia Pty Ltd. The milk levy which funds export market support payments is collected from farmers. It is essential to ensure that the way in which support payments are established is even-handed between co-operative and proprietary companies. If, as in the Government's plan, the system favours the products of proprietary companies, money collected from farmers via the milk levy will be siphoned off into profits of the multinationals. Is that what one would expect from a Labor Government? I think it reeks, absolutely reeks. The bias in the plan towards whole milk powder will simply result in a transfer of $5m or so out of the pockets of struggling farmers-some farmers earn only $6,000 or $7,000 a year-and into the profits of Unigate and Nestles. It is not difficult to overcome these potential anomalies. Clause 19 of the Dairy Produce Market Support Bill determines support payments on prescribed products using a percentage of the average export price. For all other products, clause 20 gives the ADC authority to determine these rates in the light of rates for the prescribed products. The proposal of the industry, that export support payments on butter, cheddar cheese, skim milk powder and casein be determined by the method of clause 19, is fully supported by the Opposition. The amendment I will move allows for change to the list of products under clause 19 on recommendation of the Australian Dairy Corporation. This recommendation would be made after consultation with the Australian Dairy Industry Conference. This will give the industry a means of control over the mechanism for determining export market support payments on individual products which, after all, are funded by the industry itself through a levy on all milk. It will introduce a useful check on the Government and ensure that further anomalies such as that to which I have referred in respect of whole milk powder are not introduced at some future time with other products. Mr Deputy Speaker, these amendments deserve the support of this Parliament. They would bring the Government closer to the realities of the industry. They represent a move back towards an industry that has been snubbed after two years of very difficult negotiations. The industry's proposals provide an opportunity which has never before been open to a Federal government. Never has there been such agreement between industry bodies in the various States over marketing proposals. Never before has there been this level of agreement between State governments on such proposals. The Minister has squandered the opportunity to negotiate an effective milk supply management plan which will prevent either chronic surpluses or shortages of supply to the Australian domestic and export markets. The dairy industry is not heavily supported by taxpayers' funds. Mr Braithwaite —None of the rural industry is. Mr HUNT —The honourable member is absolutely right. It has achieved greater efficiency and productivity than a great number of other industries in Australia. Just a decade ago, 388 factories employed 21,700 people. Today, 264 factories have a work force of 17,900. Milk production fell from 7.2 billion litres in 1979-80 to 5.2 billion litres in 1980-81, before rising to about 6 billion litres today. I take issue with the Minister's reported comment that Australia has profitable markets for only 4.6 billion litres. In doing so, I recall the words of the honourable member for McMillan (Mr Cunningham) in this House on 8 October last year. He said: If we do not come up with a policy which is for the benefit of the whole industry, we will finish up without an export industry in dairy products. This will adversely affect the Australian economy. We need exports. 'We need exports,' he said, and he was right. I bet he thinks the same way right now. Mr Blunt —But he won't say. Mr HUNT —But he is not prepared to say it. I will be interested to hear what he says and how he responds to that comment. The Kerin plan as it now stands threatens irreparable harm to our dairy export trade. Under the industry's plan the quick shift to 5.3 billion litres per annum would have maintained a buffer of some one billion litres to meet the increases in domestic consumption and to maintain our $400m a year export trade. The Opposition will not move to make provision for the introduction of a two-tiered levy on whole milk and an entitlement plan because it believes that if the amendments to this legislation are carried there will be sufficient signals in the industry to achieve an orderly reduction in milk production. There is no doubt that a two-tiered levy principle with a penalty levy applied similar to the principle recommended by the IAC in 1976 would have the effect of quickly reducing milk production from six billion litres to about 5.3 billion litres in a short period. If the proposals before the House fail to reduce whole milk production the option will always be available to the industry to approach the Minister to apply such a proposal. The Minister, does not seem to know how far production will drop under this legislation, although there is a general view from the industry that we will end up barely able to supply our domestic needs. There is a real fear that we may in fact lose our self-sufficiency. This fear is based in particular on our marketing relationship with New Zealand. With the loss of export pooling from the end of next month, assuming that these Bills are not amended by both Houses, Australia will not be able to live up to its obligations to co-operate with New Zealand on third markets and all bets will be off. I am concerned that the Kerin plan could result ultimately in a sell out to the New Zealand dairy industry. Let us put to rest the myth that milk and dairy produce in this country are expensive. Milk is one of two or three commodities still available for delivery to the door. High quality fresh milk still costs around 40c a bottle. It is one of the cheapest food commodities available. Mr Fisher —How much does the farmer get? Mr HUNT —Very little of it. I asked the statistics group of the Parliamentary Library Legislative Research Service to compare price increases for a range of goods and services since 1970. Honourable members would do well to take note of these figures. Using 1970 as a base of 100, milk has increased to 341 today and butter to 260, while the consumer price index has risen to 389. Prices paid by farmers have risen to 489, average weekly earnings to 535, Federal parliamentary salaries to 484 and newspapers to 600. Let there be no mistake: Milk and dairy products are amongst the cheapest and best commodities available to the consuming public. One of the reasons that the Opposition has moved to ensure a more steady pace for the implementation of this plan is the enormous potential effect it could have on the social and economic fabric of the industry and on taxpayers' revenue. The $20m offered for reconstruction will in no way compensate for the exodus of 20,000 to 25,000 people from the industry. In most cases unemployment in these provincial areas is already high. This loss of jobs carries a potential price tag for the taxpayers of $2m a week in welfare payments, leaving aside the cost of the welfare side benefits. The problems of this plan do not just affect the farmers, manufacturers and employees. The Australian Oilseeds Federation has joined the Australian Dairy Farmers Federation in calling for a more equitable, predictable and rational dairy plan. I think it is an interesting fact. The AOF can also see that a short term downwards movement in dairy prices towards world dumped prices threatens to play havoc with its industry. We are threatened with the worst of all worlds. As soon as the world market shifts away from a dumped price, Australia could find itself with inadequate supplies, not only of dairy produce but also of oilseeds products. In summary, the oilseeds industry says: The result (of this plan) would be serious disruption of the margarine industry with substantial job losses. We believe the Government is planning to proceed 'too fast too soon' without sufficient consideration of our industries. It is the concern of the industries worst affected by this plan that has led many honourable members opposite to urge their constituents and Party colleagues, quite rightly, to seek to amend this plan. The backbench members opposite who have fought this plan deserve to be heard. The Kerin plan is a recipe for economic and social chaos in an industry, which could be avoided. It is unrealistic for the Minister to attempt suddenly to apply a so-called deregulated market force approach to the dairy industry, which is competing on a world market severely distorted by EEC dumping. The Kerin plan ignores the States' regulatory role in milk production, distribution and marketing. The Minister seems to ignore the practical difficulties of dropping production so rapidly in 1986-87, causing total chaos in an industry where the decisions made by dairy farmers two to three years ago have influenced the level of production today. The Government is prepared to forgo virtually $350m to $400m dairy products export revenue built up over many decades. It is prepared to signal to the EEC: 'Okay, you chaps have won the day and we are moving over'. This will only give the EEC planners an incentive to do the same to our efficient sugar, wheat, beef, sheepmeats and other industries. God help Australia without the agricultural sector. It would be nothing but the shell of a nation. Australia cannot afford to abandon multi-million dollar export industries and our market shares at a time of high overseas borrowings and extensive repayment problems. The problems of the industry are not of its own making. It deserves the co-operation of the Government and not the contempt with which it is being treated. Mr CUNNINGHAM(McMillan)(4.28) —In speaking to the Dairy Produce Market Support Levy Bill and cognate Bills now before the House, the first thing I wish to say is that I am rather stunned to see Australian Dairy Farmers Federation representatives, Mr Bennett and Mr Manners and also factory representatives sitting in the official Opposition seats in this House. I would be surprised if it were their intention to be compromised. However I would not be surprised if the Deputy Leader of the National Party of Australia (Mr Hunt) had brought them in and sat them there for that purpose. Mr Peter Fisher —Mr Deputy Speaker, I take a point of order. Mr DEPUTY SPEAKER(Mr Keogh) —Order! The honourable member for McMillan will resume his seat. Mr Peter Fisher —I find those remarks offensive. It is obvious on looking around that there is no room in the gallery. Mr DEPUTY SPEAKER —Order! The honourable member for Mallee knows better than to speak before he is recognised by the Chair. I now call the honourable member for Mallee. Mr Peter Fisher —I am sorry, Mr Deputy Speaker. I find the honourable member's remarks offensive. If one looks around the chamber one can see that there is no room in the public galleries for these people to sit and hear this debate. Mr DEPUTY SPEAKER —Order! There is no point of order. There is no basis on which the honourable member for Mallee can raise that matter, and he really knows better than to raise such a point of order. Mr CUNNINGHAM —Had honourable members opposite been here at the start of the debate they would have seen there were plenty of seats available in the gallery when those seats on the Opposition benches were taken up. As far as rural areas are concerned, this is one of the most important pieces of legislation to come before the Parliament. The dairy industry, for much of its history has been characterised by low incomes and some dairy farmers have at times experienced absolute poverty. The response of successive conservative governments at both the State and Federal level has been to encase the industry in regulations. This has made it difficult for individual farmers to determine what actions were in their best interests or in the best interests of their industry. The industry has been plagued by recurring crises and has been dependent on government assistance for its survival. This Government's proposals are the first genuine attempt, through the progressive removal of regulations, to put the dairy industry in a more profitable and secure long term position. The current arrangements-the Sinclair plan-were introduced in 1977. It is interesting to refer to a speech given by the present Leader of the National Party in 1977 to see what the problems were then. He said: As honourable members will be aware, the Australian dairy industry has been experiencing serious difficulties for a number of years. This has been due to a combination of factors such as overproduction, increasing costs and depressed conditions in the international market for dairy products. It is one industry where the effects of the common agricultural policy of the European Economic Community both directly in the loss of sales to the United Kingdom and Europe, and indirectly in price cutting on Third World markets, has been particularly severe. Those words were said in 1977. In the last 12 months we have just been repeating history. Let us look at the conservatives' approach to rectifying that situation in 1977. Let us see what cockies' corner had to do about it at that time. Mr Sinclair went on to say: Following discussions with the industry and the States- Mr McGauran —Mr Deputy Speaker- Mr DEPUTY SPEAKER(Mr Keogh) —Order! Does the honourable member for Gippsland have a point of order? Mr McGauran —No, Mr Deputy Speaker, as you would be aware- Mr DEPUTY SPEAKER —The honourable member for Gippsland will resume his seat. If he attempts again to take the time of the House by rising without wishing to take a point of order, the Chair will have to deal with him. Mr McGauran —Mr Deputy Speaker, I was drawing your attention- Mr DEPUTY SPEAKER —I call the honourable member for McMillan. Mr McGauran —Mr Deputy Speaker, on a point of order, I draw your attention, as it is my entitlement- Mr DEPUTY SPEAKER —Order! The honourable member for McMillan will resume his seat. I call the honourable member for Gippsland. Mr McGauran —Thank you, Mr Deputy Speaker. As I am entitled to do under the Standing Orders, I draw your attention to the state of the House, given that only three members of the Government are in the chamber. (Quorum formed) Mr DEPUTY SPEAKER —Before I call the honourable member for McMillan, I remind the honourable member for Gippsland that he has now been in this House long enough to know that if he rises and receives the call of the Chair he should indicate to the Chair immediately the purpose of his rising. He failed to do so. I suggest to him that in future he show more respect for the Chair. Mr CUNNINGHAM —Before the interruption by the National Party, I was discussing the sort of approach it took to the problems of the dairy industry in 1977. We listened intently to the honourable member for Gwydir (Mr Hunt). The Opposition should at least have the courtesy to listen to the opposite arguments. Back in 1977, in this House, the present Leader of the National Party, in speaking to the Dairy Industry Stabilization Bill, said: Following discussions with the industry and the States, through the Australian Agricultural Council, the Government has decided to introduce legislation for the implementation of Stage I of the plan as from 1 July 1977. That is the plan we are working with today. He went on in that speech to say: The Government is strongly of the view that the implementation of Stage II is essential for the necessary rationalisation of the dairy industry and consequently it is important that Stage II of the plan be implemented not later than 1 July 1978. By 1978 that Government said that it would have to put Stage II in place. The industry is in difficulties today because Stage I is in place but nothing else. The years 1979, 1980 and 1981 went by. What was the honourable member for Gwydir doing in those years when the dairy industry was seeking to have Stage II implemented? Absolutely nothing. Yet he comes into this House today and tries to ridicule this Government, which has to fix up the mess which the previous Government did not have the capacity to fix when it had the opportunity. Let us look at the results of the previous Government's ineptitude as far as the dairy industry is concerned. Let us look at some figures. In 1977-78, the Bureau of Agricultural Economics estimates of farm unit cash operating surpluses over the total dairy industry were as follows: The industry came out of a trough in the middle 1970s to achieve an income of $11,047 in 1977-78 when the plan was introduced. That figure moved up through the years to a peak of $27,602 last year. The estimate for this year is back to $19,386. However, that is not the real problem of the industry. We have to look at the State figures to see what has really happened. Let us look at the figures for Victoria. In 1977, at the start of the plan, Victoria had $11,757 in cash operating surpluses. That figure moved up to $16,000, $17,000 and then $22,000 with the increase in the domestic value for levy purposes. Today it is back to $11,979-exactly where it was when the right honourable member for New England introduced legislation in 1977. So let not any farmers think that the National Party's legislation had anything to do with assisting the industry. It did not. It could not implement the second stage. Yet its members come in here today and tell us that we should be doing what they could not do in seven years. Let us move on. The existing arrangements stimulate over-production while discouraging domestic consumption. The correct product mix for both the domestic market and the export market is very difficult to achieve. Exports to the worst possible market receive the greatest assistance. Imports are encouraged by high domestic prices and the industry's capacity to respond to changing circumstances is severely curtailed. Let us take export pooling. There was a lot of discussion in Opposition speeches about that. Export pooling is a system under which all returns from export markets for certain products are pooled and an exporter receives an average price on a sale and not the actual market return. In these circumstances, what incentives do individual manufacturers have to seek out and develop the most profitable export markets? They have none. Any additional return they get is lost in the system, as the rewards for their entrepreneurial efforts are diluted by the lazy marketing practices of other manufacturers. One cannot deny that that is half the problem today. To seek to extend the system as a solution to the industry's immediate problems is only to extend the process whereby returns received by all manufacturers are forced downwards by the losses incurred by those who play the system. These manufacturers take all the milk that their suppliers, the dairy farmers, can produce. One might ask: 'Why not?' However, the manufacturers just churn out bulk products and push them out on to unprofitable export markets. The industry picks up the tab, the tab gets bigger and bigger and the industry's net revenues get smaller and smaller. The evidence is in the tables, figures from which I have cited, to show just what has been happening. The result is that the returns to dairy farmers keep falling. The system encouraged farmers to produce more milk to offset falling returns. While their average returns might have been maintained, their marginal returns, that is the money for their last litres of milk received, were actually falling and they had no indication of it. The domestic market is the industry's best market but it has been taken for granted. The only real interest shown has been in just how much one can extract from Australian consumers. The irony of that is that, as the exportable surplus has grown under the current arrangements, Australian consumers have ended up subsidising foreign consumers. This makes no sense to either the dairy industry or the Australian consumer. In his second reading speech on the Bill, the Minister for Primary Industry (Mr Kerin) stressed that the Commonwealth is committed to helping both individual farmers and factories to adjust to the changed arrangements. The Government reiterates that commitment. Steps have now been taken to commence active consultation with the Victorian Government on the structural adjustment elements of the dairy arrangements. The Minister has already sought the views of other States. The Government is prepared, as he said, to enter into consultation with any State, its industry and unions on this issue. While accepting the thrust and the essential elements of the Government's plan, a number of amendments have nevertheless been proposed by the industry. We understand that. Most amendments are concerned with, in effect, the transition from the present heavily regulated arrangements to the new market oriented system. The Government has already accepted that transitional arrangements are necessary. Included as an integral element of the new arrangements are supplementary market support payments funded by a levy on a limited number of dairy products. The phasing out of the levy and, hence, the supplementary payments is by means of a formula. This formula is designed to abate the rate of phase-out if adjustment is occurring rapidly in the industry. Following a re-examination of the elements of the formula, the Government has agreed to make one minor, but significant, change. By increasing the constant of 0.4 in the formula to 0.5, the rate of phase-out of the dairy products levy will be reduced, thereby providing the industry with a higher support level for domestic prices for a longer period. A number of amendments have been sought, to delay the cessation of export pooling. Following extensive re-examination of this point, the Government is very firm in its view that export pooling should cease on 1 July 1985. It just makes no sense at all to persist, even on a temporary basis, with a mechanism which has the debilitating effects of export pooling. To do so would simply create further adjustment difficulties a year or two down the track. It has been put to me that it is needed also to create a better opening market price. For the life of me, I cannot see how a factory opening at a low enough price as it is can be expected to pass some of that money across to support a factory which will be opening at a lower price. There are better ways to achieve that, and the Government has set out to do it. The Government is, however, aware of concern about the impact that termination of export pooling may have indirectly on manufacturers' financing arrangements and the cash flow situation of farmers. In essence, underwriting in combination with export pooling has, over the years, enabled the Australian Dairy Corporation to advance funds to manufacturers at a higher level than would otherwise have been the case. While the ADC's financial powers are significantly expanded under the new arrangements, the transition to a more commercially oriented system could lead, in the first instance, to lower loan levels by the ADC to manufacturers, and possibly lower opening prices to farmers. Therefore, the Government has agreed to two further measures which will alleviate this transitional financing difficulty. First, the Government will guarantee up to $10m to the ADC to enable the Corporation to lend at a higher level to manufacturers and to raise opening prices. This is a better method than to go through the old procedures that we have adopted previously on pooling. Secondly, an amendment will be introduced to enable the collection of the levy on all milk-the market support levy-to be delayed for up to three months. This measure will improve the cash flow position of manufacturers in the early part of the forthcoming season and will enable higher opening prices to be paid to farmers. Such an amendment is possible, given that demand for funds for the purpose of making market support payments will be less in the early months of the season. This should, in a very short time from now, allow factories to announce opening prices to the farmers, so that farmers can budget and know where they are going. I believe that the measures that the Minister has outlined address the key concerns of the industry while preserving intact the thrust and key elements of the new arrangements. As I said earlier, the industry's concerns are essentially about the transition from the old to the new, and the Government has adopted a considered and eminently reasonable approach to this matter. I should like to comment on the quotation by the honourable member for Gwydir of what I had to say last year about the dairy industry. I still believe that we need to have an export dairy industry; but we certainly cannot have one if we continue with the type of approach that we have had in the past, which goes up and down, and up and down. Honourable members opposite have even quoted their own figures as to how many people have left the industry since the last time they had a go at it, so I do not think that they can rest on their laurels as far as that is concerned. The basic objective of the Government's proposals is to develop a more efficient and more profitable industry, able to respond as quickly as possible to changing market conditions and technology. As the Minister has stated many times, the Government seeks to achieve this through reducing the burden of regulation, while maintaining a level of support for domestic prices. The Government has lived up to its responsibilities and has taken the hard decisions. But, at the same time, the Government accepts its responsibility to the industry during the period of transition, and we look to the industry to take the bullet between its teeth and not to be frightened of a bit of good private enterprise-about which honourable members opposite have always been talking. Mr DRUMMOND(Forrest)(4.44) —I wonder to whom the honourable member for McMillan (Mr Cunningham) would have the industry leaders talk. He has criticised their presence in the House. They certainly have not been welcome at the office of the Minister for Primary Industry (Mr Kerin), as I understand it, for him to have meaningful discussions with them. Mr Cunningham —On a point of order, Mr Deputy Speaker: I have been misrepresented. I give notification that I shall be raising a matter later. Mr DEPUTY SPEAKER(Mr Keogh) —Order! It is not appropriate for the honourable member for McMillan to take the time of the honourable member for Forrest for such a point of order. He knows the procedure of the House. He may make a personal explanation at the appropriate time. Mr Kerin —On a point of order, Mr Deputy Speaker: I seek your clarification. The Government has no objection to people from the industry sitting in the seats normally reserved for Ministers and the Opposition, but it is my understanding that this is not the usual procedure. I am sure that the Opposition would clobber us if Bill Kelty was sitting there. Mr DEPUTY SPEAKER —It is not the prerogative of the Chair to make decisions in respect of that matter. Mr DRUMMOND —There are three fundamental and major errors in the thrust of this legislation. First, the plan assumes that the world traded price for dairy products is a valid bench-mark for dairy products in Australia. Secondly, although the legislation is designed to deregulate the industry, it will just change the present regulations, which work, for another set of regulations, which will not work as well. Thirdly, the legislation assumes that milk production is too high because of clouded market signals, and the thrust of the legislation will further cloud those market signals. Less than 5 per cent of all milk produced in the world is traded in any form. There is no futures market or stabilised exchange for trade in dairy products. The bulk of that 5 per cent comes from the European Economic Community, which, understandably, has a policy of self-sufficiency. The price that the countries of the EEC are prepared to accept for the 2 or 3 per cent over-supply is obviously quite different from the price at which exporting countries such as Australia and New Zealand would be able to produce it. It will be argued that the legislation is designed to give the Australian industry assistance of 30 per cent above the world traded price. We should recognise that the Australian price is presently 70 per cent above the world traded price; but the Australian domestic price is still only half the price obtainable in Europe and North America. The European farm-gate price is estimated to be about 300 per cent above the world traded price. The dairy industry is one of our major rural industries. It has been, and will be again, a major earner of foreign exchange. Even this year, with markets in total-but, no doubt, cyclical-collapse, the industry will earn Australia $300m in much-needed export earnings. This industry is being pulled down despite its natural advantage of producing more efficiently than the industry in other countries. It is being pulled down because other countries are prepared to subsidise their producers and their exporters to take not only our export markets but, indeed, a large slice of our domestic market. What this means is that these countries are exporting their social problems and their unemployment to Australia. It also means that Australia will spend its already meagre supplies of foreign exchange to import food-food that can be produced more economically than the alternative sources from the other side of the Equator or even from New Zealand. Many have indicated that Australia cannot compete with New Zealand. When adjusted for currency deficiencies, the New Zealand farmer will get about $A2.50, or a price very similar to that received by his Australian counterpart, per kilogram of butterfat. Certainly New Zealand will not be able to trade into Australia without assistance when the freight cost of $A250 per tonne, or 25c per kilogram, is added. It is very difficult to assess what would be the level of fair competition from New Zealand. The New Zealand dairy industry has privileged access to markets in the EEC and in the United States of America at prices well above the Australian domestic price. New Zealand sells into the EEC 80,000 tonnes of butter-we must remember that the Australian domestic market is less than 60,000 tonnes-and 10,000 tonnes of cheese. In the United States, New Zealand has access to 20,000 tonnes of cheese sales at well above the Australian price. Additionally, both the New Zealand Dairy Board and New Zealand farmers receive very generous interest concessions from the New Zealand Government. Last financial year, the New Zealand Dairy Board received a $750m loan at an interest rate of one per cent. This subsidy alone is worth 20c per kilogram of butterfat to New Zealand farmers. The New Zealand Government also assists the industry in intangible ways. No saturated margarine may be sold in New Zealand, and imported vegetable oils face heavy tariffs. New Zealand's three million people consume more butter than Australia's 15 million people. The main thrust of the legislation is towards deregulation. Why do we have so many regulations controlling this industry? The main reason is that communities over generations have asked governments to guarantee supply so that the consumers have ready access to dairy products at reasonable prices. Milk is a unique product. It has to be processed in one form or another immediately. Manufacturers do not have the option to purchase only what they need for a particular market. The milk left behind will not keep. While all milk produced is of the same high standard, it has many end uses, all at different values. Liquid milk retails at between 66c and 76c a litre. The return to farmers is about 30c a litre. Some say that that is expensive and they would like to see the price come down, but it is highly nutritious and is cheaper than a litre of soft drink and cheaper than one-fifth of a litre of beer. The price of table cream is set by State dairy industry authorities and milk boards at approximately two-thirds of the market milk price. The next category is milk which does not have to be produced all year round and thus advantage can be taken of the economies of seasonal production. This milk is processed into butter, cheese powder, et cetera, for sale both domestically and for export, but, again, for a range of prices that vary with the end use of the milk and the market into which it is sold. The bottom end use is usually the Japanese stock-feed market for skim milk powder and the North African butter market for fat portion. It is estimated that the farm gate return for this milk is only 5c per litre at this time. So without regulation, how will the industry price the milk? We also have milk that is produced all year round and seasonally produced milk. Without regulation, produced milk, which naturally has a lower value, will replace milk which is available all year round, thus eroding the industry's ability to provide for the needs of consumers at all times of the year. The consumer will have cheap milk when it is available or rationed and high priced milk when it is short. Again, I make the point that milk is inexpensive in this country and I, like all other consumers, expect it to be readily available. This legislation aims, in a very insidious way, to break down the pricing structure between two different types of milk and will jeopardise regular supplies. If the existing regulations are left in place, obviously with some modifications such as a supply management scheme, as suggested by the industry, the dairy industry will continue to adjust, without too high a social cost. Every other nation that trades in dairy products has a heavily regulated industry, protected by its government. If, as this legislation decrees, pools are removed, there will be domestic chaos and the Australian industry will not be in a position to honour two important international agreements, namely, the General Agreement on Tariffs and Trade and the closer economic relations agreement. Without pooling, Australia will be the only signatory to the international dairy arrangement within GATT without a mechanism to hold product until a sale can be made at or above the internationally agreed minimum price. How can an individual company or trader be expected to bear alone the cost of holding products for, say, a year because this Government has agreed with other governments that a certain price must be observed and honoured? The industry is in trouble at this point because more milk is being produced than is needed to service viable markets. Until new markets emerge, it is necessary that milk production decrease. The industry recognises this point and the Opposition also recognises this point. The legislation, although recognising the point, does nothing to ease it. The problem is that the legislation does not address the fundamental reasons for the overproduction. I believe that, if the legislation is passed, the industry's first response will be to increase production, because the devil will certainly take the hindmost. Unfortunately, the people who will be forced out of the industry will not be the most inefficient. They will be the people with the highest debt load, made up of the up and coming young farmers whom we as a nation will need in the next couple of decades. It has been estimated by economists in the Department of Primary Industry that anyone with less than 80 per cent equity in his farm is at risk under this new legislation. How can an industry survive such a regime? With the 2c per litre levy going to farmers regardless of whether they are producing for the export market or not, those farmers will be taxed to support production for which there are only very poor markets. I believe we are breaking one of the fundamental rules of economics, that is, supporting price but not limiting production. The current system, which taxes the product to support export prices of the same product, is more direct and gives a better price signal to the industry than will the new system. We have been asked to curtail our time in this debate, although there is much more that I would like to say. From the Western Australian point of view, if there is to be a 2c a litre levy-it probably will be in time-it will cost most of my dairy farmers an average of $8,000 each, based on Western Australian production of 240 million litres. The average farmer in Western Australia sends 70 per cent of his milk under contract for whole milk. Only 30 per cent of his milk will receive any support from this new scheme. I believe that the amendments the Opposition has put forward are sound and that the Bills should be thrown out unless the Government supports these amendments. I believe that the amendments will be carried in the Senate. Even with those amendments in place, the industry will still have to go through a tremendous amount of readjustment and pain. Mr BEDDALL(Rankin)(4.57) —I rise to support the Dairy Produce Market Support Levy Bill and cognate Bills. They have been the subject of sometimes intense and bitter discussion over recent months. Much of that discussion has centred on the Government's rejection of milk entitlements as proposed by the Australian Dairy Industry Conference plan. Lobbyists have assured me that milk entitlements work very well in Canada. I think all honourable members should know that entitlements will perpetuate overproduction. The entitlement also gains a capital value and the advantages accrue to the most wealthy producers at the expense of struggling farmers. Entitlements also increase the cost structure on the price of milk. In Queensland, where State entitlements exist, the highest priced milk in Australia is found. Like many rural Government members, I suppose, I held a series of meetings with producers in my own electorate to seek their views on entitlements. Indeed, the Minister for Primary Industry (Mr Kerin) should recall a very well attended meeting held in Warwick. My constituents were invited and they came to hear the Minister. Other people were bussed in from the Gold Coast. It was fairly obvious what they were there for. In the best tradition of bullies and thugs, they were there to howl down the Minister, preventing my constituents from finding out how totally disadvantaged they are from the entitlements scheme. I go further: Producers near Warwick are being unfairly manipulated by the faceless men who run the Queensland National Party. One such National Party functionary is a Mr Charlie Holm. On 30 June 1981, Charlie Holm purchased a dairy at Round Ridge Road, Jimboomba. He purchased a 2.3-hectares farm from a 269-hectare property. He paid $147,000. The land had a dairy and a milk quota. Once the sale was processed, Holm shut down the dairy and transferred the quota to his existing property at Ormeau, over 50 kilometres away. Three months later, Mr Holm sold the land, with its now defunct dairy and a house on it, for only $60,000. This was a loss of $87,000 in just three months. However, the transaction allowed Mr Holm to acquire a milk quota and an entitlement worth $70,000. In 1983 Mr Charlie Holm and his family's piece of the market milk action was earning around $334,000 a year. The loss of $87,000 would have a special interest, I believe, to the Commissioner of Taxation. It is amazing that someone like Mr Holm, who successfully marketed the Canowindra rural estate on the Gold Coast hinterland, could lose $87,000 in three months on a land deal. However, I am more concerned about Mr Holm's violation of the 1977 Queensland Dairy Act. Section 87 (2) of the Act states: Milk produced by a producer on land other than the land specified in a particular allocation shall not form part of the producer's entitlement in respect of that allocation. Clearly, Mr Holm is in direct contravention of the Act. He actually transferred an entitlement 50 kilometres away. The entitlement should have gone into a drop-out pool. Mr Everingham —Mr Deputy Speaker, I raise a point of order. I do not believe the honourable member is entitled to state as his opinion that the person referred to is in contravention of the Act. Mr DEPUTY SPEAKER(Mr Keogh) —Order! There is no point of order. Mr BEDDALL —Thank you, Mr Deputy Speaker. Opposition members will not like what is to come. The entitlement should have gone into a drop-out pool. In this way it could have been distributed to less privileged producers in my own electorate, in Warwick and in the Harrisville area or even in Murgon in the Queensland Premier's electorate. I would like to draw the House's attention to another rort involving milk entitlements. On 1 July 1982, one Gold Coast farmer decided to leave dairying. The farmer wished to cancel his dairy registration approved for 72 hectares and have it registered with just over two hectares. The new portion did not even contain a dairy. The sale was to have gone through in July 1982. Notice was given that the new buyers would then cancel the registration and move the entitlement to their own farm in a four-way split. On 20 August the Milk Entitlements Committee wrote to the seller asking him to show cause why he should not have his entitlement surrendered to the drop-out pool. On 30 September the Acting Director of dairying and fisheries in the Queensland Department of Primary Industry, Mr Crittall, advised the then Queensland primary industry Minister, Mr Ahern, not to approve the transfer. Mr Bilney —Not to approve it? Mr BEDDALL —Not to approve it. But, surprise, surprise; on 8 October, the Minister approved the transfer! Honourable members might ask why there was a change of heart. Apparently the seller had gone to Mr Charlie Holm, whom we talked about previously, seeking his assistance. Charlie Holm then arranged a meeting between Ahern, himself and the seller. The Minister's stated reasons for expediting the transfer were that the seller would face bankruptcy. In fact, the seller later publicly said that his land was worth no less than $2m. His encumbrances were a mere $800 a month loan repayment to the Commonwealth Bank at Coolangatta and a leased Volvo. His income from the farm was $12,000 a month and he owned at least, of all things, a $96,000 yacht. This is the National Party's definition of bankruptcy. It is interesting to speculate why Mr Holm was there. His stated reason was to ensure that this farmer and others got a fair go. Is it not a shame that he did not extend the fair go to the Warwick producers who missed out on the drop-out pool? I think Mr Holm's assertions are nonsense. I believe he deliberately set out to, and was successful in, exerting pressure on Mr Ahern to change his mind. I believe he did this in a number of ways, Mr Holm is on the Board of Metrol Milk. He is also President of the South East District Zone of the Queensland Dairymen's Organization. Through these various boards, approvals are given for these rorts to be carried out. Indeed, Mr Holm had no trouble in shifting his own entitlement. Then, of course, there is the relationship of these boards and the Milk Entitlements Committee with the Queensland National Party, Mr Holm, by coincidence, is also a member of the National Party, but Mr Holm is no ordinary rank and file member of the National Party. He is the first senior vice-president of the Queensland branch of the National Party. He is also the senior vice-president of the Federal Management Committee of the National Party. Therefore, he is in an extraordinarily influential position particularly over someone like Mr Ahern. I believe that the seller knew this when he approached Mr Holm for assistance. He wanted a deal fixed and he got it. Honourable members might well ask what Mr Ahern hoped to get out of this deal. Mr Ahern is a non-dairy farmer. However, there is little doubt that he is an aspirant for the Premier's position. To achieve this position, he will need the backing and patronage of some senior officials in the National Party. Mr Holm fits the glove perfectly. Mr Ahern, therefore, went against the advice of his Department, went against the laws of the dairy Act and favoured a manipulation of the quota in possible return for a favour at a later date. I believe that Mr Ahern, as a Minister of the Crown, has been compromised by Mr Holm. I believe he failed to carry out his duty impartially. He acted in a way which was prejudicial to the best interests of dairy farmers, particularly those in my electorate. I believe the Premier of Queensland should show effective leadership in this matter and ask Mr Ahern to stand down from the Ministry. There is an urgent need for dairy farmers to believe that they have a fair and open go in Queensland. With Ahern, they clearly did not get it. As for Charlie Holm, I think that the National Party owes it to their supporters in the dairy industry to ensure that he is dismissed from executive levels at both a Federal and a State level. After all, I would not want a rorter and a manipulator like Mr Holm giving any bad advice to the Leader of the National Party. At a State level, Bjelke-Petersen owes it to his old friend Sir Edward Lyons to ensure that no favouritism should be played. If Lyons had to go, so do Ahern and Holm. Equity and justice in these cases demand nothing less. I call on the Queensland Premier to act decisively and in the best interests of Queensland dairy farmers. Mr Deputy Speaker, I have clearly demonstrated how the 1977 Queensland legislation has been flouted by senior members of the National Party. They are supported by the brash, arrogant, over-confident, loud-mouthed thugs who were at the Warwick meeting preventing farmers in my area from hearing the Minister's plan. The stakes for the winners in Queensland dairy farming are high. In 1983, the Queensland industry was worth $150m. Through the complex system of franchises and regulations, three major coastal associations, suncoast, metropolitan Brisbane, and south coast in association with Queensland United Foods controlled almost one-third of the milk market. That means that 14 per cent of the 2,000 dairy farmers in south-east Queensland control a massive 30 per cent of the market. The other 86 per cent, including producers in my own electorate, share the rest. The farmers' incomes in 1983 tell the story. In the three privileged coastal groups, farmers earn an average of $71,000 from market milk. Their fellow dairy farmers in the other nine associations earn an average of $28,000. Producers in my electorate are in the latter category and are quite underprivileged in comparison with coastal dairies. They are bearing the brunt of the National Party backed milk scandals. Mr Bilney —Can you prove all this? Mr BEDDALL —Every word of it. Mr Bilney —Why don't you table the proof? Mr BEDDALL —That is not a bad idea. Mr Deputy Speaker, I seek leave to table the documents. Leave granted. Mr BEDDALL —I say to the Minister: 'Ignore the claims of the National Party in favour of milk entitlements. Your scheme is a good one because it will encourage efficiency'. The only thing entitlements have achieved in Queensland is the forcing up of the price of milk making it the highest in Australia. My own electorate of Rankin is doubly penalised by the National Party. My dairy farmers do not get a fair go and the consumers, an overwhelming majority of whom are young families, face this problem through increased milk prices. I am pleased to be able to support wholeheartedly the producers in my electorate who stand to gain from a fairer milk plan. I commend the Bill, and condemn the National Party. Mr DEPUTY SPEAKER(Mr Keogh) —Before I call the honourable member for Moncrieff, I wish to refer to a matter that was raised with me earlier by the Minister for Primary Industry. The Minister raised with me the question of the occupation of seats on the Opposition side that are normally reserved for ministerial advisers. I said at the time that it was not within the responsibility of the Chair to comment on such matters. I further sought advice from the Sergeant-at-Arms in whose area of responsibility the allocation of these seats and the use of seats in the chamber falls. I have been advised by the Acting Sergeant that the two front seats, one on the Opposition side and the other on the Government side, are reserved for the use of the Leader of the Opposition and the Prime Minister. The allocation of those seats falls within their area of authority. In respect of the two seats that were occupied by other than advisers or members of staff of the Minister at the time, I understand that the attitude of the Leader of the Opposition is that he always ensures that those seats are allocated to members of his staff. I understand further that Opposition spokesmen or shadow Ministers would follow that procedure. At the time that the Minister raised the question the seats were occupied, I understand, on the authority of the Deputy Leader of the National Party (Mr Hunt). My attitude is that his direct responsibility would be to the Leader of the Opposition in respect of who occupies the seats during the time when he has charge of the debate and, in consequence, the responsibility of allocating seats. Mr Kerin —I thank you for that clarification, Mr Deputy Speaker, and point out that my colleague the honourable member for McMillan (Mr Cunningham) did not wish to see the honourable member for Gwydir (Mr Hunt) compromised. We just wanted a clarification of this matter. Mrs SULLIVAN(Moncrieff)(5.12) —I listened to the whole of the speech of the honourable member for Rankin (Mr Beddall) and I listened in vain for any reference to the Dairy Produce Market Support Levy Bill or any of the other dairying Bills before the House. These Bills will reorganise the dairy industry and lead to major changes in it. I am sure that if any dairy farmers in the electorate of Rankin were listening to the radio today they, too, would have listened in vain. I shall be interested to know whether the honourable member for Rankin circulates that speech to the very large number of dairy farmers in his electorate as some sort of illumination on the depth of his understanding of the dairy industry and this legislation. I am sure they will also look with some keenness for some indication of how deeply his concern runs for things that are within his purview. If the honourable member for Rankin wants to canvass other things that are under the control of the State Government in the course of the limited time available for us to speak on this subject this afternoon, that is his business, but it was, of course, a deliberate choice. He had next to nothing to say about the Bills that the Hawke Government has put before Parliament today and which will have such a devastating effect on the dairy industry. The piety and nervousness of certain rural back benchers on the Government side- Mr Keogh —I raise a point of order, Mr Deputy Speaker. As I returned to the chamber I distinctly heard the honourable member for Moncrieff (Mrs Sullivan) raise a matter which reflected on the Chair. Apart from the fact that I was the occupant of the Chair at the time, I think it is appropriate that I should raise this matter because she distinctly said that the honourable member for Rankin (Mr Beddall) did not cover the subject matter of the Bills in his speech. The fact is that he did. I listened very carefully to him and he was referring to matters that are covered by the Bills. Mr DEPUTY SPEAKER(Mr Drummond) — A point of order has been raised. I believe that the honourable member is being a little sensitive about it, but the point is taken. Mrs SULLIVAN —I also wish to place on record the fact that there is agreement amongst speakers on the Bills today to limit their speeches to 10 minutes instead of 20 minutes to which they are entitled under Standing Orders. Frankly, I think that time that has just been taken up by the honourable member for Bowman (Mr Keogh), who was earlier in the chair, was an irrelevance. If I had thought that a point of order was involved-and I was present in the chamber at the time-I would have risen and taken it. The honourable member could then have ruled one way or the other. I have made my comment on the content of the speech by the honourable member for Rankin and the voters of Rankin will deliver their verdict on the content. That is all that needs to be said about it. As I was saying before I was so irrelevantly interrupted, the piety and nervousness of Labor rural back benchers on this debate is equal only to the cynicism of the Hawke Cabinet in the way it has handled the whole issue of adjustment of the dairy industry. The so-called Kerin plan, which is implemented in the Bills which are before us, has thrown the industry into a turmoil of uncertainty as to its future and it has shattered the chances of thousands of rural families for ordered changes to their future prospects. I point out to the honourable member for Rankin that not only the dairy industry families are thus affected, but also a number of the consumer families in the many country towns in his electorate. However, the Minister for Primary Industry (Mr Kerin) acts as though he is doing someone a favour by doing this to the industry. I quote from his second reading speech. He said: This Government accepted its responsibilities and has made the hard decisions, commensurate with its powers. Not to have done so would have condemned the industry to a future of recurring crises with increasing dependence upon government assistance for its survival. I reject that that statement is based on fact. However, I agree that governments have to accept their responsibilities and make hard decisions. The decision in this case has been made much harder by the Government because of its approach to the views of industry representatives. The basis of the problem, according to the Minister in his second reading speech, is low export prices for milk products through what he calls 'irresponsible production' and the export subsidy practices of a number of countries, notably the European Economic Community. In his second reading speech, on this subject he said: Unfortunately despite strenuous efforts, there is little that Australia can do to change these practices in a fundamental sense. The Minister wrings his hands, sighs and shrugs his shoulders. Everybody recognises that there is a major challenge to the Australian dairy export industry because of the domestic and export policies of the European Community. But the proposals in this legislation make it impossible for the dairy industry to adjust reasonably to the challenge. There is some hope that there might be some adjustment of the present surpluses of certain milk products on world markets. It may turn out to be only a marginal change, but the Minister does not know that and does not even dare to predict it, come to that. The Minister in his speech I believe, further misrepresented the position of the dairy industry and the negotiations that it had undertaken. I refer again to the Minister's second reading speech when he justified these changes to the dairy industry. He said: Given the considerable role and powers of the States in this industry, the issue of new marketing arrangements during 1984 and 1985 was the subject of extensive debate within the Australian Agricultural Council (AAC). Despite four formal meetings AAC was unable to reach agreement on new arrangements. That is a statement of truth by the Minister but the breathtaking cynicism of the facts that he conceals with that generalisation would make everyone, I am sure, wonder about the purpose of these Bills. The only problem in reaching total agreement was a Minister from a Labor State Government-the Government of Victoria. I do not think that there is anything remarkable about the fact that it took the industry and the various State governments two years to reach agreement on a plan. The dairy industry is extremely complex and reference to the Minister's second reading speech and the reply on behalf of the Opposition by the honourable member for Gwydir (Mr Hunt) will give some indication of just how complex it is, despite the attempts to simplify understanding of the industry in those two speeches. Nevertheless, the industry reached agreement and nearly all State governments were party to that agreement. The Victorian Labor Government would not agree. Last year the Federal Minister for Primary Industry indicated that he found some dismay in this fact. However, it was only a couple of days before the Victorian State election that we saw the most cynical move of all in this entire mess when the Victorian Government capitulated and let itself off the hook for the purpose of that State election. But now, let down by the reality following that election, the dairy farmers in Victoria feel they have been betrayed by that Victorian Labor Government. We have a very sad situation of near riot in the dairy industry in Victoria. I do not like to see that sort of behaviour anywhere in Australia for whatever cause. It is an indication of the anger and the frustration, indeed the fury, of dairy farmers in Victoria at the way they have been betrayed by their State Government. The Minister for Primary Industry and other speakers in this debate on the Government side have used past disagreements in the dairy industry to gloss over the present problem. The Minister should thank his lucky stars because, compared with the experience of some other Ministers for Primary Industry, he was handed this matter on a plate. He has chosen to ignore the great opportunity it gave him. I make it clear that the dairy industry supports further rationalisation of the industry. Until recently it believed that the Minister for Primary Industry was with it. The substance of its dismay and upset at the moment is that it says that more time is needed for the necessary adjustment and that, sadly, the provisions of this Bill will dislocate, indeed destroy, the industry's chance to take reasonable steps towards the adjustment that all parties agree is necessary. The dairy industry spent two years working hard on a proposal acceptable to all. It has had the rug pulled out from under its feet by the Hawke Government and serious injury to the industry in Australia is likely to follow. Members of this industry deserve better than the attack that was mounted on them by the honourable member for McMillan (Mr Cunningham). I do not want my comments to be confused with those of a previous occupant of the chair, but the honourable member pointed to the large number of dairy industry representatives present in the Speaker's gallery. There are a large number of them here today. Mr Lloyd —And rightly so. Mrs SULLIVAN —Yes; where else would they want to be? The honourable member mounted a cowardly attack on them. Mr Kerin —That was not what he was referring to. Mrs SULLIVAN —As I recall, the Minister was not at the table. Mr Kerin —I was. He was pointing to the people in the Opposition gallery. Mrs SULLIVAN —The honourable member referred to more than two people sitting in two chairs. In any event, as has been pointed out, they had every right to be there. Mr Lloyd —And there were no seats anywhere else. Mrs SULLIVAN —That is right. They could not sit anywhere else. It is cowardly of honourable members to attack individuals sitting in the Speaker's gallery-private citizens who have the deepest interest in this subject and who cannot reply and give a reason for why they are here or voice their concerns. The industry deserves better than it has received from individual Government members, including the honourable member for McMillan, and the Minister. The industry is under extreme pressure. Farm income for 1984-85 averaged $9,168 per family. Average farm income per work year of family labour-that takes into account the number of members of the family involved-was $4,325 in 1984-85. Under those extreme circumstances the farmers nevertheless struggle to provide a reasonable future for their industry. The Opposition amendments foreshadowed and outlined by the honourable member for Gwydir in his speech should be supported. They are acceptable to the dairy industry and they support rationalisation of the dairy industry at a pace with which the industry and the country can cope and which it can afford. Debate interrupted. Mr DEPUTY SPEAKER(Mr Drummond) —It is the custom of the House to welcome distinguished visitors. I take this opportunity to welcome the Hon. John Johnson, President of the Legislative Council of New South Wales. Honourable members-Hear, hear! Debate resumed Mr FITZGIBBON(Hunter)(5.25) —Five days before the Federal election I went to Denman, a town in the Hunter electorate, in response to a call from a number of dairy farmers up that way. They proved to be very responsible citizens. They were fine men. I think we surprised each other. For the first time in its history, Denman was about to be represented by an Australian Labor Party member and the farmers were surprised to find that I, as a Labor candidate, did not have a tail and two horns. We got to know each other quite well. We had a good relationship. I told them that I did not know a great deal about the dairy industry; actually my knowledge of the dairy industry was rather abysmal. They asked me if I was willing to learn and I assured them that I was. We discussed the dairy industry. They were my teachers and we talked about the European Economic Community; subsidies; the problems of the industry, such as costs, low prices and incomes; entitlements; market and manufacturing milk; the Australian Dairy Industry Conference's plan and Victorian opposition to that plan; and overproduction. I said: 'If I am successful on 1 December, I will work to the best of my ability to try to assist you. I will work in your interests. There is really nothing political about this. They said: 'We are not blaming the Labor Party. We have had problems in the dairy industry for 20 years. We cannot blame a Labor government or a conservative government; there is something basically wrong with the industry'. That was my first lesson on the dairy industry. I was elected on 1 December and the reason is quite interesting. I was elected because of a mass exodus of support from the National Party of Australia in the Hunter electorate. That electorate now includes 18,000 electors from the former National Party seat of Paterson and 18,000 from the former National Party electorate of Lyne. Despite the fact that the National Party spent the type of money never seen before in that electorate, it ran a tired old third place-a very poor performance. National Party members had lost the confidence of the rural vote in the Hunter electorate. I started to work to help the dairy men. I did a crash course in the industry. Opposition members-Ha, ha! Mr FITZGIBBON —When going through university I did some crash courses too, but I got through. I have as much intelligence as some of those on the opposite side of the House-giants in mental sagacity. The first thing I did to learn about the dairy industry was start talking to the dairy men. I met with them throughout my electorate and slowly but surely my knowledge of the industry improved. Because of my determination to work for the dairy men in my electorate, I sought to be elected and was elected to the Government's primary industry committee. Why? I thought that being a member of that committee would provide me with the knowledge I needed to serve the dairy men whom I represent. That committee has spent hours agonising over the problems which confront the industry. It is not seeking to score cheap political points; it is trying to find a genuine, long term solution to the problems of the dairy industry. I met with dairy men from Singleton, Denman, Gresford, Paterson and other areas in the electorate. I met with the dairy co-operatives and their boards. Gradually I started to understand the basic problems confronting the dairy industry. While I was doing this, what happened? What did the honourable member for Gwydir (Mr Hunt) and some of the other National Party people do? All they did was try to spread fear and doubt about what the Labor Government would do for the dairymen. Once again they proved their great lack of understanding and their lack of ability to do anything constructive. They excell at being destructive. Recently I helped the wife of a dairy farmer. Two days later she rang me and asked: 'Why did you help me?' I replied 'What do you mean, why did I help you?' and she said: 'But you are Labor'. I said: 'So?' She said: 'You are a socialist, you are against free enterprise, you are against private ownership'. I said: 'Shades of Michael Hodgman'. What a lot of nonsense. This is the fear, the terror and the lies that those opposite spread. The people are thoroughly tired of them, and that is why the National Party candidate ran a poor, tired old third in Hunter. If there are four candidates next year the National Party candidate will run fourth. We know that the dairy industry, after 20 years of travail, needs a genuine permanent solution, not a cosmetic one. I was continually impressed with the level of debate at primary industry meetings. Every member at those meetings was motivated by a sincere desire to improve the lot of the dairy farmers. What eventually emerged is what is sometimes referred to as the Kerin plan. I did not initially have overriding confidence in the Kerin plan. It is a tough plan but I wondered whether it was tough enough to survive on its merits. I watched and listened while the batterings came. In House of Representatives committee room No. 1 the Minister for Primary Industry (Mr Kerin) sat with leaders of the industry. They battered him but he withstood their battering. Calmly, logically and articulately, the Minister considered and then demolished the arguments of those who sought to reveal flaws in his plan. While I watched the emerging strength of the Kerin plan my confidence in it solidified. I do not see the plan as a panacea for all the problems confronting the dairy industry, but I firmly believe that at last this country has a government which is prepared to face the situation head on and take positive steps in the right direction to ensure that we will have a dairy industry in the future which will be viable and profitable and everything that the National Party would have otherwise. The Minister was prepared to go throughout the country selling his plan to those who would normally accept it with open arms but who, because of the treachery and the falsehoods of the National Party, were worried about it. One night the Minister addressed a crowd of 500 people at Singleton, and I guess they were all dairy farmers. They tried their darndest to reveal flaws in the Kerin plan, but again the Minister spoke calmly, logically and articulately and tore their attacks to shreds. After the Minister had left for his motel I stayed for an hour and spoke to the dairy farmers. I believed that the evening had been an overwhelming success because they were impressed by the Minister's sincerity and ability and they had accepted the plan. But oh no, we forgot about the white-anting by the National Party. The next day the devils were out spreading their vicious doubts and fears. I found that once again the farmers were coming to me trying to point out weaknesses in the Kerin plan. It may surprise honourable members opposite, although it is no surprise to me, that they failed to do so. Once again there are people in my electorate who are saying: 'At least this man has the guts to recognise the problems of the industry and try to do something about them, instead of the cosmetic efforts that the National Party was prepared to implement'. The problem of the dairy industry is simply a problem of supply and demand. Imagine for a moment a situation where half a dozen families start up bakeries. If they cannot find a market for their product they will go out the back door, and that is exactly what is happening in the dairy industry. Mr Nehl —You will go out the back door at the next election. Mr FITZGIBBON —I will go with the honourable member. It will be wonderful to have him as a companion. It is a shame that when one's time is limited one has to waste half of it answering asinine interjections from the other side of the House. I believe I have made my point. The problems of the dairy industry are ones of supply and demand and overproduction. Somebody had to bite the bullet. I am proud that my Government was prepared to bite the bullet. I have great pleasure in supporting the Dairy Produce Market Support Levy Bill and cognate Bills before the House. Mr LLOYD(Murray)(5.36) —At about this time in Parliament in 1976 the previous coalition Government introduced for the first time underwriting for the dairy industry. Following the previous cyclical situation of overproduction in the European Economic Community and dumping on world markets there were disastrous prices for export dairy products. For six months in 1975 the Australian Labor Party Government did nothing to assist the dairy industry. We acted as soon as we returned to power with underwriting and other measures. This did not stop many dairy farmers leaving the industry but it did slow down the speed of rationalisation to a more acceptable level. This legislation coincides with another of those pendulum swings in the international dairy market due to the EEC and the United States of America, weak prices, and stocks in those countries. I want to make one point very clear, and that is that there are no stocks of dairy products in this country. If anything, the dairy industry is oversold on the export market for some months ahead, so let us hear no more talk about that. Even if the present plan continued there would be a significant rationalisation of the dairy industry because there has been a fall in the manufacturing price in real terms of at least 35 per cent over the last two years, and many people, unfortunately, cannot survive that sort of drop in income. In fact, since the plan which the Dairy Produce Market Support Levy Bill hopes to replace was introduced in 1977, one-third of all dairy farmers in Australia have left the industry. So much for the talk that the industry is not always rationalising and making itself more efficient. The real questions are these: What should be the speed of rationalisation and should the Government interfere to slow down or, in the case of the Kerin plan, accelerate that process of adjustment? We on this side of the House believe very strongly that the purpose of government should be to make the process of rationalisation less painful for a whole variety of humanitarian and economic reasons, and that is the purpose of the amendments put forward by the Deputy Leader of the National Party in relation to the Australian Dairy Farmers Federation. As in 1975, when Labour did nothing for the dairy industry, it is saying, but in a devastating way this time, that it will accelerate the problems for the dairy industry. Let us see what is happening with Labor and its policies on the rationalisation of other industries in Australia. Let us see what the Government considers to be an acceptable speed for rationalisation, an acceptable degree of world competitiveness at the end of that rationalisation, and whether the dairy industry should be allowed to continue in the long term as an important export industry. Because of the lack of a genuine international price of dairy products at the present time, the Minister has decided to use 130 per cent of New Zealand export parity as the benchmark for efficiency at the end of that five-year period. It remains to be seen whether that New Zealand price will be a genuine price at that time. Even if it is genuine, let us compare this with what the Labor Government has done for the motor vehicle industry. At the end of seven years of adjustment, it will have been granted 157 1/2 per cent of import parity and, wait for this, $150m, yet it is not even in an area where there may be some export potential for the motor vehicle industry. The sugar industry is in similar trouble to the dairy industry. The sugar industry has all the problems associated with a corrupt international market at the present time. In the last few weeks the Labor Government has introduced legislation in this House to give the sugar industry a domestic price of twice the 130 per cent of import parity. I am not criticising the sugar industry-Lord knows it needs it and more. What I am saying is that this Government is inconsistent when it comes to industry policies. This is the most ruthless scheme that has ever been introduced in my 14 years in this Parliament. What about regional Australia? More so than the sugar industry, the dairy industry of Australia sustains whole regions and communities. The Kerin plan will affect not just the dairy farmers, but whole areas. My area of the Goulburn Valley will be one of the hardest hit. The cost to the industry, to the community, to small business, to factory workers, to the service industries and transport will be not tens of millions of dollars but hundreds of millions of dollars. Let us compare the regional policies of the Labor Government with its steel industry plan for the two regional steel areas of New South Wales that have been affected by rationalisation. Government assistance for the steel industry on a regional basis is dramatically more generous. If one looks at Broken Hill Proprietary Co. Ltd in relation to what has been provided for the dairy factories of this country, BHP comes out as Santa Claus all the time. Our dairy industry is accepted as the second most efficient dairy industry in the world after New Zealand. There are not too many agricultural industries which can say that they are the second most efficient in the world. Some industries can say that they are the most efficient, but not many. No manufacturing or tertiary industry in this country can say that it is anywhere near the second most efficient industry of its kind in the world. The dairy industry presently provides close to $400m a year in export income. A combination of the devalued dollar and adjustments to dairy policies in the European Economic Community, the United States of America and New Zealand, point to a return to better export markets within the next few years. In fact, the pattern appears to be very similar to 1974, 1975 and 1976 when there was world dumping, low incomes for dairy farmers and significant rationalisation, followed by eight reasonable to very good years with international prices at times above domestic prices and considerable export income for this nation. The fluctuating level of export returns for the dairy industry is not new, but, in spite of this, the industry has consistently been a valuable export earner. The Kerin plan will almost certainly mean the end of the dairy industry as a consistent export industry and, with it will come problems created by lack of confidence by importers in other countries that Australia can consistently maintain supplies. There is a strong possibility that the Kerin plan will create an over-correction to the industry; that is, the rationalisation will be too ruthless and will mean a loss of continuity and stability of production which is essential for export marketing. It will, as I said before, ruin the whole credit structure of agriculture in the dairy areas of Australia, as well as land prices, small business and so forth for whole regions. Since 1977 the dairy industry has not required significant contributions or assistance from the Australian Government under the present plan. With the devaluation of the dollar, the projections for continuing assistance, even with the current plan, are falling dramatically, so that most products will receive little or no contribution in the future. The ADIC plan acknowledged the need for rationalisation throughout Australia so that the industry would become more efficient in total, but the speed of that rationalisation was to be at a more acceptable level and the dairy industry was to remain an export industry, albeit a more efficient export industry. Mr Cunningham —Why didn't you introduce it? Mr LLOYD —If I were the honourable member for McMillan, I would remain very quiet on the dairy industry. The honourable member has betrayed dairy farmers in his electorate in Victoria and in the rest of Australia. I congratulate the Australian Dairy Farmers Federation for a tremendously realistic and sensible approach to this whole problem with the amendments it has proposed. I make one final point concerning New Zealand. For some time now there have been statements on what the Government is really on about with this plan in relation to New Zealand and closer economic relations, and I have made my share of those comments. As each point has emerged, my suspicions and those of others in the industry have strengthened as to what the Government is really up to. I quote from a report of a meeting of the Standing Committee on Agriculture, which states: The Commonwealth has also had in mind that with the progressively closer integration of the Australian and New Zealand economies it will be necessary for the Australian industry in the longer term to compete against New Zealand imports. That was to be part of the criteria for the discussions by the Agricultural Council on any dairy plans. I then asked the Minister a question in parliament. After the Minister had talked about the benchmark price of 130 per cent, he said: I am quite confident that the Victorian and Tasmanian industries in particular with their production efficiency-as they are the industries on which 99 per cent of Australian exports are now based-can meet that sort of competition. What is that sort of competition? It is import competition from New Zealand, because that is referred to in the reply to that question. The Minister came back at me and said: 'That is a lot of rubbish'. Let us look at what the Australian Dairy Farmers Federation submitted recently to the Senate Standing Committee on Industry and Trade. Mr Clay Manners said: . . . under the CER Memorandum the New Zealand Dairy Board exercised restraint in marketing dairy products in Australia in return for Australian co-operation with New Zealand on third markets. He went on to say that, with the Kerin arrangements, it will be impossible in the future. That will be an abrogation of CER, therefore New Zealand can do what it likes. The Minister responded to that and said: 'Ballyhoo; no such thing'. Will the Minister deny what his departmental advisers have said: That once 130 per cent of import parity is reached for the manufacturing price in Australia, with what dairy farmers are left at that time, no dumping action will be instituted against any dairy products from New Zealand because at that time, whatever the basis of those exports from New Zealand, it will be considered fair trade? I ask the Minister to say 'ballyhoo' to that. I believe that once the Kerin plan is in place, it will be only the first stage, and the next stage will be the complete opening of the floodgates to New Zealand. I commend the Minister on one point. He has shown, by the amending legislation, a belated recognition of what his plan will do-the disastrous opening price it will create. Unfortunately, the opening price will be only the first of a chain of linked disasters for the dairy industry of this country and I believe it will cause the dramatic reduction and bankruptcy of a great Australian industry. Mr CUNNINGHAM —Mr Deputy Speaker, I wish to make a personal explanation. Mr DEPUTY SPEAKER(Mr Drummond) —Does the honourable member claim to have been misrepresented? Mr CUNNINGHAM —I do. The honourable member for Moncrieff (Mrs Sullivan) and the honourable member for Forrest (Mr Drummond) alleged that I had attacked members of the Australian Dairy Farmers Federation, who were, unfortunately, sitting in the advisers seats of the Opposition. What I was saying was that I was stunned to see them sitting there and I was surprised to think that the National Party of Australia would compromise these people by allowing them, without their knowledge, to sit in those seats. It was definitely not an attack on the ADFF, but it was an attack by the National Party on the neutrality of those people. Mr Lloyd —Mr Deputy Speaker, I raise a point or order. I believe that the honourable member for McMillan has no right to try to transfer his embarrassment from a major gaffe on to anybody else. Mr DEPUTY SPEAKER —Order! There is not point of order. Mr BRUMBY(Bendigo)(5.50) —I support the four Bills before the House-The Dairy Produce Market Support Levy Bill, the Dairy Legislation Amendment Bill, the Dairy Produce Market Support Bill and the Dairy Industry Stabilization Levy Amendment Bill. I shall make some comments on the background to the dairy industry, the current state of the industry and the need for the legislation which is currently before the House. If we look at the background to the Australian dairy industry it is worth noting that the size of that industry has declined significantly over the last 14 to 15 years. Since 1970-71 the total number of dairy farms has fallen from over 37,000 to about 19,000 in 1983-84. Whilst that rate of decline did slow down somewhat during the 1980s, in comparison with the rate in the 1970s, it is nevertheless continuing and will continue into the future. In addition to the reduction that has occurred in the number of dairy farms there has been a corresponding reduction in the number of dairy cattle. The net result of the decline in the number of milk cattle and an even larger decline in the number of dairy farms has been an increase in the average herd size of Australian dairy farms. It is of interest to note that the average number of dairy cows per farm has increased by a third since the early 1970s to around the current figure of 100. It should be noted also that since 1970 the milk yield per cow has risen by a significant 18 per cent to an estimated yield of 3,300 litres. The effect of those changes in the dairy industry is important because they have resulted in a core of more specialised dairy farmers and have been associated until recently with rising farm incomes. By way of background, the dairy industry also makes a significant contribution to overall production and export levels for Australia. The industry contributes between 6 to 8 per cent of the gross value of rural production. Again, it is worth noting that the contribution of the industry declined fairly consistently from 1970-71, when it contributed approximately 12 per cent of the total value of rural production. So over that period we have seen a significant fall in the value of production. The dairy industry has typically contributed between 3 and 4 per cent of exports of rural origin. From looking at that background we can say that the Australian dairy industry in terms of its size, employment, production and export earnings is in every sense a significant Australian industry. I also mention farm income, because in many ways that is at the crux of some of the problems we are discussing here today. Whilst there was some increase in farm incomes in the late 1970s and early 1980s the current situation is that those incomes are declining substantially. The Bureau of Agricultural Economics provides some interesting statistics relating to measures of farm income and farm income per work year of family labour in the dairy industry. The estimated average farm income on dairy farms for 1984-85 is forecast at $9,168. That figure compares less than favourably with the average income of $12,149 for the agricultural sector as a whole. More importantly, when we divide it by the estimated average family labour input in the dairy industry, we find that farm income per work year of family labour on dairy farms is forecast at $4,325 for 1984-85; in other words, income has declined relative to other incomes in the agricultural sector. The problem of low incomes means that the immediate outlook for the industry is depressed. It is depressed due to low prices, rising costs and, as I have said, rapidly declining incomes. To a large extent, it has to be said that the current marketing arrangements have brought this situation about by encouraging milk production beyond the level which is required for profitable market outlets. That is a simple fact. Farmers have been receiving misleading price signals because of the manner in which domestic prices have been administratively set and the nature of the price equalisation arrangements. In this context, the key economic issue is that the current marketing arrangements are generating excessive surpluses of milk. In fact, due to the effects of price equalisation, buoyant export prices, which occurred in the early 1980s, and, in some areas, good seasonal conditions in the dairy industry, Australian milk output over the last three years has risen by 14 per cent. Surplus production has either to be sold on unprofitable export markets or placed in storage. Despite some of the comments made by other speakers in this debate today there are significant stocks of dairy products in Australia that simply cannot be sold. There are stocks in my electorate. They are frozen. Throughout Australia there are significant levels of dairy produce that cannot be sold. If the existing regulation of the dairy industry were retained, there is no doubt that unit returns for manufactured milk would remain depressed because of the low price on world markets. When we combine that factor with continuing cost pressures, which will continue, many milk producers, especially the smaller producers, will be adversely affected by chronic low farm incomes, and that will inevitably lead-it is occurring now-to contraction in farm numbers. Obviously, this will occur in Victoria and Tasmania. The only way these problems can be solved is by reducing the incentive for farmers to continue producing large volumes of milk. That is a simple market reality. There are really only two ways in which we can do that. We can do it through a quota arrangement of some sort or we can expose farmers to price signals which are parallel with national and international developments in the industry. As is common knowledge, the Australian Dairy Industry Conference proposed a marketing plan that involved quotas or entitlements. I do not wish to go into a long debate about those quotas or entitlements, but I think that some of the comments made in this debate by the honourable member for Rankin (Mr Beddall) on the serious problems related to entitlements in the Queensland dairy industry are perhaps reason enough to have serious doubts about the effectiveness of such a proposal. In contrast to the ADIC plan, the Federal Government favours a national marketing plan that relies more on market pressures to achieve industry adjustment. That is what these Bills are all about. I shall make a few brief comments about the plan. The legislation before the House, the Kerin plan, provides, in my view, the greatest scope for long term gains in economic efficiency in the industry. Under this plan, production levels will more closely reflect domestic demand and demand from marginal export markets. Producers will be forced to limit production to the volume that can be sold on the domestic market and on remunerative export markets. High returns set on market milk sales-this certainly occurs in some States-could still encourage some cross-subsidisation of less profitable export sales. It must be emphasised that this proposal, if implemented, will be a significant improvement on the current situation in which the equalisation arrangements encourage production for unremunerative export markets. A brief comment can be made about cross-subsidisation. Concern has been expressed that the source of export income-the unremunerative export income-might be lost if this plan were introduced. Even if it were lost such a result would be of benefit to Australia rather than a cost. All that is happening at the moment is that the unremunerative export sales that are made represent, in effect, a transfer of income from Australian consumers to overseas consumers, who are able to buy our dairy products for less than the cost of production. That is all that is happening under the current arrangement. So if that arrangement is changed there will not be any net transfer of income abroad. There has been some debate about three other aspects of this plan: First, the level and rate of restructuring, secondly, the position of new farmers in the industry, and, thirdly, the question of interstate trade. Not just the possible size of restructuring under the Government's plan for this industry, but also the form of that restructuring, have been argued by the Opposition to be major shortcomings. It has been suggested that while the ADIC plan will provide for orderly restructuring, the Government's plan will be more unpredictable and disruptive. There may be some truth in some of those points, but they do not represent the full picture. Certainly, the reduced production under the ADIC plan would have been achieved by the allocation of entitlements to all producers based on past production and so on. In contrast, the Government's plan places the onus on individual producers to choose what they consider to be an appropriate production level. The absence of export pooling will also affect, to some extent, the overall returns on sales. The reduced level of production under both plans will place pressure on the viability of marginal producers. We ought not to be in any doubt about that. In both cases an indeterminate number of dairy farmers will be forced out of the industry in the same way as if there were no plan to alter the current arrangements. Another concern which has been expressed about the situation of new farmers to the industry is that the plan may not force out the least efficient producers, but rather the mainly young producers who currently have high debt repayment commitments. Those producers could face severe liquidity pressures if their returns were reduced. Once again, it is a simple statement of fact that those pressures would result both under the Kerin plan and under the ADIC plan. They exist now. An important difference is that the Government's plan provides for the allocation of a considerable amount of money-at least $20m-on a matching dollar for dollar basis with participating States under part B of the rural adjustment scheme. That scheme provides concessional carry-on loans to producers which are designed for producers who have reasonable prospects of long term viability on the judgment that there will be a market recovery. The third issue I touch on is that of interstate trade. The Federal Government's new arrangements do not directly interfere with the existing State regulations regarding the production and distribution of fluid milk for human consumption, although the Federal Government is repealing the unproclaimed 1977 legislation which, in many people's view, is considered to have inhibited interstate trade in market milk. The small volume of interstate trade in market milk before that legislation was passed would suggest that other factors have also acted to limit interstate trade. Probably, the two most important of those factors are fear of retaliatory action and support or consensus for the status quo. Also, most States have some degree of natural protection, as producers in other States would incur additional freight costs in supplying interstate markets. Finally, it is possible that State dairy authorities, if they wished, could initiate action to eliminate or control such sales in order to protect market milk premiums. In conclusion, the Government's plan will, in my view, inevitably lead to some reduction in the number of dairy farms and, in the short term, to a reduction in farm incomes. However, as I have said, that outcome is inevitable, whatever plan is proposed by this Government. It must be emphasised that following that initial restructuring the industry's long term structure will be more stable. It will be more responsive to market signals and thus it will be more efficient. It will be able to provide improved income for those remaining in the industry. It will be characterised, probably, by larger farms but with the entry of new farms unimpeded. Mr DOWNER(Mayo)(6.05) —It is often said that the Australian Labor Party is not particularly interested in Australia's primary industry. The fact that only four members of the Labor Party are present for the debate on the Dairy Produce Market Support Levy Bill 1985 and cognate Bills is witness to that. I recall an interjection by the honourable member for Kingston (Mr Bilney) which just about sums up what the Labor Party thinks. He called out that farmers are parasites. That sums up the Labor Party's attitude and brings shame on it as a government. I join my colleagues in endorsing the amendments foreshadowed by the honourable member for Gwydir (Mr Hunt) and express my concern and the concern of my electors about the short-run effects of these Bills. I have a very great interest in this debate as there are between 600 and 700 dairy farms in my electorate of Mayo. Whole towns in the Adelaide Hills, the lower Murray and the Fleurieu Peninsula, including my home town of Macclesfield, were built on the foundations of the dairy industry. In recent years, many of those towns have been significantly affected by the decline in the local and national dairy industries. Honourable members do not need to be reminded that the decline of the dairy industry over a number of years has caused great hardship in my district as it has elsewhere, with many dairy farmers being forced off their farms and, if they are lucky, into city-oriented jobs. If they are less lucky they have been put on the dole. All of us appreciate that when industries become uncompetitive and demand for their products falls there must be a process of adjustment and rationalisation. If that process is resisted by continually resorting to government subsidies and assistance, resources are being taken, in effect, from profitable growth industries to prop up the unprofitable. That sort of redistribution will only hold back economic growth and community welfare. I recognise these hard facts and so do my electors, including most of those associated with the dairy industry. What we find hard to sit back and accept is the way the local and national dairy industries have been battered by the distortions, the protectionism and the commercial piracy, above all, of the European Economic Community, which produces 60 per cent of the world's milk, and the way our relatively efficient dairy industry has been driven from world markets by commercial barbarians. The facts tell a very chilling tale and are illustrative of one of the fundamental ills of the international trading scene. In United States dollar terms-I use the exchange rates of 1983 before the advent of the Hawke dollar-producers in Australia received 14.3c per kilogram for manufacturing grade milk while producers in West Germany received 24.2c, in Britain, 21.6c and in France, 20.6c. In the United States of America producers received 27.8c per kilogram. Australia is all the more competitive now because of the subsequent decline in the Australian dollar. One would think, on the basis of those facts, that Australia was fighting to meet orders for its dairy products. However, the reverse is the case. In 1972-73 we exported, in 1985 dollar terms, over $32m worth of dairy products to the EEC. In 1982-83, we exported just $8m worth. That decline has not been caused by our failure to compete; it has been caused by the protectionism of the EEC. Since Britain joined the EEC in 1973, our dairy markets in Europe have been all but eliminated. Yet the EEC's dairy exports to Australia have grown from $4.3m in 1972-73 to $31.8m in 1983-84. In other words, even though average prices received by EEC dairy farmers are almost 100 per cent above Australian prices, the EEC exports to Australia as much today as we exported to the EEC in 1972-73. Prices apart, the EEC's productivity is woefully low. While the average dairy herd in Australia today is about 100 cows, in Europe it is just 14 cows. A dairy farmer in the EEC can get by, because of the largesse of the common agricultural policy, with 14 cows, while in my electorate of Mayo, for example, a farmer can no longer survive with less than 40 cows. It is not surprising, then, that the EEC's dairy budget is as much as 10 per cent of the total budget of the Australian Government. Honourable members are well aware of the EEC's practice of dumping its artificially generated and highly subsidised so-called butter mountains onto the world markets. In 1973, the EEC exported $3.2 billion worth of dairy products. In 1983, it exported over $9 billion worth, using constant prices. In other words, despite the EEC's obvious lack of competitiveness, and the comparative competitiveness of the Australian and, in particular, the New Zealand dairy industries, the EEC's exports of dairy products world-wide have risen by some 200 per cent. It is for these reasons that I take this opportunity once more to say that the EEC has become the barbarian of international trading markets and, in particular, of the international dairy market. The consequences for Australian dairy farmers, including those in my electorate, are well known. There were 49,000 dairy farms in 1964. Today there are only just over 18,000. Industry employment has fallen from 115,000 to just 30,000. The number of factories has declined from 388 to 264 in just 10 years. Milk production has fallen from 7.2 billion litres in 1970-71 to six billion litres today. Farm incomes, as the honourable member for Bendigo (Mr Brumby) pointed out, are now about half of average weekly earnings. So the decline, sadly, goes on. It is because of our failure to penetrate international dairy markets, due to the dumping of principally EEC surpluses, that Australia is now producing six billion litres of milk a year, yet we have markets for only 4.6 billion litres. We all recognise that, because of this, there must sadly be further rationalisation of our dairy industry. That situation can change only when agriculture is properly brought within the framework of the General Agreement on Tariffs and Trade. Consequently, at the behest of the Minister for Primary Industry (Mr Kerin), a dairy plan rationalising production was eventually developed by the Australian Dairy Industry Conference. That plan had its shortcomings-principal amongst them being the suggestion that production entitlements be established. But the thrust of the industry's own plan was that it should have time to adjust gradually to changing market conditions. There was a recognition that a sudden collapse in the market, which is inherent in the Government's legislation, would have severe social consequences which needed to be taken into account. After all, we are not dealing just with the calculations of accountants, important as those calculations might be; we are dealing with the lives of individual people and their families. The Kerin plan will, within 18 months, push 200 dairy farmers out of the industry in my electorate of Mayo alone. The amendments put forward by the honourable member for Gwydir would ensure that readjustment was less dramatic and less damaging. The Opposition's amendments would have a number of positive effects. These amendments, in particular those relating to export pooling and domestic pricing arrangements, would, above all, enable the Australian dairy industry to adjust gradually to changed circumstances. This would give many of my electors the chance to adjust to those changed circumstances. Yet the end result would, all the same, be a market oriented dairy industry. In the end, however, the only way in which we shall solve the very fundamental problems of the Australian dairy industry is to get an effective international regime for dairy produce marketing. If we continue as we have over recent years, with the sort of extravagance that the European Community has shown and, indeed, the extravagance that we have seen in the United States as well, the Australian dairy industry will have very little prospect for the future. I very much hope that in the months and years ahead the Australian Government will be pressing for much fairer and more effective marketing arrangements in international trade negotiations. Mr SIMMONS(Calare)(6.13) —It is rather interesting to listen to the comments of the honourable member for Mayo (Mr Downer). He put forward some interesting arguments about the problems that have faced the Australian primary industry sector because of the policies of the European Economic Community. What is he suggesting that the Government should do, in a positive way, about this problem? What did his colleagues as members of the Fraser Government do about these problems with the EEC and the problems associated with its common agricultural policy? The honourable member for Mayo correctly pointed to the decline in the number of farms, in farm incomes and in employment generally in the dairy industry. But I point out that such a decline did not occur overnight. It is worth while reminding some of the economic troglodytes who sit on the Opposition benches that the conservatives-the Liberal Party and the National Party, or perhaps I should say the agrarian socialist party-have been in power for all but five of the past 35 years, since 1949. The problems in the dairy industry have not emerged overnight. For many years there have been attempts to patch up the problems in the industry, yet the people who are criticising this Government for introducing the legislation before us tonight have not done anything positive over the last few years. Before the House are a number of very important Bills that affect the Australian dairy industry, an industry which is overproducing, which is overprotected and which, as a result of that and other problems beyond its control, particularly with respect to the EEC, has problems of competitiveness. The Dairy Produce Market Support Levy Bill, the Dairy Legislation Amendment Bill, the Dairy Produce Market Support Bill and the Dairy Industry Stabilization Levy Amendment Bill make some attempt to come to grips with some of the problems that the dairy industry faces. The Government's purpose is to cut back on some of the unnecessary regulation which has been strangling this once very profitable industry. The amendments to the Dairy Produce Act 1924 have been designed to develop the commercial and operational flexibility of the Australian Dairy Corporation and to remove the unnecessary regulation that has characterised this industry. The present condition of the Australian dairy industry is far from healthy. A rather interesting publication from the Parliamentary Library, which many honourable members will have had the opportunity to peruse over the last couple of days, makes some very telling points. My colleague the honourable member for Bendigo (Mr Brumby), in his very well reasoned speech, mentioned some of those points. The current difficulties facing the industry are shown in the Bureau of Agricultural Economics measures of farm income and farm income per work-year of family labour-which are the best measures of the welfare situation of the family farm households. According to this forecast from the BAE, the estimated average farm income on dairy farms is forecast to be, as the honourable member for Bendigo correctly pointed out, $9,168 in 1984-85, as compared with an average of $12,149 for the agricultural sector as a whole. The publication goes on to point out that, when divided by the estimated average family labour input of 2.1 workers, farm income per work-year of family labour is forecast to be $4,325 in 1984-85. Mr Brumby —A quarter of average earnings. Mr SIMMONS —Exactly. It is less than a quarter of average incomes. Mr Ian Robinson —What is your Government doing about it? Mr SIMMONS —This Government is attempting to come to grips with some of those structural difficulties, which have meant that the industry is overproducing. The figures speak for themselves in respect of farm income in the dairy industry, which depends so greatly on the prices of market and manufacturing milk. Trends in these areas are also rather grim. In 1983-84 the farm-gate market milk price rose by an average of 4 per cent. However, the average unit returns for manufacturing milk fell by 6 per cent. This decline reflected the falling international price for all major dairy products. We all know the reason for this. It is tied up with some of the comments of the honourable member for Mayo, who pointed to some of the problems on the international scene. We all recognise that the international market is corrupted by dumping practices. That is shameful. But the approach being adopted by the Opposition in attacking the Government on the dairy industry plan is not constructive in any real sense. In 1984-85 the unit value of manufacturing milk is expected to decline by about 11 per cent to 13c per litre, due to declining export values. This is causing serious problems. Leading from this, the gross value of manufacturing milk production is expected to fall by 17.7 per cent.The maintenance of the State controlled pricing arrangements for market milk, which will increase that unit value of market milk by 5 per cent to more than 30c per litre, will be insufficient to offset the decline in the gross value of manufacturing milk output. The international market for dairy products at present, and certainly in the near future, is veiled in a degree of uncertainty. In the short term, considerable uncertainty surrounds any recovery in import demand for dairy products, despite the general improvement in world economic activity. In short, we have to recognise that there is little prospect for improvement in the international dairy market situation this year. The Government, in attempting to look very seriously and consciously at the dairy industry, is aware of that. I am sure that the dairy producers and those people associated with the industry are aware of some of those problems. As a previous speaker mentioned, in the same way as the Government sought to come to grips in other industries with the problems it inherited from the previous Government-the problems with the decline in the steel industry and with the motor manufacturing industry-these things are not rectified overnight. What is required is a detailed plan by which those industries know where they stand in the future. No adjustment is ever without its pain, but I suggest to honourable members that the pain the industry will feel in the long term will certainly be more acute if the Government runs away from some of these difficult decisions. The Bill provides an opportunity to develop economic efficiency. Instead of having an unresponsive industry blundering through the market-place, the Government's plan will lead to a much more stable industry structure, much more responsive to the movements in the market and therefore more efficient and able to provide income for those remaining in the industry. It will be a restructured, profitable industry rather than a non-viable industry which faces a degree of economic uncertainty. The Federal Government plan provides the greatest scope for long term gains in economic efficiency. Under the plan, production levels would more closely reflect the returns from the marginal export market; that is, the producers would limit production to the volume that could be sold on the domestic market and on remunerative export markets. In this regard, to the extent that domestic prices for manufactured dairy products will move closer to international price levels, competition from imported dairy products should fall since they will be less attractive than at present. I believe that this legislation is a serious attempt to come to grips with a very difficult problem. As I said a few minutes ago, whatever the Government does will not be easy or without pain, but to sit back and watch an industry go further into the economic mire is irresponsible. I congratulate the Minister on his amendments and I commend them to the House. Mr HAWKER(Wannon)(6.23) —In speaking to the Dairy Produce Market Support Levy Bill and cognate Bills, and more importantly in supporting the amendments foreshadowed by the Deputy Leader of the National Party of Australia (Mr Hunt), I wish to repeat what has been said earlier because I believe it needs repeating. These Bills are extremely important. The future of many people is at stake with the outcome of these Bills. Yet, when we look across the chamber, only four members of the Government are in the House and interested in what is happening in this debate. For the interest of those honourable members who are listening to this debate, I want to mention the concern being shown by dairy farmers in my electorate and throughout Victoria at the devastating effects of the plan put forward by the Government. Many honourable members will have noticed that quite a few dairy farmers have been coming to this House every day for the last two weeks. Many of those dairy farmers have come from my electorate, and I am very pleased to be able to say that some are here today who have come all the way from the Camperdown area. This shows the sort of concern of the dairy farmers in Victoria about this industry. I also notice that a couple of senior office bearers of the United Dairy Farmers of Victoria are in the House at the moment. The sort of concern they have is shown when they are prepared to come all the way to Canberra, at considerable expense, to put a point of view and to explain in their own words how they will be hurt by the Government's plan. Many members of the Opposition have already outlined in some detail the effects that this plan will have on the dairy industry. They have also pointed out some of the problems facing the industry. I just point out again the importance of the size of the dairy industry and what has actually been happening. It should be repeated that the value of the dairy industry as measured in dollar terms can be looked at through the total milk production, which in 1984-85 is estimated to be worth $1,055m. From this, we have an export industry that is earning nearly $400m. This is almost 4 per cent of the total exports for the whole of Australia. Employed in the manufacturing of these exports, and also in manufacturing for the local market, are nearly 18,000 people. In addition, at present we have about 18,600 dairy farmers, compared with 1969, when there were 47,000 dairy farmers. When we talk about restructuring, we should look at what the industry has done already. There has been a massive restructuring in this period. Many people have left the industry. Many have had to leave it and have been hurt. Nonetheless, we have a government which is now talking about further restructuring in the most heartless manner of all time. Mr Brumby —What is happening at the moment? Mr HAWKER —The honourable member for Bendigo seems to want to talk about the level of income in the dairy industry at the moment. I must say that I do not find it interesting; I find it devastating. To say that this year the average farm income per year of family labour will be just over $4,000 is devastating. It is not interesting; it is devastating. I wonder how many trade union members would work the long hours, seven days a week, that those on dairy farms do for that sort of income. It has been said that the industry recognises the need to rationalise. There is certainly no doubt about that but, having said that, it is also fair to say that the Government's proposal will be absolutely horrific in its effect. The question of rationalisation is accepted; the timing proposed by the Government is not. Looking at the causes of the present problem, some of the previous speakers have mentioned the European Economic Community and its dumping on our markets. It is important to remember that the EEC supplies 60 per cent of total world exports. That is 12 times our total exports in Australia. It is also pertinent to note that EEC farmers receive about 25c per litre for milk whereas our farmers receive about 14c. The crunch really comes when we see that the EEC farmers receive a price 300 per cent higher than the world price for manufactured products. The EEC farmers are being very well looked after by their governments. At the same time, as was mentioned by a previous speaker, the EEC represents the barbarians of world trade. In other words, the EEC exports at about one-third of its domestic price, causing devastating effects on our farms. It is also pertinent to note the efficiency of the dairy industry and the cost of dairy products in the market today. As has already been mentioned by the Deputy Leader of the National Party, we have a series of figures which show that dairy product indices have not risen as fast as have many other indices over the last 15 years. I seek leave of the House to have this table incorporated in Hansard. Leave granted. The table read as follows- INDEX NUMBERS (March 1970 = 100.0) 1970 1975 1980 1985 Milk 100.0 187.5 229.2 341.7 Butter 100.0 120.0 170.0 260.0 Bread 100.0 200.0 300.0 455.0 Newspaper 100.0 200.0 400.0 600.0 Consumer Price Index 100.0 158.7 264.8 389.1 Prices Paid by Farmers 100.0 186.8 318.2 489.3 Average Weekly Earnings 100.0 195.1 323.7 535.9 Federal Member of Parliament 100.0 210.5 290.3 484.6 (Compiled at request by the Statistics Group of the Legislative Research Service, Parliamentary Library) Mr HAWKER —These figures are very interesting. Since 1970, using a base of 100, the price of milk has increased to 341 and butter to only 260 over 15 years. The consumer price index over that same period has risen to 389. The prices paid by farmers-that is, farmers' costs-have risen to 489. When we compare that with the prices being received by the farmers, in this case for milk and butter, we find that the prices paid by the farmers have risen considerably more than those received. More importantly, milk and dairy products have risen at a slower rate than either the CPI or, if we look further down the table, average weekly earnings. In fact, the price of butter has risen proportionately by less than half the percentage increase in average weekly earnings. I seek leave to continue my remarks later. Leave granted; debate adjourned. Sitting suspended from 6.30 to 8 p.m. Mr KEATING(Blaxland-Treasurer) —by leave-Madam Acting Speaker, tonight I present to the Parliament and the nation a statement of expenditure savings. These measures, which total $1,259m, are a progress report-a first and major instalment-towards meeting this Government's budgetary commitments for 1985-86 and for the remainder of our parliamentary term. The decisions I announce tonight arise from the extensive review of Commonwealth spending that we embarked upon early this year. That review was undertaken in recognition of the well-known difficulties of the outlays reduction task, and the wish to secure savings over the full financial year commencing on 1 July 1985. These decisions follow, and will help consolidate, the undoubted success of the Labor Government's economic strategy since March 1983. The evidence of that success is there for all to see. During 1982 our non-farm economic growth rate was 0.9 per cent; during 1983 it rose to 2.6 per cent, and during 1984 it rose yet further, to 5.1 per cent. These figures, of course, are more than mere statistics to the former unemployed who now have jobs or to the many thousands of others whose jobs were threatened by the trend of unemployment under the Liberal-National Party Government. The strong positive growth recorded in these statistics is being continued through this financial year. Recent data confirm the Government's expectations that the Budget time forecasts for activity in 1984-85 will be met. Australia's economic growth during the first two years of the Labor Government will match that achieved during the entire seven years of the Fraser Administration. Stronger economic growth and reduced inflation have been our overriding objectives since winning office. It is only through the achievement of non-inflationary growth-sustainable economic growth-that we can provide jobs to the unemployed and for all our young people. It is only through growth that we will be able to provide real benefits to other needy groups in our society. It is only through growth that we can create the more equitable and just society to which the Australian Labor Party is committed. Madam Acting Speaker, in 1983 the Government inherited an economy deep in its worst recession since the 1930s. A boost in public sector spending was needed to stimulate economic activity and produce more jobs. That was necessary to fill the gap left by the private sector, which had been shattered by the policies of the coalition. But the Government always recognised that to produce a sustainable, long-lasting economic recovery, the private sector would have to be restored to its traditional, major role. Already that is happening. Private sector investment, consumption and job growth have recovered strongly. The Government wishes to encourage and accommodate that trend. That is why we have made our trilogy of commitments, in which we have pledged: There will be no increase in tax revenue as a proportion of gross domestic product in 1985-86 and over the life of the Parliament; Government expenditure will not increase as a proportion of GDP in 1985-86 and over the life of the Parliament; and The Budget deficit will be reduced in money terms in 1985-86 and reduced as a proportion of GDP over the life of the Parliament. The trilogy amounts to a recognition by this Government that the share of the public sector in the Australian economy should be limited in the interests of further productive investment, job creation and growth by the private sector. That task has been made more important by the recent fall in the value of the Australian dollar. I note that in the past few weeks the exchange rate has been moving upwards from its low point. But there remains a very substantial depreciation of the Australian dollar to which the economy must adapt. The positive implications of the dollar's fall in value are very significant. Until now a large part of the recovery in demand within Australia has spilled over into extra imports rather than domestic production. The depreciation will provide a large boost to activity by encouraging demand to be met from local sources rather than imports and by assisting exporters to compete in international markets. As a result, we expect exports to grow faster than imports in 1985-86, so that rather than subtracting from economic growth as it has this financial year, the external sector could add a percentage point or more to GDP in 1985-86. That will provide an additional boost to job opportunities. The potential benefits of the depreciation, however, will not be realised unless economic policies are directed against the development of an inflationary round beyond the initial price rises caused by the lower exchange rate. One of the requirements for this is fiscal restraint by all levels of government in Australia. Furthermore, interest rates are now higher than they would have been if the depreciation in the dollar's value had not occurred. That makes it even more important that we assist in moderating interest rate pressures by reducing the demands of the government sector on financial markets. The Prime Minister (Mr Hawke) and I have emphasised a number of times that in this year's Budget we will cut the deficit in money terms. I can assure honourable members tonight that that cut will be significant. This Government wishes to ensure that companies borrowing to increase their levels of activity and investment will not be impeded by sustained public sector competition for borrowed funds. Deficit reductions are also required to slow the growth of public debt. It is clearly not appropriate, now that we are achieving strong growth, to continue adding to our debt at the rate of recent years. Taxpayers of the future would certainly not thank us for the interest burden. Government also has a responsibility to current taxpayers. We have the duty to avoid waste and extravagance, to spend in accordance with community priorities and to target assistance to areas of greatest need. We have pledged ourselves in the trilogy to ensuring that the burden of taxation does not rise over the life of the Parliament. Deficit reductions will be achieved not by easy resort to higher taxation but through expenditure restraint. It is with those thoughts that we have approached tonight's statement. In choosing where to make the necessary cuts, concern for the needy and the less well-off has continued to characterise our approach to public spending. We have maintained the high levels of support we have brought about for the needy. Our cuts are directed elsewhere. That orientation does not mean those cuts will go unremarked. It is impossible to cut without protest. But the Government has to determine priorities and the overriding priority at this time is to get the right budgetary outcome in the interests of all. Before turning in detail to the expenditure decisions we have made, I should add that while some specific purpose grants to the States have been decided, the bulk of Commonwealth-State financial payments will be settled at the Premiers Conference and Loan Council at the end of this month. Needless to say, the Commonwealth will be expecting the States to contribute to the restraint required of all levels of government. As indicated earlier, the result to date of our thorough examination of expenditure programs is to reduce the 1985-86 Forward Estimates by a total of $1,259m. As the Minister for Finance (Mr Walsh) has explained, the total cost of programs in the Forward Estimates report will be substantially affected by the depreciation of the Australian dollar, the changed outlook for the economy and various other factors. While the full effects of these have not been quantified, total program savings against latest available estimates are of the same order. These savings do not mark the end of the expenditure restraint process. With the aim of seeking further savings, we will be continuing to review all areas of spending until the Budget is finally settled in August. The Budget Papers will include a reconciliation of the Budget and forward estimates, showing the effect of Government decisions and other revisions on the final estimates. I turn now to indicate some of the initial decisions. SOCIAL SECURITY AND WELFARE Family Allowances From November 1985, family allowances will not be paid for dependent students aged 18 years and over except in cases of specific need. Eligibility for family allowances will continue as at present for certain categories of full time students for whom education or welfare assistance is payable. As well, the final $6.20 per week of tertiary education assistance will be subject to a more liberal income test from the beginning of 1986. Net savings against forward estimates in 1985-86 are estimated to be $20 million and substantially more in the following year. Child Care Savings in the children's services program will amount to $15m in 1985-86 and $30m in a full year. These savings will be achieved by reducing the current subsidy. The savings will not be at the cost of the undertaking to provide an additional 20,000 places over the next three years. Grants for Aged or Disabled Persons' Facilities Total savings of $9m have been made in this area. A review of in-principle approvals for capital funding of aged or disabled persons' facilities has revealed that a number of organisations have not yet proceeded with the construction of projects for which they have long held approvals in principle. In future, such approvals will lapse if the organisations have not brought their project to tender stage within six months of notification. Applications for renewal of lapsed applications will be considered against the criteria and competing demands at the time. Social Security Administration Greater efforts will be concentrated on the detection of fraud and mispayment within the social security system. Savings of $25m against the Forward Estimates are envisaged. Repatriation Disability and War Widows' Pensions The Government has reviewed the conditions applying to the grant of disability and war widows' pensions having regard to certain decisions by the High Court of Australia and their implications for the Repatriation Commission. These decisions, particularly a decision made this year, mean that such pensions may have to be granted even where there is no evidence whatsoever linking disabilities or death to war service. The Government recognises that the repatriation legislation was intended to be generous and it fully acknowledges that the community must honour its responsibilities to the veteran and war widow population. However, the Government also believes it is only fair that those pensions should not be granted unless there is a reasonable link between war service and a claim for pension eligibility. It was never intended that the law should provide otherwise. An amendment to the Repatriation Act will be introduced to make this clear. Apart from that clarification, the existing standard of proof will continue to apply to veterans with service overseas in wartime, to those who in World War II served in Australia in direct combat against the enemy, and for peacetime service on peacekeeping missions or hazardous duty as designated by the Minister for Defence. Claims by other veterans will be dealt with on the civil standard of proof. Claims for war widows' pensions will be dealt with according to the service of their husbands, except that all such claims made 40 years or more after a veteran's war or other qualifying service will also be decided on the basis of the civil standard of proof. Further details will be announced separately. Special Rate Disability Pension It is also proposed to amend legislation concerning eligibility for special rate disability pensions. In keeping with the Government's public commitments, the pension of existing beneficiaries will not be affected. The present provisions have been largely unchanged since they were first introduced over 60 years ago. They were intended to provide-during or immediately after a war-for very seriously injured veterans requiring special benefits because they were unable to be employed. Most Second World War veterans have now left the work force and most have had full working lives. The legislation will be amended to provide that future applicants will be granted Totally and Permanently Incapacitated pensions only where the veteran is eligible to receive a 100 per cent general rate pension, is totally and permanently incapacitated from injury or disease that has been accepted as related to his war service and is also suffering a loss of wages or earnings from that incapacity which prevents the veteran from continuing in remunerative work. Dependants' Pensions The legislation will also be amended to delete from future grants of disability pension the provision of minor amounts paid to certain dependants of disability pensioners. The social security system now provides for people in these categories who are in need. Existing dependants' pensions will be frozen at the levels payable at the date of effect of the legislation. War widows' and orphans' pensions will not be affected by this change. Total savings from these several measures are expected to be $36.8m in 1985-86 and significantly more in later years. Service Pensions Service pensions will be reviewed regularly to reduce overpayment, saving an estimated $6.2m in 1985-86. Veterans' Administration The cost of providing free transport and travel allowance to pensioners will be rationalised by a variety of measures, including less reliance on the Commonwealth car pool. In addition, the administration of pension payments will be improved and associated costs reduced by the direct crediting of pension payments with limited exemptions. These measures will provide savings of around $4m in 1985-86. Defence Re-establishment Loans This scheme is to be terminated. It was set up to assist service people with business and agricultural ventures, but it is no longer effectively meeting its objectives, particularly in view of other measures now available. Loan applications received up to today will be processed. Savings of $1.3m are expected in 1985-86. HOUSING Defence Service Homes The Government has decided that the private sector should take over the administration of the defence service homes loans scheme. The entitlements of those who already have or are eligible for these loans under the existing scheme will not be affected. The new arrangements, expected to apply from 1 January 1986, will eliminate the 10-month waiting period and loan amount restrictions. Under the revised scheme, the Government will arrange for private financial institutions to provide loans which will continue to include a substantial government-funded interest concession. The institutions will also be invited to take over the administration of existing loans. Savings are expected to be $60m in 1985-86 and about $120m in a full year. In the medium term, these arrangements will also allow a substantial reduction, amounting to some hundreds of staff years, in the Commonwealth sector. Details will be announced separately, and a revised home ownership assistance scheme for future members of the defence forces will be announced later. First Home Owners Scheme As announced recently by the Minister for Housing and Construction (Mr West), assistance available to first home buyers under the first home owners scheme has been reduced. There will be savings of $25m in 1985-86. Other In the administration of the Department of Housing and Construction, additional savings totalling $11m against the Forward Estimates are to be achieved in the Government's administrative operations through reductions in provisions for repairs and maintenance of Commonwealth buildings. Savings of $16.7m will also be made in the use of consultants, computing equipment and services, plant, and in general administration. DEFENCE SPENDING The approved planning guidance for defence outlays was for real growth of 4.5 per cent in 1985-86. Because of the budgetary situation, real growth will now be limited to 3.1 per cent. This compares more than favourably with the average annual real growth of about 2.5 per cent in defence outlays under the Fraser Government. It results in a saving of $83.9m against the forward estimates. HEALTH The general patient contribution under the pharmaceutical benefits scheme has not been increased since January 1983. From 1 July 1985, the contribution will increase by $1 to $5 per prescription, saving $40.3m in 1985-86 and rather more in subsequent years. Even at this level, the contribution falls well short of the average cost of prescriptions funded under the scheme. The repatriation pharmaceutical benefits scheme will also be modified as it applies to service pension beneficiaries who receive fringe benefits and have no accepted disability. These beneficiaries will now be assisted in the same manner as are pensioners in the general community under the pharmaceutical benefits scheme. This modification will save $7.9m in 1985-86. The Commonwealth contribution to the Health Benefits Reinsurance Trust Fund will be reduced with savings of $15m in 1985-86. The Government remains committed to the community rating principle which ensures that health insurance is available on the same basis to the whole population. Nursing Home Benefits The Commonwealth has decided on a number of measures in this area in the face of rapidly rising costs. The maximum level of nursing home benefits payable in Victoria, South Australia and the Northern Territory is to be frozen. The benefits payable in those States and the Northern Territory are significantly higher than in other States, reflecting the different standards imposed by governments. Similarly, the level of Commonwealth nursing home benefits payable for all State and Territory government homes is to be frozen. This latter measure does not extend to some prescribed government nursing homes run by non-profit, charitable, benevolent or similar organisations. These revised arrangements will be kept under review. In addition, the prescribed minimum nursing home patient contribution is to be restored to 87.5 per cent of the maximum standard rate of pension plus supplementary rental assistance. These measures will provide savings of $14.1m on the Forward Estimates. Veterans' Health Costs New arrangements will be introduced for the supply of spectacles, dental services and the care of veterans in psychiatric institutions. This will produce savings of at least $7.4m in 1985-86. Isolated Patients Travel and Accommodation Assistance Scheme The patient contribution under this scheme will be increased from $20 to $30, saving $1.1m. The contribution has not been increased since the introduction of the scheme in 1978. EDUCATION Pre-schools are essentially a State responsibility and the Government has decided to terminate grants to the States for pre-schools from 31 December 1985. This decision will save $16.5m in 1985-86 and $33m in a full year. Against the background of substantially increased participation rates, it has been decided to spread funds originally allocated for the final year of the participation and equity program over both 1986 and 1987 with savings on the 1985-86 Forward Estimates of $22.6m. Planned outlays on the technical and further education capital program will be reduced by $12m in 1985-86. The Commonwealth Tertiary Education Commission has been asked to advise on the specific allocation. From the beginning of 1986, no further grants for the libraries element of the Commonwealth Schools Commission's capital grants program will be provided. The Commonwealth has provided earmarked funds for school libraries for many years and the Government now considers that further funding requirements can be met within the general element of the capital grants program. The estimated saving in 1985-86 is $108m. Additional savings have been found by: Reducing Commonwealth expenditure by $2.5m on special programs of assistance to schools; Tightening the eligibility criteria for student assistance and terminating the fares allowance to unmarried independent students, saving a total of $2.9m; The announced increases in overseas student charges, providing net savings of $3.2m in education spending; and Deferring to September 1985 the commencement of construction of the Australian Film and Television School's new premises, saving $2.9m. LABOUR AND EMPLOYMENT Expenditure on the community employment program is to be reduced by $120m on the 1984-85 provision. While that represents a substantial cut in funding for CEP, it has been recorded in this statement as a saving against the forward estimate of only $10m. This is because the forward estimate for CEP only took account of the need to maintain the same rate of new project approvals as in 1984-85. In addition, the allocation for labour market programs is to be reduced by tightened targeting and priority setting. Savings of $15.8m against the forward estimate will be obtained in 1985-86. MIGRANT CENTRES AND PROGRAMS The 1984-85 refugee and special humanitarian program provided for 12,000 assisted passage places with a decreasing number of boat people and an increased emphasis on family reunion. The number of such places in 1985-86 is to be reduced by 2,000 providing savings of around $3.6m. The Government intends to sell surplus migrant centre buildings and associated land. The sale of these properties, located in the eastern mainland States and South Australia, together with a reduction in associated costs, saves an estimated $16.6m in 1985-86. COMMONWEALTH STAFFING The Government is concerned at the rapid increase in Public Service staffing. In 1983-84, growth in staffing, including the full year consequences of staff growth allowed by the former Government, was about 4 1/2 per cent. This growth rate was significantly reduced, to about 2 1/2 per cent, in 1984-85. The Forward Estimates report indicates that possible Commonwealth staffing growth in 1985-86 ranges between 0.3 per cent, as estimated by the Department of Finance, and 2 per cent, as sought by departments. Staffing issues have not yet been resolved, but the final growth figure for 1985-86 will be closer to one per cent, thereby again halving staffing growth rates. Full staffing details and implications will be provided in the Budget Papers. INDUSTRY ASSISTANCE AND DEVELOPMENT Petroleum Products Freight Subsidy From 21 May 1985, the Commonwealth will reduce the subsidy presently being paid under the petroleum products freight subsidy scheme. The reduction of 4c per litre in the subsidy will save $116m on the 1985-86 forward estimate. The subsidy will continue to assist consumers in remote areas where the cost of transporting petroleum products is in excess of 5.2c per litre. Opposition members interjecting- Mr KEATING —This is a typical response from the coalition, which is always lecturing the Government on the need to cut expenditure but attacks the individual measures the Government proposes. It is typical of the humbug and hypocrisy that we have seen in years gone by. Members of the Opposition must wonder why they did not do these things themselves. At least then they might have had some more tenure on this side of the House. Tourism The Government intends to terminate the subsidy for diesel fuel costs of Great Barrier Reef island tourist resorts with expected savings of about $300,000 in 1985-86 and $500,000 in a full year. The 1985-86 allocation in the Forward Estimates for tourist projects within the steel region assistance program is to be reduced with a saving of $4m. Trade The Government has been increasingly concerned at both the growing cost of the export market development grants scheme and its effectiveness. Commitments under the scheme have been rising alarmingly and, due to its open-ended nature, that trend seems bound to continue. There is, moreover, evidence casting doubt on its value. In particular, it has been found that nearly 50 per cent of grant recipients actually export nothing or very little. Consequently, the Government has accepted the thrust of the report of the National Export Marketing Strategy Panel, and a revised scheme-maintaining the 70 per cent grant rate-will take effect on 20 May 1985. For 1985-86, savings will be $48m resulting from implementation of the new scheme and a deferral of payment of some commitments into future years when the reduced cost of the amended scheme will make less of a call on the Budget. As part of the recent review of the Trade portfolio, a reduction of 50 staff, saving $2.6m in 1985-86, is to be realised. Relevant to these decisions, I note that the recent depreciation will provide real and effective assistance to exporters. Industrial Research and Development The Government remains committed to providing adequate support for industrial research and development. However, spending on selected industrial research and development grants programs in 1985-86 will be held to the same money level as in 1984-85. This will reduce the forward estimate for 1985-86 by $9.6m. Primary Industry The Commonwealth contribution to the bovine brucellosis and tuberculosis eradication campaign in 1985-86 is to be maintained at the same money level as in 1984-85. This will result in savings of over $6m. This allocation will enable the continued steady progress of the campaign. Other Assistance Initiatives introduced by the Government in 1983 substantially increased the capacity of the Australian Industry Development Corporation to expand its activites through borrowings. In that light, the AIDC has now withdrawn its request for a capital instalment of $12.5m in 1985-86. The Government has commissioned a study to examine the need for a more broadly based manufacturing industry advisory service. Pending consideration of that study, the Government has decided not to proceed with the establishment of an advisory service on computer aided manufacture, estimated to cost $2.4m in 1985-86. GENERAL AND SCIENTIFIC RESEARCH Savings of $24.9m will be made against the forward estimates submitted for the Commonwealth Scientific and Industrial Research Organisation. CSIRO will have about the same real level of resources for ongoing activities. A cost recovery program is to be introduced in 1985-86 for services provided by the Australian Government analytical laboratories, resulting in additional revenue of $2.3m. WATER SUPPLY ELECTRICITY AND GAS The Commonwealth is to reduce the 1985-86 forward estimates for the federal water resources assistance program by $8m. This will allow the Commonwealth to meet formal commitments and to continue projects, including new water research initiatives. The Northern Territory Government has decided recently to generate electricity from natural gas rather than coal, as previously envisaged. In view of the significant lessening of future costs that this implies, the Commonwealth will reduce its assistance in 1985-86 towards meeting operating losses of the Northern Territory Electricity Commission. Under the new arrangements which will phase out the Commonwealth's annual subsidy over four years, assistance in 1985-86 will be reduced by some $37m. The liquefied petroleum gas subsidy will be abolished from 1 October 1985, saving $1.4m against the forward estimate. Automotive LPG is not covered by this scheme. The Government believes that this scheme distorts energy demand and prevents the most efficient use of energy resources. TRANSPORT The Minister for Transport (Mr Peter Morris) has recently introduced a Bill for a new five-year transport program to replace the Roads Grants Act. The total provision for roads under the Australian land transport program and the Australian bicentennial road development program represents savings of $60m against the Forward Estimates. In addition, following improved financial performance, the operating subsidy payable to the Australian National Railways Commission will be reduced by an estimated $5.6m. Savings of $5.3m will be achieved against the forward estimate for the Tasmanian freight equalisation scheme. Aviation The Government has decided not to renew the Western Queensland Air Services subsidy scheme and the Melbourne-Tasmania air fare subsidy. The estimated 1985-86 cost of these subsidies was $7.5m and is additional to the total savings detailed in this statement. Provisions in the Forward Estimates for the aerodrome local ownership plan are to be reduced by $7m in 1985-86 to reflect the current state of progress on negotiations with local authorities. The Forward Estimates provision for plant and equipment for 1985-86 for airports and airways services is to be reduced by $7.3m. In line with the Government's emphasis on a more commercial approach to airport management, initiatives have been taken to expand business concession revenues, which will reduce Forward Estimates by around $9.6m. As recently announced by the Minister for Aviation (Mr Peter Morris), the development of Darwin Airport is being reappraised. Estimated savings against the 1985-86 Forward Estimates are $36.8m. Rescheduling of expenditure on other airport projects at Brisbane, Townsville and Sydney is expected to reduce estimated spending by a total of $14m. It is not expected that the planned commissioning date of late 1987 for Brisbane Airport will be affected. COMMUNICATIONS The global 1985-86 funding for the Australian Broadcasting Corporation is to be limited to $395m, a saving of $7.9m against the forward estimate. Funding for the Special Broadcasting Service in 1985-86 will be $46.5m, a saving of $3.5m against the forward estimate. The Government has indefinitely deferred the extension of the Special Broadcasting Service to Darwin, resulting in a saving of $0.5m. There will also be additional savings of $2.5m against the forward estimate on the amount to be provided in 1985-86 for the installation of new transmitters for the ABC and SBS. The Government has also decided that the funding of national broadcasting requires further examination and will be reviewing this issue in the near future. Pending a full review of existing arrangements, the net payment in 1985-86 to Telecom Australia for operating and maintaining ABC transmitters will be set at $50m, a saving of $3.5m against the forward estimate. The Government has decided that the Australian Telecommunications Commission is to repay $35m in 1985-86 of interest-bearing Commonwealth advances. This will not be at the expense of an increased borrowing requirement and, in accordance with established practice, the repayment will offset outlays in this function. URBAN AND REGIONAL DEVELOPMENT The Government has decided to sell the Belconnen Mall in Canberra. Opposition members-Hear, hear! Mr KEATING —If honourable members opposite say 'Hear, hear', one must ask why they did not do it. The answer is because they did not have the good sense. The Government has also decided that the planned Tuggeranong Town Centre in Canberra should be developed and operated by private interests. This will enable an early start on proposed additional community facilities. These measures together will provide savings in 1985-86 estimated at about $72m. The decision on the Tuggeranong Town Centre will also avoid the need for additional Commonwealth borrowings amounting to about $30m. NATIONAL ABORIGINAL CONFERENCE As the Minister for Aboriginal Affairs (Mr Holding) has announced, operations of the National Aboriginal Conference will not be extended beyond 30 June 1985. This decision will save $8.6m against the forward estimate. An alternative representative national Aboriginal body will be established and funded from the global allocation available to the Aboriginal Affairs portfolio. LOCAL GOVERNMENT For 1985-86, general purpose assistance to local government is to be limited to a 2 per cent increase in real terms over 1984-85 levels. This increase exceeds that provided in the previous two years but still represents a saving of around $62m from the 1985-86 Forward Estimates. The issue of longer term arrangements for the funding of local government is currently being examined by the National Inquiry into Local Government Finance which is due to report after the 1985-86 Budget. ADMINISTRATIVE SERVICES Government decisions will result in administrative savings in a number of areas. I set out the main measures. Savings of $6.5m will be achieved by improvements in the management of overseas property holdings, involving the sale of some surplus property and economies in managing the remainder. Savings of $4.6m will be achieved by a rationalisation of the existing Commonwealth vehicle fleet, aimed at a 5 per cent reduction in the overall fleet size. The Government has been increasingly concerned at the resources devoted to the provision of material under the freedom of information legislation. The cost in 1984-85 is estimated to be $20m, involving about 300 full time staff. Charges will be increased to recover a greater proportion of costs, and staff savings will be made, leading to a total saving of $5m in 1985-86. The Attorney-General (Mr Lionel Bowen) will shortly announce the new charges. The Government has decided that under-used defence land and buildings to the value of $15m are to be disposed of in 1985-86. From 1 January 1986, payments to Australia Post to cover the costs of Customs inspection of overseas postal articles will be discounted. Costs of importing through the parcel post will henceforth be borne by users. Savings are estimated at $2.4m in 1985-86. LEGISLATIVE SERVICES Expenditure by the Parliament House Construction Authority in 1985-86 will be limited to $154.1m, a reduction of $15.9m on the forward estimates. This reduction will also help to ease serious capacity pressures in the Australian Capital Territory construction industry. The Government has decided not to conduct habitation reviews to update the electoral rolls in 1985-86, saving $2.8m. Oppositions members interjecting- Mr KEATING —The wimps in the Opposition are squealing like pigs. They did not have the courage to do any of this themselves, and they squeal like stuck pigs, particularly the honourable member for the Northern Territory. LAW, ORDER AND PUBLIC SAFETY Director of Public Prosecutions Savings of $5.6m will result from revised procedures for committing legal expenses. This will not impact on the Government's ability to prosecute major tax fraud offenders. FOREIGN AFFAIRS AND OVERSEAS AID The Government has decided to reduce the Forward Estimates for the 1985-86 aid program by $23.9m. The allocation of the program will be announced later, in the normal way. There will be a decrease in 1985-86 in the ratio of official development assistance to gross national product, but all formal obligations for discharge in 1985-86 will be met. MONETARY AND WAGES POLICIES The decisions that I have announced tonight take their place in the Government's overall approach to economic policy, including monetary and wages policies. There has been much ill-informed comment about monetary policy since the Government's decision in late January to suspend the M3 monetary projection for 1984-85. It should be clear to anybody who has monitored monetary developments since that time that the Government and the authorities have not departed from the firm non-inflationary monetary policy stance which has characterised this Government's period in office. The M3 projection was suspended because that aggregate-indeed the monetary aggregates in general-was not providing a reliable guide to financial conditions. Unfortunately, but unavoidably, that continues to be the case. Opposition members interjecting- Mr KEATING —Madam Acting Speaker, the fact that members of the Opposition front bench do not understand what I am speaking of comes as no surprise whatsoever. Australia has been undergoing major institutional change in its financial sector, much of it stemming from deregulation of the banks and other financial institutions and of foreign exchange dealings. These changes have widespread support. They will undoubtedly improve the Australian economy and the living standards of all Australians. For the present, however, they complicate the conduct of monetary policy. In particular, the M3 aggregate is badly flawed as a monetary indicator and is not maintaining a reliable relationship with trends in the real economy. Current circumstances in Australia-just as similar circumstances in periods of financial innovation and deregulation in the United States, the United Kingdom and elsewhere-lower the weight that can be put on the monetary aggregates. A considered assessment of a wide range of indicators is called for. As I said in January, the future of the practice of conditional projections-and the more general issue of the prominence to be attached to such aggregates in conditions of change and uncertainty-will be determined prior to the forthcoming Budget. Meanwhile, it should be clear to all that financial conditions have firmed in recent months and that policy has played its part in that firming. This was appropriate in the light of the apparently rapid growth in the demand for credit and the earlier sharp weakening in the Australian dollar. This firmer stance for monetary policy will be maintained so long as it is required. With that in mind, the Treasury will be announcing the details of a bond tender for an amount of $1,200m on 23 May. I now turn to the important subject of wages policy. The right wages outcome is essential if we are to maximise the gains and minimise the costs of the Australian dollar's depreciation. This Government's accord with the trade union movement provides a mechanism through which a wages outcome, consistent with continued strong growth in the economy, can be achieved. Such an outcome must involve a lesser real wage level during the adjustment period than would otherwise have applied. We have been examining options and are discussing them with the Australian Council of Trade Unions. Clearly, the required objectives could be achieved by discounting the consumer price index for wage adjustment purposes to the extent that price increases were due to the devaluation, or by delaying the implementation of any productivity increase. In considering this issue, it is important to appreciate the factual uncertainties surrounding it. As we have so clearly seen, floating exchange rates are very volatile. Nobody can predict just where the Australian dollar will settle or move in the period ahead. Nor is it possible to predict with any certainty what effect a given depreciation will have on prices. The price effect is subject to variable lags and depends on sourcing options and supply and demand conditions. It is fairly clear, however, that there was little impact on prices in the March quarter. While a larger part of the price effect may show up in the current quarter, on the basis of past experience the full impact of the depreciation will come through over a longer period. Against this background, it is the Government's view that the wage indexation case should proceed as normal in September under the principles. As for any productivity increase, however, it is our view that the questions of the size, timing and phasing of any such increase should be deferred until the scope of the depreciation and the extent of its effect on the economy becomes apparent. CONCLUSION The decisions announced tonight make clear the Government's approach to the 1985-86 Budget. These decisions will inevitably be unpopular with some members of the community. But the consequences of not facing up to priorities this way would put continued recovery in the Australian economy at risk. For too long, tough, politically unpalatable decisions were put off in this country, because our predecessors did not have the courage to take essential hard decisions. When it came to the crunch, they put their short term political interests first. As a result they allowed the economy to career into recession with the burden of their irresponsibility falling on those who could least afford it. Inflation ravaged savings and living standards while hundreds of thousands of Australians were thrown out of work. Madam Acting Speaker, this Government believes it has a responsibility to all Australians to run the economy in the national interest and a particular responsibility to those sections of the community who are least able to protect themselves. In our first two years, we did not flinch from the decisions that we knew had to be taken and we have not done so in the preparation of this statement tonight. We have the courage to put the national interest first and we have the confidence that our decisions will be justified by the national economic performance in both the medium and the long term. If there is a short term political price in these measures, we are pleased to live with it. For in the long term Australians will know that our stewardship of their affairs will have provided them with growth, with jobs and with opportunities which for so long have eluded them. They will remember that Australia's new prosperity was provided by an Australian Labor Government. I present the following paper: Government Expenditure Savings-Ministerial Statement, 14 May 1985. Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr Sinclair) adjourned. Mr Cadman —Madam Acting Speaker, I take a point of order. I wonder whether the Treasurer (Mr Keating) has read the policy speech made just six months ago. Promise after promise has been broken. Madam ACTING SPEAKER —Order! There is no point of order. The honourable member will resume his seat. Mr YOUNG(Port Adelaide-Leader of the House)(8.50) —by leave-I move: That standing order 48A, adjournment of the House, as amended by sessional order, and standing order 103, 11 o'clock rule, be suspended for this sitting. I have moved this motion merely to ensure that we complete the debate on the dairy Bills this evening. Mr SINCLAIR(New England-Leader of the National Party of Australia)(8.51) —The Leader of the House (Mr Young) has consulted with me on this matter and there will be no opposition to it. Question resolved in the affirmative. Bill-by leave-presented by Dr Blewett and read a first time. Dr BLEWETT(Bonython-Minister for Health)(8.53) —I move: That the Bill be now read a second time. By introducing this Bill, the Government proposes to amend the National Health Act to effect two changes to the pharmaceutical benefits scheme. The first of these changes relates to the occasional situation where the Minister for Health and the manufacturer of a drug are unable to agree upon the price for a drug. Under the existing legislation, the Government is placed in an invidious situation when a manufacturer unilaterally increases the price of a drug. The Government may either continue to list that drug as a pharmaceutical benefit and meet the additional cost imposed by the manufacturer, or it may remove the drug from the list of pharmaceutical benefit drugs. In the latter case, patients must then either meet the full retail cost of the drug or forgo the treatment recommended by their doctors. Though bilateral agreements on drug prices are extremely desirable, there have been several occasions in the past when agreement could not be reached with a manufacturer. When such disagreements occur the Government believes that patients should not be faced with a choice between meeting the full cost of drugs-no matter what effect that might have on their own financial resources-or forgoing recommended treatment. I note a further deficiency in the operation of the existing legislation. When a new drug is recommended for listing as a pharmaceutical benefit there can be considerable delay in reaching agreement with the manufacturer as to the price of that drug. Under the existing provisions no government subsidy can be available until agreement is reached. Accordingly, by the first of these amendments I, as Minister for Health, will be allowed to determine a price upon which reimbursement to pharmacists is made in respect of those drugs where there is no agreement with a manufacturer. This will apply to drugs which, desirably, should be listed as pharmaceutical benefits under the pharmaceutical benefits scheme. The proposed amendment to Part VII of the National Health Act would also allow me as Minister to determine a special patient contribution in respect of such a drug. The special contribution would amount to the difference between the total reimbursement that a pharmacist should receive, based upon the manufacturer's actual price, and that reimbursement that the pharmacist would have received if the price of the drug had been set at a level acceptable to the Minister. The patient concerned would be required to pay the special patient contribution in addition to the appropriate normal contribution. Concessional beneficiaries and pensioners would be required to pay the same special patient contribution as the rest of the community. The effect would be that the drug would continue to be available as a pharmaceutical benefit and thus to be subsidised by the Commonwealth. Patients would then be able to obtain the drug at a charge less than the full price which would have applied if the drug had been removed from the list of pharmaceutical benefits. The second of the changes is part of the package of measures announced by the Treasurer (Mr Keating) this evening. The general patient contribution for pharmaceutical benefits has been increased by $1, with effect from 1 July 1985. This will bring the patient contribution to $5 from the existing level of $4. This is the first increase in the price of pharmaceutical benefits in the 2 1/2 years since 1 January 1983. Over that period the average cost of a general benefit prescription has increased from $6.03 to an estimated $7.38-an overall increase of $1.35. Despite this, the Government has decided to limit the increase in the general patient contribution to $1. Mr Ian Robinson —Why do you keep hitting the poor? Dr BLEWETT —In relation to the slathering hypocrisy which we are no doubt likely to hear and have already heard from the honourable member's corner of the House, I point out that this action is in sharp contrast to the 167 per cent increase in the general patient contribution during the seven years of the previous Government. I emphasise that no change is being made in the cost for concessional beneficiaries, which is to remain at $2, and pensioners will still be able to obtain pharmaceutical benefits free of charge. For the first change, only a small number of drugs are involved in the price disagreements between manufacturers and the Minister. The cost to the Government of the proposal to list drugs as pharmaceutical benefits where there are price disagreements-a new provision-will be insignificant. However, the economic benefits to individual patients who require a price-disagreed drug will be considerable. With the second change, the increase in the general patient contribution for pharmaceutical benefits will result in an estimated saving of $40.3m per annum. I commend the Bill to the House. Debate (on motion by Mr Porter) adjourned. Bill-by leave-presented by Mr Scholes, and read a first time. Mr SCHOLES(Corio-Minister for Territories)(8.58) —I move: That the Bill be now read a second time. The purpose of this Bill is to amend the Defence (Re-establishment) Act 1965 to provide that no further loans or guarantees are to be granted under the defence re-establishment loans scheme in respect of applications received after 14 May 1985. The defence re-establishment loans scheme was designed to assist eligible veterans to make the transition to civilian life by providing finance for them to establish business or agricultural ventures. Decisions by successive governments not to increase the loan amounts have meant that the loans no longer provide a useful contribution to the cost of establishing a business or agricultural venture. The maximum value of the loans has not been increased since 1975. Budget restrictions will not permit increases in the loans. The scheme has been managerially inefficient because of legislative and public accountability requirements. The cost of administering the loans is high and, in the financial year which ended on 30 June 1984, approached 20 per cent of the value of the loans issued during that year. The re-establishment loan, at $10,000 for agricultural ventures and $5,000 for business ventures, is simply a cheap alternative source of a small part of the finance required to re-establish a serviceman or woman in civilian life. The Government believes this scheme is now out of date, because its objective as a re-establishment measure is not being met and it is inefficient to administer. This is reflected in the fact that only about 200 loans are approved each year. Applications for loans and guarantees under the scheme, received on or before 14 May 1985, will be processed normally. Loans and guarantees which have been granted will not be disturbed by this amendment as 14 May 1985 was the date of the Government's statement of the intent to abolish defence re-establishment loans. I commend the Bill to the House. Debate (on motion by Mr Porter) adjourned. Debate resumed. Mr HAWKER(Wannon)(9.00) —Before the debate on the Dairy Produce Market Support Levy Bill 1985 and cognate Bills was adjourned I was talking about how the price of milk and butter had changed over the last 15 years compared with average weekly earnings. As I have said, the price of butter has risen by less than half the rate of average weekly earnings over the last 15 years. The price of milk has risen by less than two-thirds of average weekly earnings. I suggest that that destroys any myth that market dairy prices are high. I note again, as I noted when I started my speech previously, the lack of support shown by Government members. Four Government members were present in the chamber when I started speaking. I see that there are only two here now. That shows how much importance the Government places on the dairy industry. The Minister for Primary Industry (Mr Kerin) has made some complaint about the cost of underwriting, suggesting that it has cost $18m over the last two years and $6m last year. I put that in perspective by saying that is the cost for an industry which is worth $1,000m a year and which has exports worth close to $400m. When one considers that the industry is facing a crisis, this sort of Government support is fairly miserable. There has been some mention of the cost to consumers. I have already shown that dairy prices have not risen nearly as fast as has the CPI over the last 15 years. When we talk about protection we should look at the sort of protection the car industry is getting from this Government-something like 157 per cent. The car industry is also to get $150m over the next few years. Mr Cobb —A national disgrace. Mr HAWKER —That is right. It is a question of perspective. I concede to the Minister that his plan will cost quite a bit. What he probably does not like to concede is the cost it will have in terms of unemployment and social security. That is not to mention the heartache and heartbreak of many individual families who will be pushed out of this industry-in many cases, quite unnecessarily. If the Minister were to take on board the amendments the Opposition will move he would realise that many of these problems could be alleviated. The Minister also overlooks the effect that his plan will have on local communities. Not just dairy farmers, but also local communities, are supported by this industry. We will see many towns, that are very much dependent on dairying areas, slowly strangled. Mr Andrew —The social impact. Mr HAWKER —The social impact will be very high and very costly. In conclusion, as I have stated, the industry accepts the need for rationalisation. All it is asking is that it be done at a slower rate. There is a very real risk, as many industry leaders have pointed out to the Minister, that there would be a considerable over-reaction if rationalisation is allowed to occur too rapidly. Mrs Sullivan —He doesn't care. Mr HAWKER —Maybe he does not care. That might be the fact of the matter. The Government, in its haste to bring in rationalisation, has also completely ignored the other side of the problem. I am referring to the farm cost side of the equation. The National Farmers Federation has made an excellent submission to the Government pointing out the problems of farm costs. We do not see this Government as being the slightest bit interested in deregulating the wage system. It is as committed to the wage fixing system as it ever has been. Tonight's address by the Treasurer (Mr Keating) reinforces the fact that not only is the Government committed to the wage fixing system but also that it is committed to fully indexing it. Mr Cobb —It has put petrol up, too. Mr HAWKER —Yes, it has just raised the price of petrol by a fairly large amount. The Government ought to look at the Opposition's foreshadowed amendments. They are reasonable. They merely ask that the industry be given a little more time to readjust and that the harsh and unnecessarily difficult effects that the Government's plans will have on the industry be removed. In conclusion, I remind honourable members that dairy farmers are extremely hard-working people. They get up early every morning. They work seven days a week. In many cases, they have very little alternative to dairying in their areas. The social costs of this plan, if implemented as proposed by the Government, will be extremely severe for many individuals. I urge the Government to accept the Opposition's amendments. Mr O'KEEFE(Burke)(9.07) —I rise to support the Dairy Produce Market Support Levy Bill 1985 and cognate Bills because I regard the legislation as being a consistent application of the Government's approach to deregulation and to improving the competitiveness of industry within Australia. I ought to make the point that, while we are specifically debating dairy industry legislation, it is but part of a consistent and coherent approach by the Government to a number of our national industries that have found themselves in difficulty. It almost seems to be a part of Australia's heritage or tradition that we elect Labor governments when the hard decisions have to be taken and the state of the nation has to be fixed. The dairy industry had been eroded to a position where, unless hard decisions were taken and implemented, it would have finished up going out the back door. A lot of what has come from the other side of the House in respect of this legislation amounts to an admission of support for the fact that the industry needed help, needs to change its directions and needs new guidance and a new plan. I predict that what is now euphemistically being called the Kerin plan will be regarded, in three or four years time, as not only the most major development in this industry but also the most beneficial thing to have happened to it in many years. I also wish to place the problem in perspective. When we get down to the fine detail of subsidies and protection, we find that often people lose sight of the need for change and the overview that is involved. The dairy industry has developed under a scheme of production, manufacturing and marketing based almost on a principle of export at any cost. It has not been widely understood in our general community that in recent years our manufactured products for the export market have, one could almost say, been dumped and that dumping has been subsidised by the domestic price. The process of marketing and export pooling has led to a situation whereby the domestic price of manufactured dairy products has supported, quite extravagantly, the returns to manufacturers for export products. In recent months we have had an example of a domestic price of about $1,800 per tonne for a manufactured product as compared with an export return of $850. Those sorts of examples are not generally known, and they are certainly not to be condoned or continued. That is unreasonable. It is not the dairy farmers who are to blame. That is something that our friends on the Government benches have not addressed tonight. In their term of office, when they took their advice from producers, from manufacturers and from industry, they did not address the fact that our manufacturers have got on to a rort-a rort which has cost dearly and has cost dairy farmers dearly. It ought to be realised that it has not been the dairy farmer's fault. He is now the bunny at the end of the line that they built up. I find it amazing that they can sit on the Opposition benches and even look anyone in the eye over their performance in the administration of this industry in all their years in office. That is something to which I shall return later. There are a number of dairy farmers in my electorate. I have spent a lot of time in recent weeks discussing with them the plan and the solutions that we are proposing. I have discovered, as my colleague the honourable member for Hunter (Mr Fitzgibbon) said earlier in the debate, that the problem, among other things, has been one of communication. Those farmers have needed time to understand the plan and the Government's approach. Their initial response was one of total opposition. Now, through their national body, the Australian Dairy Farmers Federation, they have accepted the introduction of the plan, and they are in discussion with the Government over ways in which we can make it work. I see that as an appropriate procedure. Part of the solution to the problem is not to hand to producers, farmers or growers in Victoria or Tasmania the total burden of the industry. One might ask how it comes to be that Victoria and Tasmania carry such a burden. The reason is that the majority of milk produced for our manufactured export market-that is, milk that is turned into cheese, butter and whole-milk products of various kinds-is produced in Victoria. That is the milk that has gone into export markets which are now totally unviable. Those sorts of results can be seen in the statistics produced by the Bureau of Agricultural Economics, which my colleague the honourable member for McMillan (Mr Cunningham) mentioned earlier today. They are of great importance to the debate. I seek leave, Mr Deputy President, to have the full table incorporated in Hansard. Leave granted. The table read as follows- 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 National Figures BAE estimates farm unit cash operating surplus over total dairy industry (not necessarily for family farm) 8,784 11,047 17,841 17,233 21,657 23,309 22,864 27,602 (Provisional estimate) 19,386 State Figures Victoria 7,522 11,757 17,854 16,593 22,636 20,468 21,287 21,999 11,979 Tasmania 10,130 9,355 18,200 18,205 19,206 22,441 27,179 24,914 13,417 NSW 11,428 13,013 17,327 17,830 19,131 30,103 28,106 37,509 31,914 Mr O'KEEFE —The Bureau of Agricultural Economics estimates show the cash surplus over the total dairy industry, that is, not necessarily per family farm but averaged over the industry. In 1977-when the Leader of the National Party (Mr Sinclair), was the Minister for Primary Industry and introduced the Sinclair plan-the average return in Victoria for a farm was $11,757 per annum. In 1984-85 the figure is $11,979. In other words, the farmer in Victoria has had virtually no increase in his operating surplus in seven years. That is an indication of how well the Sinclair plan worked. So let not Opposition members tell us that they know how to handle the industry. They have failed. In Tasmania, the figure for 1977 was $9,355. It has risen to $13,000. Compare that with the figures for Sydney or New South Wales-$13,000 and now $31,000. That does not necessarily say that the New South Wales industry has succeeded substantially, because we all know that much of the New South Wales returns relate to the Sydney liquid milk market. The point is that the plan introduced by honourable members opposite failed. Because it failed, we as a government are faced with having to find something that will work. This plan will work. The producers in the industry know that it has taken some courage on our part to bite this bullet and turn to something that will work. I will go on the record as saying that I am quite optimistic about the future of the industry and I see several avenues that will come into process now that we have deregulated and opened up the market to mechanisms which will give clear signals to the production community. There will be price adjustments. There will be changes in the market mix. It is a national industry and we will be seeking national solutions within the industry. There will be movements to alternative uses of the land. I shall cite just a couple of examples that I am aware of that hold great potential. I was recently in the Hawkesbury Valley and I saw an area where some 40 square miles of what had been dairy farm land had been turned to cultivating instant turf. It is an amazing sight to see farmers mowing the lawn and acres and acres of ground being cultivated for instant turf. It is turned over three and four times a year and transported to Sydney and other places for the national instant turf market that is developing. Those farmers, I am told, are making very significantly increased profits from their land. Another industry area that is developing is that of white vealers. Although honourable members from cockies' corner probably have not heard of this, certainly in some parts of Victoria it is an industry that is coming along very nicely, and the Victorian Minister for Agriculture and Rural Affairs is very interested in promoting further analysis of the prospects of this area. There are a number of alternative uses of the land and they will come into being. There will no doubt be better marketing in the industry. Domestically, there is a touch of irony when one notices in the national papers last week a full-page advertisement urging people to buy Australian dairy products. That is commendable. Was it taken out by the dairy industry or its marketing people? No. Who did take it out? It was the Builders Labourers Federation-an organisation which honourable members on the other side of the House have taken every opportunity they could over the years to knock and stand on. Here it is urging the Australian consumer to buy Australian dairy farmers' products, and honourable members opposite have nothing to say about it. Honourable members opposite should ring up the Builders Labourers Federation tomorrow morning and thank it. Externally, the Minister has entered into discussions with the European Economic Community, and we know from undertakings given to him earlier this year that the EEC has given a commitment that it will not dump into the Asian markets. So there is some prospect that this Government, through its actions, might be able to develop more profitable export markets for the industry. We will be trying to do that. I mentioned earlier the question of communication. The communication given to the dairy farmer from those who are opposed to the Government's proposals-again, this was commented on by my colleague the honourable member for Hunter-was to come out with a heap of scaremongering and misinformation, and to talk in terms of 25 per cent of dairy farmers being forced off their land. This was totally irresponsible scaremongering. I do not think that we will see in a year's time or two years' time that there has been very much of that at all. I think that better marketing and alternative uses of the land will lead to a take-up of much of the production surplus that exists at the moment. I would also like to see the Australian Dairy Corporation play a greater co-ordinating role. I would also like to see producers and manufacturers, for the first time at a national level, starting to work together to co-ordinate the industry. In fact, I know that this has already begun. That is something to be commended. I would like to see the States start working better together to reduce the emphasis on their parochial boundaries and start seeking national solutions to the problems of the milk production industry. I see strong prospects for the dairy industry in Australia if it is well handled. I should like to take just a couple of moments of the time of the House to read an extract from a recent editorial in the journal of the Australian dairy industry which, commenting on the future of the industry, stated: Too many of them-- that is, the manufacturers- have been producing products to get the most out of the system instead of getting the most out of the market place. It is heartbreaking to know that farmers are driven to the desperate step of blockading milk to try to get the Government to increase the price back to the farm when you know the factories could increase returns to producers if they would stop cutting prices and start marketing product. We don't need the Federal Government to get a better deal, we need better marketers. This is from the industry's journal. It continued: . . . instead of continuing to ask the Federal Government to help to keep things as they are, we need to push these factories into the market place to get the money our product deserves. I could not agree more with that comment from the industry. I make another point which again comes back to the scaremongering and misinformation that has been spread in this industry. The most despicable of the rumours that have been started and spread is that which relates to some sort of export-import deal done with New Zealand. Farmers have been told that we have done a deal to export our manufactured products to New Zealand in return for New Zealand getting its agricultural products into Australia and that we will allow the Australian industry to be wiped out. That is the sort of stuff that has been spread and farmers have believed it. I find that despicable. I place on record a very clear statement. The Minister has said this many times and will continue to say it, because it is right. We are committed to a strong and viable national industry. We will make it work. We are making it work. Opposition members should hang their heads in shame over their past performance. As for the amendments and stuff they have proposed, it is too little and far too late. They can sit there and cop it sweet and watch the industry prosper under our Government. Mr COWAN(Lyne)(9.23) —Throughout the debate this evening we heard continually about how, through the Dairy Produce Market Support Levy Bill and cognate Bills, the Government intends to deregulate the dairy industry. That is all right; it can start there, but, for goodness sake, it should also deregulate the work force because nothing is more of a problem today to primary industry than rising costs within the community. As a result of the unions association with the Government, the Government is frightened to deregulate the work force because of the consequences. I say to the honourable member for Burke (Mr O'Keefe) that, if the Government is to deregulate the dairy industry, it should make sure that it starts by getting its friends from the corner closest to us to agree with it. I am sure that the Left will not agree. The changes in this legislation are very radical indeed. I was always taught that, if there are to be changes to an agricultural industry, they should be made slowly and in co-operation and agreement with the industry. The Minister for Primary Industry (Mr Kerin) has proposed legislation that is unacceptable to the dairy industry throughout Australia and we have to realise that it is unacceptable to the industry. The measures in this legislation are built up to kill off the industry and for no other reason. The proposal that went before the Minister and the Australian Agricultural Council was such as to enable, over a number of years, a rationalisation of the industry that would be acceptable to farmers. We should know something about the background of the dairy industry, which has been very important for Australia. It employs about 67,000 Australian people on 18,000 farms. Hundreds of our smaller country towns are dependent on the dairy industry. The industry generates over $4,000m per year within the community and over $7,000m is invested within the industry. As has been said earlier in the debate today, it is an industry in which people work for seven days a week because cows must be milked twice a day. The capital investment in the industry is exceptionally high. Furthermore, it employs Australian families, and that is an important factor. Later on I will say something about the decline that will take place as a result of this legislation and will take much of the dairy industry out of the hands of ordinary Australian families and put it into the hands of bigger combines and interests throughout Australia, as has occurred in other countries. Let us look at the history of the industry. Something that has barely been spoken about during this debate is the fact that the dairy industry is a State industry, not a Commonwealth one. There are people who would like to see it as a Commonwealth industry. I know that because there are reasons for that which I fully understand. The Australian dairy industry has grown and stabilised under State laws. The only time the Commonwealth has ever been involved with the dairy industry has been through the Australian Dairy Corporation, the underwriting of exports, and matters of assistance from the Commonwealth. I emphasise that in the dairy industry peculiar situations exist in each of the States of Australia. I could speak particularly about the industry in New South Wales, which is typical. Maybe the industry is better off there because over 50 per cent of our total output from farms goes into market milk consumption in the State. The New South Wales industry, along with those in Queensland and Western Australia, is an example of the rationalisation that has taken place. It has seen the problems that will arise over the years because of export markets and the growth of the European Economic Community and it has met those problems. In fact, the figures for New South Wales show that in 1970 there were about 7,400 farms. Today there are fewer than 3,000 farms within the State and the number is being reduced rapidly because there is an incentive for farmers to reduce overall production. The success of this industry does not lie in what the Government plans to do in this legislation. All this legislation will do is to kill off the industry. It will reduce production from six billion litres of milk per year to 4.6 billion litres. The figure for local consumption within Australia is 4.3 billion litres. As the Dairy Farmers Federation has pointed out, that is a buffer of 300 million litres per year. This plan will not rationalise the industry fairly and so help out the farmers. What the Minister intends to do with this legislation is to starve out the farmers. He will starve 20 per cent of the dairy farmers of this nation off the land. He will incur a social security or unemployment bill of up to $100m per year. Mr Slipper —How much? Mr COWAN —Up to $100m per year because at least 20,000 people will be unemployed as a result of this legislation. We should realise that two years ago the Australian dairy industry recognised that there must be a rationalisation and that we had to reduce production because of world market availability. This problem was tackled. The representatives of the industry went to the Minister, through the Australian Agricultural Council. They went to the Minister, as State organisations, with a proposal that had been agreed by every State within the Australian Dairy Industry Council. A proposal came before the Government. It was a sensible proposal which would come into being over three, four or five years, which would assist farmers off the land if they wished to go, without hurting them the way we are going to do at present. But the Government would not accept that. There were two proposals. Firstly, there was a basic proposal where each of the States-I know New South Wales farmers were agreeable-would contribute up to $18m per year through a levy to actually assist the farmers of other States. Secondly, the farmers sought the entitlement of a two-tier price for surplus milk, which I personally agree with. The farmers came up with two basic proposals which were acceptable to practically all dairy farmers throughout Australia but they were not acceptable to this Minister for Primary Industry. The dairy industry cannot afford to have academics, whether they are in the Department of Primary Industry or anywhere else, deciding what will happen to a primary industry. That cannot be done. We cannot change this industry overnight. That would drastically affect the welfare, the investment, the social life and every form of life of every person who is involved within the industry. What is the Kerin proposal? One thing I was always taught is that one section of an industry should never be dragged down too far to assist another section. Such assistance should be brought in gradually. One group of farmers throughout Australia was prepared to assist those who never had to market milk an opportunity to level out and get an income. Was this not a fair proposal for the industry to put before the Minister? The Minister does not come to the Parliament and say: 'I have received nothing from the industry itself'. He cannot do that. As I say, he did receive something from the industry and he said: 'No, I do not agree with you'. This is the Minister's proposal. What will the Kerin plan do? It thrusts upon the industry a proposal that it does not support; it terminates government support on exports; it imposes a levy of up to 2c per litre and it eliminates the pooling from 30 June 1985, as pointed out by the Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt). Today in a very fine speech before this House he said that we cannot afford to eliminate pooling. The industry has told the Minister this. The amendment that we will place before honourable members asks that the pooling remain for at least two years. It also removes the Commonwealth legislation concerning safeguards with respect to over the border milk sales. This has not been spoken of, but I am confident that the industry, State to State, will make its own satisfactory arrangements on this matter. The Minister for Primary Industry has openly said in this Parliament and out of the Parliament: 'Right, Australia is one country. Go ahead, invade the markets of your neighbour next door'. That is all right. I hope that the industry, State to State, can come to the negotiating table on this matter. This legislation reduces the production of milk to 4.6 million litres per year. I am not against that. The history of primary industry shows-no matter whether one is talking about dried fruit, wool, beef, wheat, dairying or whatever-that there come times when there are bad markets. But times change. It is the responsibility of the Government to prop up that industry and help it through, help our national herd survive and help our farmers retain the quality of their soil, fencing and buildings. The Government should not just kill them off as we see here with the legislation that the Minister has brought before this House, because history will change. This country has a tremendous responsibility to feed the hungry countries of the world. The Australian Labor Party should be the last party-it is always talking about this-to turn its back on the potential of this country to produce food to sell. We should be helping the farmer, assisting him to stay on the farm instead of passing legislation that will take at least 20,000 farmers off the farm deliberately. The actual effect will be a reduction of price to the producer. I feel that, for a little time, there will also be a reduction of price to the consumer. Maybe this is the object of the Government's exercise. The Government might achieve this now, but wait until it starts importing dairy products from New Zealand and other parts of the world. Perhaps the legislation is designed to do this under closer economic relations. I hope that nobody in this country ever turns around and says to the previous Government that we should not have CER. Of course we should have CER but our domestic industry should be in such a state that it is able to compete. This will happen. Honourable members will know that there comes a time, with drought, flood, fire and other effects in the industry, when we will not be able to meet-if the Government reduces the production of milk to 4.6 million litres-our own domestic responsibilities over the years to come. These matters have been overlooked and they should not be overlooked with this legislation. This will destroy an export market. As bad as markets may be, are we in a position in this country where we can throw away an export market of $350m to $400m per year? Mr Lloyd —We cannot afford to do that. Mr COWAN —We cannot afford to do that. We can have positive plans to reduce it, but what the Minister is attempting to do will eliminate exports. I have explained that before with the possibilities of New Zealand products coming into Australia. Economic problems in this nation have always been solved by the primary producer who could always bring Australia's economy back. If the Government kills off primary industries one by one, as is occurring in the legislation-this is true not only of the dairy industry but other industries that we see affected week after week in legislation coming before the Parliament-where will our standards of living finish up and will our economy survive so far as the nation is concerned? I appreciate the fact that my time is overdue, but I cannot support the legislation. I strongly support the proposed amendments. I would like to see something further done with respect to a two-tier price on entitlements. I trust that the Minister will, from the arguments we have placed before the House and knowing that the industry is at stake and considering the people who are involved in the industry, take the opportunity, at this late hour, to make some positive amendments that may change the course of the dairy industry. Mr CLEELAND(McEwen)(9.38) —Tonight we have seen a classic example of the hypocrisy of members of the Opposition. It was, of course, followed by their hypocrisy in government. They talk about regulation and regulatory control of varying industries. The question arises: What happened in the 1970s when they spoke about small business and the small farmer? In the 1970s under the Fraser Government we saw the highest rate of bankruptcy in the history of this country. Small businesses in their droves went bankrupt. People lost their capital. Those who were employed by the small business people-and this is one of the social consequences of bankruptcy-also lost their jobs. Where were the agro-socialists then? They did not give a damn. Members of the Opposition pursued policies in government in the late 1970s which caused the greatest loss of jobs and the greatest loss of capital amongst small business this country has seen. Mr Peter Fisher —Bob Hawke did that as a member of the ACTU. Mr CLEELAND —The honourable member should have a look at the statistics and then come back and argue with me. He might get a lesson. Opposition members do not understand even today what they did in their last disastrous period in government. They sit here today and talk about deregulation of the dairy industry. We have seen what their economic policies have done to this country and what they have done to small business, to people who lost their capital. Members of the Opposition, when in government, did not give a damn and today they still do not care about them. They love to talk about deregulation. They sit here as economic whimps and spout forth deregulation, but when they see it happen, they cannot wear it. Where are the dries of the Opposition? They have not walked into this House tonight. They have been too ashamed to come in and listen to the wets arguing. They are too surprised, too ashamed and too embarrassed to listen to the hypocrisy that the wets are coming out with. These Opposition wets do not have the support of the local Press, the community or the farmers. This is the fascinating thing about this debate. If they read their newspapers they would know this. I refer to the Weekly Times of 10 April 1985 in which there is a farmers survey conducted by Wilson Market Research, of Sydney. This is a quarterly survey and it covers matters in a variety of agricultural areas. Opposition members should listen to this, they might learn something. This survey asked dairy farmers whether they supported deregulation and it found that 58 per cent of them did support it. Opposition members sit in this House tonight expressing concern for dairy farmers and telling us we should not deregulate, but the farmers do not agree with them. Perhaps honourable members should go out into their electorates and talk to the farmers and find out what they are concerned about. Mr Martin —They all live in the city! Mr CLEELAND —That is why the National Party has the smallest representation in this House. Let us see what Maximilian Walsh said in the Age on 28 March 1985. He said: The Kerin proposal is a modest step towards deregulation in the dairy industry. It will, it is true, reduce the number of dairy producers who are still an important constituency for the National Party- that is the problem- Judged against the criteria of economic rationality, the Kerin proposal is infinitely superior to the present system. The dries of the Liberal Party- we have not seen them tonight- who have applauded the deregulation of the financial system and now argue that they should be elected to deregulate the wage market would, if they believed what they preach, back the Kerin proposal. That would incur the wrath of the Nationals who don't give a fig for the arguments of economic rationality. That is what the commentators say about honourable members in the National Party. Maximilian Walsh continued: It is a fascinating situation. For years the non-Labor parties have been able to drive wedges through the Labor side by introducing policies which pitted the pragmatists of Labor against the idealists. Now the boot could be on the other foot. The Liberals have a significant element which has decided you need ideals in order to govern. Frankly, I think the Liberal dries will fail this test. They have not been heard or seen tonight. The article continued: With very few exceptions they are a bunch of pussy cats when it comes to standing up to the Nationals. Their experience in government demonstrated that. This will put the wood on the Democrats . . . The choice for an opportunistic political party is an easy one-go for the dairy farmers because they will appreciate it; the consumers don't know they are being fleeced. At stake in the whole business is more than the $200m subsidy to 18,000 dairy farms. This is the first significant step towards rural deregulation. If it fails there will be no others. That was Maximilian Walsh in the Age on 28 March 1985. Let us look at the 'Modest Farmer'-Bert Kelly-one of the Opposition's lot. He used to be in the Government. Let us look at what he had to say in the Bulletin on 16 April 1985. He said: Often, as we were travelling around, particularly on the fringes of the Downs, the locals would explain that the country through which we were passing was once farmed by small, struggling dairy farmers. It is now used for growing all kinds of arable crops and, although the farmers are not rolling in money, they are certainly far better off than if they, or their forefathers, had been induced, by government intervention, to keep on milking cows. People should remember this when belting the daylights out of John Kerin and his dairy plan. It is all too easy for politicians to make good fellows of themselves by telling farmers what they want to hear and so encourage them to continue to work like peasants in an industry for which there is no long-term future except in the home market. If we had not encouraged dairy farmers to produce- and that was a Liberal Government- more butter in 1962, they would not be in the mess they are in now. The 'Modest Farmer' knows where the blame lies and he shoots it home to the Opposition. He is not alone. Let us look at the Weekly Times on 10 April 1985 and see what it says. Mr Nehl —That is an easy way to make a speech-you just read other people's. Mr CLEELAND —The honourable member does not like the facts. He does not like hearing it from other people. The Weekly Times said: As Primary Industry Minister, John Kerin, headed for Warragul last week to talk to Victorian dairy farmers, it was becoming clearer that there will be little rational industry debate- there is none in this House- as far as his national dairy marketing plan is concerned. Much of the blame for this must be attached to dairyfarmer leaders who, to put it mildly, have spread misinformation and fear of the unknown in their efforts to discredit the Kerin Plan. Dairy farmers who actually listened to what was said at the well-attended meetings at Warwick (Qld) and the NSW meetings at Lismore and Singleton came away a lot less fearful. What the Kerin Plan is about is manufactured and exported products. On top of that, producers and manufacturers do not even understand the current system of levies and export pooling. We know that National Party members never have understood and they have never cared. The article continued: In predominantly market milk areas, they have never had to understand. But even a factory manager at the meeting at Singleton, where the factory is making a contribution to the stabilisation levy, did not appear to have a clue how the system works. It is obvious why the grass roots producers are misinformed when even the people dishing up the money don't understand. This is the quality of the debate we have heard tonight. When quite respected people in the Press, who have listened to the arguments and who understand the dairy industry, can write about Opposition members' comments in that way, Opposition members should be absolutely ashamed of themselves. Even the Australian Financial Review on 25 March 1985 had this to say: As a side effect, Mr Kerin has also put pressure on the National Party, Liberal Party and the National Farmers Federation which have all called for deregulation and market force rationalisation in the financial, manufacturing and labour sectors. That is what the Opposition wants, is it not? It wants it everywhere but in its own area. The Government's decision is likely to cause more than a passing case of heartburn among the 'dries' of the Federal Liberal Party, who will be in the position of either supporting the move and splitting from the National Party 'agrarian socialists', or supporting the 'wet' or soft policy of protecting the dairy farmers. Those are the facts as seen by independent observers who understand the situation. I see the honourable member for Denison (Mr Hodgman)-Mr 60c in the dollar-is smiling. I point out that the dollar is now nearly 70c and it is improving. We understand his economic rationality too. These are the economic facts and of course the history is a long one. It will be a disaster for the dairy industry and people will be put in financial hardship. Opposition members may well ask why. When I was practising in a small country town in northern Victoria, on the Murray-- Mr O'Keefe —Dairy farming country. Mr CLEELAND —It is dairy farming country and I acted for many dairy farmers. Even then when dairy farmers were not making an adequate and reasonable living according to the hours they were working, the National Party in Victoria, in conjunction with the Liberals, was buying broad acres at Rochester and carving them up into dairy farms. Opposition members should stop and think about that. They complain about it but, at a time when dairy farmers were working like peasants, the National Party, in conjunction with the wets of the Liberals, was buying broad acres of Victoria and at enormous capital cost was putting in irrigation, fencing, housing and dairies in order to put young people at heavily subsidised cost-city dwellers, I might add-on to the land where they could not make a living at dairy farming from the first day that they moved into those farms. Opposition members sit here today in this Parliament and accuse us of not caring. They did not care when they put those farmers on the properties. They did not worry about whether those young people would make a living and their parties stand condemned. Mr MILES(Braddon)(9.48) —I rise to address the House on the Dairy Produce Market Support Levy Bill and three cognate Bills that are designed to restructure and make more competitive one of Australia's long established and most efficient industries. The dairy industry is based on men and women who have gone into an industry that requires and demands a wide range of technical, managerial and research skills. Farming has become a highly complex business and in recent years the dairying industry has been one of the few rural industries in Australia where young competent people have been able to do without heavy capital support from parents or relatives; the consequences being that some of the most able and well-educated people to enter the rural sector of Australia for many years did so. The Bills before the House now have all the hallmarks of forcing these people, who have high bank commitments, to leave the industry. Many within the industry believe that whereas a year ago they were receiving in excess of $3 per kilogram of butter fat for first advance payments from the manufacturers, next season they will be given an expected opening price of about $1.80 to $2-in other words a 33 per cent reduction. The industry financing has been turned upside down. The farmers will now have to carry their finance for at least nine months. The industry certainly can adjust, but it needs time. The older, more established farmers whose families have grown up and who have fewer bank commitments will be able to survive, but the young, innovative dairy farmers with young families often will be forced to leave the industry. Yet the money grabbing Hawke Government is willing to listen to a Minister who can best be described as an academic bureaucrat who wants to experiment with theoretical models at the expense of thousands of families. I illustrate that by referring to a conversation that the Minister for Primary Industry (Mr Kerin) had when he was in my electorate. He was asked whether the Government had done any sort of forward planning on whether there would be any impact on families. The answer was that no impact studies had been done. The Minister said: 'It all depends on whether you are talking about a dynamic model or a static model'. What is a dynamic model or a static model? Nobody was able to tell us that. That is where the conversation ended. We got the same answer from the Department of Primary Industry people, from the bureaucrats. The rural people of Australia have just had the cruel and inequitable assets test dumped on them, and now they will be bludgeoned into submission and many will have to leave their farms. No real consensus with the dairy industry was envisaged. Again we see that this Government's meaning of consensus is only double talk, for its words do not correspond with its actions. Consensus is a smooth, massaging word that really means that one agrees with the Government. If one does not, one is confrontationist, naive on recalcitrant or one does not understand the facts. For two years the industry worked on a plan to regulate itself. When agreement was reached and the conditions fulfilled, as asked for by the Minister, the Minister said: 'Sorry, it is two weeks too late'. Then he had the audacity to tell 1,400 farmers in my electorate that the meeting he chaired at which the States agreed to a plan was only a kiss and a promise. The Minister believes that the dairy industry plan was 'directed to short term band-aid measures'. Within the next few years the dairy industry will need more than band-aid measures to keep it together. Unless the proposed amendments are adopted, the fall-out from the industry by the time of the next Federal election will be so great that Labor members of Parliament in marginal rural seats will need, not a campaign manager, but a bunker designer. Dairying is not an occupation for the faint-hearted since it involves long hours, risk and a tedium that most people of lesser quality would reject. Yet people like this are the basis of an industry that provides jobs for others and quality products enjoyed by many Australians at a very moderate and stable price throughout the year. The rural industries are still the most important in Australia. Until productivity improves and new products are produced by the urban centres, we will continue to rely heavily on the rural people of Australia to produce our wealth. Most Government members seem to believe that redistribution of wealth is of the highest priority, if not the only priority. They never seem to be able to understand that our present standard of living has been procured only by industrious Australians who have won overseas markets and thus brought in export dollars. The economics of maintaining or increasing Australia's living standard are basically straightforward. If we do not sell overseas, no extra capital comes in. If no money comes in, we as a nation will stagnate. At present, the dairy industry is worth more than $1 billion per annum. It had export earnings of $350m in 1983-84. Of this the Minister has stated that $18m has been contributed from the Budget allocation in the last two years. If the Minister regards this as being a substantial amount, I assure other honourable members that many other industries in the pipeline urgently require deregulating, the removal of subsidies and the abandonment of tariffs. People's work in a nation can be broadly grouped as being productive or consuming of wealth. The dairy industry does not have fat cats living off the labours of others. Dairy farmers are producers and as such their conditions should be competitive, but equitable, in the Australian economy. This plan makes their conditions competitive, but it is not equitable in the Australian or world context because the industry is being forced to operate as if it were in a free market while many other industries enjoy the protection that comes from regulation. I refer to the passenger motor vehicle, footwear, clothing and textile industries. This Government is making much of the need to deregulate the dairy industry, and to that I have no opposition. But when deregulation refers to only one aspect of the industry-that is, the side that affects the income of dairy farmers and their families-and not to the cost side of the industry, it is totally unsatisfactory and, again, inequitable. The social consequences to many families in Tasmania and Victoria will be very great if the speed with which the Government's plan is introduced is not tempered by the amendments as outlined by the Opposition's spokesman for primary industry, the honourable member for Gwydir (Mr Hunt). The manufacturing sector is being asked to compete on the world market-a market that is corrupted by anyone's standards. Australian dairy farmers are amongst the most efficient in the world but, due to heavy government subsidies, protective policies and dumping by others, the world market is not one in which Australia should go it alone and let its conscientious and industrious dairy farmers suffer. In matters such as this, I am first for Australia and second for deregulation. If European Economic Community countries and other countries are going to subsidise and dump products on the world market, it is naive for the Australian Government to expect its producers to compete on such a basis. For this reason alone the pooling mechanism that has existed for many years should be maintained. But if the Government is intent on doing away with it, it should give the industry time to adjust. I believe this would be achieved by the first amendment foreshadowed by the Opposition. If we expect our rural producers to compete on the world market in a deregulated atmosphere, the same should be the case for every other industry. This Government wants deregulation in the dairy industry only in an endeavour to reduce the cost of dairy products such as milk, cheese and butter to the consumer and it hopes that this in turn will help keep down inflation at a time when it shows signs of being on the up again. It has not really been implemented for the benefit of the dairy industry. The price of such action will be that 4,000 to 5,000 families will be forced off their farms, with an inevitable lengthening of dole queues and reduced export earnings. It was interesting to see in this morning's Sydney Morning Herald that in the 1950s we were eighth in the world in regard to exporting products, and in the 1980s we were twenty-third. Our share of world exports has now slipped from 2.6 to 1.2 per cent-a 54 per cent decline in the last 30 years. Yet here we have a government that is prepared to attack our export industry. The Kerin plan is stark and vicious, and is a stab in the dark by bureaucrats who are far removed from the reality of market forces. This plan can be made practical, workable and humane if the amendments foreshadowed by the Opposition are adopted. Mr IAN ROBINSON(Page)(9.57) —The Dairy Produce Market Support Levy Bill 1985 and cognate Bills will have a tragic effect on the dairy industry in Australia. The proposals are devastating in the time scale of their implementation. The amendments foreshadowed by the Deputy Leader of the National Party of Australia (Mr Hunt) would provide at least some cushioning of this devastating effect. This afternoon, in a belated approach, the Minister for Primary Industry (Mr Kerin) has offered a reprieve which is no reprieve at all. It provides for an extension of three months for levy collection and a fixed amount guarantee to the industry. Of course, this is too little too late. Undoubtedly, the Minister has recognised that he now has a monster on his hands and does not quite know how to control it. It is to be hoped that there will be support in this Parliament for the amendments proposed by the Deputy Leader of the National Party. Industry unrest, which has been expressed so vehemently, is due to the lack of notice that the industry is receiving from the Government in respect of these proposed changes. How ridiculous it was to tell the industry last week, at the eleventh hour, that it had about six weeks to prepare for what is in fact an axing of a very substantial proportion of the industry in what can only be described as a callous manner. The Minister must surely realise the financial constraints that those within the industry are experiencing. Of course, it means little to him. His approach is that of an academic, a heartless bureaucrat backed by a team of equally heartless bureaucrats and a government which does not understand the realities, which does not recognise the real import of this industry in Australia. The Minister fails to recognise the components of the industry and what is really required to deal with the massive problems confronting it. The industry, during the past 24 months, recognised the difficulties and came forward with a constructive plan. At first the Minister pretended to accept that plan and discussions were held with the Australian Agricultural Council but almost overnight the whole thing was overturned. In the famous statement of 2 April the Minister announced the policy he was to introduce in which he said that the Government would unlock dairy industry potential. What utter humbug! What sheer hypocrisy. Although that was meant to be the main theme of the Minister's Press statement, if we look through the whole statement we find that it is a proposal to restrict the industry, to cut down production and, even worse, to reduce the return to the producer, to reduce the return the industry is capable of receiving in the immediate future, without any recognition of the impact that will be felt in later months. It is in effect, a denial of natural justice for the industry. We know there are no stocks being held at present for export. We know that there are prospects of maintaining the industry while problems are sorted out and there is time for people to be put on notice. The Minister is not interested in recognising that and he is turning his back on the real requirements of the industry. He has turned his back on the fact that those who have financial commitments are being given no time in which to make plans to restructure their business approach as individual farmers. Likewise, co-operative factories are being given no time to restructure their management and planning for the season ahead or the season after that. This is a denial by the Minister and by the Federal Labor Government of what can be described only as the traditions of an industry, traditions which are well recognised by anyone who knows anything about it but which, in the face of a heartless bureaucratic approach, could well end in disaster. If the opening price per kilogram for butterfat in the coming season is around $2 and possibly a little less, despite the suggestion by the Minister this afternoon that the three months extension might alter that figure and that the $10m he quoted as a possible figure might lift that figure slightly, those within the industry who are able to make effective assessments say that that will not occur, there will be disaster, which will begin as from the enactment of this legislation unless the foreshadowed amendments are accepted by the Parliament. If they are not, heaven help us. There is one chance beyond that that in another place there might be some real recognition of the disaster this Minister has perpetrated on the dairy industry and the dairy farmers, who contribute enormously to our export earnings, and on those who are indirectly employed within the industry. A total of about 65,000 people are directly dependent on the dairy industry. The Government has gone out of its way to support other industries such as the car industry, the steel industry, and so on. It has gone out of its way to pander to sections of the community through the prices and incomes accord. It constantly makes appeals to the trade union movement on wages, but does it suggest a cutback of the sort it is now putting through this House in this legislation for a section of the industry? Mr Braithwaite —Never. Mr IAN ROBINSON —Never. The honourable member for Dawson is accurate in that respect. There is no similar approach by this Government except in respect of sugar and other primary industries. In this recognised difficult economic period one of our basic industries, one of the export earning industries, has to bear the brunt of what can be described only as a quite stupid decision. The amendments would provide an opportunity to cushion a restructuring. Allegations were made by speakers from the other side of the House during the debate this afternoon and this evening reflecting on what had previously been our policies in relation to the dairy industry. I remind those who offered that criticism that they failed to take any time at all to look at the history of the industry, to look at what assistance has been given by the Liberal Party and the National Party over many years, not just monetary assistance or subsidies, but by allowing the industry to engage in its own management, to take into account the opportunities it seized upon from the various phases of marketing and productivity for self-regulation. Self-regulation is a vital ingredient for any primary industry that is to survive the cyclical effects of market difficulties. The effect of European Economic Community policies on the low export market return of about two years ago has been mentioned today. By means of self-regulation the industry could tackle this problem, and it offered so to do, but that was not good enough for this Minister and this Government. They chose a direction for the industry. They chose to tell the industry what it must do, by way of a simple mathematical calculation, as to estimates of future production, as to estimates for a return on that production, taking a heartless approach in respect of the economy of each dairy farm. I conclude by saying that no sympathy at all for the individual farmer has been offered by the Minister or by any of those who have spoken from his side of the House. They have totally ignored the individual farmer, the family farm and all that goes with it, the low income returns that are such an imposition on that section of the community. In many instances they are not able to change from that form of production as their land is either unsuitable to enable them to turn to some other form of productivity or they are in a part of Australia where there is a need for local production of whole milk. Of course, there must be some related productivity in terms of milk that goes into the manufacturing sector. That is inescapable if we are to have a whole milk supply system for every part of Australia, but there is not one word about that. There are those who are being forced to look at their farmgates and say to themselves: 'The day will come very quickly now when we will have to go out that gate for the last time, get what we can for our property, try to satisfy our creditors, and be on our way'. Is that the way for any government of this country to treat the loyal farmers who have played their part, in many instances for generations, in what is in fact recognised as one of the difficult industries? It is a seven-day-a-week job and a task which can be undertaken only by those who are dedicated to that kind of life. I am absolutely appalled at the approach being taken in this matter and I deprecate the legislation. However, I hope that there will be support for the amendments that are to be put forward. Mr McGAURAN(Gippsland)(10.11) —As I rise to contribute to this debate on this extremely important legislation which will affect the lives of a great many people, not to mention the communities in which they live, I note, more with sadness than anything else, that apart from the Minister for Primary Industry (Mr Kerin), there is but one other member of the Government in the chamber at this very important time, when the Opposition is putting forward three very constructive amendments to the legislation. There can be no more stark reminder of this Government's callousness and heavy-handed treatment of the dairy industry than the lack of display of members participating in this debate. The few members of the Government who have participated in the debate throughout the day will live to regret the pious platitudes they offered, as glibly as a movie star in a Hollywood production. If the Minister believes that glib assurances of some sort of economic well-being-so far down the road that we cannot see it-will satisfy either the Opposition or the dairy farmers in any part of this nation, then he certainly has a great deal more to learn about his portfolio. The Minister and his Government, in refusing to entertain the amendments being put forward by the Opposition on behalf of the industry and concerned dairy farmers throughout the country, fly in the face of the importance of the industry, an importance to which so many members on this side of the Parliament have addressed themselves. This industry has export earnings of between $350m and $400m a year. We must focus also on the effects on rural communities, which will suffer because so many dairy farmers will be forced under this legislation to leave their chosen profession. We have to consider also the effect on traders in towns. To draw on the example of my electorate of Gippsland, whether it be the towns of Foster and Yarram; Leongatha and Maffra in South Gippsland, or Sale in central Gippsland, we know what effects this plan will have on the businesses and related industries of those towns. In my view, in a general sense, amongst many other faults, this legislation has four weaknesses more striking than any others. The first is that it does not properly provide for a national industry; so the thrust of the legislation is against the young farmers; those who are highly geared and, in many cases, are the most efficient. One does not have to be a young farmer to fall within that category. As long as we retain the artificial barriers to a national industry, then I believe, as do so many other members on this side, that the weaknesses within the industry will continue for many years to come. The second major weakness is, of course, that the Minister is seeking to align producers' incomes with export price parity, which flies in the face of reason, given that the prices for dairy products produced by the European Economic Community and other countries are so heavily subsidised as not to give a real estimate of the actual cost of production in those countries. Furthermore, the Minister must be aware that if this country were to become dependent on New Zealand or the EEC for the importation of dairy products at the cost of a declining domestic industry, we would quickly realise that, once in a monopoly position, those countries would very easily, without hesitation, increase the price of those products. The third major weakness is the pace of deregulation on which the Minister so heavily hangs his hat. It may be said that the dairy industry is in need of deregulation so as to provide a more equitable distribution of the rewards within the industry. However, it is totally unfair and totally wrong to deregulate income support but not prices. I do not believe that this legislation will solve the crux of the problem, which is that one does not deregulate simply the method of production; one must also deregulate the price structure. I do not believe, however much the Minister may argue, that this legislation provides for that necessary correlation. Fourthly, I do not believe that this legislation in any way seeks to protect the domestic industry from cheap, subsidised imports which are being dumped in this country, as we know, principally from the EEC. The Minister in his second reading speech referred to the strong action the Government is prepared to take to protect the domestic industry from unfair competition. We have seen no evidence of that in his period in office. There is no evidence of the Government's firm resolve or firm commitment to that proper objective in this legislation. Until the Minister stops echoing the pious platitudes of members such as the honourable member for McMillan (Mr Cunningham), who has totally betrayed the interests of the dairy farmers in his electorate, we cannot properly protect our industry. The dairy farmers of Gippsland, or anywhere else in Australia, seek only to be able to deal with imported products on a fair basis. The products landing in this country are being dumped at below the cost of production. Looking at the three amendments which the Opposition has put before the Minister-to date he has categorically refused to entertain them-I look first at the matter of export pooling. It is the proposal of the Opposition that the export pools on butter and cheese should be continued for the 1985-86 and 1986-87 financial years. As the Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt) explained to the House earlier, equalisation of domestic and export market prices has been in existence for some 50 years, yet it is to cease on 30 June of this year. The pooling of export market returns has always played an integral part in this equalisation scheme and by extending it for two years we believe that the industry will have time to adjust. Without that time to adjust there will be tremendous upheaval, not only to farmers, but also to so many factories-principally the factories situated in Victoria and Tasmania. The Minister has made great play of the report of the Industries Assistance Commission which was released in March 1984. If that be the case, why has the Minister not acted upon the proposal of the Commission that the retention of export pooling be continued for the time being? I turn now to the second of the Opposition's amendments, that relating to domestic prices. It is the Opposition's proposal that the support levels through the product levies should be maintained at the current level for two years, and then be phased out by one-quarter each year from the 1987-88 financial year to the 1990-91 financial year. It should be pointed out that domestic prices of leviable products have not risen since December 1983. Although the Minister is only too well aware of the tremendous problems that flow from that he has never seemed to take much notice of them. At the risk of stating the obvious, those prices stand in very marked contrast to the costs of production to the dairy farmers. The Opposition's proposed amendment seeks to maintain domestic prices for a second year. We believe this would give the world market more time to recover from its General Agreement on Tariffs and Trade minimum levels as well as-it cannot be stressed strongly enough-ensuring that producers and manufacturers have more time to revise their budgets, thus easing the problems caused by the phasing out and eventual abolition of the levy. The Opposition has proposed this amendment which, if accepted, would very simply reduce the problem of productivity levies by bringing about their abolition in four equal steps between 1987 and 1990. The third amendment proposed be the Opposition relates to export market support payments. We are very concerned about the method of establishing market support payments in the legislation introduced by the Minister. The reason we hold these very great concerns is that it is proposed to establish a market support rate for whole milk powder which, because of its milk content, is 20 per cent higher than the market support levy on butter and skimmed milk powder. This means that in this legislation one product is given an advantage over others. Bearing in mind that the levy on all milk which funds the export market support payment system is collected from farmers, it is essential to ensure that the way the payments are established is even-handed. This is especially necessary when we consider that whole milk powder is produced mostly by two proprietary companies and we do not want to see the co-operatives, which do not deal in whole milk powder nearly to the same extent, being disadvantaged. The amendment proposed by the Opposition gives the industry a means of control over the mechanism for determining export market support payments on individual products which, I repeat, are funded by farmers through the levy on all milk. I again draw to the Parliament's attention the very serious and, not to put too fine a point on it, critical condition in which so many of our farmers find themselves through no fault of their own. They are the most efficient dairy farmers in the world. Yet the Minister and the Government have pulled down the shutters and will not entertain the very responsible and constructive amendments proposed by the Opposition, which will do more to alleviate the impact of the Minister's hard-hitting proposals than would any other suggestion put forward by honourable members from the Government side who have spoken in this debate. The ball is in the Minister's court. Is he prepared to take on board the proposals of the Opposition-indeed, the proposals of the industry-and save so many families, individuals and rural communities or does he intend once and for all to turn his back on them and thereby show his true colours? Mr NEHL(Cowper)(9.24) —I suppose it comes as no surprise to the people of Australia, who have been watching the Hawke socialist Government for some time and have seen it establish itself with the introduction of the assets test as a granny basher, that the Minister for Primary Industry (Mr Kerin), the Ghengis Khan of the cowyard, will establish himself as the great basher of the dairy farmers. Tonight in the debate on the Dairy Produce Market Support Levy Bill and cognate Bills, much mention has been made of statistics. Honourable members on the other side of the House have talked about the 18,000 dairy farmers and this, that and the other. Mr Deputy Speaker, I am not so concerned about statistics. There have been mentions of models, whether they are dynamic models or static models-- Mr Kerin —I will explain it to you one day. Mr NEHL —I know that the Minister has explained it, and I do not give a pinch of salt about any of his economic models because I care about people. I speak tonight about some of the people who will be affected by this draconian legislation which will undoubtedly have a most adverse effect on the Australian dairy industry. Rather than speak in thousands, I will speak about the dairy farmers in my electorate of Cowper. Mr McVeigh —They have a good member, too. Mr NEHL —There is no doubt about that. I thank the honourable member for Groom for that endorsement. In the electorate of Cowper there are four dairy factories-at Comboyne, Wauchope, Frederickton and Raleigh. When claims are made by media commentators-such as those quoted by the honourable member for McEwen (Mr Cleeland) earlier in the debate-that the Australian dairy industry is less than efficient, it is worth considering that on the beautiful Comboyne Plateau, above the Hastings Valley, 47 producers produce 12.1 million litres of milk a year. At Wauchope on the rich and fertile Hastings, 96 producers produce 20 million litres of milk a year. At Frederickton, on the Macleay, 103 producers produce 25.4 million litres. At Raleigh, on the beautiful Bellinger, 169 producers produce 45 million litres of milk. All those milk factories are run as co-operatives. They are run by individual farm groups. One would think that the members of the Australian Labor Party-the socialists, those who proudly proclaim their interest in the little person, the worker and the battler-would go out of their way to do something to help protect the co-operatives of small farmers, but no. The major impact of this legislation will be to benefit the major companies involved in the milk industry, such as Nestle Australia Ltd. I believe it is very important that this Parliament should be concerned about the future of the co-operatives and the people who run them. It is worth noting too that at the Comboyne factory there are 15 employees. At Wauchope there are 35, at Raleigh, 90 and at Frederickton, 32. If the point is reached where those co-operatives are no longer economic because of the attrition of producers, what will happen? There will be unemployment among the factory staff as well. We are looking at this stage at a total production valued at $29.5m a year, which is significant and is certainly of great importance to my electorate. I wish to make a few comments about the adverse effects that this draconian legislation may well have, and I expect will have, in some places. At the Comboyne Rural Co-operative Society Ltd it would take only 10 per cent of the producers to disappear for it to become less than viable. If it were closed down it would effectively shatter the entire social and economic fabric of the Comboyne Plateau, which has no primary industry activity other than dairying. Should Raleigh be forced into closure, Coffs Harbour, Macksville, Bowraville, Bellingen and Dorrigo would all be adversely affected. At the co-operative in Wauchope, which has 96 producers and employs 35 people, a 10 per cent reduction in milk intake would lead to between five and six staff positions being shed. At Frederickton, every lost producer would at some stage lead to employees being shed. This would have a major effect on both output and profitability. The adverse effects of these Bills will not just harm the dairy farmer himself or his family; they will spread out into the wider communities served by those people. In the time left to me I shall take up the question of the consumer subsidy. When speaking earlier tonight, the honourable member for McEwen made some reference to the greatest furphy, the greatest fallacy, ever; that is that there is a consumer subsidy of milk and butter to the order of $160m or $200m. He quoted Maximilian Walsh, who said: It is costing Australia's 15 million or so milk consumers some $200 million a year over and above the real market price to support our 18,000 dairy farms . . . Let us consider what that real market price is. What the commentators and those who are concerned with maligning the dairy industry and spreading this malicious rumour about a subsidy are talking about is not the domestic market price in other countries but the dumped price, the price at which the European Economic Community and New Zealand get rid of their surplus products. Mr McVeigh —It is an immoral price. Mr NEHL —It is a national world parity price. They suggest that because we are paying a price for milk and butter now that, in comparative terms, is too low, the consumers of Australia are subsidising the dairy farmers. That is just not true. Mr Walsh might consider that the price of the newspapers he has written for, using 1970 as a base of 100, has gone up to 600 since 1970. At the same time, the price of milk has only gone up to 341. Again, using the same base of 100, butter has gone up to only 260 between 1970 and 1985. At the same time, average weekly earnings have gone up to 535.9. Compare that again with the real growth in the price of butter to only 260. Bread has gone up to 445 in 1985, using the 1970 base. The world parity price, the dumped price, is not the price on which the domestic price should be judged in Australia. It is not the price which is paid by the consumer either in New Zealand or the EEC countries. Their prices are considerably higher than the cost of the surplus on the international markets. Indeed, under the common agricultural policy, any surplus of agricultural production is subsidised for dumping on world markets. It is totally unrealistic for the prices of butter and milk on the Australian domestic market to be measured against the prices of dairy products dumped by the EEC. The national world parity price does not exist in a market established form anywhere in the world. It is a fabrication. It is a price devised by those who want to attack the Australian dairy industry and who want to push the notion that the industry is being highly subsidised by consumers. Its existence is demonstrably a contrivance to destroy the market place by circumventing market forces. I return to where I started, which was with the people in my electorate, the dairy farmers who supply the co-operative factories at Comboyne, Wauchope, Raleigh and Frederickton. What will they think when this Labor Government Bill becomes an Act? Mr Conquest —The same as what they thought after the assets test. Mr NEHL —They will think exactly the same as they think about this Government's imposition of the assets test. They will be appalled. Many people will be unemployed. They will certainly not be in the same situation as they are in today. Every State industry and every State government agreed on a scheme which would rationalise and benefit the national dairy industry. It is most unfortunate indeed that the Government and the Minister for Primary Industry are not prepared to go along with the wants of the industry. I strongly support the three amendments to be moved by the Deputy Leader of the National Party (Mr Hunt). I would have liked to have seen a fourth amendment, making provision within the legislation for the introduction of a two-price, two-tier entitlement scheme. Nonetheless, I urge all members of the House to support the amendments to be moved by the Deputy Leader of the Opposition. Mr WRIGHT(Capricornia)(10.35) —It was not my intention at first to speak on this legislation, the Dairy Produce Market Support Levy Bill 1985 and cognate Bills. However, in view of what has been said tonight by the Opposition, particularly by National Party of Australia members, I thought it best that I make a contribution for the few moments which have been made available to me. Honourable members opposite have said today that the dairy industry has taken a position that is totally against what the Government is doing here today. They have canvassed every aspect, including a two-price entitlement scheme, which, I place on the record, they promised the dairy industry they would support, but then backed down yesterday. They talk about being consistent. They talk about- Mr McVeigh —Who promised? Mr WRIGHT —The honourable member should talk again to the industry. That information was given to me by members of the dairy industry. I am prepared to name those people if necessary, so the honourable member should be very careful. Honourable members opposite then foreshadowed some other amendments. I shall place on record what the dairy industry is now saying about the Kerin plan. I quote from a telex of today's date: The Federal Government's decision to amend its controversial dairy industry plan was welcomed tonight by concerned dairy farmers spokesman Neil Fleming. Honourable member's should listen to these words: 'It's extremely good news. Any move to help dairyfarmers in their present plight is great', said Mr Fleming. He said, 'concerned dairyfarmers members earlier today formed a new body, the Victorian Milk Producers Association, which would enable the members to speak with an official voice during negotiations on the milk industry dispute. The move makes us a constitutional body and puts us on equal footing with the United Dairy Farmers of Victoria' said Mr Fleming. The substance of what Mr Fleming is saying is that what the Minister for Primary Industry (Mr Kerin) is doing tonight is good news. Mr Hawker —I take a point of order. Could I just correct the honourable member's views? The Australian Dairy Farmers Federation is the representative- Madam ACTING SPEAKER —Order! The honourable member does not have a point of order. He will resume his seat. Mr WRIGHT —My next quotation is from another telex which states: Commenting on amendments to the plan announced by Mr Kerin today, Australian Dairy Institute President Harold Snow said at least they would help set prices. 'It is going to help factories set a reasonable price for farmers', Mr Snow said. 'Before we had no idea, but now we can have a good idea what the opening price for farmers will be'. He said the changes were not basic and did not go far enough, but they had given dairy processors some more time to become accustomed to the plan. Another telex, from the dairy industry again, states: It is now up to the industry to come to grips with what the Government is intending to do. Every honourable member who has sat down with dairy farmers knows how difficult these decisions have been to make. Six billion litres of milk are being produced with a salable quantum of something like 5.2 billion litres. It has been a very difficult decision to make but we have here a Minister and a government that have been prepared to make it. As one who is concerned about the proposal I am now prepared to say: 'Let us wait and see'. I believe that that is what we need to do here tonight. Someone had to make the decision. The Minister has made it, in the interests not of this Government, but of the dairy industry of Australia. Madam ACTING SPEAKER —I point out to the honourable member for Wannon that although he had a definite point of view it was not a point of order. Mr KERIN(Werriwa-Minister for Primary Industry)(10.39) —in reply-In summing up this debate, I should like to say that I have addressed many dairy farmer meetings throughout Australia in the last month or so, and even at those meetings such as that at Warragul, where I could not even be heard, I think I heard a lot more sense than I have heard here tonight from the Opposition. That does not apply to the honourable member for McMillan (Mr Cunningham), Rankin (Mr Beddall), Hunter (Mr Fitzgibbon), Bendigo (Mr Brumby), Calare (Mr Simmons), Burke (Mr O'Keefe), McEwen (Mr Cleeland) and Capricornia (Mr Wright), who all made good contributions to this debate. The Opposition is basically very big on analysis of the problem, but it has not offered any solutions. Opposition members have been carried away by their own propaganda. They have not tried to see through or think through the problem by themselves. They have just simply taken the advice of the industry. There is even a bit of twisted logic about export pooling. Some Opposition members were saying that all doom would come from the end of export pooling-but they think it will be all right in two years' time. I was particularly grateful to the honourable member for Rankin for pointing out the rorts in which the National Party in Queensland engages in the dairy industry. Of course, that is at the domestic or State level, and we well understand the corruption. I guess that one day we shall understand the corruption associated with the Bjelke-Petersen Foundation in that State. Mr Slipper —On a point of order, Madam Acting Speaker: Once again the Minister is talking utter nonsense. Madam ACTING SPEAKER —Order! There is no point of order. The honourable member will resume his seat. Mr KERIN —The Opposition here today is being told what to do by the industry. The amendments have been drafted by the Australian Dairy Farmers Federation or the Australian Dairy Industry Conference. I do not object to that. This is a pretty open society. But the National Party applies double standards. The Queensland National Party Premier objects to this Government even talking to the unions; he so hates the people who work for wages and salaries. Of course, the National Party in that State sacks people and breaches international covenants. Honourable members opposite tonight are saying that we should do what the industry wants. I simply say that no government can do whatever any industry wants. That would be marvellous. We would have Rafferty's rules. The big problem, the reason why Opposition members are not very consistent tonight, is that the Liberal Party and the National Party are pretty much divided on this issue. To its credit, the Liberal Party will not wear entitlements. So it is only this fact which has prevented the Opposition from bringing in the whole of the ADIC scheme again. Of course, that gives some people opposite quite a few problems. The honourable member for Gippsland (Mr McGauran), who was No. 10 on the Opposition list tonight, did not quite know whether he should support the ADIC plan or support all the petitions that he was bringing in here against entitlements. The simple fact is that members of the National Party are the true socialists. They want to stifle the industry with regulations as long as the industry agrees. They do not want to think through the problems of this industry. I have admitted all along that the Commonwealth Government was in difficult, no-win situation. I have been justifiably critical of the last plan, brought in by the present Opposition, by the right honourable member for New England, Mr Sinclair, when he was the Minister; but he had the same problem that any Commonwealth government has, and that is that the States will never agree and the States have sufficient legislative and regulative power to frustrate what the Commonwealth is doing with respect to marketing arrangements for a product. As the honourable member for McMillan said, the entitlements could have been brought in with the existing legislation if anyone had chosen to do that. The honourable member for Gwydir (Mr Hunt) said that there is turmoil with this plan. Most of the turmoil is caused by the problems of the existing regulations and legislation. He talks about the time scale. The Australian Dairy Industry Conference wanted this plan and wanted its scheme by July 1985. The whole problem with that, when we said that that was not on, is that one needs State government acquiescence. Tasmania is one of the principal areas affected by the problems of the dairy industry, and the Tasmanian Government could not even focus on the Industries Assistance Commission report or the ADIC scheme before the third quarter of last year; so there was not much worry about speed there. But would the ADIC scheme have been costless? The honourable member for Gwydir says that there would have been turmoil, but that it would have been all right. A 5.3 billion litres entitlement would have been set. The industry would have been paying 2c a litre all milk market levy-certainly 2c for the first year or two; the original proposal, at one stage, was 4c or 5c all milk levy-and a penalty of 8c or 10c a litre. No agreement was ever reached on the method of establishing entitlements. So I do not know what the David Everests or the Diana Stewarts of this world would have said in regard to the messy institution of entitlements and then a penalty levy of 10c a litre. What would this have done to the go-getting, young, innovative farmers about whom I keep hearing? The ADIC scheme would have wiped out anyone with low equity and capitalised the assets of the established farmers. That was one of the basic problems with the entitlements scheme. Time will not permit me to go through the points raised by honourable members opposite, but I should like to try to sum up the debate by making some general points, because some of the lines being run by honourable members are the general propaganda lines of people in the industry who cannot face the facts of the problems that the industry faces. Very few substantive points were made by the Opposition. No real alternatives were proposed, as I have already said. The amendments, frankly, would only encourage further overproduction and delay the necessary adjustments to the industry. The whole problem, as I have said, was that the concept of entitlements was not agreed to within the two coalition parties. So, if we accept these amendments, there is simply no cap on production at all. Opposition members should think themselves pretty lucky that we do not accept these amendments, because they would simply compound the problems that the industry already has. The claims made by the Opposition can be summed up into five. The first is that we are going to wipe out all exports. The second is that this plan is designed to assist New Zealand. The third is that this plan will lead to Australia being unable to fulfil its obligations under the General Agreement on Tariffs and Trade and closer economic relations with New Zealand. The fourth claim concerned the role of the European Economic Community. Finally, the fifth major point made by the Opposition was that the domestic price support is too low at 30 per cent. The arguments used by the Opposition in debate and the amendments it proposes indicate clearly that it has no alternative to the Government's plan; indeed, that Opposition members are not willing, even at this stage, to face up to the real fundamental problems of the industry. In particular, the Opposition amendments, as I have already said, could only further encourage overproduction. Claims have been made that we are going to wipe out dairy exports. Nothing could be further from the truth. What we are doing is removing current serious distortions in the present arrangements which encourage and, indeed, financially reward the production of exports sold below the cost of production. Secondly, we are removing present distortions which actively encourage exports of the least profitable products to the least profitable markets and actually discourage the development of new export products and new markets. Thirdly, we are providing concrete encouragement to a whole range of non-traditional dairy exports which presently receive no support. We are doing that through the market support and supplementary market support payments. Perhaps the Opposition can explain the rationale of continuing to encourage the production of a product which costs the industry money to export. But that is precisely what the Opposition proposes to do by seeking to continue export pooling. As to the business of exports, exports will be assisted. They will be assisted by a 30 per cent market support payment. This gives the lie to the claim that the Government wants to wipe out exports. The assisted price received for exports sets a price higher than that which would otherwise prevail and at which a manufacturer would be indifferent as between an export sale and a domestic sale. So this provides domestic support but does not set domestic prices. What people need to realise is that, if the domestic market will sustain a higher price, there is nothing to stop a manufacturer seeking it. I believe that there is more money in the domestic market for products. The second major point made by the Opposition is that the plan is designed to assist New Zealand. That is a pretty callous, cynical sort of propaganda. Claims are made that it is designed to assist the New Zealand dairy industry-although, interestingly, in almost the same breath it is also claimed that the New Zealand industry will be so disadvantaged as to lead to a breakdown of the present memorandum of understanding between the two industries. The simple fact is that the retention of an efficient, competitive Australian industry is the best defence against fair competition from New Zealand, or any other country for that matter. We cannot wish other countries away. This has been a consideration in the development of the new marketing arrangements. Not to have taken this into account would have been irresponsible. It should be stressed that under CER-negotiated with manic determination by Mr Fraser and Mr Anthony-all dairy products from New Zealand are allowed duty-free entry for unrestricted quantities. So that I am not criticising unfairly those two gentlemen, the situation was the same under the New Zealand-Australia Free Trade Agreement, the previous trade agreement. Only the memorandum of understanding between the industries of the two countries-which incidentally is not the same as the basic CER trade agreement-limits New Zealand exports to Australia, and then only for cheese, for which New Zealand exports to Australia are contained to the growth of the Australian market. I have spoken about fair competition from New Zealand. Unfair competition from New Zealand or anywhere else which damages or threatens to damage the local industry will not be tolerated. The honourable member for Murray (Mr Lloyd) said that the Government would accept New Zealand competition as fair if it occurs at 130 percent of export prices. This is not the case. If it turns out that New Zealand subsidises exports to Australia to compete at a level of 130 per cent of export prices, the CER allows action to be taken, and the Government is prepared to take the necessary action. Incidentally, I have not heard anyone say that the Australian industry cannot meet fair New Zealand competition. The third major claim by the Opposition was that the abolition of export pooling would lead to Australia not being able to meet its GATT commitments and would, moreover, lead to a breakdown in the memorandum of understanding between the Australian and New Zealand dairy industries. The first point is just plain nonsense. Australia will certainly be able to continue to meet fully its GATT obligations and will do so under the new arrangements. With regard to the second point, it should be remembered that the need for extensive consultations between the two industries under the memorandum of understanding is in large part a result of Australia's present highly regulated support arrangements. Under the Government's plan the greater degree of market discipline will lead to less need for direct administrative discipline, as presently is required. In effect, with export pooling, Australian exporters can potentially sell into any market at any price, thereby causing disruption. This will not be the case under the new arrangements. The fourth point is the role of the EEC. The honourable member for Mayo (Mr Downer) deplored in strong terms the practices of the EEC, and I endorse his comments. However, again I note that he had no solutions to offer. Indeed, under the previous Government, the EEC's practices went from bad to worse. I will not make cheap points about whether Vic Garland did or did not do anything about the EEC. That is something with which all Australian producers have to deal. I am not being overly critical of the Opposition because, in practice, it is extremely difficult for a country the size of Australia to turn back the EEC tide of subsidised exports. Nevertheless, we are doing everything we can. I have made two trips to Brussels and in a few weeks time will be leaving again for Brussels. We must keep trying. Another point was that the domestic price support was too low at 30 per cent. The Government proposes to provide a minimum support level, but we do not set domestic prices. As production comes down, as everyone agrees it must, market forces may well lead to domestic prices rising well above the minimum support level. The assisted price received for exports sets a price higher than that at which a manufacturer would be indifferent between an export sale and a domestic sale. Many points have been made in the debate by honourable members opposite. I take particular exception to the honourable member for Gwydir hitting the multinationals. I think that Unigate Australia Pty Ltd, Kraft Foods Ltd, Nestle Australia Ltd and Bongrain, although they are multinational companies, serve the dairy producers very well indeed. The honourable member talked about allowances. He should also realise that, while we are taking off allowances, as I said in my second reading speech, allowances allowed butter from one State to be sold in other States at below the cost at which the product was available in the originating State. At one time companies were compensated by the whole industry even for exports that were of dubious quality. The honourable member for Gwydir said that we should stick to the report of the Industries Assistance Commission. We rejected the IAC report, as did the industry. There is continual confusion about the 4.6 billion litres. People are saying that we need exports. I say again that there is no magic level of production. This is not in anyone's mind. However, we have a domestic market for 4.3 billion litres of production. We have quota markets of another three million litres. Certainly, the industry's profitability and viability will be restored at something in excess of five billion litres. We need exports. There always must be a margin for exports in this industry because of the seasonal nature of production. It is calculated that at present there is about $240m worth of assistance in this industry. The point is not that that is a corrupted figure-I am very dubious about it myself-but that only a quarter of that assistance, no matter how it is calculated, actually gets back to the dairy producers. That is why the honourable member for McMillan is saying that whatever subsidisation is in this industry-and the calculation at present is up to about 72 per cent protection-all we are doing is subsidising overseas consumers without any benefit to Australian producers. What this really means is that the dead-weight loss of increasing production needs to be removed. The honourable member for Forrest (Mr Drummond) made some points about New Zealand which I have largely covered. When we talk about the undumped, unsubsidised price, when we allow for New Zealand's privileged access, most of the points disappear. The honourable member must also take into account that manufacturers can get what they can from the domestic market. The Commonwealth is involved with only five prescribed products. Not all cheeses and whole milk powders are within the five prescribed products and a lot of other products are being produced. The claim which was made, I think, by the honourable member for Forrest that we will not meet our commitments under the General Agreement on Tariffs and Trade if export pooling is abolished is not correct because there is nothing in the GATT which bears on export pooling. The honourable member for Moncrieff (Mrs Sullivan) made all sorts of weird and wonderful claims that basically indicate that she does not understand the industry. The point is that, as she said, we have had recurring crises basically due to the fact that the genetic potential of the cow has still not been reached. That is why we had crises through the 1970s; that is why the numbers of dairy farmers in the industry are going down. She also made points about the present Victorian Cain Government. Of course, the fact is that previous Liberal governments compounded the problem in that State for the present Government. Justice Robinson, when reporting on the dairy industry to the Victorian Government recently, pointed out that if the industry's profitability was to be restored to what it was a couple of years ago-that is when the industry had a farm cash operating surplus of $21,000 rather than a bit less than $12,000 or a family farm income of about $2,500 as now-one would have to increase the price of market milk by 67 per cent. The judge pointed out also that if the Victorian producers were to get what the New South Wales producers got on average the price would have to be trebled. The size of the problem in Victoria can also be exemplified by the fact that if Victoria took all the New South Wales market for market milk it could get only another 3c a litre. That is how big the problem is. The honourable member for Murray made some political points, one of which was his criticism of the 1975 Labor Government. I point out to him that the National Party of Australia lived off the poverty of the dairy industry for many years. It kept on a small subsidy that bled the industry to death slowly and fed on people's hopes. The Whitlam Government had to take firm decisions. I think it is a bit funny for the honourable member for Lyne (Mr Cowan) to participate in this debate because, of course, the National Party in his State before the government changed also set up a structure in New South Wales which included rich and poor dairy farmers. Even today dairy farmers are in different situations within States. The final point I would like to take up is the question of some honourable members not understanding the difference between dynamic and static. It is easy to label people as academics and bureaucrats but I will explain this on another occasion. Madam ACTING SPEAKER —Order! The Minister's time has expired. 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 HOLDING(Melbourne Ports-Minister for Aboriginal Affairs) —I seek the indulgence of the Chair to provide further information in respect of questions asked of me in Parliament today. Madam ACTING SPEAKER —The Minister may proceed. Mr HOLDING —Today I was asked questions without notice which required the provision of certain detailed aspects of the financial management of the National Aboriginal Conference. I want to take this opportunity to provide the House with the information on those matters about which I was questioned. Honourable members will recall that on 17 April I tabled the report of the Auditor-General on the NAC's finances. I had commissioned a special report under section 63P of the Audit Act. The report set out in some detail the various matters of concern about the NAC's financial management. The Auditor-General's report dealt with many issues, but there are two matters which have apparently fascinated honourable members opposite. Those matters are: First, the purchase of the motor vehicles for members of the NAC and, secondly, a period in the middle of last year when the NAC went into overdraft on various items. The facts relating to these matters are set out respectively in Appendix D to the Auditor-General's report and in the passage on page 8 of the report as tabled by me. I make it clear to the House that I have not sought to conceal these matters then and I do not do so now. With regard to the purchase of motor vehicles, the facts are as I informed the House in answers to questions yesterday and again today. The amount of about $360,000 was provided in the NAC's notional budget for 1982-83 to enable it to purchase motor cars in order to help members of the NAC to discharge their normal electoral duties. It is a matter of record that the NAC overspent the notional budget quite considerably and it did so in spite of repeated warnings from me and directions not to do so. I repeat: I am quite happy to make the relevant correspondence between the NAC and me available to honourable members opposite. It is also a matter of record that once I declined to approve spending of public moneys on cars for NAC members it was indicated that they could seek personal loans from the Aboriginal Development Commission to finance purchase of the cars. That was one option. The other option was that they had to return them to the Department for reallocation to Aboriginal organisations. There seemed to be some concern among honourable members opposite that there was something improper in my indicating to NAC members that they could arrange to purchase the cars personally by obtaining finance from the ADC. I remind the House that the principle of ADC funds being used in this way was not established by me but in fact was established by Senator Peter Baume who, as Minister for Aboriginal Affairs, had issued a special instrument to the Aboriginal Development Commission to enable it to make such loans to NAC members. My action was thus in accord with established policy which this Government inherited on taking office. I believe that the record on this matter shows conclusively that I have acted with due regard for the safeguarding of public moneys, but also with very proper regard to the principles of Aboriginal self-management. Honourable members opposite also made some play about the situation when for three periods for a few days each last year, the NAC went into overdraft. The facts are as set out in the Auditor-General's report. It is true that departmental officers were stationed in the NAC secretariat at that time and were at that time aware of the NAC's transactions. They were aware in fact of what was a temporary and technical infringement of the strict letter of accounting arrangements. I remind the House that the officers concerned were in a very difficult position. Creditors of the NAC were demanding payment. There was a reasonable expectation that they could and should be paid, and a reasonable belief that in time most of the necessary documentation in respect of those requests would be reconciled. On the other hand, there was not sufficient documentation available to the Department for it to provide the ongoing funding that was necessary. Officers were caught in a predicament. If they provided ongoing funding without proper documentation they were in breach of the provisions under which the Department acts. If they allowed the NAC to go into overdraft they were also in technical breach. They opted for the latter position. The Department's officers made what I believe was a reasonable judgment in all the circumstances at the time. The rightness of that judgment is borne out by subsequent events; there has been a sustained improvement over time in the NAC financial administration and the need for overdraft accommodation has not recurred. I make it clear to the House that at the time I was not informed of these judgments. I also want to make it clear that if I had been so informed I would have endorsed that action, and I do so now. The actions taken were reasonable and preferable to other consequences of a failure to act to meet the exigencies of the situation. I have never concealed from the House that my Department found that the NAC records were in a state of disorder. That is why I insisted on the agency arrangement and asked the Auditor-General to provide me with a full report on all aspects of the matter. Bill-by leave-presented by Mr Howe, and read a first time. Mr HOWE(Batman-Minister for Social Security)(11.08) —I move: That the Bill be now read a second time. This Bill implements two decisions of the Government which were announced a short time ago. Nursing Homes Assistance Act 1974 The first decision is that there will be no Commonwealth funding of any new or additional services provided in nursing homes to other than nursing home patients where those services are not approved or approved-in-principle prior to 21 August 1985. Commonwealth funding for services which have been so approved before that date will be maintained, with adjustments for necessary cost increases. At present, the Commonwealth funds a number of services which are provided in nursing homes for both nursing home patients and aged or younger disabled persons in the surrounding community. To date, the Government has considered it reasonable that the Commonwealth should fully meet the costs of these services. However, the direction of Commonwealth funding in this field is changing rapidly. Further decisions in this area will be announced at a later date. It is expected that this measure will save $500,000 in the remainder of the 1985-86 financial year and $500,000 in the 1986-87 financial year, and that savings will accumulate at the rate of $500,000 in later years. Social Security Act 1947 The second decision is to discontinue, as from 1 November 1985, the payment of family allowance in respect of student children who have attained the age of 18 years. There will be some limited exceptions to the new rule. In general, these are designed to ensure that groups of people in needy circumstances will continue to receive family allowance. It is expected that savings from this measure will be in the order of $20m in the remainder of the 1985-86 financial year and $30m in the 1986-87 financial year. I commend the Bill to the House. Debate (on motion by Mr Connolly) adjourned. Bill-by leave-presented by Mr Uren, and read a first time. Mr UREN(Reid-Minister for Local Government and Administrative Services)(11.10) —I move: That the Bill be now read a second time. As part of the cost saving measures, announced by the Treasurer (Mr Keating) earlier this evening, the Government has decided to increase by a lesser amount than is currently provided for under the Local Government (Personal Income Tax Sharing) Act 1976, personal income tax sharing grants payable to local government in 1985-86. The purpose of this Bill is to give effect to the changes that are necessary to that Act. At present the Local Government (Personal Income Tax Sharing) Act 1976 provides for local government to receive every year 2 per cent of personal income tax collected in the previous year. Had this arrangement been continued, grants for local government in the States in 1985-86 would have increased by nearly 20 per cent or by some $97m. The Government considered that this increase was excessive in the current circumstances and that local government authorities should share in the expenditure restraint that will need to be exercised by other spheres of government in order to lay the foundation for sustained economic growth in this country. It is therefore proposing a special arrangement, for 1985-86 only, whereby local government will receive an amount equal to the grant in 1984-85 increased in real terms by 2 per cent. On the basis of available estimates it is anticipated that this new formula will result in local government receiving $531m in 1985-86, an increase of $45m on grants made available in 1984-85. This means that, compared with a situation under which the present arrangements would have continued to apply, the saving to the government will be about $52m. It is important to note that this new arrangement will be applicable for 1985-86 only. The arrangements to apply after 1985-86 will be determined by the Government following its consideration of the report of the national inquiry into local government finance. This inquiry, which I announced in May last year, has been conducting hearings throughout the country and is undertaking a particularly thorough examination of the Local Government (Personal Income Tax Sharing) Act and other aspects of local Government Finance. Its Chairman, Professor Peter Self, has indicated that he will present his report to the Government by the end of September. On this basis I would expect the Government to have considered the report, considered the views of all interested parties on the report and introduced any necessary changes to the Act in time for them to be effective for the 1986-87 financial year. The arrangements that are to be introduced for 1985-86 adhere fairly closely to those which had previously applied. The process will begin before the end of August when the Treasurer, at the time of his Budget announcements, will publish the estimated movement in the consumer price index in the year to the March quarter 1986. The States will be advised of this estimate together with an estimate of the grants they will receive for distribution to local government. As is the case at present, the States will then advise me of the proposed allocation of grants to local government together with an assurance that the allocations have been made in accordance with the Act. I will satisfy myself that the Act has been complied with and then advise the Treasurer of my views. The Treasurer will immediately authorise payment to the States concerned. The Bill provides that the payments made to the States for local government can be adjusted if the actual change in the consumer price index is different from that which was estimated in August. This adjustment would be made following the release of the consumer price index for the March quarter 1986. If the estimated increase in the consumer price index for the year exceeds the actual increase, the States will be required to repay to the Commonwealth the difference. If, on the other hand, the actual increase exceeds the estimated increase, the Commonwealth will be required to increase its payments to the States. If a State is required to repay the Commonwealth the Bill permits this to be deducted from payments in future years. If a State is entitled to additional payments the Bill requires that they be distributed among local governing bodies in the same way as the first payment was distributed. The Act does not apply to payments the Commonwealth Government makes to the Northern Territory Government for the five local govern- ment authorities in that Territory. However, the memorandum of understanding with the Northern Territory Government requires that those payments are to be made on a similar basis to those for local government elsewhere in Australia and this will be reflected in payments to the Territory for local government in 1985-86. In concluding I would like to emphasise that the grant that will be provided to local government in 1985-86 represents an increase of some $45m. It is the largest increase since 1982-83. It is also important to recall this Government's commitment to local government. In 1983 we established the first ministry of local government. We strengthened its role under the revised administrative arrangements that were introduced last December by combining it with the related functions of regional development and Commonwealth property. We have ensured that local government is represented in the highest economic forums of the land. We have supported the constitutional recognition of local government which it has struggled for so many years to achieve. We have introduced the local government development program to assist local government authorities to strengthen their efficiency and capacity. We have expanded and introduced other programs involving local government such as the Australian land transport program and community services programs. Overall, Federal Government grants, both tied and untied, to local government now total nearly $1 billion per annum. This represents a 50 per cent increase in the first two years of the Government on the last year of the Fraser Government. These facts emphasise that the Government is firmly committed to raising the status and strengthening the capacity of local government throughout Australia. We have put in place the basis for a fuller national recognition of the importance of local government and are building upon it. Our commitment to local government is enduring. It is a commitment which this Government will continue to work towards. I commend the Bill to the House. Debate (on motion by Mr Everingham) adjourned. The following Bills were returned from the Senate without amendment or requests: Fishing Legislation Amendment Bill 1985 Fisheries Levy Amendment Bill 1985 Dried Sultana Production Underwriting Amendment Bill 1985 Dried Vine Fruits Equalisation Levy Amendment Bill 1985 Bill received from the Senate, and read a first time. Ordered that the second reading be made an order of the day for the next day of sitting. Consideration resumed from 9 May, on motion by Mr Kerin: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. The Bill. Clauses 1 to 12-by leave-taken together, and agreed to. Clause 13 (Repeal) Mr HUNT(Gwydir)(11.23) —On behalf of the Opposition, I move: Clause 13, page 5, omit the clause, substitute the following clause: Repeal ''13. Sections 17, 19 and 20 of the Principal Act are repealed.''. I spoke to this amendment at some length earlier in the day and I do not want to delay the Committee other than to make the point that this amendment seeks to extend the export pooling arrangements for butter and cheese for two years to allow greater lead time for farmers and manufacturers to adjust to the new marketing system. I make one strong plea in this regard. As I indicated earlier, we are not opposing the legislation as a whole, but we are endeavouring to convince the Government of the necessity to at least slow down the legislation's early implementation to allow both the industry at the manufacturing level and the farmers at the farm level to adjust to what will be a fairly tough and difficult regime. Most thinking people in the industry are well aware of the seriousness of the international marketing situation with the world stockpile of dairy products and also our own level of production, which is not at an all time record by any means. It is back to about six billion litres from an earlier high of about 7.2 billion litres. The sudden transition in six weeks from the present regime to another by abolishing the export pooling arrangements that have existed for 50 years seems to me to be a very tough way in which to approach the industry, factory management and those involved in the factories. I remind the Minister for Primary Industry (Mr Kerin) that the Bureau of Agricultural Economics made a very valid point, which I think is worth repeating, in its interim report of 23 November 1983, when it stated: Taking into account the effect of export pooling on export revenue, stability of domestic prices and producer returns and on the industry's underwriting and financing arrangements the Commission proposes to recommend the retention of export pooling for the time being. The Industries Assistance Commission became aware-I do not think it was always aware-in the course of hearing evidence and in the course of considering all the issues that a time lag was necessary in regard to this aspect of the marketing process for manufactured dairy products. A sunset clause in that amendment which I have moved in fact specifies the cessation of that pooling arrangement. I do not expect the Minister to accept this amendment tonight because I know he would want to discuss the matter with his colleagues after the debate in another place. I think it would be very unfortunate however for the dairy industry and this Parliament if, out of sheer cussedness, the views of the Opposition and of the industry were totally ignored. I think it is central to the current difficulty that the Minister has in trying to sell his version of the recommendations of the Industries Assistance Commission. On behalf of the Opposition parties I make an appeal to the Minister and to the Government at least to give some consideration to the views expressed. I make it very clear that the States which will have the most difficulty in adjusting to a new system without export pooling from 1 July will be Victoria and Tasmania. Victoria especially is involved in the production of a large percentage of our manufactured dairy products. This is the State in which there has been so much unrest and ill feeling within the dairy industry. Therefore, in all sincerity on behalf of the Opposition I appeal to the Minister to take aboard the concerns that have been expressed, not only in this place but also in other political environments, whether the concerns are expressed, for example, in a party political sense or whatever. I know the industry in general and the manufacturing side of the dairy industry in particular are very concerned about the matter. They have bought their concerns to the Opposition. Therefore, I commend the amendment to the Committee. Mr HAWKER(Wannon)(11.29) —In supporting this amendment to the Dairy Legislation Amendment Bill I would like first of all to say on behalf of every member of the Opposition that I take exception to the disparaging remarks made by the Minister for Primary Industry (Mr Kerin) in closing the debate on the previous Bill. I think they were quite unnecessary. Many members on this side of the chamber have spent a lot of time talking to dairy farmers and a lot of time consulting with other people in the industry. I think members on this side have a very good grasp overall of the problems facing the industry. Therefore, I think that those sorts of comments were quite unnecessary. In supporting this amendment I should like to quote from the Industries Assistance Commission 1983 report on the dairy industry, which states quite clearly at page 53: . . . it is recommended that export pooling be continued, at least until the industry is next reviewed, in order to smooth the transition of the manufacturing sector from existing arrangements to those recommended by the Commission. The maintenance of export pooling would act to ensure more stable domestic returns than may have resulted from the Commission's Draft Report proposals as day-to-day fluctuations in export returns would be removed by averaging export returns from a production period. Maintenance of export pooling would allow continuation of the current arrangements for underwriting and financing. That last sentence spells it out very clearly. In passing I mention that the IAC recommended that any new dairy plan should be reviewed in three years rather than four. Without this amendment, the problem faced by the factories is the real difficulty of knowing how to quote an opening price for butterfat. If the factories are unsure of that they run into problems with the Australian Dairy Corporation in relation to advancing finance. I know the Minister is aware of this problem. He has mentioned an amendment of his own, but I really do not think it gets to the nub of the problem. This amendment asks that the manufacturers be given time to adjust to these changes, otherwise the loosers will be the dairy farmers. To give honourable members some idea, one manufacturer in my electorate told me that he would have no difficulty in opening at $2.80 a kilogram butterfat if he were allowed to have pooling, but without it the opening price would be considerably less than that. There is a considerable amount of uncertainty because of the effect on the opening price, with all the different payments and market support value that go with it. The Minister has been going around to the various dairy farmers meetings saying that he estimates that without pooling farm gate returns from presently prescribed products would increase by about 9 per cent. If he allows pooling to continue for two years, as suggested by this amendment, then according to the manufacturers I have spoken to, and various others, that statement would be correct. Without pooling, I believe the Minister is quite mistaken. If pooling is not extended, factories will be in financial trouble, and the Minister knows this. In order to generate a bit of cash flow they will be forced to sell on the local market. This will lead to oversupply problems and will put downward pressure on the domestic price. Without pooling how else will they raise that cash? Is that what the Minister wants? In the statement he issued to the Press on 22 March 1985, when he made the big announcement about his new dairy plan, he said in part: The consumer and the nation's economy will benefit through lower prices. I wonder whether that is really what is in the back of the Minister's mind with this proposal. While the Minister may be very keen to please the consumers of this nation, he also has to realise that the dairy farmers will face considerable difficulties if pooling is not extended for two years, as suggested by the amendment. I repeat to the Minister that it is a question of giving the industry time to adjust. After all, pooling has been in place for something like 50 years, and no other industry in Australia has been asked to adjust in a matter of weeks to a quite radical change in its method of financing. I think the Minister is being quite unreasonable in expecting the industry to accept a short time in which to adjust. All this amendment asks for is an extension of two years for pooling, and after that the industry believes it will be in a position to adjust to the changes proposed under the Minister's dairy plan. Mr McVEIGH(Groom)(11.34) —I want, very briefly, to be associated with this legislation and to support the comments of my deputy leader, the honourable member for Gwydir (Mr Hunt) and the previous speaker from this side of the House, the honourable member for Wannon (Mr Hawker). It is not very often that I have the slightest disagreement with my deputy leader, but I dissociate myself slightly from his statement that he expected that the Minister for Primary Industry (Mr Kerin) would not accept our amendment. I hope the Minister will accept the amendment which was so immaculately argued by the honourable member for Gwydir because he, from practical experience, knows only too well that farmers, dairy farmers included, are a very disciplined lot. They can accept change, but they need time to accept that change. That is what the speakers from this side of the chamber were talking about. They accept the principle that the Minister is espousing. I ask the Minister to consider the recommendations of the Industries Assistance Commission. Usually he takes a lot of notice of the IAC, but his legislation flies in the teeth of the IAC recommendation. All we are suggesting to the Minister is this: As on previous occasions when he used the IAC as his authority, on this occasion please accept the IAC recommendation. Many people will be placed in very difficult situations. People associated with factories-that is, the workers-and also individual farmers will be placed in difficulty. Dairying, unlike many of the other industries in manufacturing areas, just cannot be changed overnight. Other speakers in the debate have indicated the length of time necessary for a farmer to plan his total dairying program, including his calving sequence. It is necessary for those people, if there are not to be serious distortions in their finances, to be given the time to readjust. I also indicate to the Minister that it will be necessary, under an individual export arrangement, for some of these factories to indicate overseas trading arrangements. Of course, there will be great difficulties in servicing the internal market when individual factories are faced with a proposition of being able to treat another State as an export market, as opposed to the traditional export markets overseas. If that local market may give a slightly greater return than the traditional overseas markets, it could lead to massive distortions. I know that economists cannot give us an exact answer to a given set of circumstances. All they can give us is the choice between alternatives. I remind the Minister that if he needs some assistance and guidance in chaotic conditions that can occur if the whole market situation in Australia is thrown open he should get some of his advisers to look at the situation that prevailed in the wheat marketing industry in Australia when the only State that had a statutory marketing authority was my own State of Queensland. Other States then treated the Queensland market as an export market. The end result was that the Queensland wheat farmers were faced with declining market shares because they were unable to accept other States treating them as an export market. I want to make sure that the Minister fully understands that we have certain joint ventures overseas. PT Indomilk, of which the Minister is aware, has created difficulties in the past. These markets need to be sustained if there is ever to be any hope of getting the proper Australian equity. The final point I want to comment on is that it has been particularly noticeable in this debate that none of the academics who sit opposite us has seen fit to comment on this legislation and it just worries me that those people do not really look at the programs on the television or listen to programs on the electronic media generally which actually depict the truth of the situation. Mr Nehl —They are not interested in the truth. Mr McVEIGH —The honourable member is a man who is very disciplined. I can understand that, as a great defender of the people in his own area, he felt compelled to make that kind of utterance. I understand that he did so because of his great concern for all those people. We hear so much of this mumbo-jumbo academic economic nonsense of transfer from the consumer to the producer. If some of these people had been watching a certain television program this morning-Mr Deputy Chairman, I would never take the opportunity of advertising on your program, so I will not mention that program-they would have seen Mr Andrew Robb, a distinguished Australian from the National Farmers Federation- Mr Kerin —An economist. Mr McVEIGH —An economist, but he is a true economist because he has a little bit of practical knowledge mixed with the theory. Mr Robb said that it is about time some of these people who do not really understand the significance of primary production woke up to the fact that it is indisputable and mathematically correct that there is a massive transfer from every farmer in Australia to the rest of the community of $7,000 per year. Mr Robert Brown —Rubbish! Mr McVEIGH —What a scathing indictment; that is a slur, firstly, on Mr Robb's intelligence and, secondly, on his honesty. The honourable member for Charlton (Mr Robert Brown) will put a feather in the ground one of these days and come back in two months time and wonder why it has not grown into a rooster. That is all he knows about. There has been a massive transfer, not from the consumer to the farmer, but from the farmer to the consumer. It is about time Government members in this Parliament were not recreant to the trust that has been placed in them by all of their constituents and legislated for all of them, not just a few. It is about time they told the truth about the transfer-not the transfer from the consumer to the producer, but the transfer from the real, fair dinkum Aussie, the battler, the dairy farmer, to the consumer of Australia. I hope that the Minister will accept the proposition argued so immaculately by my colleague the honourable member for Gwydir (Mr Hunt), because it is based on concern for and knowledge of the particular difficulties that face the great dairy industry of this nation. Mr KERIN(Werriwa-Minister for Primary Industry)(11.43) —Export pooling is the crunch issue in the Government's plans for the dairy industry, and I have made no secret of that. I spoke on that issue at great length in my second reading speech and again tonight in summing up the second reading debate. The fact is that at various times whole milk powder and casein could have been taken out of export pooling. Some members of the Australian Dairy Corporation called for this in 1980-81. It could have been taken out then, but the argument was that it was not the right time to take it out. It is not cussedness or spleen on behalf of the Government; it is straight out logic. We are putting up a totally new system, based on an all milk levy, based on a market support mechanism which is an explicit rather than an implicit consumer transfer. It is a totally different approach altogether. The alternative to what the Government finally decided was the Australian Dairy Industry Conference scheme. I point out that the penalty levy in that scheme would have put a cap on production and slashed production right across the board, again at different levels in different areas-I do not want to use too many academic words. A penalty levy on 7/60th of production of 8c to 10c for people who are receiving about 11c a litre for milk would have also caused distortions. Quite frankly, the Government's answer to the proposal to continue export pooling for two years for butter and cheese only, is that there is no point in continuing, even on a temporary basis, pooling which has such obvious distortions. The Government believes that it will only worsen the situation. Pooling and the domestic value for levy purposes mechanism are inducing the responses at present and adding to and compounding the problem. The Government's proposed amendments and the commitment to assist the ADC on financing will meet the essential concerns of the dairy industry; that is, the essential concerns with the immediate termination of export pooling. I suggest that if it is delayed for a year or two the situation may be worse on the international dairy market; one does not know. What we do know at present is that we do have an advantageous exchange rate and that will cushion the industry along with the adjustment assistance package we hope to develop, particularly the Victorian Government. I think the honourable member for Wannon (Mr Hawker) and the honourable member for Groom (Mr McVeigh) started to lecture the Government about using the Industries Assistance Commission report. The IAC draft report advocated the abolition of export pooling. By and large, whichever way one goes, the IAC only advises government. The IAC cannot be used as a crutch, an excuse, a saviour or a reason for a government's decision; the Government still has to go through the analysis of what the IAC is putting forward. The IAC's report was based on 1982-83 production figures. When I had discussions with the IAC Commissioners they said that if they had to report again, on the basis of more recent figures, they may report in a different way. In other words, we have to adjust our policy solution to an industry in the light of the present figures and information we have before us. At one stage I said, on the basis of an arithmetic calculation, that the support level or the price could be lifted by 9 per cent and that is when the word 'static' came up. I know that it confuses the honourable member for Cowper (Mr Nehl); it is a pretty big word, as is the word 'dynamic'. However, I did qualify what I said because the immediate reaction of the ADFF to the Government's proposal was also based on a static analysis. I will explain that to the honourable member for Cowper. Static means that everything stays still; that is, the production of the cows is the same, there is the same number of farmers, the same number of factories, all the products are the same and the rainfall is the same as it was in the previous year. That is static-nothing changes. Prices do not change and production does not change. Dynamic is when there is a bit more rain or a bit less, or some of the farmers feed their cows a little more or a little less, or people produce other products. That is dynamic. Some factories produce only two or three products. Some might produce more. Dynamic means changing. That is the difference between static and dynamic. The honourable member should understand this academic, bureaucratic talk. I apologise for it; I know that it confuses him but that is the explanation. I know that the honourable member for Groom rejoices in these things. I learnt once that he went to school. I do not know why he apologises for learning things. The National Party of Australia is the party of ignorance, fear, prejudice and insularity. It likes to perpetuate a smear. One of the easiest ways to smear anyone is to say that he is an academic or a bureaucrat. That passes for argument but really it does not wash. Most people are really sick of this sort of nonsense. Arguments have to stand on their own logic; they have to stand on their own logic in this place. I am open. I am quite happy to concede some things concerning this industry. One of the basic facts in the dairy industry that one cannot get over is that 60 per cent of the milk is produced in Victoria, another 6 per cent in Tasmania and some more in the south-east corner of South Australia. Some 87 or 88 per cent of the milk goes into manufactured products. That is what causes the problems in those States. Ninety per cent of exports come from those two States, and no plan will get over that basic fact. That is why most of the adjustment pressures will fall on those States. I had to say that in Victoria and Tasmania when I wandered around those States trying to talk to farmers. The honourable member for Groom also raised the whole question of tariffs. I will simply not open up that debate. I am sure that the honourable member for Parkes (Mr Cobb) could join in and articulate the argument far better than could the honourable member for Groom. Mr McVeigh —Go on, tell us the truth. Mr KERIN —The National Party has a terrific record. When Gough cut tariffs by 25 per cent Doug Anthony said it was a cowardly act. That was really marvellous. The National Party drove us into the ground. Here was a Labor Government which had the courage to cut tariffs by 25 per cent and that was described as a cowardly act. That is the attitude of members of the National Party. They are marvellous in opposition but when in government they never did a darn thing about it. The Liberal Party is a high protection- ist party and the Government rejects the amendment. Dr HARRY EDWARDS(Berowra)(11.51) — I am stunned by the Minister's patronising approach and the disparaging remarks he made at the end of the second reading debate. Mr McVeigh —You are upset, are you not? Dr HARRY EDWARDS —I am particularly upset by the Minister's approach. Early in his remarks he said that export pooling was the crunch issue of principle. I think it is important to note that the Opposition today has accepted that the Government's plan for the industry is correct in principle. That is what has been the plain message of the Opposition. Mr Young —Good. We want to go home. Dr HARRY EDWARDS —I want to go home too but our amendments are not about issues relating to the principle of the plan but the way in which the industry should adjust from one position to another. For the information of the Minister, the essence of the distinction between a static analysis and a dynamic analysis is whether one looks just at one position and then the new position or whether one studies how to move towards it. Dynamic analysis is all about how to move towards it . What the Minister said was nothing to do with that. It was a lot of bunkum and bull. I will not say anything beyond that. Mr Porter —He was not even a good bureaucrat. Dr HARRY EDWARDS —As my colleague says, he was not even a good academic or a good bureaucrat. We have moved an amendment to facilitate the movement from one position to another. There are good reasons why it is relevant to look to a period two years ahead. This is a point which the Minister has not mentioned. After all, he brought in his plan with the view, above all things, of reducing production. There can be no doubt that in two years time, under the impact of that plan, production will be reduced . Where the volume of production and the overhang are reduced, the prospect of making a go of export pooling is fair enough. Who knows also whether the cycle will be moving back a little and export prices will be better? Under the Minister's arrangements and proposals to spread the export subsidy over all products so that new products will be opened up for export competition, there will be even less pressure as a result. The Minister made some suggestions in regard to the financing argument. There are some very sound and good reasons why in two years time the abandonment of export pooling, which the Opposition does not oppose, would be a much better possibility. We have not opposed the plan in principle. We accept that export pooling has to go. But the scheme proposes that the level of home prices be 30 per cent above the export price-it is currently 90 per cent above the export price and the Government intends to move from a 90 per cent to a 30 per cent level-and market milk is under threat because the Government has removed stand-by legislation. In that situation there is a massive adjustment in prospect for the industry, with grave financial and social implications. We are not proposing a change of principle in the industry, but we are making a dynamic analysis of how to get to that stage. In our amendment we are asking the Government to ease the transition and retain export pooling for two years from 1 July. Amendment negatived. Clause agreed to. Proposed new clause 13A. Mr HUNT(Gwydir)(11.55) —On behalf of the Opposition, I move: Page 5, after clause 13 insert the following new clause: ''13A. Sections 20AA and 20AB of the Principal Act are repealed and the following sections substituted: Export of certain dairy products prohibited unless exporter party to arrangement '20AA (1) A person, other than the Corporation, shall not export, or cause to be exported, dairy products as specified in section 20AB from Australia unless the person is a party to an arrangement with the Corporation entered into under section 20AB that relates to those dairy products. Penalty: $1,000. '(2) The regulations may provide that this section does not apply in relation to dairy products of a prescribed class. Export sales pooling arrangements '20AB (1) In this section- ''exporter'', for the purposes of this section, means a person, a partnership or a body corporate, accepted by the Corporation as being engaged in the sale of dairy products to overseas markets; ''principal markets'' means markets or groups of markets prescribed for the purposes of this section by the Regulations; ''pool'' means a separate account set up and maintained by the Corporation in respect of the dairy products, and for the periods, specified in sub-section (2). '(2) The Corporation shall establish and maintain pools for the purpose of this section as follows- (a) butter and the commercial butter equivalent of butter oil exported between 1 July 1985 and 30 June 1986 but manufactured after 30 June 1985; (b) cheddar cheese and the natural equivalent of processed cheddar exported between 1 July 1985 and 30 June 1986 but manufactured after 30 June 1985; (c) butter and the commercial butter equivalent of butter oil exported between 1 July 1986 and 30 June 1987 but manufactured after 30 June 1985; and (d) cheddar cheese and the natural equivalent of processed cheddar exported between 1 July 1986 and 30 June 1987 but manufactured after 30 June 1985. '(3) The Corporation shall, from time to time, for the purposes of this section, fix an average price for each of the dairy products in respect of which a pool is maintained by the Corporation under sub-section (2), being a price that the Corporation considers will be the average export price for those dairy products. '(4) The Corporation may, from time to time, for the purposes of this section, fix assessed export prices for each principal market for each of the dairy products in respect of which a pool is maintained by the Corporation under sub-section (2), being prices that the Corporation considers appropriate at the time and in the circumstances. '(5) The Corporation may, with the approval of the Minister, make to persons engaged in the production, storage, distribution, sale, export or promotion of dairy products payments to meet expenses incurred in the storage, distribution, sale, export or promotion of dairy products to which this section applies and, where any such payment is made, the amount of the payment shall be debited to the appropriate pool. '(6) Where an exporter makes sales of dairy products, in respect of which a pool is maintained by the Corporation under sub-section (2), to a principal market and the assessed price for the relevant principal market at the time of the sale is greater than the average price for the product determined under sub-section (3), the exporter shall be required to pay to the Corporation for the purposes of the relevant pool the difference between the average price for the product and the assessed price for the product in the relevant principal market. '(7) Where an exporter makes sales of dairy products, in respect of which a pool is maintained by the Corporation under sub-section (2), to a principal market and the assessed price for the relevant principal market at the time of the sale is less than the average price for the product determined under sub-section (3), the Corporation shall pay to the exporter from the funds available for the purposes of the relevant pool the difference between the average price for the product and the assessed price for the product in the relevant principal market. '(8) Where, at the end of each financial year, the Corporation is satisfied that no more amounts will be credited or debited to any of the pools established pursuant to sub-section (2), the Corporation may- (a) if the funds in the relevant pool are in credit, divide the amount of the credit amongst exporters who have contributed funds to the pool in accordance with sub-section (6) in the year in question, in proportion to their respective contributions to the pool; or (b) if the funds in the relevant pool are in deficit, transfer an amount equal to the deficit from the Supplementary Market Support Trust Fund established under section 28 of the Dairy Market Support Act 1985. '(9) Where the Corporation engages in the export of dairy products of the kinds specified and during the periods specified in sub-section (2) it shall, for the purposes of sub-sections (6), (7) and (8) be considered to be an exporter.'.''. The debate has centred really around the substance contained in proposed new clause 13A; that is, the question of export pooling. I addressed myself to this particular amendment when dealing with the earlier two consequential amendments. I make one further comment about 'static' and 'dynamic'. There is one thing about the Minister for Primary Industry (Mr Kerin): He is not what I would call static, because in a Press statement on 12 November-and I quote him again, as I did earlier today-he said: . . . I have not moved away from the levy-entitlement plan negotiated between me and the Australian Dairy Industry Council and supported by the Australian Dairy Farmers Federation. Is the Minister flexible? Is he dynamic or is he static? I do not think he is very ecstatic about that comment. On behalf of the Opposition I once again commend the amendment printed in my name to retain the pooling arrangement for a two-year period. I make that final appeal because I think it is absolutely critical to an orderly transition from the existing marketing regime to one that is going to be presumably more market-oriented. I know that the industry, in the factories, is going to have to make all sorts of adjustments in respect of its financing arrangements for the Australian Dairy Corporation and with other lending facilities. Also, as I said earlier, there is the production problem for farmers who have a two and a half year overall planning and breeding cycle for their herds. It is very hard to try to get farmers with livestock to suddenly change, diversify or adjust in the period inherent in the Bill now before the Committee. Mr KERIN(Werriwa-Minister for Primary Industry)(11.57) —The Government opposes this amendment for the reasons stated in my previous comments on this Bill. I am prepared to concede that I am flexible, as long as that is all right by the honourable member for Berowra (Dr Harry Edwards). Question put: That the proposed new clause 13A (Mr Hunt's amendment) be inserted. The Committee divided. (The Deputy Chairman-Mr J. G. Mountford) Ayes . . . . . . . . . . . 59 Noes . . . . . . . . . . . 74 —— Majority . . . . . . . . . 15 —— Adermann, A. E. Howard, J. W.Aldred, K. J. Hunt, R. J. D.Andrew, J. N. Jull, D. F.Beale, J. McArthur, F. S.Blunt, C. W. McGauran, P. J.Braithwaite, R. A. MacKellar, M. J. R.Brown, N. A. McVeigh, D. T.Burr, M. A. Miles, C. G.Cadman, A. G. Millar, P. C.Cameron, Donald Moore, J. C.Cameron, Ewen (Teller) Nehl, G. B.Cameron, Ian Porter, J. R.Carlton, J. J. Reith, P. K.Cobb, M. R. Robinson, IanColeman, W. P. Rocher, A. C.Connolly, D. M. Ruddock, P. M.Conquest, B. J. Shack, P. D.Cowan, D. B. Sharp, J.Downer, A. J. G. Shipton, R. F.Drummond, P. H. Sinclair, I. McC.Edwards, Harry Slipper, P. N.Everingham, P. A. E. Smith, W.Fife, W. C. Spender, J. M.Fischer, Tim Sullivan, K. J.Goodluck, B. J. Tuckey, C. W.Hall, Steele Watson, DavidHalverson, R. G. Webster, A. P.Hawker, D. P. M. White, P. N. D.Hicks, N. J. (Teller) Wilson, I. B. C.Hodgman, W. M. Baldwin, P. J. Jacobi, R.Beazley, K. C. Jakobsen, C. A.Beddall, D. P. Keating, P. J.Bilney, G. N. Kelly, R. J.Blanchard, C. A. Kent, L.Blewett, N. Keogh, L. J.Bowen, Lionel Kerin, J. C.Brown, John Klugman, R. E.Brown, Robert Lamb, A. H.Brumby, J. M. Langmore, J. V.Campbell, G. Lee, M.Charles, D. E. Lindsay, E, J.Charlesworth, R. I. McHugh, J.Chynoweth, R. L. McLeay, LeoCleeland, P. R. Maher, M. J.Cohen, B. Martin, S. P.Cross, M. D. Mayer, H.Cunningham, B. T. (Teller) Milton, P.Dawkins, J. S. Morris, AllanDubois, S. G. Morris, PeterDuffy, M. J. O'Keefe, N. P.Duncan, P. O'Neil, L. R. T.Edwards, Ronald Price, L. R. S.Fatin, W. F. Punch, G. F.Fitzgibbon, E. J. Saunderson, J.Free, R. V. Scholes, G. G. D.Gayler, J. Scott, J. L.Gear, G. Simmons, D. W.Gorman, R. N. J. Snow, J. H.Grace, E. L. Staples, P. R.Griffiths, A. G. Theophanous, A. C.Hand, G. L. Tickner, R. E.Holding, A. C. Uren, T.Hollis, C. West, S. J.Howe, B. L. Willis, R.Humphreys, B. C. (Teller) Wright, K. W.Hurford, C. J. Young, M. J. Dobie, J. D. M. Mildren, J. B.Fisher, Peter Hayden, W. G.Hodges, J. C. Jenkins, H. A. Question so resolved in the negative. Wednesday, 15 May 1985 Remainder of Bill-by leave-taken as a whole, and agreed to. Bill reported without amendment; report adopted. Bill (on motion by Mr Kerin)-by leave-read a third time. Consideration resumed from 9 May, 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. Clauses 1 to 5-by leave-taken together, and agreed to. Clause 6 (Time for payment of market support levy). Mr KERIN(Werriwa-Minister for Primary Industry)(12.10 a.m.) —by leave-I move: (1) Clause 6, page 3, line 27, omit ''28 days'', insert ''the relevant period''. (2) Clause 6, page 3, after sub-clause (1), insert the following new sub-clause: ''(1A) In sub-section (1), the reference to the relevant period shall be construed as a reference to- (a) in any case other than a case to which regulations in force under paragraph (b) apply-the period of 28 days; or (b) in a case where regulations are in force prescribing a specified period, being a period of more than 28 days, as the relevant period in respect of particular relevant dairy produce-the period so prescribed.''. These amendments provide a mechanism whereby the due date for collection of market support levy may be varied from time to time. If left unamended, sub-clause 6 (1) would require market support levy to be paid 28 days after the last day of the month in which the leviable product was produced. The amendments are designed to enable the period before payment is due to be extended in order to improve the cash flow position of manufacturers during the early months of operation of the new arrangements. If, for example, the due date for payment of levy were initially delayed until three months after the month in which the produce was produced, manufacturers would by this time have begun to receive market support payments. In turn, manufacturers will be able to offer suppliers a higher initial payment for their milk. Mr HUNT(Gwydir)(12.12 a.m.) —The Opposition does not oppose these changes to the legislation. We understand that they are to improve the availability of finance to the industry, as a saver, overcoming some of the difficulties in the Bill caused by the fact that, as it is presently printed, the Bill does not contain provisions for the continuation of an export pool. Amendments agreed to. Clause, as amended, agreed to. Clauses 7 to 18-by leave-taken together, and agreed to. Clause 19 (Rate of market support payments in relation to prescribed dairy produce). Mr HUNT(Gwydir)(12.13 a.m.) —Clause 19 determines support payments on prescribed products using a percentage of the average export price. There is a related factor in this in respect of clause 20. In my response to the second reading speech, I foreshadowed that the Opposition would move to allow for a change to the list of products under clause 19 on the recommendation of the Australian Dairy Corporation. This recommendation would be made after consultation with the industry parliament, that being the Australian Dairy Industry Conference. This gives the industry a means of control over the mechanism for determining the export market support payments on individual products, which are funded by the industry itself through a levy on all milk. It would introduce a useful check on the government of the day to ensure that further anomalies, such as that with whole milk powder, to which I referred earlier today, are not introduced at some future time with other products. On behalf of the Opposition I formally move: (1) Clause 19, page 9, lines 2-11, omit sub-clause (1), substitute the following sub-clauses: '' (1) Where dairy produce that is exported from Australia was, at the commencement of the marketing year during which it is so exported, dairy produce of a kind that was, in accordance with the provisions of sub-sections (1A) and (1B), prescribed dairy produce for the purposes of this Act, the rate at which market support payments are payable in respect of dairy produce of that kind is the amount per unit of that dairy produce that is equal to the difference between the export target price in relation to each such unit of dairy produce of that kind in respect of that marketing year and the estimated average price in force in relation to each such unit of dairy produce of that kind that is so exported during that marketing year at the time when that unit of dairy produce is so exported. '' (1A) For the purposes of this section, and notwithstanding anything contained elsewhere in this Act, 'prescribed dairy produce', unless otherwise determined in accordance with the provisions of sub-section (1B), means butter, cheddar cheese, skimmed milk powder and casein. '' (1B) The definition of 'prescribed dairy produce' for the purposes of this section provided in sub-section (1A) may only be varied by instrument in writing signed by the Minister. '' (1C) The Minister shall not sign an instrument under the provisions of sub-section (1B) unless it is fully in accordance with a recommendation, in writing, of the Corporation. '' (1D) The Corporation shall not make a recommendation under sub-section (1C) to the Minister unless it has consulted with the Conference on the matter.''. Mr KERIN(Werriwa-Minister for Primary Industry)(12.15 a.m.) —It is my understanding that this amendment would allow market support payments for whole milk powder to be determined by the Australian Dairy Corporation rather than by use of the target price mechanism. This is rejected by the Government on the grounds that the target price mechanism reflects market prices. The objective is that as many products as possible should obtain market support payment based on what the market says they are worth. Whole milk powder has been disadvantaged under the previous arrangements. Essentially, the discrimination against whole milk powder is now being removed. Allegations were also made during the debate that we were advantaging the multinationals as opposed to the co-operatives. The co-operatives have the opportunity to produce whole milk powder if they can find markets. Surely, the Opposition is not suggesting that the Government should actively discriminate against multinationals. Question put: That the amendment (Mr Hunt's) be agreed to. The Committee divided. (The Deputy Chairman-Mr J. G. Mountford) Ayes . . . . . . . . . . . 58 Noes . . . . . . . . . . . 73 —— Majority . . . . . . . . . 15 —— Aldred, K. J Howard, J. W.Andrew, J. N. Hunt, R. J. D.Beale, J. Jull, D. F.Blunt, C. W. McArthur, F. S.Braithwaite, R. A. McGauran, P. J.Brown, N. A. MacKellar, M. J. R.Burr, M. A. McVeigh, D. T.Cadman, A. G. Miles, C. G.Cameron, Donald Millar, P. C.Cameron, Ewen (Teller) Moore, J. C.Cameron, Ian Nehl, G. B.Carlton, J. J. Porter, J. R.Cobb, M. R. Reith, P. K.Coleman, W. P. Robinson, IanConnolly, D. M. Rocher, A. C.Conquest, B. J. Ruddock, P. M.Cowan, D. B. Shack, P. D.Downer, A. J. G. Sharp, J.Drummond, P. H. Shipton, R. F.Edwards, Harry Sinclair, I. McC.Everingham, P. A. E. Slipper, P. N.Fife, W. C. Smith, W.Fischer, Tim Spender, J. M.Goodluck, B. J. Sullivan, K. J.Hall, Steele Tuckey, C. W.Halverson, R. G. Watson, DavidHawker, D. P. M Webster, A. P.Hicks, N. J. (Teller) White, P. N. D.Hodgman, W. M. Wilson, I. B. C. Baldwin, P. J. Jacobi, R.Beazley, K. C. Jakobsen, C. A.Beddall, D. P. Keating, P. J.Bilney, G. N. Kelly, R. J.Blanchard, C. A. Kent, L.Blewett, N. Keogh. L. J.Bowen, Lionel Kerin, J. C.Brown, John Klugman, R. E.Brown, Robert Lamb, A. H.Brumby, J. M. Langmore, J. V.Campbell, G. Lee, M.Charles, D. E. Lindsay, E.J.Charlesworth, R. I. McHugh, J.Chynoweth, R. L. McLeay, LeoCleeland, P. R. Maher, M. J.Cohen, B. Martin, S. P.Cross, M. D. Mayer, H.Cunningham, B. T. (Teller) Milton, P.Dawkins, J. S. Morris, AllanDubois, S. G. Morris, PeterDuffy, M. J. O'Keefe, N. P.Duncan, P. O'Neil, L. R. T.Edwards, Ronald Price, L. R. S.Fatin, W. F. Punch, G. F.Fitzgibbon, E. J. Saunderson, J.Free, R. V. Scholes, G. G. D.Gayler, J. Scott, J. L.Gear, G. Simmons, D. W.Gorman, R. N. J. Snow, J. H.Grace, E. L. Staples, P. R.Griffiths, A. G. Theophanous, A. C.Hand, G. L. Tickner, R. E.Holding, A. C. Uren, T.Hollis, C. West, S. J.Howe, B. L. Wright, K. W.Humphreys, B. C. (Teller) Young, M. J.Hurford, C. J. Dobie, J. D. M. Mildren, J. B.Fisher, Peter Hayden, W. G.Hodges, J. C. Jenkins, H. A. Question so resolved in the negative. Mr KERIN(Werriwa-Minister for Primary Industry)(12.25 a.m.) —I move: (3) Clause 19, page 9, line 16, omit ''within a period of'', insert ''not earlier than''. This amendment is designed to remedy a fault in sub-clause 19 (2) which could technically have resulted in the market support payments system being inoperative in the first year of the operation of the legislation. It is merely a correction. Mr HUNT(Gwydir)(12.26 a.m.) —The Opposition has no objection to this amendment. Amendment agreed to. Mr HUNT(Gwydir)(12.26 a.m.) —I move: (2) Clause 19, page 11, line 19, omit ''declared by the regulations'', substitute ''determined in accordance with sub-sections (1A) and (1B)''. I addressed myself to this matter during the course of my speech at the second reading stage and earlier in the evening. This amendment is complementary to what has been discussed. Therefore, I do not intend to proceed any further at this stage other than to say that the Opposition very strongly supports this amendment. Mr KERIN(Werriwa-Minister for Primary Industry)(12.27 a.m.) —The Government opposes the amendment. Amendment negatived. Clause, as amended, agreed to. Remainder of Bill-by leave-taken as a whole. Mr HUNT(Gwydir)(12.28 a.m.) —by leave-I move: (3) Clause 20, pages 11 and 12, omit the clause, substitute the following clause: Rate of market support payments in relation to dairy produce other than prescribed dairy produce. ''20. Where dairy produce that is exported from Australia was not, at the commencement of the marketing year during which it is so exported, dairy produce of a kind that was prescribed dairy produce for the purposes of section 19, the rate at which market support payments are payable in respect of dairy produce of that kind is such amount per unit of dairy produce of that kind as the Corporation determines in writing, from time to time, to be appropriate having regard to the rates of market support payments that are applicable to dairy produce of kinds that were, at the commencement of that marketing year, so declared to be prescribed dairy produce.''. (4) Clause 29, page 16, line 27, after paragraph (e), insert the following paragraph: ''(ea) money repaid to the Supplementary Fund, being money that was lent out of the Supplementary Fund to the Corporation for the purposes of the operation of the pools established pursuant to sub-section 20AB (2) of the Dairy Produce Act 1924;''. (5) Clause 32, page 18, line 22, after paragraph (d), insert the following paragraph: ''(da) in making loans out of the Supplementary Fund to the Corporation for the purposes of the operation of the pools established pursuant to sub-section 20AB (2) of the Dairy Produce Act 1924;''. These are consequential amendments to other provisions that we sought in respect of the legislation which relate to the restoration of export pooling for two years. Mr KERIN(Werriwa-Minister for Primary Industry)(12.29 a.m.) —The Government opposes the amendments for reasons that I have already stated. Amendments negatived. Remainder of Bill agreed to. Bill reported with amendments; report-by leave-adopted. Bill (on motion by Mr Kerin)-by leave-read a third time. Consideration resumed from 9 May, on motion by Mr Kerin: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Clauses 1 to 6-by leave-taken together, and agreed to. Clause 7 (Rate of levy). Mr HUNT(Gwydir)(12.32 a.m.) —I move: Clause 7, pages 3 and 4, proposed section 7, omit sub-sections (2) to (10) (both inclusive), substitute the following sub-sections: ''(2) The rate at which levy is imposed on dairy products of a particular kind being dairy products that are produced on or after 1 July 1985 and sold during the year commencing 1 July 1986 is equal to the rate determined by the Minister for the purpose on the day before the commencement of that year. ''(3) The rate at which levy is imposed on dairy products of a particular kind, being dairy products that are produced on or after 1 July 1985 and sold during the year commencing on 1 July 1987, is a rate that is calculated on a day determined by the Minister for the purpose, being a day occurring before the commencement of that year, by multiplying the rate of levy applicable to dairy products of that kind that are sold in the year ending 30 June 1987 by .75. ''(4) The rate at which levy is imposed on dairy products of a particular kind, being dairy products that are produced on or after 1 July 1985 and sold during the year commencing on 1 July 1988, is a rate that is calculated on a day determined by the Minister for the purpose, being a day occurring before the commencement of that year, by multiplying the rate of levy applicable to dairy products of that kind that are sold in the year ending 30 June 1987 by .5. ''(5) The rate at which levy is imposed on dairy products of a particular kind, being dairy products that are produced on or after 1 July 1985 and sold during the year commencing on 1 July 1989, is a rate that is calculated on a day determined by the Minister for the purpose, being a day occurring before the commencement of that year, by multiplying the rate of levy applicable to dairy products of that kind that are sold in the year ending 30 June 1987 by .25. ''(6) No levy under this section shall be payable in respect of dairy products that are produced after 30 June 1990.''. I have moved this amendment in the hope that the Government will accept the wisdom of extending the current domestic prices for two years and then phase the product levy out in four equal steps. This will maintain real support levels for production during 1985-86 and 1986-87, overcoming the rapid cut to butter and cheese levies and providing a more predictable phase out of the product levies. This is totally consistent with the approach that we adopted to the export pooling arrangements. We have endeavoured to ensure that there is a proper and smooth transition to the phase down of the product levies. We are not suggesting that the Government maintain them beyond a certain period. I know the Minister for Primary Industry (Mr Kerin) has an amendment that is also designed to achieve that objective. But in the second year the great hike that will occur, notwithstanding the change in the factor from 0.4 to 0.5 which will probably result in about a 10 per cent reduction in the overall anticipated 60 per cent fall in the product levy in the second year, will still be a very harsh drop even in the current pricing circumstances, notwithstanding the effects of devaluation. Clearly, the Opposition and the industry, particularly the manufacturing industry, are concerned to ensure that there is a smooth transition. Therefore, on behalf of the Opposition I once again make a very earnest appeal to the Government to give serious consideration to the amendment and not just wave it aside with some inconsequential request. I know there is very strong support in the Parliament for this approach. Many members opposite would like to have the opportunity of supporting this approach. The honourable member for Groom (Mr McVeigh), who has been taking a great interest in this debate, also has a great sense of urgency in regard to this matter. I think the time has come when we should, once again, say: 'John Kerin, please give this your earnest attention. Don't forget us'. Mr HAWKER(Wannon)(12.35 a.m.) —I support the amendment. It is in the same vein as the amendment on pooling. All it asks is that the Government give the industry a little time to adjust and that product levies be maintained for two years and then phased out over four years. That is not an unreasonable request in the light of what industry is now going through and the problems that confront it. That is all that is being asked. I draw the attention of the Minister for Primary Industry (Mr Kerin) to a matter he brushed aside earlier when he talked about the effect on the closer economic relationship with New Zealand. If this amendment on levies and that on pooling are rejected by the Government, the Australian Dairy Corporation will be in a real bind when it comes to consulting with the New Zealand dairy industry. The ADC will not be able to predict exactly where the price of our exports is going and, more importantly, what will be the position on co-operation with New Zealand as outlined in the CER document. The memorandum of understanding on dairy products makes clear that the members of the Joint Dairy Industry Consultative Committee place on record that it will consult twice a year. The memorandum says that the consultations have the mutual objective of sustaining the confidence of the industries in both countries and not undermining the returns to the industries of either country. The memorandum states a little later: Consistent with the increasing degree of co-operation between the two countries, which is envisaged in the CER, the JICC would like to see more specific action by the New Zealand Dairy Board and the Australian Dairy Corporation to develop further co-operation in international markets, in the interest of optimising returns to the industries in both countries. Without these two amendments, that will be impossible. The ADC will not know what sort of pricing arrangements will be undertaken and Australian manufacturers will be forced to undercut their New Zealand counterparts just to get the business. Without these amendments the Minister is undermining the understanding developed under CER. I have much pleasure in supporting the amendment. Question put: That the amendment (Mr Hunt's) be agreed to. The Committee divided. (The Deputy Chairman-Mr J. G. Mountford) Ayes . . . . . . . . . . . 58 Noes . . . . . . . . . . . 73 —— Majority . . . . . . . . . 15 —— Aldred, K. J. Howard, J. N.Andrew, J. N. Hunt, R. J. D.Beale, J. Jull, D. F.Blunt, C. W. McArthur, F. S.Braithwaite, R. A. McGauran, P. J.Brown, N. A. MacKellar, M. J. R.Burr, M. A. McVeigh, D. T.Cadman, A. G. Miles, C. G.Cameron, Donald Millar, P. C.Cameron, Ewen (Teller) Moore, J. C.Cameron, Ian Nehl, G. B.Carlton, J. J. Porter, J. R.Cobb, M. R. Reith, P. K.Coleman, W. P. Robinson, IanConnolly, D. M. Rocher, A. C.Conquest, B. J. Ruddock, P. M.Cowan, D. B. Shack, P. D.Downer, A. J. G. Sharp, J.Drummond, P. H. Shipton, R. F.Edwards, Harry Sinclair, I. McC.Everingham, P. A. E. Slipper, P. N.Fife, W. C. Smith, W.Fischer, Tim Spender, J. M.Goodluck, B. J. Sullivan, K. J.Hall, Steele Tuckey, C. W.Halverson, R. G. Watson, DavidHawker, D. P. M. Webster, A. P.Hicks, N. J. (Teller) White, P. N. D.Hodgman, W. M. Wilson, I. B. C. Baldwin, P. J. Jacobi, R.Beazley, K. C. Jakobsen, C. A.Beddall, D. P. Keating, P. J.Bilney, G. N. Kelly, R. J.Blanchard, C. A. Kent, L.Blewett, N. Keogh, L. J.Bowen, Lionel Kerin, J. C.Brown, John Klugman, R. E.Brown, Robert Lamb, A. H.Brumby, J. M. Langmore, J. V.Campbell, G. Lee, M.Charles, D. E. Lindsay, E. J.Charlesworth, R. I. McHugh, J.Chynoweth, R. L. McLeay, LeoCleeland, P. R. Maher, M. J.Cohen, B. Martin, S. P.Cross, M. D. Mayer, H.Cunningham, B. T. (Teller) Milton, P.Dawkins, J. S. Morris, AllanDubois, S. G. Morris, PeterDuffy, M. J. O'Keefe, N. P.Duncan, P. O'Neil, L. R. T.Edwards, Ronald Price, L. R. S.Fatin, W. F. Punch, G. F.Fitzgibbon, E. J. Saunderson, J.Free, R. V. Scholes, G. G. D.Gayler, J. Scott, J. L.Gear, G. Simmons, D. W.Gorman, R. N. J. Snow, J. H.Grace, E. L. Staples, P. R.Griffiths, A. G. Theophanous, A. C.Hand, G. L. Tickner, R. E.Holding, A. C. Uren, T.Hollis, C. West, S. J.Howe, B. L. Wright, K. W.Humphreys, B. C. (Teller) Young, M. J.Hurford, C. J. Dobie, J. D. M. Mildren, J. B.Fisher, Peter Hayden, W. G.Hodges, J. C. Jenkins, H. A. Question so resolved in the negative. Mr KERIN(Werriwa-Minister for Primary Industry)(12.45 a.m.) —I move: Clause 7, page 3, line 10, omit ''0.4'', insert ''0.5''. This simply adjusts one of the parameters in the formula. The most fearful interpretation of the way the formula would work at one stage said that the market support would phase out after three years. Always implicit in the formula as far as the Government was concerned was that the support could go out to six years. This will certainly mean that there will be market support for longer than there would have been if the parameter had not been changed. The Opposition has the view that we could replace the formula by phasing out the product levies and that would be taking the equal step approach. We have examined that proposal quite comprehensively. Basically the Government is sticking to its guns and going for a formula approach, believing that it is a more rational way of taking account of the pace of adjustment. What we are doing is modifying the formula to phase out over a longer period. This, of course, is a part of a package of a new approach to this industry. We have a market support levy, we have an all-milk levy and we have a formula in terms of phasing out that market support levy. In terms of whether one goes, in dollar terms, for a formula approach or a stepped approach, the situation will probably be very different at various times. But at least with the Government's approach, if production drops more support will be given to the manufacturing sector which needs the most assistance. There could be quite a bit of support going all the way to 1991 when there is a sunset clause in the legislation. Mr HUNT(Gwydir)(12.47 a.m.) —The Opposition opposes this amendment as it, indeed, opposes the original provision in the Bill because we do not believe that even the amendment goes far enough in relation to the transitional reduction rate on the levy. But I concede the fact that the Minister for Primary Industry (Mr Kerin) has recognised that the Bill, as printed, is a bit rugged. I think the Government has attempted to face up to that problem. I hope that between now and when this Bill is likely to come back to the House of Representatives, the Government will give further consideration to the formula we have established which gives the two years transitional period and then a drop at the rate of 25 per cent per annum. I will not call for a division. We divided on the last issue. I think it is time we all went home. Those of us who have cows to milk had better get home to do it. Amendment agreed to. Clause, as amended, agreed to. Remainder of Bill-by leave-taken as a whole, and agreed to. Bill reported with an amendment; report-by leave-adopted. Bill (on motion by Mr Kerin)-by leave-read a third time. House adjourned at 12.50 a.m. (Wednesday) The following notices were given: Mr Howe to present a Bill for an Act relating to social security, repatriation and other matters. Dr Blewett to present a Bill for an Act to amend various laws relating to health, and for related purposes. Dr Blewett to present a Bill for an Act relating to the grant of financial assistance to the States and the Northern Territory with respect to nurse education. Dr Blewett to present a Bill for an Act to amend the States Grants (Tertiary Education Assistance) Act 1984. Mr Duffy to present a Bill for an Act to amend the Broadcasting and Television Act 1942 and for related purposes. Mr Duffy to present a Bill for an Act to make certain amendments in consequence of the enactment of the Broadcasting and Television Amendment Act 1985. The following papers were deemed to have been presented on 14 May 1985: Fisheries Act-Notices, Nos 135, 141. Public Service Act-Parliamentary Presiding Officers' Determination-1985-No. 2. The following answers to questions were circulated: (Question No. 83) Mr Spender asked the Minister for Defence, upon notice, on 25 February 1985: What responsibilities has he allocated to the Ministers Assisting the Minister for Defence. Mr Beazley —The answer to the honourable member's question is as follows: Responsibilities of the Minister for Sport, Recreation and Tourism as Minister Assisting the Minister for Defence. (a) (1) Recruiting; (2) Financial conditions of service including Retirement and Death Benefits matters; (3) Housing; (4) General employment policies; (5) Education, training and development other than operational training; (6) Establishment variations and endorsement of promotions at one star level; (7) Posting of one star officers to appointments which have more than single Service implications. (b) Civilian industrial relations issues but excluding those relating to the Defence factories and stockyards. (c) Administration of the Army and Air Force Canteens Service. (d) Financial services including: (1) Administration of financial policy for the Department and the Defence Force including Defence contracts, agreements, military operations and scientific and industrial undertakings; (2) Administration of policy and accounting operations for all Defence expenditure including management and payment of Defence Force salaries; (3) Oversight internal audit and efficiency review functions. (e) Responsibility for Defence facilities including capital works, property acquisition, repair and maintenance, environmental factors and dealings with the Parliamentary Standing Committee on Public Works. (f) Attention to the following activities and duties related to and arising from the discharge of the responsibilities listed above: (1) Initiation of and replies to correspondence from all sources except the Prime Minister and Minister's constituents; (2) Handling of less important legislation; (3) Processing of routine formal instruments; (4) Ceremonial and hospitality functions including representing the Minister at graduations and parades; (5) Clearance of departmental media releases. (g) Expenditure approval against Defence appropriations and programmes within the amount included for the appropriation item, provided that: (1) there are no substantive policy issues involved; (2) expenditure does not exceed $3m in any one case; (3) for expenditure against capital equipment and facilities projects, the amount is within the existing project approval given by the Minister for Defence; and (4) where variation in expenditure is involved, the variation does not exceed 10% of the Minister's latest approval and the cumulative total of variations does not exceed $3 million. Responsibilities of the Minister for Communications as Minister Assisting the Minister for Defence. (a) The administration of defence production policy as it relates to the Defence owned and operated factories and dockyards. (b) The administration of Defence factory and dockyard personnel, including their conditions of service. (c) Industrial relations in the Defence factories and dockyards. (d) Matters requiring Ministerial attention, other than those allocated to the Hon. J. J. Brown as Minister Assisting, but which do not call for the personal attention of the Minister for Defence. (e) Attention to the following activities and duties related to and arising from the discharge of the responsibilities listed above: (1) Initiation of and replies to correspondence from all sources except the Prime Minister and the Minister's constituents; (2) Handling of less important legislation; (3) Processing of routine formal instruments; (4) Ceremonial and hospitality functions, including representing the Minister at graduations and parades; and (5) Clearance of departmental media releases. (f) Expenditure approval against Defence appropriations and programmes within the amount included for the appropriation item, provided that: (1) there are no substantive policy issues involved; (2) expenditure does not exceed $3m in any one case; (3) for expenditure against capital equipment and facilities projects, the amount is within the existing project approval given by the Minister for Defence; and (4) where variation in expenditure is involved, the variation does not exceed 10% of the Minister's latest approval and the cumulative total of variations does not exceed $3 million. (Question No. 102) Mr Adermann asked the Minister for Health, upon notice, on 25 February 1985: Has his Department allowed payments to pharmacists to remain unpaid for long periods; if so, (a) why has this occurred, (b) when will outstanding payments be made and (c) will his Department ensure that accounts are paid promptly in future. Dr Blewett —The answer to the honourable member's question is as follows: My Department is responsible for processing national health scheme (NHS) and repatriation pharmaceutical benefits claims. Repatriation claims continue to be processed for payment within 30 calendar days of receipt in line with undertakings given by successive Ministers. Unfortunately, however, NHS pharmaceutical benefits processing backlogs developed in most States. Factors which contributed to those backlogs include: productivity losses during the retraining of staff for the new PHARMPAY processing system; industrial disputation related to PHARMPAY staff classification issues and the recent Public Service staff associations' campaign for salary increases: a high incidence of repetition strain injury among processing staff; the enforced relocation of some processing centres because of asbestos issues (asbestos insulation prevented recabling); and mail delays, transport and power disputes. To reduce inconvenience to pharmacists, arrangements were made to pay them an estimated 90 per cent of the value of their NHS claims within 14 days of receipt by my Department. However, delays in paying the balance of the claims became unacceptable. I am conscious of the need to overcome these delays and I have approved an interim arrangement to pay the estimated outstanding value of claims for NHS dispensing. Payments on these outstanding claims are currently being processed. I anticipate that payment of the outstanding balances will be achieved by the end of May 1985. (Question No. 204) Mr Ruddock asked the Special Minister of State, upon notice, on 20 March 1985: (1) How many employees of the Minister's Department receive a language availability performance allowance? (2) Is any record kept of the languages spoken by the staff and the availability of such staff receiving this allowance to meet the needs of the clients of the Minister's Department. (3) What operational procedures are in place to ensure that all such skills for which allowances are paid are effectively used in pursuit of the Minister's Department's objectives. Mr Young —The answer to the honourable member's question is as follows: (1) Nil. (2) No. (3) Not applicable. (Question No. 328) Mr Wright asked the Minister for Health, upon notice, on 21 March 1985: (1) Will he investigate the concept of enabling people outside Medicare centres to ring Medicare offices either on a reverse charge basis or using the 008 call system. (2) Will he consider setting up Medicare agencies in the larger country towns as part of a 'one stop shop' concept to provide a wide range of Commonwealth services. Dr Blewett —The answer to the honourable member's question is as follows: (1) Not at this time. The 008 mechanism has been used as a means of providing information to the public relating to a new scheme or changed arrangements. However once a scheme has been accepted by the public the facility has proved of little use in supporting administrative arrangements and is not seen as an appropriate means of addressing the problems highlighted by the honourable member. Utilisation of the reverse charge arrangements may be even more costly and operationally difficult. (2) The establishment of a Medicare office in a remote area would not in itself address the concept of one stop community services. Before considering such a proposal there would need to be a thorough investigation to establish the range of services to be offered by other Government bodies, the costs involved, the likely utilisation and the degree of administrative integration necessary to achieve the objectives. I do not feel that an investigation at this time would be useful since the concept suggested implies a greater integration of programs, computer systems and procedures than is currently possible. (Question No. 339) Mr Lloyd asked the Minister for Aviation, upon notice, on 21 March 1985: Is it a fact that Department of Aviation Regulation AGA-7 was introduced over 20 years ago and that none of the helipads in Sydney fully complies with it; if so, what is being done to revise this standard. Mr Peter Morris —The answer to the honourable member's question is as follows: The general requirements for helipads contained in AIP AGA-7 were first formulated in 1967 following an evaluation of International Civil Aviation Organisation and overseas practices. It is not correct to say that none of the existing helipads in the Sydney area meets these requirements, although many require specific approval simply because of their proximity to Sydney or some other airport. A review of the required physical characteristics for helipads was initiated on 15 November 1983 by a committee which included three industry representatives. Progress of the work of the committee is addressed in my response to Question No. 344. (Question No. 340) Mr Lloyd asked the Minister for Aviation, upon notice, on 21 March 1985: Is it a fact that Qantas is required to pay for a departmental inspector to check any new airport Qantas may wish to use overseas; if so, what are the reasons. Mr Peter Morris —The answer to the honourable member's question is as follows: Yes: A part of the Secretary's statutory responsibility is to satisfy himself as to the safety of Australian airline operations within Australia and overseas. One means of achieving this is to inspect periodically airports, routes and facilities utilised by Australian operators. While many countries conform to International Civil Aviation Organisation standards, experience with operating conditions at a number of overseas airports suggests that safe operations into international airports in every country cannot in prudence be assumed. In consequence, specialist departmental officers carry out an initial inspection of each new airport proposed for use by Qantas to assess the degree of compliance with ICAO standards, and to impose appropriate limitations on the use of such an airport if compliance is not met. The charge for this important service is borne by the operator proposing the use of the airport in the first instance. The costs of subsequent routine inspections are borne by the Department. (Question No. 344) Mr Lloyd asked the Minister for Aviation, upon notice, on 21 March 1985: (1) Who are the members of the committee to review the requirements for helicopter landing areas. (2) When will this committee report. (3) What will be the procedure for the adoption of the committee's recommendations. (4) Is the Darling Harbour helipad included in this review. Mr Peter Morris —The answer to the honourable member's question is as follows: (1) The members of the committee which reviewed helipad requirements were: Mr R. C. O'Day-Chairman-Department of Aviation Mr W. English-Vowell Air Services (Helicopters) Pty Ltd Mr K. Gosling-Trident Helicopters Pty Ltd Mr T. Summers-Rex Aviation Ltd Mr H. von Muenchhausen-Department of Aviation Mr C. F. Daley-Department of Aviation (2) The committee reported on 6 April 1984. (3) The draft of the revised requirements was issued to the industry for comment as Aviation Regulatory Proposal (ARP) 84/9 on 23 May 1984. Following incorporation of a number of industry suggestions it was re-issued on 19 November 1984. Further amendments have now been made and early action is being taken to publish the new requirements in a revision of Aeronautical Information Publication AGA-7-Authorised Helicopter Landing Sites. (4) The purposes of the review was to determine new general authorisation requirements for helicopter landing sites, and therefore the review did not address any one helipad specifically. (Question No. 405) Mr Porter asked the Minister for Health, upon notice, on 22 March 1985: (1) Is it a fact that in New South Wales his Department is currently processing claims lodged by pharmacists for National Health Service prescriptions dispensed on 7 December 1984. (2) When will the Government ensure that full payment of claims is made within 30 days. Dr Blewett —The answer to the honourable member's question is as follows: (1) A small number of pharmacists' claims for National Health Scheme (NHS) dispensing received by the New South Wales Regional Office of my Department on 17 December 1984 were not fully processed at 29 March 1985. However, all the pharmacists concerned had received a part-payment of 90 per cent of the estimated value of their claims. (2) On 25 March 1985 I approved an interim system whereby pharmacists will be paid 100 per cent of the assessed average claim value in respect of all outstanding NHS claims. I anticipate that full payment of all claims within 30 days of receipt should be achieved by the end of May 1985. (Question No. 441) Mr Ruddock asked the Minister for Health, upon notice, on 26 March 1985: How many (a) males and (b) females have been engaged in (i) the Minister's Department, and (ii) any statutory authorities reporting to the Minister, as temporary employees under the Community Employment Program, in (A) June, (B) July and (C) August 1984. Dr Blewett —The answer to the honourable member's question is as follows: (i) and (ii)- June July August 1984 1984 1984 Department of Health Male 194 201 213 Female 113 109 118 ACT Health Authority* Male 4 4 4 Female 7 8 8 Total Male 198 205 217 Female 120 117 126 *Formerly Capital Territory Health Commission (Question No. 469) Mr Price asked the Minister representing the Minister for Resources and Energy, upon notice, on 26 March 1985: (1) Has the Minister or the Minister's Department written to (a) Blacktown and Penrith Councils, (b) the New South Wales State Emergency Services Headquarters or the Blacktown or Penrith divisions and (c) the Nepean District, Blacktown or Mount Druitt Hospitals, advising them of the storage of radio-active wastes at the St Marys' Munitions Factory; if so, when. (2) In the event of an accident involving these radioactive wastes, have procedures been developed; if so, what local organisations are involved. (3) have any mock accidents been staged to test the response and effectiveness of procedures; if so, when. Mr Barry Jones —The Minister for Resources and Energy has provided the following answer to the honourable member's question: (1) No, my predecessors and I have answered questions by various people and organisations concerning the storage of radioactive waste at the Munitions Filling Factory, St Marys. Advice concerning the management of these wastes has also been made available to Parliament and to the New South Wales authorities responsible for administering the New South Wales Radioactive Substances Act. (2) The management methods adopted at St Marys aim to minimise the possibility of any incident involving the wastes stored there. The waste storage facility has thick reinforced concrete walls and roof and fire-proof doors. The building is securely locked with access strictly controlled and the factory is subject to 24 hour security. Radiation checks are carried out at regular intervals to ensure that the store continues to meet safety requirements. The normal accident-handling procedures for the Munitions Filling Factory site would be adequate to deal with any foreseeable accident involving radio-active wastes. (3) No. (Question No. 697) Mr Rocher asked the Minister for Social Security, upon notice, on 17 April 1985: How many people were employed full-time in the Minister's Department in (a) 1983 and (b) 1984. Mr Howe —The answer to the honourable member's question is as follows: (a) In 1983 an average of 15,920 full-time operative staff were employed in the Department of Social Security. (b) In the first eleven months of 1984 an average of 17,553 full-time operative staff were employed. On 12 December 1984 1,720 staff were transferred from my Department to the newly created Department of Community Services and from that date to the end of December 1984 the average number of full-time operative staff in my Department was 15,709. The overall average figure for 1984 is calculated at 17,381. Note: The above annual figures include staff of the Office of the Commissioner for Employees' Compensation. Mr Young —On 25 March 1985 (Hansard, page 801) Mr Smith asked me, as the Special Minister of State, the following question without notice: When did the Government first learn that the New South Wales Police interceptions had in fact continued from 1981 until 1984? How many interceptions took place in this period? What action has been taken to ascertain the identity of those involved, the instructions given to set up the interceptions, and the use made of those interceptions? In answering the honourable member's question, I undertook to obtain any further information that might be available. The following is now provided: The Government was first alerted to the possibility that the New South Wales Police interceptions may have continued from 1981 until 1984 when Mr Justice Stewart submitted his Eighth Interim Report in December 1984. I am advised by the Australian Federal Police that the investigation conducted on behalf of Special Prosecutor Temby and recent material coming into the hands of Mr Justice Stewart suggest that the so-called Age tapes are but a percentage of what is, or was, available as a result of illegal telephone interception activity over a period. A review conducted by the AFP to establish whether there was any question of the AFP receiving, at any time, telephone interception material from the New South Wales Police since 1981 has established that the AFP has not knowingly received telephone interception material from any New South Wales Police source other than that provided to the then 'B Division' of the force during 1980-81 and that received from 'the Age' newspaper. (Question No. 417) Mr Lloyd asked the Minister for Aviation, upon notice, on 22 March 1985: (1) Is Regulatory Proposal Flight Service 84/14, concerning general aviation pilots currently before the Aviation industry. (2) What are the present and proposed regulations. Mr Peter Morris —The answer to the honourable member's question is as follows: (1) Aviation Regulatory Proposal (ARP) 84/14 concerns the review of Air Navigation Order (ANO) Section 40.1.8 'Instrument Ratings' and was issued to the industry for comment on 24 September 1984. Responses, which were received from a wide range of recipients, have been collated and many have been incorporated as amendments to the original ARP. The revised ARP will be reissued for further industry comment in the near future. (2) The current Air Navigation Orders provide for First and Second Class, Class 1 and Class 3 aeroplane and helicopter instrument ratings, with varying conditions concerning duration of validity, endorsements, aeronautical experience and training. The proposed Air Navigation Order consolidates the current scheme by providing command and co-pilot instrument ratings applicable to both aeroplanes and helicopters. This is intended to standardise the variations allowed within the present scheme, and as a result will also streamline the administrative process and reduce cost to both the Department and Industry. Copies of the current ANO 40.1.8 and the original ARP 84/14 are obtainable from my Department. (Question No. 480) Mr Lloyd asked the Minister for Primary Industry, upon notice, on 27 March 1985: (1) Is it a fact that the New Zealand Minister for Agriculture intervened in the consideration of domestic marketing arrangements for the dairy industry by criticising the Australian Dairy Industry Conference plan in a letter to him. (2) Did he quote from this letter at the 20th Dairy Summit, in December 1984, in support of his rejection of that plan. (3) Has the New Zealand Minister intervened in other Australian domestic policy issues. (4) Has he intervened in any similar New Zealand domestic policy debates; if so, which ones. Mr Kerin —The answer to the honourable member's question is as follows: (1), (3) and (4) In a letter to me of 18 December 1984, the New Zealand High Commissioner wrote to me on behalf of relevant New Zealand Ministers, indicating a number of concerns of the New Zealand Government in regard to possible future dairy marketing arrangements. It is of course normal and acceptable international practice for Governments (including the Australian Government) to convey their views to other Governments on issues in which they have an interest. (2) I quoted from the New Zealand High Commissioner's letter at the Dairy Summit of 20 December 1984. I did not reject the Australian Dairy Industry Conference's marketing plan at that meeting nor did the New Zealand Government's view have any bearing on the Cabinet's decision with respect to marketing arrangements for the dairy industry.