Wednesday, 15 May 1985 Madam ACTING SPEAKER (Mrs Child) took the chair at 10 a.m., and read prayers. Debate resumed from 8 May, on motion by Mr Keating: That the Bill be now read a second time. Mr HOWARD(Bennelong)(10.01) —The Taxation Laws Amendment Bill gives effect to quite a number of changes to the taxation law and the Opposition will not oppose its passage. The coverage of the Bill is quite extensive. First of all, it deals with the abolition of the 30:20 rule affecting life assurance companies. That area of financial intervention was first developed in the early 1960s and its abolition was recommended by the Campbell Committee of Inquiry into the Australian Financial System. The Opposition is pleased to support that change. The second major area of the Bills each involves action to counter some further tax avoidance schemes of the expenditure recoupment type. Once again, the Opposition offers no objection or criticism to this aspect of the measure. It is interesting to reflect that the action of the Government relies on a statement made by me, as Treasurer in the former Government, in September 1978. Therefore, we again have practical evidence, despite the Government's criticism and rhetoric to the contrary, of this Government acknowledging the work done by the former Government in stamping out tax avoidance arrangements. I take the opportunity to say again that we have yet to see any evidence from the Hawke Government of how all the laxity that was supposed to have been exhibited by the previous Government on tax avoidance matters has been replaced by its anti-tax avoidance zeal. The truth is that we did the job, there was nothing left to be done. The Bill now before the House, particularly so far as it relates to expenditure recoupment, is but a further example of the way the job had been done effectively by the former Government. Thirdly, the Bill phases in personal income tax on Christmas Island from the commencement of the 1985-86 year, and introduces full company tax and the Medicare levy from the same date. Once again, there are no grounds at all for the Opposition opposing this eminently understandable measure. The Bill will also empower the Commissioner of Taxation to make available to the Australian Statistician certain information in relation to business taxpayers. This will put those taxpayers on the same footing as individual taxpayers, and they will be treated in the same way. The Opposition also supports that measure, as it supports the measure in the Bill that achieves consistency between the pay as you earn and the prescribed payments system provisions by extending the objection and appeal rights available in relation to certain prescribed payments system penalties to the corresponding penalties available under the PAYE system. That also appears to be a very sensible measure. I take the opportunity while discussing that and the matter of penalties to say that the Opposition remains concerned about the potential reach of the Commissioner's ruling in relation to the so-called Friday-Monday schemes of tax avoidance. They derive their name from the fact that employees enter into arrangements whereby their own company hires their services out to the company that formerly employed them and a tax advantage is derived from that. On behalf of the Opposition I say that we have no objection at all to action being taken by the Government to stamp out straight out Friday-Monday arrangements. They clearly confer a tax advantage that was never intended by the tax law. They clearly place the beneficiaries of those arrangements at an advantage, giving them a preferred position against other bona fide employees, and naturally the Opposition cannot object to any action taken by the Commissioner or the Government. Our concern, however, is that the Commissioner's 2:2:1 ruling has gone further than that. We are worried that that ruling affects bona fide sub-contracting arrangements. We are concerned that it has the effect of imposing an unfairly onerous tax rate on bona fide self-employed small business people who have not engaged in Friday-Monday arrangements. It is one thing to enter into one of those service company arrangements and continue to do exactly the same job for the same employer, but it is entirely another thing to start one's own business and then find that because of the reach of this ruling one can no longer take advantage of the assessment procedures and the provisional tax procedures which are available to small business people. I ask the Minister assisting the Treasurer, the Minister for Immigration and Ethnic Affairs (Mr Hurford), in replying to this debate, to focus on that issue. I am not trying in any way to object to the banning of straight out Friday-Monday arrangements. They ought to be subjected to the kind of action to which the Commissioner has subjected them. I have no quarrel with that. We are not trying to protect anybody except the bona fide small business man, and he does need a bit of protection. The concern I have about the reach of this ruling made by the Commissioner comes at a time when, particularly in New South Wales, many of those same people are under attack from the Wran Government and from the predatory eyes of the Building Workers Industrial Union in New South Wales. The BWIU and the Wran Government are trying to wipe out the sub-contractor in the building industry by giving him an award. Mr Hand —Oh! Mr HOWARD —The honourable member for Melbourne thinks that is a terrific idea; of course he does. He would love the building sub-contractor to have his own award because that would mean that the BWIU would get some more members. It would also mean, of course, that the average cost of a house in New South Wales would go up by several thousand dollars. One of the great things the sub-contracting system in the building industry does, is through its competitive effect, to keep the price of housing in New South Wales at a lower level than it might otherwise be. If an award is introduced and a special tribunal created, if the sub-contracting system in the building industry is unionised, the effect will be to produce higher house prices. That is what the Wran Government, the BWIU and other unions are on about in New South Wales at this time. I realise that that bears but an indirect connection with the bill that is now under debate. The point I make and the nexus I establish is that the concern that the Commissioner's ruling on Friday-Monday arrangements may go a little too far happens at a time when the very same group it might inadvertently affect is under attack from another quarter. That is another reason why I believe the Government ought to look very carefully at the effect of the Commissioner's ruling in that area. There are but two other provisions in this measure on which I want to comment briefly. They relate to some drafting errors that had an unintended consequence so far as the extension of the availability of the dependent spouse rebate is concerned. I offer no objection to that. I do, however, take the opportunity to say that I hope that in the August Budget the Government does not try to selectively increase taxation on single income families, which has been threatened by the Minister for Finance (Senator Walsh) and the Minister for Education (Senator Ryan). There seem to be some people in the Government who have the misguided idea that means testing the dependent spouse rebate in some way cuts a welfare payment. Means testing the dependent spouse rebate is the equivalent of means testing the tax-free threshold, and it totally ignores the fact that it costs more to keep two people than one. The Government may want some more tax revenue in the August Budget-I do not know, because I do not know what spending plans it has between now and the August Budget. Nothing that was said last night persuaded me that what was taken from some areas with one hand will not be given back to other areas with another hand. It has happened before. Mr Hurford —No. Mr HOWARD —The Minister assures me that it will not happen. He has given me an assurance that his colleague the Treasurer (Mr Keating) was unable to give last night, but perhaps that debate belongs to another hour in this Parliament. I take the opportunity to say on behalf of the Opposition that we continue to believe that single income families are not well treated by our taxation system. Their position was protected and improved by significant increases of approximately 105 per cent in the dependent spouse rebate during the time I was Treasurer. I say to the Minister that those in his ranks and elsewhere who believe that in some way means testing this rebate represents an exercise in cutting expenditure are misguided. It would be nothing other than a selective tax increase on single income families. If one is going to increase tax, it must be done in a consistent manner. If one is going to selectively increase tax on a single income family with an income of, say, $25,000 to $30,000 a year, one should do the same thing with a double income family, which is far better off because there are two taxpayers enjoying the benefit of the tax-free zone. When making changes in this area we have to be careful that we do not end up creating a new elite in this country which consists of two highly paid, superannuated professional people, with no family responsibilities whose financial position is enormously strong. We have had a lot of rhetoric about families in this country. I make a genuine plea to the Minister that when the Government is looking at taxation matters at the taxation summit, it ought to look carefully at the impact of changes to the taxation system on family arrangements and family groupings. I hope that no government in Australia will ever create a totally neutral tax system so far as family formation is concerned. I think that would be a retrograde step. I am a believer in greater neutrality in the tax system. I would be the first to concede that there are many biases in the tax system that ought to be taken out, but I think there is one bias that ought always to remain in the tax system, and that is a bias towards families. I hope that any decision the Government takes will ensure that those biases that exist are not removed, because I think that would be an extremely retrograde step. In acknowledging my support for the changes intended by the Government in this area, I make those comments and enter that plea on dependent spouse rebate and related matters and the principles raised in relation to them. Beyond that, I have no further comment on the Bill. Mr PUNCH(Barton)(10.14) —Before turning my attention to the Taxation Laws Amendment Bill, I want to comment briefly on those remarks made by the honourable member for Bennelong (Mr Howard) in regard to the tax system and families in this country. I fully concur with what the honourable member for Bennelong said in relation to the need for the tax system in this country to contain a bias towards the family. The family is the basic unit upon which our society exists, and as such must be encouraged and protected. I add my voice to those thoughts and say that in the coming tax changes that will be pursued by this Government that should be a major priority. Lest I should be seen to be too much in agreement with the honourable member for Bennelong, and that would never do-- Mr Howard —Don't do that; that would be dangerous. Mr PUNCH —That could be a mutual kiss of death. Mr Howard —For whom, you or me? Mr PUNCH —I said it could be mutual. I take this opportunity to say that the proposition put forward by honourable members opposite that income splitting is the panacea for all these ills is entirely erroneous and, in my view, would only exacerbate current inequities. What is clearly needed are some fresh ideas and fresh policies to help families in this country. The Liberal Party's position on this issue would do nothing more than exacerbate the problem. Once again, lest I should be seen this morning to be in too great agreement with the honourable member for Bennelong, being in such a good mood after the introduction of our great mini-Budget last night, the sting in the tail from me this morning is this: The honourable member had seven years to fix up the problem and he did nothing about it. I let my case rest there. The Taxation Laws Amendment Bill is a very worthwhile piece of legislation put forward by this Government. It does a number of very worthwhile things. The proposed changes to the 30:20 rule for insurance companies is yet another example of a deregulatory act by this Government to unshackle business in this country, where that can best serve a purpose. The moves to facilitate personal income tax collection and other related matters applying to Christmas Island are a necessity. The Government is moving quickly in this regard. There are two matters in particular that I want to discuss this morning in the debate on the Taxation Laws Amendment Bill. The first is the proposed relating to the expenditure recoupment schemes. This is yet another example that this Government is fair dinkum and relentless in its pursuit of tax avoidance. Since coming to government the Australian Labor Party has clamped down to the best of its ability in the House of Representatives on tax avoidance and tax evasion schemes totalling $2 billion revenue per annum. The mini-Budget cuts announced last night of $1.25m amount to scarcely more than half of the annual saving to taxpayers that this Government has made through its pursuit of tax avoiders and evaders. It is a great pity that that figure is not higher. It is not higher because the Government does not control the Senate and we have seen not once, not twice, not three times but four times the bottom of the harbour tax avoidance Bills being knocked back in the Senate. I call once again on honourable members opposite to review that situation, to come to grips with their consciences and to instruct their colleagues in the Senate to pass the tax avoidance Bills, known as the bottom of the harbour measures, at the earliest opportunity when they come forward again. Briefly, the expenditure recoupment schemes referred to in this Bill relate to those provisions that are designed to deny tax deductions or rebates for certain expenditure incurred after 24 September 1978 under a tax avoidance scheme entered into after that date. Under the present legislation there are 19 variants that the previous Government installed. This measure will have the effect of adding two more. The latest variants of the basic scheme seek to exploit the special income tax deduction allowable for capital expenditure incurred in respect of a unit of industrial property and the deduction allowable for losses and outgoings incurred in gaining or producing assessable income or in carrying on a business for the purpose of producing such an income. I believe that this is consistent with the intentions of the basic legislation brought forward by the honourable member for Bennelong when he was the Treasurer in 1978 and should be recognised as such. Specifically, the amendments in this Bill will apply to expenditure incurred between 24 September 1978 and 28 May 1981. That will mean that the estimate by the Treasurer of $25m in revenue in relation to schemes of this kind entered into between 24 September 1978 and 28 May 1981 will become available to the Government. That is yet another practical move by this Government to pursue relentlessly tax avoiders and evaders. The other item that interests me-I will not speak for long this morning as I do not want to delay the proceedings of the House-is the amendments in the Bill dealing with the disclosure of additional taxation information to the Australian Statistician. I liken the problems that governments in the past have had essentially to flying a very large aircraft in hazardous weather with very few decent instruments to guide it. One of the great successes of this Government has been its pulling together and reorientation of the information bases of the economy. The policies that have resulted have been highly successful. The amendments in this legislation will mean that those compiling periodic industry surveys and the Australia National Accounts will have yet more information at their discretion. I, for one, would be always wary and watchful of the Government intruding too much-whether it be the Statistician or any other instrument of government-into the personal affairs of citizens. In this case, no member of this House could say that the measures are harmful or wrong. In fact industry in general and taxpayers will reap the benefits for years to come. Therefore, I support the Bill before the House and look forward to its early passage. Mr BRAITHWAITE(Dawson)(10.23) —The introduction of the Taxation Laws Amendment Bill 1985 gives the House the rare opportunity to discuss the current tax debate that is going on outside this chamber. It seems rather strange to me that, being elected to govern and to look after the Treasury, the Government would want to widen the tax debate but not provide the opportunity for debate in this chamber. It would be to the benefit of all Australia if the tax debate took place in this chamber and ran for a couple of days so that we would find out the various conflicts and ideas that exist among the parties in regard to this issue. Having been denied the opportunity of being able to speak outside the chamber it is pertinent to be able to make a few comments on the taxation Bill before the House. Without particularly pointing to any aspect of the legislation, its various clauses and parts are designed to make make for a better tax collection system throughout Australia without really looking at where the problems in the system arise. I believe that the complications and various functions of the Income Tax Assessment Act 1936 have led to an ignorance of it by the ordinary taxpayer. That ignorance, in turn, breeds contempt. I also believe that when people are talking about a new tax they should be looking at the present taxation system. We should try to clean up once and for all the problems that are brought to our attention from time to time when we consider various amendments designed to close loopholes. I agree with Eric Risstrom, the Secretary of the Australian Taxpayers Association, who says that there is scope within the income tax Bills before the House and sales tax Bills to come before the House to effect that improvement to do away with as much as possible, this evasion. We might then look at another base for taxation. In this regard, I refer to an article which appeared last week in the Sydney Morning Herald, in which it is stated that the Government has estimated that it is losing $4 billion just in evasion. That figure is projected to increase to $7 billion or $8 billion. That is a staggering amount. It almost equals the deficit that has been created this year in the budgeting arrangements. As I say, if these Acts could be cleaned up and if the fraud and evasion could be detected in an easier way, perhaps we would not have our present problem. Having said that the complication causes an ignorance of the Acts, I have a basic belief that this then causes contempt, and in the long run the taxes evaded have to be made up in a higher rate of taxation. It is almost like a cat chasing its tail. What happens in this event is that people who are forced into a high tax situation have three options. They can pay their tax-and those who do are becoming a fast diminishing proportion of our taxpayers. They can either voluntarily reduce their input or productivity so that their earnings are less and they pay less tax in that way. Or they are forced into the corner of total evasion. This is all brought about from the basic fact that in that circle government then increases taxation. At the forthcoming tax summit, when people are talking about a more equitable deal, I suggest that this should be spread right across the field as far as welfare recipients, factory workers and people on high incomes are concerned. But the one item that is being lost in this total argument is that it is time that the taxation Acts or the Government's policies gave a fair deal to taxpayers themselves. If one looks back over the last 15 years, one will see the comparison. Fifteen years ago a larger proportion of people were in the higher income brackets, and they were paying a greater proportion of the funds derived by the Australian Taxation Office. Now, 15 years later, that proportion of people has halved and the amount of collections is also halved. Honourable members on the Government side of the House will immediately say that that is all because of avoidance. It is not because of avoidance. Honest taxpayers are wondering where the future is in earning in a high productivity area and paying 61c in the dollar to the Government and retaining 39c in their own pockets. I have figures from the World Bank which contain 10 comparisons. I draw the attention of the House to the statistics which I have tabled previously, as reported at page 862 of Hansard for 25 March. In those statistics, 20 countries were compared. They were compared in twos. That made 10 comparisons. They were over seven indices of improvement as far as the economy was concerned. The groupings were in the same per capita income bracket. At one end we had a low taxing philosophy of a nation, compared with one with a high taxing philosophy. Those 10 groupings produced 70 statistics. They included the increase in the gross domestic product, public consumption, private consumption, gross domestic investment, exports, labour force, and labour productivity. That makes 70 comparisons. In only one of those comparisons did the high taxing nation exceed the low taxing nation. If people look at these factors and draw on the American experience-where a reduction in the rate of taxation on the high income bracket has meant a greater collection because the income base has been raised and productivity has increased-they will find that there has been a greater collection of taxation revenues than applies at present. The taxation Act at which we are looking concentrates too much on trying to bleed the tall poppies without realising that, every time we do that, we are actually decreasing incentive and decreasing productivity, and our tax base, as a result, is lessening. Out of that, we come to the aspect of the tax evaded. The figures in the Treasury paper published in the Sydney Morning Herald would be fairly accurate. The estimates of the cash economy in this country range from $10 billion to $16 billion and tax on that amount would produce those results. I support Eric Risstrom when he says that if we were to look at our present legislation, make it less complicated and explain it, and if we were prepared to take a lesser amount out of the top pockets of the taxpayers, our base would be secure. All it needs is somebody with grit and determination to bring that about. I see no virtue in a transfer to another tax that gives the present Government or any future government another base on which to tax. The one thing upon which there is consensus among Australian people is that they do not want to pay more tax. I am no stranger to that philosophy. I believe that if we gave taxpayers a fairer package under the current legislation, we would be better off for it. I wish to devote some time to several items in the Bill, particularly those relating to the pay-as-you-earn and the prescribed payments systems and to interest on penalties. I instance one area where compliance is now practically complete in that the Australian Taxation Office has tried to get a quicker reward from the PPS scheme. I have had the experience of a company which was visited by inspectors from the Taxation Office. They tried to force all sub-contractors, who were obeying the rules of their builders association relating to the method of payment of sub-contractors, to transfer to a PAYE scheme because of the exemption. That is laudable in itself but all it does is to force one compliance area on to another. The tax will come in eventually anyway. In many of these cases, through heavy handedness, the Taxation Office tried to make a complete conversion, except where companies had the experience and were able to say: 'No. Let us look at this realistically. Who is a sub-contractor or a contractor as against a PAYE taxpayer? Let us get this sorted out'. In those cases the companies won. Contractors are now being recognised as such by the Taxation Office. They are being recognised for workers compensation and by the payroll tax authorities. Yet, in spite of this, I had the experience of that same company having the Building Workers Industrial Union of Australia going on to the site and declaring the site black and those contractors and sub-contractors being forced to take out union tickets. Mr Slipper —Shame! Mr BRAITHWAITE —It is a shame, and it is an indictment of our system that, when a pattern has been established and recognised by government, this can be changed by the industrial climate. It is all very well for a union to say 'This is the manner in which we enforce voluntary unionism', but to put a respectable company that has always paid its taxes under the threat of a black ban is quite wrong. The Government should apply itself- Mr Nehl —It is blackmail. Mr BRAITHWAITE —It is industrial blackmail, and all for the profit of the union trying to build up its membership. I believe that the collection of union tickets in Australia is worth about $200m. I believe that, where arrangements are recognised by all three authorities, the unions should also be made to abide by those arrangements. I wish to mention, as did the shadow Treasurer, the arrangements for the de facto spouse rebate. While I understand that the legislation aims to correct a typing error or anomaly in the original Act, originally the de facto spouse rebate was intended to reward what one might say is not a traditional family. It had an impact on the traditional family in that what was allowed within the de facto spouse rebate allowance was not then available to the traditional family. I believe that our laws should try to keep in touch with the traditions of this nation. That was one aspect that I disagreed with because I believe it disadvantaged the single income family. What concerns me in the present debate is the lack of perspective of people within the welfare system in regard to the dependent spouse tax rebate. I have always regarded-I believe I would be right if we went back through the history of taxation-the dependent spouse tax rebate as being there to try to equalise the income tax burden between the single income and double income families. If it were to do its job properly, it would have to be about $1,300 or $1,400. In the meantime, if tax splitting is not being allowed, the dependent spouse tax rebate is a wonderful opportunity to bring about taxation equity between single and double income families. There are people who are suggesting that it is now a welfare payment, that it should be a family payment. I am not saying that the family, particularly the traditional family, should not be given some recognition, perhaps through an increase in the present family allowance, but a transfer from one policy area as a tax rebate to the family allowance would leave the single income family again in that very difficult position, without tax splitting, with a penalty of about $1,300 or $1,400 placed on the single income family as against the dual income family. I hope that those people who argue that the dependent spouse tax rebate should be a welfare or a family commitment will bear that in mind. It could also be said that by swapping from one to the other one gains the same effect; that is, that the allowance is still being used by the mother for the family. I have seen transfers of these special deductions in the past where the aspect of equity is entirely overlooked once it becomes the family allowance. Honourable members might recall that in 1977, I think it was, the dependent spouse tax rebate became a family allowance. It received one recognition in eight years, which was to increase it to recognise the aspect of inflation. I mention the de facto spouse rebate for two reasons: Firstly, to espouse again the cause of the traditional family in this House; and, secondly, to warn that if the spouse dependent tax rebate is removed from the relevant section of the Income Tax Assessment Act and put into a welfare situation we will come back to the position where the single income family in Australia will be massively disadvantaged, as it has been in the past. I wanted to mention those few aspects. I hope that some time in the not too distant future-this Parliament has only a week left before it rises-an opportunity will be given for a full tax debate in this House so that members can contribute towards that debate instead of, as we have at the moment, every other interest group in Australia, including the trade unions, doing just that on our behalf. Mr WRIGHT(Capricornia)(10.38) —The Taxation Laws Amendment Bill before the House is further evidence of the Hawke Labor Government's determination to address the anomalies, injustices and I think also, the bias that the Deputy Leader of the Liberal Party of Australia, the honourable member for Bennelong (Mr Howard) mentioned in the Australian taxation system. However, it surprises me that whenever we have such a piece of legislation before an assembly such as this, we have members of the Opposition standing up and talking about what ought to be done and what should have been done. It needs to be pointed out that for the last 35 years the Liberal and National parties have been in control of this nation. They have had some three decades to address the many problems that exist in the taxation system. They have had the opportunity to try to remove these anomalies, iniquities and the bias that their own Deputy Leader stresses, but instead of that we have seen 30 years of procrastination and posturing and certainly no action. There is a need to address the problems and I believe the Hawke Labor Government is doing this. There has been a major shift in the tax burden in recent times. I noted in a speech made by the Treasurer (Mr Keating) recently to the Fabian Society that he pointed out that 2 1/4 million Australians now face the marginal tax rate of 46 per cent or higher. We need to point out very quickly, because there is some confusion here, that that does not mean that 2 1/4 million Australians are paying 46c out of every dollar earned; but it does mean that on part of their income they are paying that rate. I welcome a review by the Government. I believe that this is a responsible approach, that it is necessary and that there is a sense of urgency. I am surprised because of the comments made by members of the Opposition that they are not prepared to take that extra step to make sure that their points of view are made known and take part in the proposed tax summit. I agree with the honourable member for Dawson (Mr Braithwaite) that there is a need for debate, but surely the opportunity is being given to the Opposition-as a Liberal Party and a National Party-to go to that summit and put forward those views so that we can have the mix, the amalgam of ideas. Let the people of Australia hear what they want to say and what they are suggesting as alternatives. Mr Slipper —The summit is a fraud. Mr WRIGHT —That is not the view held by the vast majority of Australians. It is not the view held by those many hundreds of thousands of Australians who are paying too much tax because of conservative governments in the past. It is certainly not the view held by the business sector or the view held by the Cattlemen's Union of Australia or those to whom I have spoken recently in the primary industry areas. It is not the view held by the vast majority of Australians, who know also that the top 10 per cent of Australians receive 29 per cent of the total income. Let us consider that for a moment. One out of every 10 Australians gets almost 30 per cent-it is in fact 29 per cent-of the total income spread across the population. The bottom 10 per cent of Australians receive 0.3 per cent-less than half a percent-of the total income of our nation. I note also that the top 10 per cent of Australians hold 60 per cent of the wealth of our nation. So there is a need to redress that situation, a need to address the problems and a need to attack the causes of poverty and improve the quality of life of all Australians. This means shifting the tax burden and it means also improving the purchasing power of families and individuals. There is also a need to reintroduce incentives to the working Australian. There is a need for an incentive to earn. We must remove the negatives from working today. Obviously there is a need for review, regardless of what honourable members opposite have said, and I suggest that the review is timely because it is aimed at reducing the tax burden on the PAYE employee. It is also aimed at eliminating tax evasion and avoidance. I am not surprised that the honourable member for Fisher (Mr Slipper), who is a member of the National Party, should say that it is a fraud because he does not want to see any moves to stop evasion or avoidance of tax. Again, the measures before the House are in line with what the Government is trying to do in combating avoidance of tax-in this instance, sales tax. I welcome that initiative. I take this opportunity to express some concern about the workings of the sales tax system in our nation. I know that you, too, Mr Deputy Speaker, in your capacity in the area which you represent, have expressed concern about the problems confronting people, not because of the principle of sales tax but instead because of the application of that tax. I refer honourable members to the situation where that sales tax is applied not only to the price of the product purchased from a manufacturer or wholesaler, but also to the freight cost of shifting that product from the point of manufacture to the point of sale. I see sales tax on freight as iniquitous. It forces up the cost of living, not only to the family, but to every person who lives outside the capital cities of our nation. I give as an example an item which would cost $500 to purchase and which has a 20 per cent sales tax. It then has a price not of $500 but $600. If the retailer put a 10 per cent profit margin on it, it would mean that the price to the consumer would be $660. But let us take the example of the same product being sold in the country. The price to start with is $500. On top of that we have a freight component of $200, which is not unreasonable, so we therefore have $700 before the sales tax is applied. Mr Tuckey —On a point of order, Mr Deputy Speaker: Is it the intention of the House to have a cognate debate on the Taxation Laws Amendment Bill and the Sales Tax Laws Amendment Bill or are they separate debates today? Mr DEPUTY SPEAKER(Mr Millar) —Order of the day No. 1 is before the House. Mr Tuckey —The honourable member for Capricornia is now debating the second order of the day. He is talking about sales tax. Mr DEPUTY SPEAKER —I thank the honourable member for drawing the attention of the Chair to this matter. I was temporarily distracted by an approach from an honourable member seeking advice. The honourable member for Capricornia may proceed, mindful of the situation outlined by the honourable member for O'Connor. Mr WRIGHT —I shall, Mr Deputy Speaker. But I am also mindful of the fact that the Deputy Leader of the Opposition canvassed other aspects of taxation; as did other honourable members. Therefore, I thought that we were taking a more general approach to the issues before the House. I will restate my point. The cost of the product is $500 plus the $200 freight cost. The application of sales tax then adds and additional $140. Then the retailer works out his profit margin of 10 per cent not on the $500 for which he has originally bought the product, but on 10 per cent of the total landed price. He puts his 10 per cent profit margin not on $500, not on $700, but on the original cost plus the freight cost plus sales tax. So he puts his profit margin on $840, which means that the consumer pays $924-an extra $264, and a difference in sales tax alone of $64, or about 12 per cent. I suggest that this is unfair to people who live in country areas. It forces up their cost of living and reduces their purchasing power because the item cost is dearer. But it is also unfair to the business world. This practice forces up the price of the item on the shelf and therefore reduces demand. It makes the small business person far less competitive because the large chain stores are not applying that tax. Mr Tuckey —I raise a point of order, Mr Deputy Speaker. The honourable member for Capricornia had the opportunity to list himself to speak in the sales tax debate. I am quite pleased that you have given indulgence, Mr Deputy Speaker, but these Bills will be dealt with as another order of the day-- Mr DEPUTY SPEAKER —The honourable member is ranging somewhat inside of the point in his point of order. He should be a little more succinct. The point of order is upheld. The honourable member for Capricornia's comments must remain relevant to the Bill before the House. Mr WRIGHT —I have to accept your ruling, Mr Deputy Speaker, but I note that the same ruling was not applied to Opposition members. I am not casting aspersions on you, sir, but on the Opposition members who refrain from making any type of interjection or taking any point of order against their own speakers. The honourable member for Dawson was able to range very widely. I thought that in your wisdom, Mr Deputy Speaker, in order to allow debate to continue and to allow these matters to be raised in the interests of the Australian community, you were allowing that course to be followed. I make the point that regardless of what the honourable member for O'Connor (Mr Tuckey) says, he is obviously not concerned about the costs that country people face today. He has no concern whatsoever for the problems of people in small country areas. Mr Lloyd —Mr Deputy Speaker, I raise a point of order. Does not the honourable member for Capricornia know that Labor promised two elections ago that this would be removed and it has not done a thing to do it? Mr DEPUTY SPEAKER —Order! There is no point of order. The honourable member will resume his seat. I caution him against taking specious points of order. I call the honourable member for Capricornia. Mr WRIGHT —I welcome that interjection because I agree that it is a difficult question. I note that not only has this Government tried to address the problem but so too have previous governments, at least by investigation and review. I am told by the departments that the removal of sales tax on freight is a bureaucratic nightmare. I argue the opposite. I suggest that whilst it creates some difficulties, there is no reason why today, with the computerisation available, any business should not be in a position to work out the actual freight costs of any products sold. We need to address this situation. I do not believe that there is a need to have sales tax on freight. I see it as being of enormous cost disadvantage to people in country areas. It is making the small business person uncompetitive because big business applies the sales tax not at the point of sale but at the point of invoicing. So Woolworths, K-Mart and other stores are able to buy products cheaply because of bulk purchases, special freight rates and special contributions made by manufacturers towards advertising costs. Then, because they pay lower sales tax on freight-in some cases no sales tax on freight-they are able to compete unfairly with small business. I would like that point to be taken up by the Treasurer. I believe that his Department must look again at sales tax on freight. As the honourable member opposite said, I acknowledge that there is no easy solution. But it must be a matter of urgent consideration by government, and particularly by this Government because that is where the buck stops. I see this as the most important issue confronting small business in country areas. I see it as a vital issue confronting consumers outside the capital cities of Australia. Mr SLIPPER(Fisher) —Mr Deputy Speaker, I claim to have been misrepresented. Mr DEPUTY SPEAKER(Mr Millar) —Does the honourable member for Fisher seek to make a personal explanation? Mr SLIPPER —I do. I mentioned by way of interjection during the speech of the honourable member for Capricornia that the tax summit was a fraud, which it is. In referring to my interjection, the honourable member mentioned that I did not consider that there was a need for a review of the Australian tax system. Nothing could be further from the truth. The National Party of Australia and all of its members-- Mr DEPUTY SPEAKER —Order! The honourable member is debating the matter. He will resume his seat. Mr TUCKEY(O'Connor)(10.51) —The honourable member for Capricornia (Mr Wright) seemed to believe that in taking a point of order against him I was trying to restrict the breadth of the debate on taxation. That was far from the truth. The fact is that I kept drawing to his attention that the matter of sales tax is specifically listed for debate on the Notice Paper today. He particularly suggested that I, as a rural representative, had no concern in this area, but had he also looked at the speakers list he would have seen that I had chosen to list myself to speak on both these matters. In fact, I will be speaking later on sales tax. Mr Wright —I will be pleased to hear your contribution, then. Mr TUCKEY —The honourable member certainly will be. He will hear the sort of things that the Government's new legislation will do to aggravate the matters that the honourable member is so piously raising and which I presume Government members must have had ample opportunity in Caucus to do something about. He should not come in here making speeches for publication in his electorate, when he has missed all the opportunities to fix up this matter. I do not think any more of that than I do of other bleatings that we get on the assets test and other matters. Mr DEPUTY SPEAKER —I invite the honourable member to relate his remarks to the Bill. Mr TUCKEY —The honourable member has had plenty of opportunity to fix this problem. He comes raises a point when he should not-- Mr Duffy —Mr Deputy Speaker, I raise a point of order. We heard the points of order made by the honourable member for O'Connor in relation to the fact that sales tax legislation will be dealt with as the subject of another order of the day. I ask what relevance are the remarks of the honourable member for O'Connor to the matter before the House? Mr DEPUTY SPEAKER —Apparently the Minister did not hear the Chair requiring the honourable member for O'Connor to be relevant to the Bill. Mr TUCKEY —It is the usual practice of the House for us to comment on the previous contributions of honourable members in a debate. It was of some interest to me to hear that the honourable member for Barton (Mr Punch) was at some pains to call on members of the Opposition, in regard to tax avoidance, to come to grips with their consciences. I wrote those words down as he said them. I immediately went to Hansard and found that the honourable member for Barton is recorded on 11 October 1983 at page 1586, and again on pages 1642, 1658, 1697, 1799 and 1800 as having voted to support the then Minister for Finance who was accused of, and about whom documentary evidence was given, substantial tax evasion-in fact, $1m worth of tax avoidance. Mr DEPUTY SPEAKER —Order! The Chair has previously invited the honourable member for O'Connor to keep his remarks relevant to the Bill before the House. Mr TUCKEY —Certainly, Mr Deputy Speaker, but I am responding. Mr DEPUTY SPEAKER —The honourable member will keep his comments relevant to the Bill. Mr TUCKEY —I am quite pleased to follow that arrangement. As I said, comments have been made in regard to this Bill and I think it is my job to defend the Opposition's stand and to point out to the Government that, when it comes to coming to grips with our consciences, the conscience of the honourable member for Barton must be of a very peculiar type. He is on the record as supporting in this place tax avoidance and tax evasion. Mr Price —Mr Deputy Speaker, I raise a point of order. It appears to me that the honourable member for O'Connor is not heeding the ruling you gave. Mr DEPUTY SPEAKER —Order! The Chair is in a difficult position. The House tends to pay scant regard to the question of relevance. There have been a number of precedents in recent times which might induce honourable members to believe that they can ignore the Standing Orders. The Chair, of course, has no such option. It has invited the honourable member for O'Connor to be relevant. The Chair would not seek to disadvantage him to the extent of denying him opportunities that others have enjoyed, but the Chair has no option but to uphold the Standing Orders. I invite the honourable member for O'Connor to be relevant. Mr TUCKEY —Thank you, Mr Deputy Speaker. The matters before us relate to the Taxation Laws Amendment Bill. We are quite clearly dealing with such amendments. I was at pains, at the beginning of my speech, to draw your attention to the fact that my objection was only that an honourable member chose to address another matter on the Notice Paper. Had he not done so I would quite clearly not have raised a point of order. I was present in the House earlier and I heard Government members range far and wide on matters relating to tax law, but I had no objection whatsoever to that. Having ranged far and wide, some of those speakers were at pains to criticise the Opposition and its performance in government. I suggest that on all occasions it is appropriate for honourable members so criticised at least to defend themselves. Clearly a response to matters already mentioned must be relevant, and we are now in that situation. I repeat that I had no intention of interfering with the honourable member's speech until he clearly transgressed into another matter that is listed on today's Notice Paper. Mr O'Keefe —Mr Deputy Speaker, I raise a point of order. You have given your ruling. The honourable member for O'Connor has now spoken for about six minutes and I do not think he has said anything that is relevant to Order of the Day No. 1. Mr DEPUTY SPEAKER —Order! There is no point of order. The honourable member will now address the Bill. Mr TUCKEY —Thank you, Mr Deputy Speaker. In further responding to some of the matters that were raised by the honourable member for Capricornia that did not deal with sales tax, he was at some pains to tell us that our Government did nothing in 35 years to deal with the tax system. He carried on with the push of the Australian Labor Party that it is all our fault, but the figures do not support that. One of the major magazines, the Business Review Weekly, recently published a bar graph, which the honourable member can probably see from here, showing how Prime Ministers have performed on government spending. Of course, government spending and tax are all put together. We find that in 16 years under Prime Minister Menzies the annual percentage increase in Budget outlays was 3 per cent; in the two years under Prime Minister Holt it was 7.5 per cent-a very high rise; in the three years under Prime Minister Gorton it was about 4.5 per cent; in the two years under Prime Minister McMahon it was 4 per cent; in the three years under Prime Minister Whitlam it was 11 per cent-- Mr Slipper —How much? Mr TUCKEY —Eleven per cent. In Prime Minister Fraser's seven years in office it was an average of 2.5 per cent, and in the two years that Prime Minister Hawke has been in office it has been 7 per cent. The honourable member for Capricornia says it is all our fault! I will donate the honourable member that piece of paper to read. They are not my figures, they are figures from a respected independent Press publication which tell us who were the big spenders, and of course they are also the big taxers. Mr Wright —What did you do to the tax system? What did you do to reduce the burden on the PAYE taxpayer? Mr TUCKEY —The Labor Government has not done anything about the tax system. It is talking about doing something. It is a 'gonna do' government. It is always 'gonna' do something, but it does not. The first responsibility of a government in relation to tax is to contain expenditure. Clearly there is a link. This Government has a bit of something it has put in the middle called a deficit. That is taxation deferred, but of course the Australian public is not yet fully aware of the great problems of deficits. There is normally a link between expenditure and taxation. Mr O'Keefe —How can you talk about the deficit? Mr TUCKEY —We can talk about expenditure, and there is the record. We see where the bumps occur. If the honourable member looks at the graph I am holding up, which appeared in a very responsible document put out by the Institute of Public Affairs, Policy Issue No. 2, he will see a lovely big graph that shows what has happened to tax over the years. I note that in 1973-74, which I think was when the Whitlam Government was in power, there was a massive jump in personal income tax rates on average weekly earnings. Look at the jump, from 36 per cent to 44 per cent in one Budget. Up jumped the personal income tax rates on average weekly earnings, and then they dropped again in 1975 when Malcolm Fraser took control of the Budget. They continued to drop, and then suddenly, as that graph shows, in 1984-85 it jumped up again and we see it running off to 47 per cent. Who has been in control of the Treasury bench during that period? There is the graph, which clearly shows that every time a Labor Government is installed in Australia there is a massive jump in the percentage of tax paid by wage earners. Yet Government members stand up, as they do day after day in this place, telling Australians that it is all someone else's fault. The record does not prove that to be the case. We are now confronted with the prospect that that will continue. It is my responsibility to make some reference to the problems of this legislation. I welcome the Government's move-- Mr O'Keefe —Ha! Mr TUCKEY —I have so far only responded. If honourable members opposite are having any problems with what I have talked about let me bring them back to something else. They made an impassioned plea in relation to the horrible situation of the top 10 per cent and the bottom 30 per cent of wage earners. I think they were the words used. That is surely something to do with the 30:20 rule, but let me say something about that. It is not all that long ago, when the Government first came to office, that Senator Walsh was going to have a penalty tax on the top 2 per cent of income earners in Australia. That was really going to get at all these horrible rich people. In Kalgoorlie one day I pointed out to him that at that stage the threshold for the top 2 per cent of Australia's income earners was $32,500. The honourable member for Capricornia, when he wants to get on to that lovely socialist trick about all those wealthy people in Australia who make all the money, should realise that. He can go back to the Budget Papers and look at that. The figures will have altered slightly, but basically people earning under $35,000 a year are included in the top 2 per cent of Australia's income earners. There are all those rich people around. I welcome the move to abolish the 30:20 rule. We see that move as helping to free up the position. As Christmas Island is now part of Australia, such taxes as can be raised there sensibly will be in our interests. I think Christmas Islanders now receive the same sorts of wages as Australians and it appears that there is no reason why they should not pay the same tax as Australians. We always worry about breaking the secrecy provisions of the Income Tax Assessment Act, but in my experience the secrecy that has been maintained at the Australian Bureau of Statistics has always been good, and I think most of us in Australia have some confidence in that regard. The other matters all appear to be of a common-sense nature. As has been mentioned in the debate, I also have concern as to the treatment by the Taxation Office of small business people. I refer to a Manufacturers' Bulletin, published recently, which states: A small Chamber member whose debtors include many government departments was 21 days overdue in lodging its group taxation deductions of $10,216.89, resulting in a fine of $408.33 late payment penalty at a rate of nearly 70% per annum. The President of the Chamber of Manufactures of NSW, Mr Wal Cryer, said the member had complained to the Chamber about the stiff penalty. He urged other members who had been similarly treated to furnish details to the Chamber so that it could make out a strong case to the Taxation Department. The problem is that huge pressure is being put on the business community to pay its money into government very quickly, and those sorts of penalties are extremely hard to bear. Often it is not any deliberate action of the taxpayer that causes those delays. Many taxpayers have businesses that are widespread and they are unable to get in the information in the seven days given to them in this regard. I would say that this person who was 21 days overdue had paid at the end of the month, which is a normal commercial transaction. If we look at the other side-the document says 'member whose debtors include many government departments'. In other words, he was owed money by government departments. He was not being paid by the Government, but the Government was demanding immediate payment at great penalty. No doubt by now Government members would be aware of my efforts to introduce legislation to make the Government pay its debts promptly-I mean any government-or pay interest on the amount outstanding after the 25th of the month. I would greatly appreciate it if members of the Government would come to my aid in Caucus and have that matter listed, so that in a bipartisan way we can overcome the problem of, for instance, the pharmacists who are having terrible problems in relation to the Government's inability to pay. The Minister for Health (Dr Blewett) told us the other day why he could not pay. He blamed repetitive strain injury, I think. It is quite clear that in those circumstances, were my legislation in place, there would be compensatory interest payments made to people like pharmacists in that situation. Surely the Government should be prepared to do that. Surely governments should be able to pay their bills on time. Governments are not like private enterprise; governments work on a strict budgetary arrangement. Governments should not commit themselves to expenditure if they do not have the money to hand. I have a funny feeling that included in all these delays of payment is a sincere attempt to fudge the Budget deficit, because it is bigger than the Government is admitting to. The Government now has a new lender, and an interest-free lender at that-the Australian business community. The business community is waking up and complaining. I call on Government members to get up in Caucus, as I suggested to the honourable member for Capricornia, and do a bit of good for the people whom they represent, because there would not be many Government members who do not have constituents who are owed money by the Government. The other area of taxation which is of concern, as mentioned by the honourable member for Dawson (Mr Braithwaite), is the situation relating to people who are contractors of one sort or another, who suddenly have been deemed not to be contractors. It is a great debate, which I have looked at closely. I am not sympathetic to all of those who claim to be in the category of contractors, as compared with the pay as you earn category. What I complain about is that for instance in the case of Mr Tuppicoff, the Commissioner of Taxation needed to take the matter to court, when, to my mind, it was a clear cut case, and I am sure that the High Court of Australia will confirm that. I think it is a very bad example which is being used against people who are genuine contractors and should be given the rights of that arrangement. I draw the attention of the House to section 170 of the Income Tax Assessment Act, which states: The Commissioner may, subject to this section, at any time amend any assessment by making such alterations therein or additions thereto as he thinks necessary, notwithstanding that the tax may have been paid in respect of the assessment. Of course, the point regarding that is that it goes on to state the condition: 'where a taxpayer has not made to the Commissioner a full and true disclosure'. In other words, if he has made a full and true disclosure, the Commissioner has no right to reassess him. The Commissioner is being somewhat devious in how he approaches that with these people. These people have paid their tax and, having made full disclosure, they should not be dragged back into the ring. We have now 53,000 people waiting for Taxation Board of Review hearings, and there are only three Boards of Review. Honourable members can work that out for themselves. One would want to have a tax problem the day one was born, because one might just get it dealt with before one dies. Mr DEPUTY SPEAKER(Mr Drummond) —Order! The honourable member's time has expired. Mr O'KEEFE(Burke)(11.11) —I will probably become the good guy in this debate, because I intend to discuss order of the day No. 1, the Taxation Laws Amendment Bill. The honourable member for O'Connor (Mr Tuckey) wasted a considerable amount of the time of the House this morning with his continual disposition to muck-rake and wander off on tangents which have nothing to do with what we are talking about. He also made a couple of points which do warrant reply. Mr Hodgman —Why are you replying to him? Mr O'KEEFE —In response to the honourable member's interjection, I do intend to reply to them, and I hope that he remains in the chamber to hear the answers, because he does not have them himself. The Taxation Laws Amendment Bill which is before the House will extend existing tax avoidance provisions to counter further schemes that have turned up, on which this Government is now required to take action. I will talk a little more about that in a few moments. As has been mentioned, we are extending the introduction of personal income tax to Christmas Island residents to integrate fully the island with mainland Australia. We are amending also the secrecy provisions of the Income Tax Assessment Act to enable the Commissioner of Taxation to supply further statistical information to the Australian Statistician. The legislation also amends the dependent rebate provisions of the tax law to ensure that social security income supplements will not be treated as net income for dependants. There are changes also to the 30 : 20 investment rules, which improve the situation for the insurance industry. I make the point that the Treasurer (Mr Keating), in arriving at this legislation, has engaged in consultation with the industry through the Life Insurance Federation of Australia. The provisions contained in this Bill take into account many of the suggestions made by the industry. The expenditure recoupment schemes that have flourished in recent years-this one being another product of the tax avoidance industry-have resulted in the Government being required to introduce further legislation into the House to plug yet another loophole. At the moment there is about $25m in government revenue which has yet to be recovered. It will be interesting to see what the approach of the Opposition will be in the other place, or whether this will be another piece of tax avoidance recoupment legislation introduced by this Government which will be obstructed in the other place by the Opposition. As has been mentioned, the legislation provides for further information to be given by the Australian Taxation Office to the Australian Bureau of Statistics. I want to reiterate the point that this is not information which is likely to cause any concern in the community. Through having this information, the Statistician will be able to provide a better research data base for the Government to assist it in its policy development. This is an administrative measure in the Bill that will have no direct effect on revenue. The changes to the legislation that cover rebates for dependants really tidy up a drafting error that brought the effect of the dependent spouse rebate into question. The Government is simply tidying that up because it was never intended that a supplement be taken into account in determining the separate net income of a dependant. In looking at the legislation that is being debated this morning, it is relevant, particularly following the comments made by speakers from the other side of the House, to discuss the Government's approach to tax legislation and the tax system. To start that discussion, we have first of all to ask the question: Why do we now need a major overhaul of the tax system? Why do we now need a tax summit, to which honourable members opposite do not intend to come? The simple reason is that over some decades a tax system and a tax legislative base have developed that are simply too complex and no longer work. This Government is caught in something of a bind. It has to tidy up the mess that was left behind; it has to simplify the system so that it will again become workable; and, most importantly, it has to return to some principles of fairness and equity. This morning the Deputy Leader of the Opposition, the honourable member for Bennelong (Mr Howard), made the point that as Treasurer he introduced legislation to start tidying up tax avoidance and that had some substantial effect. Let us look at when it was done and let us look at why it was done. This legislation was introduced very late in the term of office of the Fraser Government and it amounted to too little, too late. The reason it was done was that that Government had devised a system whereby the tax avoidance industry flourished. It no longer had the revenue to enable it to manage the country. Honourable members opposite spoke earlier about the Budget deficit and an increase in government spending. A deficit of $9.6 billion was inherited by our Treasurer. He is now being called the world's best Treasurer because he was able, despite the mess that honourable members opposite left, to reduce the $9.6 billion deficit. Mr Tuckey —That is your figure. Mr O'KEEFE —The honourable member for O'Connor pulled out Institute of Public Affairs statistics and talked about an increase in government revenue. Of course there has been an increase in government revenue. We have put people back to work. They are not receiving unemployment benefit any more; they are back in the work force and they are paying taxes. Of course we have had an increase in revenue. It was a lot of garbage for the honourable member for O'Connor to wheel in a graph and say that we are getting more in taxes. Of course we are. He cannot come in here and dish out that sort of tripe and expect to be taken seriously. Let us talk a little about Western Australia, from where the honourable member for O'Connor comes. One of the steps taken by his Government was to set up the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. In future when this whole tax debate is looked back on and after we have reformed it and have a fair and equitable system again, the contribution of Commissioner Costigan and his Commission will be seen to be very significant. Let us see what his investigations led to. First of all, the Commission was set up by the previous Government with the intention of doing over the Victorian painters and dockers, but where did it take us? It took us to the Perth Deputy Crown Solicitor's Office. What did the previous Government do about the Maher schemes? What did it do between 1973 and 1980 as the tax avoidance industry flourished because a whole range of solicitors and accountants in the community saw that that Government was not prepared to do anything. It turned a blind eye, and it continued to turn a blind eye until the point was reached where the deficit was out of control and that Government knew it had to do something because the ordinary person had woken up to the fact that it was doing nothing. As a result of the work of the Costigan Commission we suddenly discovered the extent of tax avoidance in this country. I refer not to tax avoidance by the little person, the ordinary wage and salary earner, but to avoidance by big business and by leading sectors of the community. Honourable member opposite should hang their heads in shame over their Government's failure to act. They have not been fair dinkum about tax reform. Ever since this Government came into office Bills introduced and taken through this House which were genuinely intended to recover avoided income have been obstructed in the other place. We now have to have a tax summit and bring the whole tax system under review because honourable members opposite failed when in government, and it should not be forgotten that they failed. This legislation is a further tidying up that is required as part of the ongoing process for the Government to continue to make the system work. I would be the first to acknowledge that it is a band-aid approach. We have a tax body, if I can use the analogy, that is bleeding everywhere. It has cuts everywhere and band-aids are having to be slapped on to it as each little factor is revealed and we find out what was really going on in the avoidance industry. There is a room full of tax legislation and reviews. We can draw the analogy that Frank Hardy drew in his book the Outcasts of Foolgarah, where he talked about lurks and lurk detectors. We now have a system whereby for every lurk there is a lurk detector. The Taxation Office and the Government have to try to find a solution for every little lurk that members of the community have found to debase the tax system. We have reached the stage where, on one hand, we are slapping on band-aids and on the other we are looking at the question of reforming the whole system to make it workable again. The Australian people understand the situation. They understand that something has to be done. They understand that honourable members opposite sat on their hands, did nothing and failed. Government of this country has now been handed over to a government that is prepared to take action and to do things. I conclude by making the point that there is one glimmer of hope to be found on the Opposition benches. Mr Cleeland —Really? Mr O'KEEFE —Yes, there is. I have to draw attention to this, in all fairness. When the Deputy Leader of the Opposition spoke on the Bill this morning he again said that he supported most of the actions being taken by the Government. That is consistent with his view on a number of approaches we are taking. The other day in this place, in debate on the Banks (Shareholdings) Amendment Bill, he said that the Labor Party is now playing a significant, proper and creditworthy role in the deregulation of the financial system. He also said the same thing about our actions as proposed in the Bill today. But what is happening as a result? He is coming under criticism from honourable members opposite for acknowledging the good work of the Government. His Leader, the honourable member for Kooyong (Mr Peacock), as I understand it, has now removed him from being the chief spokesman on finance matters because he has acknowledged the good work done by this Government. I give credit to the honourable member for Bennelong because he understands these matters and he has noted that the Government is playing a proper role. I do not want to add anything more. I commend the actions of the Treasurer in introducing this legislation and I take this opportunity to commend the Bill to the House. Mr DONALD CAMERON(Moreton)(11.24) —I thank the Minister for Immigration and Ethnic Affairs (Mr Hurford), who is at the table, and the Government Whip, the honourable member for Griffith (Mr Humphreys), for extending me a courtesy and agreeing to my withdrawing from speaking on the next Bills. From listening to the contribution by the honourable member for Burke (Mr O'Keefe) to the debate on the Taxation Laws Amendment Bill, one would think that he was at a local Australian Labor Party branch meeting talking to the converted when he referred to the $9.6 billion deficit. I do not intend to use the few minutes allocated to me to refute the rubbish that spewed forth from him. With respect to his reference to band-aids, I say to the honourable member that if he lived for another million years he could come into this chamber in a million years time and he would hear politicians talking about tax evasion and tax avoidance, because the ingenuity of man is such that no government will ever devise systems to eliminate it completely. Mr Gear —But we try. Mr DONALD CAMERON —The Government may try. The point is that we tried, too. Claims are made that, when in government, this side of the House did absolutely nothing. I can recall the traumas in our own Party. The honourable member for Bennelong (Mr Howard) and the Minister Assisting the Treasurer, who is at the table, will recall the arguments over retrospectivity. The Government of the day took bold and very unpopular steps to pursue those in the league of big time tax avoiders. One of the points that Government members do not understand is that all they have done is to introduce Bills to collect tax. They have done nothing to this time, despite their promises during the 1983 election, to reduce tax. The level of taxation in this country has forced people to look at how to minimise their contributions. I suppose that the statement by the Treasurer (Mr Keating) last night is like that of a man who has an alcohol problem and drinks 30 beers a day. He cuts it back to 20 beers a day and says: 'I am reformed. I am no longer alcoholic'. That is exactly what the Government did with its expenditure cuts last night. they will amount to about $600m, and not $1200m, because the Government has increased taxes. For instance, the government has increased the tax under pharmaceutical benefits scheme by 25 per cent, after two years since the last increase. The government says: 'Are we not wonderful?' The history of its two years in government is that its members have acted like madmen. It has been somewhat like the Whitlam years when numbers in the public sector were increased to such a great extent. The Government introduces its hare-brained schemes. It has established the Human Rights and Equal Opportunity Commission and it has moved in other areas. It is already spending hundreds of millions of dollars more than when it took government. It has now taken away from the invalids, the elderly diggers and those with small children in kindergartens. Government members then come in here, beat their chests and say: 'We are setting a great example to the world', I am not going to get caught up on that subject because I want to speak on a more important matter in relation to the Bill before the House. I refer specifically to the decision of the Government to lift the secrecy provisions and to give the Australian Statistician more information from the Australian Taxation Office. Regrettably, I know that my side of the House is supporting the Government on this measure. However, I am deeply concerned about the attitude which exists in this country towards the collection of information. When we talk about government expenditure, we should remember that so many millions of dollars are being spent on the wages and paper needed for the purpose of information collection. It is high time that this country started to analyse exactly what it is doing in terms of information collection. It is one of the growth areas in Australia, one of the areas of employment opportunity. We are told everyone wants to know exactly what is going on in every nook and cranny. So often, the combination of knowledge which people possess from mixing with other people and supportive information is sufficient to influence decisions in this place and in other parliaments of Australia. About five weeks ago, in an adjournment debate in this House one night, I said: 'I am going to have two bursts at the Australian Statistician. Tonight I will have the first. I will have another a little later'. It was my intention to be more constructive on the second occasion than I had been on the first when I towelled up the Australian Statistician for having railroaded a man well over 60 years of age through the courts. It cost the man nearly $500 because he told the Australian Statistician to get nicked, that he was not going to fill in all the forms that officers were regularly banging on his door saying he had better complete. I established that about 12 people a year are railroaded through the courts by the Australian Statistician. I gave a warning then that the Australian Statistician should watch out if he persisted with that practice because I would take a keener interest in his activities. Having said that, I express my total opposition to the decision of the Government, of even my shadow Treasurer and of this side of the House to support the Government in allowing the Statistician to get his hands on more information. The second reading speech of the Treasurer sounds so innocuous when it says: . . . information as to the name, address and industry classification of an employer-- Do honourable members know why the Statistician wants that information? It is so that he can get his fingers on to more and more people, send out more and more returns, have more and more information and produce bigger and bigger reports. That is what it is all about. I say to the Minister at the table that I bet my boots that is what is behind it. The Statistician says to the Government: 'We have trouble in contacting and finding all businesses; so we want you to lift this veil of secrecy just for us, to enable us to obtain the privileged information of the Taxation Office. Everyone sends in a tax return, so we want access to those better and larger lists as well'. I just hope that the Australian Democrats-I do not think I have ever called upon the Democrats to do anything-wake up to what is going on and join my Liberal colleagues in the Senate and the National Party of Australia senators. I notice that all the National Party members of the House today are listening to this debate. I hope they will convey the contents of my speech to honourable senators and say: 'Red alert! The big hand of government is spreading even further'. During my speech in the adjournment debate I said that I would make a second contribution in regard to the Australian Statistician. Despite my comments at the time about the unbelievably heavy-handed approach of the Statistician it is fair to observe that, generally-this is probably my first big public concession to the Statistician in about 15 years-the Australian Bureau of Statistics is doing a responsible and reasonably good job. However, there is room for vast improvements and change, especially in a body as large as the Australian Bureau of Statistics with 3,400 employees and a budget of $115m. I repeat: Nearly three and a half thousand people work for the Bureau, with a budget of $115m. To put the position in easily understood terms, there are three times as many Bureau of Statistics people out there as there are Australian Federal Police in the States. That staff level gives one some idea of how figure-mad and information-mad we have become. Granted, much of the time, it is a bigger business than Federal crime fighting. The Statistician is doing only what the Government directs but he has had fingers into everything. To be specific, I refer to the onerous nature of some of the surveys undertaken of the business community, especially small business. To give some idea of the scale of the surveys imposed, the ABS conducts a manufacturing census yearly of 42,000 businesses, a quarterly survey of capital expenditure of 8,000 businesses, a quarterly survey on stock levels of 13,000 businesses, a 6-yearly retail survey of 110,000 businesses-the next one to be held later this year-and a monthly survey of 7,000 businesses, again on retail figures. Putting to one side the value and benefit of these surveys to those who utilise the information, I believe that the Government is either guilty of allowing the ABS to go too far or is responsible for the ABS going so far in demanding the uncomplaining compliance of people in completing what amounts to a torrent of statistical forms. The now steady stream of threats to prosecute by the ABS is evidence of the fact that too much is being asked of too many people without their being recompensed in any way. The trend towards the conscription of the general public to perform government-directed tasks without remuneration is growing. It falls especially hard on the small businessman, whose cost of compliance in such things as sales, payroll and pay-as-you-earn tax deductions is much larger proportionately than for a large business. For these people, the debilitating effect of completing an ABS survey lies not simply with the onerous nature of the survey-it often requires hours or even days to complete detailed questions-but also in the cumulative nature of all the government forms piling on to the back of the harassed and often struggling to survive businessman. Sadly, many people in secure government positions-I do not refer specifically to anyone in the galleries, but people who have permanency, such as people in the ABS and Ministers who dream it is theirs, seem hardly to understand the battle simply to survive which confronts many who comprise the backbone of this nation. To start reversing this trend, I make a proposal. Big and small businessmen who are forced to complete statistical surveys should be recompensed for their efforts. Let us make no bones about it. I have in my hand examples of the kind of books with which small businessmen must cope after getting home-after wrapping up fish and chips all day, or peeling potatoes to make chips, or running a little transport business. What do they find when they get home? This is the latest one, the big transport industry survey. It is headed: 'Transport Industry Survey-Taxi and Hire Car Industry'. Other parts are headed: 'Transport Industry Survey-Road Freight Industry', 'Transport Enterprise Return-Air Transport'. Mr Andrew —After driving all day. Mr DONALD CAMERON —Or after flying all day. Other parts are titled, 'Transport Enterprise Return-Freight Forwarding', and 'Transport Enterprise Return-Road Freight Transport'. I shall abide by my agreement to deal with this matter fairly briefly. All this is but a sample of what government is producing these days. All I can say is that once the economy is on its feet again-and it is not back on its feet, despite claims to that effect-so what? A happy, bubbling nation does not need all this information. This is the type of thing to which we resort when we are in trouble. It is important to remember that the statistical surveys are not like other government requirements, such as those for sales tax and payroll tax, which are universally compulsory for relevant firms. With the ABS, people and companies are selected at random by a kind of game of Russian roulette, and for the unlucky ones in the business world, it immediately places them at a competitive disadvantage compared to those lucky enough not to be included. I therefore advocate the introduction of a tax concession. That is something that rarely occurs in this House; all that we see is tax Bills grabbing more money. I am advocating a tax concession particularly for businesses which are lately faced with more than threats of being pushed through the courts-businesses are being railroaded through the courts these days-if they do not comply with the sometimes very costly demands of the Commonwealth Statistician. Time does not allow me to address the nature or the size of the tax concession that may be appropriate, except to say that, in principle, if the ABS had to pay for its information, that would have a positive effect in its decision as to whether it really needed all that information. It would introduce an element of the market-place into an otherwise secluded area of government currently devoid of any market forces. I believe that the ABS is an example, albeit an unwitting one, of a trend towards greater compulsion by seemingly benevolent government agencies. A financial reward to offset the compulsion of ABS surveys would be a positive step towards reversing this trend. I thank the Minister. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(11.38) —In closing the debate, I thank all honourable members who have taken part. There is not a lot to which to respond. Many of the contributions made were interesting and contained strong political points, but there was not much of a technical nature. That is not so of the contribution of the honourable member for Moreton (Mr Donald Cameron). He drew attention to a particular aspect of the Taxation Laws Amendment Bill in which we are seeking more information to be made available to the Australian Bureau of Statistics. The honourable member indulged in one of his fads. He is a member of the mushroom club. He believes that it is good enough to be fed just on bulldust and kept in the dark. But unfortunately, he wants the rest of the community to join his mushroom club. I do not think that would be a good thing for Australia, because I believe that good policy requires good information. I commend the honourable member for Moreton for being a devil's advocate, for making sure that unnecessary information is not collected and that human rights issues are attended to. He plays a useful role. It is good to have a devil's advocate. However, we have an Australian Statistical Advisory Council, which is made up of people from a wide cross-section of the community. They would be the first to attest that the problems of the ABS and of Ministers such as myself who are responsible for it are not a matter of less information; they are that the community is always seeking more information. It is the transport industry that wants that information on transport; it is not some bureaucratic body that is constantly thinking up requirements for new information that it wants to collect. It is the industries themselves that want this. The Government generally, of course, needs such information. I repeat: If good policies are to be devised, we need good information. This Bill is another testimony of an active, energetic government doing something about tax reform. we are pleased that the Opposition supports this measure. Most of the speech of the Deputy Leader of the Opposition (Mr Howard) I could agree with thoroughly. Of course, our Hawke Labor Government will be looking after the interests of the family, to which the honourable member drew attention, and particularly the one income family. A particular point that I should mention was raised by the Deputy Leader of the Opposition-the matter of the Friday-night Monday-morning trust. The honourable member asked me to respond specifically to his claim that the ruling of the Commissioner of Taxation applies to true business situations. I have some notes on this matter which I should put on record. I believe that they will reassure the Deputy Leader of the Opposition. Taxation Ruling No. I.T. 2121 sets out the official views in the light of a significant increase in the creation of family companies and trusts set up to obtain income tax advantages from the splitting of income derived from the personal exertion of a family member. The ruling is concerned solely with income splitting in respect of the rendering of personal services. In a number of cases coming to the attention of the Taxation Office a taxpayer has ceased employment on one day and purported to carry on the same work the following day, not as an employee of the former employer but as an employee of a family trust or company. The case of Tuppicoff v. The Federal Commissioner of Taxation is typical of this sort of arrangement. The ruling states that it will apply to any arrangement for the splitting of income and consequent avoidance of liability for income tax where the income involved is income arising from a taxpayer's personal exertion and the arrangement operates solely in respect of that income. The ruling-and this is the important part to reassure the Deputy Leader of the Opposition-does not apply in a true business situation where the assets of a business are transferred absolutely to a trust for the benefit of family members and the business thenceforth is carried on for the benefit of family members. Each of these cases must be decided on its own facts. I hope that that reassures the Deputy Leader of the Opposition. I now commend the Bill to the House. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Hurford) read a third time. Debate resumed from 9 May, on motion by Mr Keating: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Drummond) —I understand that it is the wish of the House to debate the Sales Tax Laws Amendment Bill 1985 currently with the Sales Tax Assessment Bill (No. 10) 1985, the Sales Tax Bill (No. 10A) 1985, the Sales Tax Bill (No. 10B) 1985, the Sales Tax Bill (No. 10C) 1985, and the Sales Tax (No. 5) Amendment Bill 1985. Is there any objection? There being no objection, the Chair will allow that course to be followed. Mr HOWARD(Bennelong)(12.43) —The Opposition has major concerns about the manner in which the Government is handling this legislation. There are many features of the Sales Tax Laws Amendment Bill which are quite acceptable, and there are many features of the Bill with which the Opposition has no quarrel. For one thing, the Bill implements foreshadowed action that I announced as far back as September 1981 to deal with certain sales tax avoidance practices, and, obviously, I have no quarrel with the Government embracing decisions that were made by the former coalition Government in the taxation area. It is becoming quite a habit lately. This Damascus road is getting very crowded. I just pass that aside, however, and say to the Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer (Mr Hurford) that what worries the Opposition about this package of Bills is the totally inadequate amount of time that has been allowed for interested parties to examine the legislation. It was introduced into the Parliament last Thursday. Today is Wednesday-barely six days later. It represents probably the biggest change to the sales tax law for about 30 years. It has enormous ramifications for many traders, yet the Government has allowed a bare six days for this legislation to be scrutinised. I know that in the past governments have been guilty of doing the same thing; I acknowledge that. But I do not believe that in this case two wrongs make a right. This is yet another example of the way in which we make a mockery of the legislative process. It is possible to have sensible examination of complicated legislation of this kind. It ought to be possible for some sensible non-controversial changes to be made if unintended consequences arise. I am not saying that they will arise. Frankly, I have not had sufficient opportunity to examine it in detail. I do not think I have been particularly dilatory in my duties over the last six days. Interested people in the accounting and legal professions have not had an opportunity to examine it in detail. I say to the Minister for Immigration and Ethnic Affairs who is at the table, that this is not really good legislative practice. The Government has made its announcement about the new tax avoidance practice it wants to close off. The Government is relying on a 1981 announcement with regard to earlier practices, so there is no question of letting any money slip through the fingers of the Treasury while further consideration of the Bill is allowed. Why cannot consideration of this bill be deferred for a couple of weeks to allow people in the profession and people who will be affected by it to understand it? The sales tax law is complicated. As I have said, this is the biggest change for 30 years. Frankly, I cannot see what the Government will lose by delaying; in fact, the Government would gain a good deal of credit if it agreed to put this off for a couple of weeks. We would not seek at the end of that time to delay the passage of the Bill or to make difficulties for the Government. The Government cannot ram through legislation of this complexity and justify it on the grounds that other people have done so. That does not alter the fact that people will react to what is being done now. They will not remember what may have been done in the past by those on both sides of the political fence. My first response is to make that point. By way of illustration, I refer the House to a telex I received this morning from the Managing Director of Reader's Digest Services Pty Ltd, a very large and well-known publishing organisation not only here but also around the world. He sent to me a copy of a telex he has sent to the Treasurer (Mr Keating), and in that telex he makes the very point I have just made. He says: My company is a major compiler and marketer of collections of records and cassettes to the public. We are disturbed at the haste and lack of consultation surrounding the introduction of the legislation. Our position has always been consistent and within the law. We are now caught up in an umbrella of reform which will substantially increase our costs to an extent greater than the profit we make on our music business. I repeat that: . . . which will substantially increase our costs to an extent greater than the profit we make on our music business. I am not giving any undertaking to this company, or indeed to any other company, that the Opposition will move amendments to the Bill or that we are opposed to it. I simply make the point that that kind of reaction, from a reputable company which is a major activist in its own field and which has an enormously good reputation around the world, is symptomatic of why the indecent haste of the Government on this piece of legislation is so wrong. The telex continues, inter alia: We believe this all-embracing legislation is of great detriment to the music industry and urgently ask you to consider these aspects of the proposed legislation and consult with industry before proceeding. That telex was addressed to the Treasurer. If I may say so, I understand better than most why the Treasurer does not have the time to talk to them today or tomorrow and did not have the time yesterday or last week. That is all the more reason why this legislation should be postponed for a week or two. Representatives of the Government could then talk to people such as those from Reader's Digest, and also have a word with us. I promise the Minister at the table that we will not move any frivolous amendments or give any comfort to anybody in any part of the industry that may be affected by this legislation who is engaging in some of the practices against which it is directed. I have absolutely no quarrel with the determination of the Government to curtail sales tax evasion practices which have developed by the misuse of sales tax certificates. The Government estimates that about $200m is at stake. I have absolutely no quarrel with that, nor have I any quarrel with the intention of the Government to close off practices whereby wholesalers, who technically become retailers under an agency or similar retail selling plan, avoid paying sales tax on their wholesale profit margin. If that is happening, with the result that genuine evasion of tax is occurring and if arrangements are entered into deliberately to evade tax, of course measures to counteract that, of which proper warning has been given, will be supported by the Opposition. The concern of people such as those from Reader's Digest and those in the accounting profession and the business community is that this legislation will go further than that. It is just not good enough for the Government to bring in this legislation and to say, six days later: 'We require you to pass it'. I will move a second reading amendment, although I imagine I will not have the numbers in this place to get it carried. I do not think my powers of persuasion will be sufficient to enable that second reading amendment to be carried. If the Government does not acknowledge in some way what is a legitimate complaint made on behalf of people affected by this legislation, it would be the intention of the Opposition in another place perhaps to invite a Senate committee to look at the legislation in order to be satisfied that there are no unintended consequences. Let me say immediately that that will not in any way affect the anti-avoidance provisions of this Bill because they can run from the date of its introduction; there is no argument about that. The Government has given due warning and due notice of this. The legislation is picking up my 1981 amendments. The new anti-avoidance measures being taken can date from the time the Bill was introduced. There is no argument about that. The Government will not be able to run the line of argument that if we send it to a Senate committee the crooks and smarties will get away with a large amount of money. That will not happen because they will be caught from the date of the announcement. There are no problems on that front. There is no logical reason why the request I make cannot be complied with. We had similar problems with the prescribed payments system. I had no fundamental quarrel with that-I hardly could because I announced it in the 1982 Budget-but I did have a quarrel with the way in which the Government was handling it. The Opposition ensured that it went to a Senate committee and, as a consequence, the Government picked up a large number of changes. As a result, the measure has become more acceptable in the business community than it otherwise would have been. Surely there is nothing wrong with that? It is no skin off the Government's nose. It is a rather more intelligent use of the legislative procedure. Surely to goodness we do not have such a stubborn blind pride in anything we bring into this House that we cannot listen to some kind of change. Surely we are more sophisticated and mature than that and can recognise that occasionally there may be a proposition put forward, other than from within the ranks of the Government or the bureaucracy, which casts some doubt on the veracity of what the Government is doing. I know that the Minister will say that past governments have done this. Maybe we have all been wrong in the past and maybe it is time on that front that we recognise it. I am asking for only a week or two-that is all-for this to be looked at. I have not had an opportunity to analyse the ramifications of it and I do not think anybody in the profession has. Frankly, it is far too big a change and will have too dramatic an impact on certain sections of the industry for it just to be rushed through in a mere six days and given this kind of peremptory treatment. I appeal to the Minister at the table. I know he is a very reasonable man and he always gives very careful considerations to sensible propositions that are put forward by the Opposition. Mr Hurford —Flattery will get you everywhere. Mr HOWARD —I am glad he interjects that flattery will get me everywhere. If it is necessary to flatter the Minister to get a delay, I will be delighted to do so. It is not difficult to flatter the Minister at the table. He is normally a very co-operative fellow who tries to do the right and ever-courteous thing. But we are dealing with a very big change. The sales tax laws are very complicated. People have got a lot on their plates with tax changes at the moment. I would like the honourable gentleman to give very serious consideration to the sorts of changes that I am suggesting. I repeat, and I want to make it perfectly clear so that there is not even a zephyr of a possibility for the Minister to say that in some way we are protecting people engaged in evasion practices. There is no question of that. My announcement in 1981 covers one set of evasion practices and the date of introduction of the measure can be the operative date for the other evasion practices. If changes are made to the Bill in the future, indeed, it will be possible. I would like to make one or two very brief observations about the current debate that is going on about indirect tax in Australia. I would like, particularly, to make a comment or two about some of the arguments that have been advanced in relation to the tax mix in Australia. I note that over the last few days many leading people in the trade union movement have re-entered the lists so far as the debate is concerned. We have had the return of Cliff Dolan to the debate. He has added quite a bit of heat and fury to the debate and he has made it very entertaining. He has also advanced a few theories that used to be very popular and very beloved of all people in the Labor Party-I dare say it is still very beloved of a lot of people in the Labor Party-that is, great opposition to the introduction of a broad based indirect tax and the introduction of a greater reliance on indirect taxation. I just take the opportunity of saying that the Opposition, unlike the Government, has had a quite clear policy for some months now. We took that policy on taxation to the last election. It contained a number of elements. Of course, the principal element of any taxation reform in Australia will need to be the introduction of a broad based indirect tax. This foolish notion that, in some way, we can bring about major reforms to the Australian taxation system without going down that path is a very discredited notion. It is based on a very false premise and it ignores the rather obvious fact that the existing indirect taxation system so far from being progressive is, in fact, in many features quite regressive because of its heavy reliance on a narrow range of items. The example has often been used that a man on $15,000 a year drinks as much beer as somebody on $100,000 a year and, in relative terms, he pays a darn sight more excise on the beer that he drinks than does a person on $100,000 a year. So I would simply make the plea quite genuinely to people in the Government not to take, on this occasion, too much notice of Mr Dolan, because I think he is wrong. They have taken a lot of notice of him on wage discounting. That was quite apparent from the Treasurer's statement last night. There was a complete capitulation to the Australian Council of Trade Unions- Mr Shack —Sell-out. Mr HOWARD —an absolute sell-out to General Dolan last night on the question of wage discounting. I only hope that the Government does not make that same mistake on the taxation front. If it does I think it will be making a very significant mistake because the basic promise of the ACTU's opposition to an indirect tax is wrong in fact. It is possible to structure an indirect tax system that is not regressive; it is possible to structure one that is less regressive than the existing one, and it is possible to structure it in concert with other changes to the taxation system that will be of benefit to the entire community. I return to my original theme; that is, that there are many features of this Bill that the Opposition supports. However, we believe that more time should be allowed. I will move an amendment to the second reading motion to that effect. The Government will do itself credit among those likely to be affected by the legislation if it accedes to a thoroughly reasonable request that the legislation be deferred to allow people just a little more time to analyse its consequences and its impact. I therefore move: That all words after 'That' be omitted with a view to substituting the following words 'whilst not declining to give the Bill a second reading the House deplores the totally inadequate time allowed by the Government for scrutiny, consideration and analysis of the most significant changes to our sales tax laws for about 30 years'. Mr DEPUTY SPEAKER(Mr Andrew) —Is the amendment seconded? Mr Cadman —I second the amendment. Mr CHARLES(Isaacs)(12.01) —If the recent intense public scrutiny of our tax system has shown us anything, it is that tax avoidance and evasion is running at intolerable levels within our community, levels which we are now coming to recognise as crippling to this country's development and the Government's ability to arrange taxation on the most equitable basis possible. The cost to this country of tax evasion at present levels is very high-estimated at several billion dollars. Measures contained in the amending legislation before us today are estimated to recoup some $426m at current rates, a most significant saving, if not the means of winning the war against tax avoidance and evasion in one fell swoop. Unlike the Fraser Liberal Government, the present Government has a strong commitment to seeing things through. This legislation illustrates the resolve, which involves tackling problems at the point at which they occur with strong and appropriate measures. I must agree, to some extent, with the former Treasurer, the honourable member for Bennelong (Mr Howard) when he said that the sales tax laws are complicated. The six sales tax Bills before the House make changes-quite revolutionary changes, as the former Treasurer said-to a number of things that have applied for 30 years. I must admit that I am not completely on top of all the Bills before this House. The bulk of the amendments, however, is addressed to two distinct abuses of the current sales tax system, each currently costing this country around $200m a year. As the Treasurer (Mr Keating) has already shown us in his second reading speech, one major abuse of great concern to the Government is the practice of using indirect retail marketing arrangements to avoid full payment of sales tax. It is possible, for example, for a wholesaler to become, as it were, the retailer, through the use of agents, of floor sharing arrangements with retailers and thus avoid the tax liable at the real wholesale point. Under such manipulated arrangements sales tax is payable not on the wholesaler's price to the retailer but on the price at which the wholesaler initially purchased the goods-a much lower sum which excludes all the marketing costs of the wholesaler and the wholesaler's profit margin. Examples of the types of practices to be affected by the amendments have been flagged by the national Press in the last few days. They include party plan arrangements and shared floor plan selling where a store keeper undertakes to display and sell goods belonging to another person in return for commission. It is probably indisputable that many of these arrangements, most particularly party plan selling, were undertaken and developed for reasons other than outright tax avoidance. There was, and remains, a particular market for what one might call novelty buying done in a social and easy going environment. These sales generally form very little part of people's day to day expenses and some-for example, the tupperware party-have become institutions. Nevertheless, these arrangements do benefit these modes of operation considerably in minimising their sales tax liabilities and to my mind there is absolutely no reason why sales of any product should not attract tax just because marketing arrangements vary from the norm. That does not conform with our ideas of fairness on this side of the House. It gives the sellers in question an undue advantage over more conventional competitors. I am sure that every member of the House will agree that the appropriate tax should be paid, whether it be from the conventional shop front retailer, the door to door salesman or a party type arrangement such as I have just mentioned. If sales tax is due in a retail sense it should be paid and not avoided. We are not suggesting that it is avoided deliberately in many cases, but it is avoided at present. The second area of major reform is in the sphere of registration of wholesalers and the quotation of registration numbers. Under present arrangements a person who starts a business of manufacturing goods for sale or of wholesaling goods is obliged to register with the Taxation Office. On registration a sales tax certificate is issued to that person with a personal number for quoting in future transactions. If a manufacturer, that person then quotes the number on all purchases of materials to be used in the manufacturing process, including any machinery involved in that process. These items will be sales tax exempt as aids to manufacture. If a wholesaler, the person quotes the number on all purchases intended for resale. Again those purchases will be sales tax exempt. In effect the quoting of a certificate number means a tax-free sale. It is assumed that tax on the goods in question will be paid at a later stage in its processing. Sales tax is ultimately payable in situations where one sells to a retailer who has no certificate to quote, to a wholesaler who does not quote his certificate number or to a member of the public. The problem that the Government has addressed here is that there is widespread abuse of the registration and/or quotation system. For example, buyers can quote their certificate number in purchases quite removed from their manufacturing enterprises. Others can quote bogus numbers to obtain goods free from sales tax. The present law does not bind vendors to ensure the law is adhered to in transactions in which they are involved. Accordingly, the tendency has grown up in many areas to ignore outright abuses of the system. I suppose a typical example of the evasion of sales tax through this loophole involves an unregistered person quoting a phoney certificate number, giving a fictitious name and then conducting the transactions through the use of cash or a bank cheque. The goods are sold tax free, the purchaser is unable to be traced and no tax is collected on the goods involved at any point. To counter instances such as this which are calculated at costing the Government about $200m a year, the amendment proposed by the Government includes the very sensible increase in the level of the amount of security which may be called for at the Commissioner's discretion to $25,000, the granting of increased powers to the Commissioner to refuse or revoke a sales tax registration and to gazette, revoke or cancel numbers, and provision for increased responsibilities on the part of the vendors involved, who must be satisfied that customers are bona fide. The amendments make provision for the collection of the avoided tax from the vendor in question if it appears that conditions of the new legislation have not been met. As I mentioned earlier, the sales tax laws are complicated and this raises the whole question of the wholesale tax base. I would like to make a few comments in that regard and reflect on the present tax debate. I do not wish to go down that track too far. I shall make a few general comments which are pertinent to this legislation and the wholesale tax system as it operates in Australia. Sales tax is now levied on a multirate basis-that is, at 7 1/2 per cent, 20 per cent and 32 1/2 per cent-with a large number of exemptions. Well over 50 per cent of our final consumption expenditure is free of any sales tax component. Exempt, for example, are foodstuffs, clothing, footwear, drugs, most fuels, water, books and printed matter. Taxable, on the other hand-and this is a random selection of examples-are building equipment, household furniture, household utensils, cars, alcoholic beverages and pet food. Anomalies and inconsistencies abound in this area of tax activity and the administrative problems are great. That was mentioned by the former Treasurer, the honourable member for Bennelong, and I would concur with the comments that he made. This illustrates the fact that in the present tax debate, no matter which track the Government may take, it may well be appropriate anyway to replace the entire wholesale tax base with another measure. From my calculations, if one replaced the wholesale tax base completely with a 5 per cent retail sales or consumption tax, one would see a rough parity; in fact, I think the Government might come out slightly in front with a 5 per cent levy. There is a rough parity there and this would do away with the many anomalies in the wholesale tax area and also it would do a great deal for manufacturing industries, which in many cases are hit by the wholesale tax base. A shift to a consumption tax, even at a very low level as a compensatory measure, would assist the manufacturing industry quite significantly. This is an area that obviously the Government will look at. There are various options. During the public discussion we have seen options floated in many areas, including the suggestion of the extension of consumption tax to a 12 1/2 per cent rate. But I am specifically talking about the equation of a consumption tax as against the wholesale tax we have at present. Once more I must agree-some may say unfortunately-with the remarks of the former Treasurer when he said it is true to say that it is ridiculous to claim that if one intends to make massive changes to our tax system one can do it in any other way but through some form of indirect taxation. The monetary figures, the mathematics involved, just do not add up with any other form of change in the tax system. If one is looking at changing the tax system drastically-such a change must involve a substantial shift in money terms of billions of dollars-the only way one can go is down the indirect tax route. There is no other way. Of course, there are other measures to bring in funds, such as capital gains taxes, death duties and the like, but they will not net the Government the billions of dollars that are needed if huge cuts are to be made in direct personal tax. Of course, the Government may decide not to go down that route, but if one makes a clear decision to change the system, there is only one way to do it. I leave the House with those few thoughts. This is a very interesting and complex area, not least the area of the wholesale tax base I believe that no matter what happens in the tax debate in the next couple of months, it would be a good idea to get rid of the wholesale tax and at least compensate for it with a 5 per cent consumption tax, which is the rough equation. Beyond that I will leave the matter for future debates and, hopefully, I shall have something to say later. In conclusion, I support the legislation and congratulate the Treasurer for bringing it before the House. It is complex. It is a pity we did not have a little more time to digest and debate it, but the pressures of government are upon us and it is unfortunate that that is not possible. I support the amendments before the House and I hope that they have a swift passage through this House and the Senate. Mr CADMAN(Mitchell)(12.14) —There are three real areas of concern with the taxation legislation before the House. The first area of concern for me is how this legislation fits in with the proposals that will be before the tax summit. A few weeks before the tax summit we have the introduction of legislation such as this that affects the whole spectrum of indirect taxes paid and that could all be prone to alteration in a few weeks, as has been suggested by the honourable member for Isaacs (Mr Charles), or it could stay in place and a different sort of tax complexion could be applied across the whole gamut of indirect taxes. The second point of concern is the short amount of time that the Opposition has had to deal with this matter because it is complex and extensive. It raises $426m, a substantial amount of funds, and moves into new areas of sales tax collection. The third area of concern is the implication of reverse onus of proof inherent in the legislation. In regard to the reverse onus of proof, the Government's wish to instigate processes whereby any tax avoidance is prevented has led to it drawing up legislation which will impose a new responsibility upon those entering into transactions. Let us consider the new sections 1 (c) (2) and 1 (c) (3) of the Sales Tax Laws Amendment Bill which deal with the responsibilities placed on the vendor for checking the sales tax numbers of persons seeking to make a purchase. My reading of that clause is that should the Australian Taxation Office wish to apply the precise details of that law, it may pursue the vendor to ensure, first, that the vendor is fully informed of all provisions of the Act; secondly, that the vendor has sighted documents or has established for himself by some objective method the entitlement of an individual to gain access to sales tax exemptions; and, thirdly, that the person acting on the vendor's behalf has the capacity to convince the Commissioner of Taxation that all these processes have been completed. In practice, that could mean that the vendor's employees, or the vendor himself, may have to be fully informed and examine the Commonwealth of Australia Gazette to find out his precise responsibilities on the levels of sales tax, what the exemptions are and who has access to those exemptions. Then the eligibility and bona fides of the individual seeking exemptions must be checked. This rule can be applied very strongly as a reverse onus of proof in that the person making the purchase is not completely responsible for his own action but two individuals are responsible for the transaction; that is, the person making the purchase and the person making the sale. So we have joint responsibility in this legislation. If exemptions and certificates of exemption are issued, it must surely be the responsibility of an individual who has such an exemption to demonstrate that fact. I know that there has been concern about transactions in the electronics industry in regard to goods such as video cassette players. The Commissioner, in his collection of appropriate taxation, is concerned at the way some individuals have abused the processes of the sales tax Acts. It does not seem proper to use a sledge-hammer to crack a walnut because there are honourable and legitimate operators right across the sales tax field. Because a problem has been identified with one group of individuals-in this instance it may be only one company-the sledge-hammer comes out and reverse onus of proof takes place. The person writing up the sales docket, the person taking the order, now becomes partly responsible to the Commissioner for his actions. I do not think that the technique employed by the Bill is a proper and Australian way of doing things. Let there be greater onus on those seeking a sales tax exemption. Why has that approach not been taken so that documents and certificates have to be presented on each occasion that exemption is sought? Why cannot proper authority be given by the Commissioner in writing to those who have exemption other than by way of certificate so that they can present that proof of exemption when making a purchase. Many techniques can be adopted by the Government to achieve its objective in this instance. I believe it is throughly objectionable for the Government to seek to support the Commissioner in spreading onus of proof to include reverse onus of proof. The complications of administering this process will be substantial. It will mean that those people taking orders will either deny legitimate exemptions or will have to instigate through their sales process additional costs to ensure that the bona fides of purchasers are established. That is not the way the sales tax Acts have operated and it is not the way that they should operate as from last Thursday. A second matter which concerns me is the problems presented to members of this House by the Government bringing in some hundred pieces of legislation within the last sitting days of this session and expecting us to deal with a complicated matter such as sales tax. I have dealt with one aspect of it-the reverse onus of proof. However, there are many such areas and business and industry are really concerned. Accountants, solicitors and tax lawyers have not really had an input into this legislation so that it can be clean and well-considered by the House. I refer the House to an article in yesterday's Australian Financial Review in which spokesmen for two major companies in the sales tax field made statements about their concern. I telephoned them today and they are uncertain how the Act will operate. They have expressed concerns which I think would be shared by all. I hasten to say that they were not critical of the Government's right to introduce legislation of this type. The companies cited in the Australian Financial Review are Arthur Young and Associates and KMG Hungerfords. Both firms have expressed their concerns publicly, and they are legitimate concerns. The week's delay being sought by the Opposition is surely reasonable so that the consultative process on which the Government claims to pride itself can take place. The Government has slammed legislation into this House, will pass it within a week and trust that it will work. It will raise $426m by the process, and it seems to me that it is more interested in the financial gathering than in the details of the legislation. Mr Price —Oh, come on! Mr CADMAN —Come on, my colleague says. The Government selects a group of people, shoves them into something that is called a summit and says it has consulted the Australian people. I could read out the very select and elite group who will be consulted at the summit. The Prime Minister (Mr Hawke), in the ninth point of his letter of invitation to people going to the summit, says: . . . any reform package must have widespread community support, including support at a widely representative National Taxation Summit . . . How many people will be here? There will be 30 or 40 representatives of exclusive organisations while entire groups of the community will not be represented. Where are the representatives of the housing industry and the home buyers? Where are the consumers of all sorts of goods? Of course, the Federal Chamber of Automotive Industries will be there; the Australian Bankers Association and the Confederation of Australian Industry will be there, too. Sure they should be consulted but it is not a proper consultative process. The Government has not consulted anybody in this sales tax amendment process either. The whole administration of sales tax is thrown into confusion by the Government's wish to block loopholes. I agree with the blocking of loopholes; it is essential and proper that the Government proceed against individuals who have abused the sales tax Acts. But I have illustrated with one small point that the Government is using a sledge-hammer to crack a walnut. If proper application were given to this matter by all members of this House I know that together we would produce better legislation. The Opposition's amendment, moved by the Deputy Leader of the Liberal Party of Australia, is an amendment of protest at the inadequacy of time allowed to the Opposition to explore and examine the provisions of the sales tax amendments. It also reflects, I believe, the concern of the community, which is going to be affected by the sales tax provisions. Another area of concern to me-I have not been able to establish whether it applies in this legislation-is the process of the artificial division of responsibility of wholesalers and retailers. It has come to my attention that large food chain stores have a process of wholesale and retail which is interlocked and their payment of sales tax is quite different from that of other retailers of food products who purchase from wholesalers. It seems to me that there are advantages in the system favouring, for instance, the Woolworths group-I use it only as an example and I do not in any way present it as being a tax avoider-which has an interlocking wholesale and retail outlet process. Is it the intention of this Bill to divide that process so that sales tax is paid when the goods move out of the warehouse to the retail centre? Is that covered by the Acts? Let us get some of these things straight because the Press reports and the comments of people who should be informed on these matters indicate that there is grave concern. Mr Damian Walsh, of Arthur Young, said: The definition is broad enough to catch many payments for services and franchise fees as well as the commonly accepted forms of royalties but does not include performance or exhibition royalties. Mr Keating has presented this new tax on royalties as an anti-avoidance measure but as is generally the case, the legislation is not restricted to anti-avoidance arrangements. That is true. Mr Malcolm McLean of KMG Hungerfords sees the proposed legislation in this way: . . . the most important legislative changes to the sales tax system since the introduction of sales tax in 1930. The Government is going to race this legislation through the House after only a week of public exposure. That is not proper. It is grossly improper of the Government, not only by the standards of the community but by the standards it has placed on itself by committing itself to consult with industry, interested parties and individuals in everything it does. I believe that the whole process of this legislation, the way it has been introduced and the way it is being actioned, is grossly improper and unfair. Why should the community not have a say? Why should the Opposition not be allowed to examine in fine detail the way in which this Act will apply. I predict that there will be some fairly gross inequities in the process of its application. Further amendments will have to be implemented or the Government will have to tough it out in the way it tried to tough out the ITA.2121 ruling, which applies to a whole range of people not at first envisaged by that ruling. The application of tax law in Australia is more and more in the hands of the Commissioner. In some ways that is good and in some ways it is unfortunate. I see great delays in the assessment of tax claims when people ask that their matters be reviewed. The 20 per cent fine ticks up the whole time that the matter has to go to review. It is causing grave problems for many people, who feel completely justified in saying that the Commissioner has been hasty or inaccurate in his assessment of the income tax they should pay. Businessmen have said to me that if the Commissioner keeps this practice up he will find, after two years, that he will be chasing shells, not companies or business organisations. The 20 per cent interest charge he applies during this period is so high and demanding that it is easier to fold up a business and leave nothing but a shell for the Commissioner to chase at the end of that period. That is the tragedy but that is what delay does under this system where big penalties are applied. I have no objection to the penalties but I have great objection to the slowness with which these matters are being executed. I turn to the implications this sales tax amendment has for the summit. The Government has said that by this process of what it says is blocking a loophole, there will be a revenue gain of $426m. We are in a few weeks to have a tax summit. The Government is known to be enthusiastic about an extension of indirect taxes. This sales tax amendment is an extension of indirect taxes. We do not know yet what the Government's proposals are or what the White Paper that is to be discussed at the summit will say. We do know that the options for indirect taxes will be contained within it. If it is the Government's proposal to dispense with existing indirect taxes and to apply a new system of indirect taxes this legislation is premature and unwarranted. The honourable member for Chifley (Mr Price) shakes his head, so according to his knowledge it is not the Government's proposal to wipe out existing indirect taxes and establish a new indirect tax which covers the consumption of all commodities and services. So the Government, according to my colleague, is going to add on a consumption tax across the board, including an add-on to sales tax contained in this legislation. I do not know how the Government or its members can possibly comprehend the decisions they are involved in. We have a sales tax Bill in the House, for one week's consideration by the Parliament and the community, on top of which the Government is going to place broadly based consumption taxes. I do not know how any appropriate consideration can have taken place on this. The process the Government is entering into of indirect taxes is faulty at base. The Government was hasty and committed itself to this summit process because the Prime Minister, in a throw-away line on a radio station broadcast said: 'let us have a tax summit'. The Prime Minister and the Treasurer (Mr Keating) have already said that if the unions or any other major section of the community object, the Government will not impose an indirect tax and will have to do something else instead. These sales tax provisions are so wide, and appear to move into such completely new areas, that they to some extent pre-empt the decisions of the summit. No Government member has considered indirect taxes, applied through the process of sales tax, and their relationship to the summit. The Treasurer in his speech indicated that it was a matter only of picking up a few provisions where people had avoided tax. It is far more than that. It covers a wide range of things that deal with royalties and franchises. Goodness knows whether it applies to McDonalds Family Restaurants. If we go into McDonalds and grab a bit of chicken is there sales tax on that? There is a franchise involved. What is the precise arrangement of the McDonald franchise? What is the precise arrangement on royalties on all sorts of things? I know that the Government is concerned and that it has picked up the RCA Pty Ltd decision and used that as the basis upon which to extend the provision of sales tax into wider areas. I do not think it is good enough. I appeal to the Minister assisting the Treasurer, the Minister for Immigration and Ethnic Affairs, to assess what he is doing. I do not believe he has read the legislation. I do not believe he has consulted anyone about pushing the legislation through. Mr DEPUTY SPEAKER(Mr Andrew) —Order! The honourable member's time has expired. Mr GEAR(Canning)(12.34) —This package of Bills-the Sales Tax Laws Amendment Bill and cognate Bills-epitomises the inefficiencies of the existing tax system and is further evidence of the need for taxation reform. I should like to refer to a few aspects of the first Bill. it is another band-aid approach-this was referred to earlier today-in that Bills come before the House chasing taxation dollars after entrepreneurs in different fields find loopholes in the law and exploit them. We come in here and pass a Bill, then these particular entrepreneurs go on to other areas, and we come in here and pass more Bills. This Bill is all about tax evasion. That links up with what I said previously. The fact is that tax evasion is rampant in Australia. It is starting to become the case that we are getting on top of it and plugging up the loopholes as we go, but reform of the whole tax system is necessary to make sure that the tax evasion practice is made as difficult as possible. The Treasurer (Mr Keating), in his second reading speech, said that tax evasion is not engaged in by ordinary pay as you earn taxpayers, but by people in the business area. If they can find a way of avoiding tax, they do. By and large, the person who picks up the tab is the ordinary PAYE taxpayer. He is getting hit in the neck. It is mainly because of that inefficiency in the system that we are looking at reforming the taxation system. The former Treasurer, the Deputy Leader of the Opposition (Mr Howard), who has just left the chamber, talked about indirect tax. When he was Treasurer, he did something about it. He presided over the largest rise in indirect taxes in Australian history. In just two Budgets, those of 1981 and 1982, the then Treasurer presided over a huge rise in wholesale taxes. He added on 2 1/2 per cent across the board in 1981 and 1982. This raised the revenue from indirect taxes by a massive 66 per cent. If he was really interested in taxation reform, I would have thought we would have seen a reduction of taxes somewhere else, but it was an add-on. The former Government actually spent the money. There was no income tax reduction. There was a cosmetic reduction in the infamous Budget of 1982, which was designed for the 1983 election, but we never saw genuine tax reform. In a matter of public importance in the House a couple of weeks ago, the Treasurer spoke about the same sort of approach with the oil tax levy-the windfall of $3,000m that the former Government inherited. It never actually reduced taxes in other fields, it just spent the money. When we talk about add-on, as did the honourable member for Mitchell (Mr Cadman), we have only to look back at the record of the former Government to find out that it was the add-on specialist. I refer to another thing which the former Treasurer did in relation to sales taxes. In 1981 he included quite a few items which previously had not attracted any tax at all. I will highlight a few items from Appendix III to the Budget Statements of that year. Up until that time, manufactured pet foods and motor vehicle safety belts, to name a couple of items, were exempt from all tax. The former Treasurer put a tax of 17 1/2 per cent on both items and the next year he raised it to 20 per cent. He must have had something against alarm clocks, because they were taxed at 15 per cent and then he put it up to 30 per cent, and they are now taxed at 32 per cent. If we look at the productive areas of our economy, those areas that produce wealth, such as bulk handling of grain, the road vehicles used by farmers and the road vehicles used in the mining industry were previously exempt from tax. He slapped on them a tax of 17 1/2 per cent, and the next year he put it up to 20 per cent. He was not content with taxing just the dog food, he was taxing also the more productive areas of the economy. There is no doubt that there is in the air a need for reform. If we look at the present system of raising indirect taxes, I can easily show that it focuses on a small area. From an estimated $4.7 billion revenue from sales taxes in the 1984-85 financial year, $3.3 billion is expected to come from the 20 per cent rate. The major item taxed at the 20 per cent rate is motor vehicles. Certainly we are getting a lot more revenue from that because motor vehicle sales have sky-rocketed. From my understanding of the reforms the Government is looking at, if there is a flat rate tax, at whatever rate it is struck, it will be certainly something less than 20 per cent, so we could see a dramatic fall in the price of cars. The fact is that cars have become a necessity in life and by and large they are bought by the working people of Australia. If we can reduce the cost of cars to the working public, we will stimulate activity in that area and add further impetus to the recovery that is taking place. By contrast, looking again at sales tax, only $700m of the $4.7 billion expected sales tax revenue is estimated to come from the 32 1/2 per cent rate, which suggests that this rate does not apply to a wide range of goods. It is notable that this rate applies to luxury items. At present, services are almost totally excluded from the Commonwealth indirect tax net. An exception is overseas travel. The departure tax, from memory, was the only progressive tax brought in by the former Government. By and large it is the more affluent people in society who can afford to go overseas, and they are the ones who have to pay the $20 departure tax. Referring to the Treasurer's second reading speech, he said: Sales tax has not been immune from the influence of the promoters of tax avoidance schemes. But sales tax avoidance, once it takes hold in a particular industry, is cancerous in its growth. The level of sales tax payable directly affects the ultimate price of goods and its avoidance by one firm in an industry gives an unwarranted competitive advantage in the market-place to that firm. Others in direct competition with that firm are often forced to engage in similar sales tax avoidance or go under. Once these practices are adopted by one particular firm, it is not long before its competitors have to follow the same practice, or dob them in to the Taxation Office. There is not much of that going on, from what I can understand. I have talked in general terms about some of the aspects of the sales tax legislation. I have a few figures on income tax on average weekly earnings which might be worth taking into account. I refer to the growth contributed by the PAYE taxpayer during the period of the former Government. First, the taxes of a single taxpayer, as a percentage proportion of income rose from 22.8 per cent in 1975-76 to 23.9 per cent in 1981-82. That was a change of almost 5 per cent. The contribution of a taxpayer with a dependent spouse and two children, in a single income family, rose from 13.4 per cent to 16.3 per cent of his income. In percentage terms that was a rise of 21.6 per cent. In the same period, the contribution of a two-income family with two children rose from 7.6 per cent of income to 13 per cent. That was a massive 71.1 per cent rise. Looking at those two aspects-the indirect or sales tax areas and the personal income tax area-there is an urgent need for reform. The honourable member for Mitchell talked about who was coming to the taxation summit. Invitations did go to members of the Liberal Party, but as soon as there is a sniff of reform in the air, that is the last one will see of them. They will backtrack so fast, it will be unbelievable. They will not come in here and talk about reform, they will not put up their ideas. Nothing surprises us-whether it is electoral reform in Western Australia or Queensland, or taxation reform. They sat on their hands for 30 years and did nothing about it, and it is left to this Government to tackle the problem. It does not surprise us that the Liberal Party will not turn up. There is one more aspect of the debate at which I would like to look. The honourable member for Mitchell asked who we are going to consult. He should be aware that this Government set up the Economic Planning Advisory Council, which is an ongoing Council. It meets with various industry groups, union groups and consumer groups and gives advice to the Government. That was something the former Government never did. In fact, former Government members used to read about the Government's decisions in the newspapers the next morning. Having said that, I add that it is to be hoped that the taxation summit achieves the success it deserves for the Australian people, who deserve a taxation system which is more equitable than they now have. If we have an equitable tax system legislation of this type will not be needed in the future. Mr DEPUTY SPEAKER(Mr Andrew) —Order! It being 12.45 p.m., the debate is interrupted in accordance with sessional order 101A. The debate may be resumed at a later hour. Sitting suspended from 12.45 to 2 p.m. Mr HAWKE(Wills-Prime Minister) —Madam Acting Speaker, I advise the House of the following ministerial arrangements. The Minister for Trade (Mr Dawkins) will be absent from Australia from today until tomorrow and again from 19 to 25 May. During this period he will be visiting New Zealand, Singapore, Indonesia and Thailand on government business. During his absence the Minister for Primary Industry (Mr Kerin) will be Acting Minister for Trade. Mr HOWARD —My question is addressed to the Treasurer. Can the honourable gentleman assure the House that the total public sector borrowing requirement in 1985-86 will be less than that required in 1984-85? Mr KEATING —That is certainly the aim of the game and, as far as the Government is concerned, we have said all along that we needed to bring down the public sector borrowing requirement in 1985-86 below that of 1984-85. Through a money reduction in the deficit, depending on what the deficit outcome will be and the size of gross domestic product in 1985-86, the chances are that the requirement will be well under 3 per cent. It is expected to come in this year at about 3.3 per cent, which would be a substantial reduction in the Commonwealth Government component of public sector borrowing. In respect of the States, you may recall, Madam Acting Speaker, that last year the Commonwealth succeeded in getting them to face up to their responsibilities regarding the public sector borrowing requirement. For the first time in many years we succeeded in getting a total global borrowing limit imposed on a voluntary basis which last year limited money borrowings by the States and their instrumentalities, which also included Commonwealth authorities, to the same level as those of previous years. Global borrowing will also be an issue at this year's Australian Loan Council meeting. With expected savings in that area, there is every prospect that the public sector borrowing requirement will come down from its current level of about 7 per cent, hopefully, to nearer 6 per cent. We are yet to see whether we can achieve this outcome but the Government would be very pleased if it could bring the public sector borrowing requirement down by a full percentage point to about 6 per cent. Given the current strength of private sector investment in the economy and the pick up we are now witnessing, this would the appropriate stance of policy for 1985-86. Mr PRICE —I direct a question to the Prime Minister. How has the May economic statement delivered by the Treasurer last night been received? Mr HAWKE —I could answer that question very briefly simply by saying extraordinarily well. However, the warmth and the perspicacity of the comments that have been made deserve a more extended answer. I say very seriously that there has been a clear welcoming of the Government's courage in making the decisions necessary to provide for Australians the growth, the jobs and the opportunities which for so very long eluded them under the years of conservative government. There is a clear understanding both in the business community and the trade union movement of the necessity of the action that was taken to sustain Australia's long term economic growth. The Leader of the Opposition simply does not understand what is required. It is very interesting-I am sure this did not escape the attention of a large number of people in the community-to see the way he made the great jump in the dark last night when he issued his statement. I will read to the House what the Leader of the Opposition had to say on this matter. He said: In all its aspects, Mr Keating's main economic statement fails the test it sought to make for itself-the test of the business and economic community. There we had the Leader of the Opposition saying that the Keating statement made on behalf of the Government did not find support and failed the test of confidence in the business community. I suppose that in those circumstances it makes sense, with the Leader of the Opposition having made that assertion about the reaction of the business community, to look at what that community had to say. I will read extracts of what has been said. Mr White of the Business Council of Australia said: The Council strongly supports the early indication of a firm direction to fiscal policy in 1985-86 embodied in the Treasurer's statement today . . . The fact that the Government has exceeded its target of $1 billion in expenditure reductions is evidence of its determination to succeed in the task of restraint for 1985-86. On the National last night, Mr White, when asked whether he liked the indications in the statement, said: I certainly do . . . I think there will be widespread support. He went on to say: I think this will restore a lot of confidence in the investment community. It needs to be followed up by taxation concessions and the Treasurer is setting the scene for that. Sir Arvi Parbo, speaking on Australian Broadcasting Corporation radio, had this to say: Well, I thought the general thrust of what the Government is trying to do and what the Treasurer was saying was most welcome. . . . . I think it is going to be seen as a good beginning. Mr Ken Court, the President of the Australian Chamber of Commerce, had this to say: The Federal Government's economic statement is a positive and constructive first step in a longer term program of expenditure reduction and reform at both the Federal and State Government levels. He continued: The economic statement in many respects amounts to a concerted first attack on waste and inefficiency in Federal public spending. This is to be warmly applauded. Mr Williams, the President of the Confederation of Australian Industry said that the expenditure cuts announced by the Treasurer, although modest, were a step in the right direction. This next quotation is particularly for cockies corner. What did the National Farmers Federation have to say? The statement of Mr Andrew Robb, Deputy Director of the National Farmers Federation, was in the following terms: As an organisation we have consistently argued that governments should reduce expenditure, reduce the size of government, as the most constructive thing it can do to help farmers and to help the nation. And so long as farmers aren't disproportionately dealt with we would strongly support the Government initiative. He continued: It looks as though farmers haven't been disproportionately dealt with. His statement becomes very interesting because of what he had to say about cockies corner. The journalist interviewing him put a question about this Government. Mr Robb said: Well I think that we have certainly got senior Ministers who have taken a lot more time and effort to get on top of our problems. I don't say that we are ever totally happy. The journalist then put the following question to the spokesman for the National Farmers Federation: We heard in the Parliament tonight some members of the National Party expressing horror at the cut. The spokesman for the National Farmers Federation replied in these terms- Mr Cobb —What about the fuel prices? Mr HAWKE —I know that honourable members opposite do not want to hear what the real spokesman for the National Farmers Federation had to say, but this is what he said: Well that is the prerogative of the National Party. We are not a political party. It is our view that the most constructive action this Government can take not only now but in August is to continue to cut back the size of government. That is what the National Farmers Federation had to say. Mr Donald Cameron —I raise a point of order, Madam Acting Speaker. The Prime Minister has been going for eight minutes on this answer. Madam ACTING SPEAKER —Order! There is no point of order. I point out to the House that the Chair has no jurisdiction over the length of answers given by Ministers, a fact of which the honourable member is quite aware. Mr Tuckey —Madam Acting Speaker, I also raise a point of order. I call your attention to the precedent of previous Speakers, who have called on Ministers to bring their answers to a close. Madam ACTING SPEAKER —Order! There is no point of order. Mr HAWKE —I can understand the discomfiture of those opposite, so I will bring my answer to an end with a quotation from Queensland. Mr Ian Cameron —From Joh? Mr HAWKE —No, not from Joh. Joh was sleeping through it all. May I say that, from the quality of the comments from the Leader and Deputy Leader of the Opposition, they seem to have slept through it, too. It was stated on 4BH Radio News at noon today: A Queensland industry chief says the Federal Government's spending cuts are a positive step towards boosting confidence in the Australian dollar. Queensland Confederation of Industry president, Mr Bill Blair, says he's pleased the cuts were across the board. The pruning of export grants was not as severe as expected and shouldn't hurt Queensland industry too much. There we have a broad spectrum of the business community, a business community that the Leader of the Opposition said last night would not support the decisions of this Government. They have, because they understand what is necessary for the continued growth of this country. Madam ACTING SPEAKER —I inform the House that we have present in the gallery this afternoon a delegation from the Supreme Soviet of the Union of Soviet Socialist Republics, led by Mr Babken Sarkisov, Deputy Chairman of the Supreme Soviet. On behalf of the House I extend a very warm welcome to the members of the delegation. Honourable members-Hear, hear! Mr HOWARD —I refer the Treasurer to his statement on this morning's national Today show when he said: I will guarantee the States that there will be savings off the Forward Estimates from our negotiation with the States because they must play their part. I agree with that sentiment. I ask the Treasurer: Will he repeat that guarantee and assure the House that the tax-sharing and identified health grants to the States and the Northern Territory will be less than the $11.027 billion provided for in the Forward Estimates? Mr KEATING —I have tried to nail this idea into the mind of the Deputy Leader of the Opposition on three occasions since last evening, but I see that I have not yet succeeded. He does not seem to understand the point about the Forward Estimates. The Forward Estimates provide for ongoing programs. Policy which is technically new policy resides not in the numbers of the Forward Estimates but in the conservative bias facted into the document. Obviously, payments to the States cannot expire. What do expire are the three-year or five-year agreed programs. They then become technically new policy. When they become technical new policy, they are not then expressed in the numbers. However the bulk of them are expressed in terms of the same money as the previous year, and whatever addition will be negotiated at the Loan Council Premiers Conference is expressed in the conservative bias. For the benefit of the dummies on the other side of the House, paragraph 10 on page 8 states: Conservative bias cannot be quantified precisely because it involves judgments in distinguishing between those programs which could be considered genuinely ongoing and those which are likely to lapse, which in turn depends upon the priorities of the government of the day. To illustrate the extent of the conservative bias it is estimated that about $1 billion would be added to the existing 1985-86 Forward Estimates. The forward estimate number in the document for 1985-86 is $68,264m. The $1,000m conservative bias would bring it up to $69,264m. It is off the $69.264m, off the $1,000m of conservative bias, that the savings in payments to the States will be made. It is not off the same money amount. The same money amount is there only to put the bulk number into the Forward Estimates. The residual topping up comes out of the conservative bias because technically it is a new policy. I tried to get that into the head of the Deputy Leader of the Opposition. I will tell the House what he said to me last night. I know it is letting out a private conversation-- Mr Howard —You are very good at that. Mr KEATING —No, I am not. As we left, he said: 'You should make those Forward Estimates a little more simple to understand'. I said: 'Next time we will'-for him. Mr GRIFFITHS —I remind the Special Minister of State of the apparent vigour with which the Opposition approached the issue of organised crime immediately prior to the last election. I ask the Minister to comment upon whether that vigour has been sustained in a non-election period. I would like the Minister to make reference to whether last night's economic statement had any impact on the Government's general approach to fighting organised crime in this country. Mr YOUNG —Following a decade of reports to the Fraser Government and this Government, such as the reports of the Moffitt Royal Commission on Alleged Organised Crime in Registered Clubs in New South Wales, the Woodward Royal Commission into Drug Trafficking, the Stewart Royal Commission of Inquiry into Drug Trafficking and, most recently, the Costigan Royal Commission into the activities of the Federated Ship Painters and Dockers Union, this Government has made a commitment in the law enforcement area-discussions were held at the drug summit with all State governments in regard to the law enforcement area-which we believe was necessary. This area has not been subject to any cuts in terms of the role we see for law enforcement agencies in Australia to carry out the fight against organised crime. The budget for this year, under this Government, was some 16.5 per cent above that of the last year of the Fraser Government. During our period in office we have increased the manpower of the Australian Federal Police by 420 personnel. Over the next three years we are committed to spending another $10m on manpower in the AFP and $7m on new computer facilities for the AFP. We are also committed to spending $1.5m to improve the computer capacity of the Australian Bureau of Criminal Intelligence, which is a common police service used not only by the Australian Federal Police but also by police forces throughout the Commonwealth. This year we are spending more than $7m on the National Crime Authority, which is a figure which has been agreed upon between the Government and the National Crime Authority to meet all the expenditure that the Authority requires in order to carry out its duties. This compares with an expenditure of $5.5m spent on the Costigan Royal Commission during its last year of operations. From the figures that I have given, I think that the commitment that the Government made in the fight against crime has been maintained. Mr PEACOCK —My question is directed to the Treasurer. I refer him to the Prime Minister's statement on 12 April this year that as a result of the devaluation of the dollar 'perhaps 100,000 jobs could be directly created over the next few years if we can maintain the now enhanced competitiveness of Australian suppliers'. Does the Treasurer endorse the Prime Minister's estimate of the number of jobs that could be created as a result of the depreciation of the dollar now that the Government has decided not to discount wage indexation for the consumer price index effect of devaluation? Mr KEATING —Of course, one of the great misconceptions about the state of the Australian dollar and comment about whether it is sick or otherwise are due to a very poor understanding of the value of the competitive adjustment which a floating exchange rate can give this country, and, of course, a change in its parity, which has been given to it by virtue of the decision that the Government made to float the exchange rate-as distinct from the overvalued dollar which the former coalition Government had as a crude anti-inflation weapon, which tore the heart out of our manufacturing industries and made our exports uncompetitive. It is just an interesting commentary that the cockies who are always so noisy in the corner there never seemed to worry about the overvaluation of the exchange rate for so many years. The fact is that we have seen a decline in the value of the dollar against the trade-weighed index, and that will lift our competitiveness dramatically. It will mean that we shall be much more competitive in exports and in our import-competing industries, and particularly if this advantage is preserved in the economy. The import of the question by the Leader of the Opposition is that in some way-if I understand the point that he is making-he is trying to make a political point about the question of whether the value of this depreciation will be maintained. Last night I said quite specifically that such an outcome on wages: must involve a lesser real wage level during the adjustment period than would otherwise have applied. I went on to say: 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. The honourable member therefore has no basis for assuming that the Government, as he says, has abandoned discounting. He goes on then to draw from the comment that I made about the March and June quarters that that applies to any other quarter, when what I have said quite explicitly on behalf of the Government is that we would be looking to determine what the inflationary impact was in the quarters to come and then, upon being apprised of those inflationary impacts, to making a judgment then as to whether the principles would allow for a departure, if justified, in September, and whether there should be any productivity case at all, and the quantum size, timing and phasing. In other words, what I return to again is the statement that there has to be a lower wages outcome than might otherwise have been the case pre-devaluation. That seems to me to be a fairly clear statement on the part of the Government about wages within the framework of the incomes policy it has with the Australian Council of Trade Unions, and about preserving the competitive benefit of the depreciation, and that competitive benefit will obviously bring growth to this country and, of course, much stronger growth and much stronger employment growth. To that extent the Prime Minister was quite correct in pointing to those favourable influences from the depreciation, which have been so often overlooked in public comment and totally overlooked in comment by the Opposition. Ms MAYER —My question is directed to the Prime Minister. Is Australia's national interest served when there is a broad degree of bipartisan support on foreign policy issues of importance and principle? Mr HAWKE —There is no doubt that Australia's national interests and its international credibility are strengthened when there is a broad degree of bipartisanship on issues of importance and of principle. One outstanding example of where that is true is on the question of racism and racial equality and justice, such as developments in South Africa and its iniquitous apartheid system. Mr N. A. Brown —There are other countries, you know. Mr HAWKE —Indeed there are, and I accept-- Mr N. A. Brown —Tell us about those, for a change. Mr HAWKE —But you will see, Madam Acting Speaker, that there is a very specific reason for referring to South Africa, because I want to note and applaud in this House, and I hope that you will note and applaud with me, the remarks attributed in today's Australian Financial Review to the shadow Minister for Foreign Affairs, the honourable member for Goldstein, on the Government's attitude to the proposed rebel cricket tour. The shadow Minister for Foreign Affairs had this to say: Leaving aside how it was presented, the Hawke Government's position is consistent with the Fraser Government position on the Gleneagles Agreement. The voluntary code of conduct by business is a logical extention . . . the fact that a regime treats individuals so differently according to the colour of their skin must be intolerable to any Australian who cares about individual liberty and freedom. The progress which has been made in South Africa that people can point to so far is too little too late. If the South African Government in incapable of moving faster then it's got a huge problem on its hands. That statement represents a very significant advance on the position taken by other prominent members of the Opposition recently. The honourable member for Goldstein did not end his bipartisanship there. It will be very interesting to see now whether we get the degree of agreement on the other side of the House with his observations. The honourable member for Goldstein was asked what his attitude was to the Hawke Government's proposed nuclear free zone in the South Pacific. I ask honourable members to note his answer. He replied: We are committed to it, we always have been. That is a clear statement. He went on to say: We are not going to embrace the treaty sight unseen. When it is available in draft form it will be looked at by governments for another 12 months and there will be plenty of time for debate. But his statement was: We are committed to it, we always have been. The intelligent and responsive attitude of the honourable member for Goldstein stands in sharp and absolute contrast, honourable contrast, to the petty, small-minded-- Mr Goodluck —We have free minds. We are not dictated to by Left, Right and Centre. We say what we think. Mr HAWKE —We can see that at least some honourable members do not agree with what is being said on the other side of the House. I ask the House to contrast the statement by the honourable member for Goldstein-'We are committed to it, we always have been'-with the miserable, small-minded position stated in this House on 5 September last year by the Leader of the Opposition. In contrast to that statement by the shadow Minister for Foreign Affairs, this is what the Leader of the Opposition had to say: I regard the pursuit of a nuclear free zone in the Pacific as total hypocrisy by this Government and an absolutely Mickey Mouse proposal which has no capacity to be policed, to be effective, and which can only impact severely on our major ally, the United States . . . The Government will not receive any endorsement from us on its nuclear free zone. There is a clear distinction there. The shadow Minister for Foreign Affairs says: 'We are committed to it, we always have been', and he says it honourably and in a way which respects the tradition that on matters of importance and principle, where the interests of this country and the world are concerned, he will state a position as it should be. It is about time that the Opposition got its act together, and that act should be got together behind the position of principle of the shadow Minister rather than the opportunism that at all times characterises the position of the Leader of the Opposition. Mr SINCLAIR —My question is directed to the Minister for Defence. Given the significance of overseas payments to meet the capital procurement program of the Department of Defence, I ask the Minister: Will the combined cost of the Australian dollar devaluation and last night's $84m cut amount to around $500m from his defence vote? As a result, what capital programs will be deferred or abandoned? Or is it the Minister's intention to prejudice operational capabilities of the forces by penalising servicemen and servicewomen alone, as he did by increasing service rents to more than negate the recent 2.6 per cent pay rise increase? Mr BEAZLEY —I would have thought that the Leader of the National Party of Australia would have had enough on this subject yesterday. Mr Sinclair —You didn't do very well yesterday. Mr BEAZLEY —But he will get it again today when we get into more detail on his question. He is the man who, representing his Government at the time, presided over what effectively amounted to a double freeze on the pay increase for service personnel in this country. It was his Government that neglected their position. Mr Sinclair —What programs have you commenced? Mr BEAZLEY —It is this Government which has set up a tribunal which is going through the pay and conditions of servicemen and will make recommendations to the Government later this year. Mr Sinclair —You made a mess of it. Madam ACTING SPEAKER —Order! Mr BEAZLEY —The right honourable member need not worry about it. He can yabber all he likes because we will go right through his points, point by point. It is this Government which has sat down and addressed seriously the situation of the-- Mr Sinclair —Why haven't you increased pay rates for two years? Madam ACTING SPEAKER —The Leader of the National Party will cease interjecting. Mr BEAZLEY —It is this Government which has sat down and addressed the need to put some real meaning into the home loan arrangements for existing servicemen. It is this Government which will provide them with a serious opportunity to get substantially more than was the case with the limitations which were left on them for a considerable period under the previous Government. We have shortened the waiting period. We will deal with that problem. The Leader of the National Party asked us whether what we are going to do will impose impossible burdens on the defence forces. Mr Sinclair —Words, words, words. What are you doing? Madam ACTING SPEAKER —Order! The Minister will resume his seat. The Leader of the National Party has been a member of this House for a very long time. I would have thought that, in that time, he would have learned to respect the Chair. The Chair has now twice asked him to cease interjecting. I ask him again to remember his long time service in the House and to behave in the appropriate manner. Mr BEAZLEY —I will get back to the point of his question, having dealt with the rubbish that he put forward on the subject of what we are doing about servicemen's conditions. The intention of this Government is that that will be 3.1 per cent real growth. The record of this Government has been that, when we have been confronted with the problems associated with the devaluation of the dollar-if he had looked at the additional budgetary provisions that have gone through this House recently he would have discovered this-we have been prepared to address in a generous way any problems associated with devaluation in regard to the defence budget. It is our intention that there will be 3.1 per cent real growth. The full impact of devaluation cannot be known because at the different times when we have to make those payments, that is when we have to confront the situation. But it is a policy decision of this Government that there will be 3.1 per cent real growth so there will be adjustments accordingly. The point about that, of course, is that, unlike the previous Government, we deal seriously with the problems of the defence forces. As I mentioned yesterday, what we have achieved effectively in our three Budgets has been a 3.5 per cent real increase on an annual basis in expenditure on defence. What the previous Government achieved was 2.5 per cent against its guidance of 5 to 7 per cent in the 1976 White Paper, and then 7 per cent on Afghanistan. I underestimated the previous Government's guidance when I gave that answer yesterday. It is this Government which seriously addresses the problems of the defence forces of the nation. It has always been the case that, year after year, the tories have rocked into this Parliament wrapping themselves in the flag, denigrated those who oppose them and accused them on occasions of treacherous behaviour. They have repeatedly wrapped themselves in the flag, rocked into the Parliament and depleted the defence forces of this country, relying on their alleged reputation of being tough-minded in this area and able to overcome the problems associated with the forces. What we got out of the previous Government over seven years for the defence forces was eratic increases from time to time. It was a stop-go situation on various policies. In the end there was a glutting or, I might say, a humping of defence expenditure. We might call it the Sinclair humping of defence expenditure at the time when he was in office. Bottled together, it became a whole series of promises for which no budgetary provisions were made and which repeatedly obliged delays down the line in the purchase of equipment. This Government deals with those sorts of problems and it deals with them seriously. The previous Government never did so. If ever it were to get back into office, it would continue its practices of the past. It is not without significance that the Leader of the National Party, who is normally capable of restraining himself sensibly during Question Time when he has to listen to answers like this, cannot avoid keeping up a constant babble because he will not open his ears to hear the truth about his administration in this area or to hear the direction in which we intend to go. Mr GRACE —My question is directed to the Minister for Sport, Recreation and Tourism. Can the Minister inform the House of the changes to the tourism industry provisions of the export market development grants scheme following the announcement by the Treasurer and the Minister for Trade last night? Can the Minister further inform the House whether any mechanisms are in place to compensate the tourist industry for exclusion under the scheme? Mr JOHN BROWN —There has been a deal of speculation, fuelled by the shadow Minister in this area who, I add, has yet to surface and ask his first question on that or any other subject. Mr Hawke —Who is it? Mr JOHN BROWN —It is the honourable member for Richmond. There has been a considerable amount of fairly mischievous speculation in the Press about the effect on the tourism industry of changes to the export market development grants. In answering the question, it is fair to point to the unique nature of the tourism industry and the fact that that unique nature has made it very difficult for the tourism industry to comply with the regulations that existed with the export market development grants, particularly in terms of the application of an export performance test. No doubt even the shadow Minister will understand that it is difficult to identify specific tourist sources in some areas of the industry. But it is also fair to point out that, of all the industries that have been covered by the export market development grants, tourism is the one which has had the highest threshold to cope with in order to obtain a grant. It is also fair to say that it has been the most successful industry in Australia in developing an export market in the last couple of years. That said, obviously tourism should not be advantaged vis-a-vis other industries because of changes to the export market development grants scheme. The existing provisions will cease on 20 May 1985 but I will bring forward to the Cabinet proposals for direct assistance to the tourism industry as outlined by the Minister for Trade last night. Mr Blunt —How much will they be worth? Mr JOHN BROWN —The honourable member can wait and see. If he asks a question, perhaps I can answer it. He puts out copious Press releases that nobody reads. He must chop down 20 forests a week to cope with them. Why does he not stand up and ask a question occasionally? Certainly, many options are available to institute a new scheme to assist the tourism industry to carry on with this very valuable search for export markets. I have asked my Department to bring forward a range of options which will be looked at. I can assure Opposition members, and they can assure their friends in the industry, if they have any, that no precipitate decisions will be made without reference to the industry so that it can have an input into the scheme which covers its particular difficulties. A decision will be made very early- Mr Blunt —You got rolled in Cabinet, John. That is why you have this job. Mr JOHN BROWN —It really does appal me, given that the previous Government sat in office for seven years with a gold mine at its feet and never dug out a nugget because it did not realise that tourism was an industry, to see the ridiculous statements that the shadow Minister puts out criticising this Government, especially as everybody in Australia, particularly those in the industry who might very well be the previous Government's political supporters, eschew any point of view that the shadow Minister puts forward and are particularly supportive of this Government in regard to the way it has promoted this industry. We will accept no more nonsense from him. Mr Blunt —It is all froth and bubble. You cannot stand behind this sort of statement. Mr JOHN BROWN —There are 40,000 young people in Australia who have obtained jobs in the last two years in the tourism industry who would not think it was froth and bubble. They might have thought that the performance of honourable members opposite over the previous seven years was froth and bubble, but not ours. The important thing is that the tourism industry will be looked after with a new scheme that I will be bringing forward to the Cabinet to cover the investment that the tourism industry makes in the search for new export markets. Mr McARTHUR —In the absence of the Minister for Trade, I direct my question to the Treasurer. Can the Treasurer confirm that the 1984-85 Budget allocation of $125m to the export market development grants scheme has already been spent? Has an extra $60m recently been allocated to the scheme along with 25 extra staff with unlimited overtime and travel to enable the money to be spent by 30 June 1985? If so, does this mean that the so-called $48m saving from the export market development grants scheme announced last night is simply a thimble and pea trick to move the 1985-86 expenditure back into the 1984-85 books? Mr KERIN —Just before Question Time I found out that I am the Acting Minister for Trade. The honourable member asked questions of a very specific nature. I will reply to him on that matter. Mr MacKellar —The Treasurer can answer it. Mr KERIN —The Treasurer is not standing in for John Dawkins. I would like to talk about the generality of the export market development grants scheme. Mr MacKellar —Read it out. Mr KERIN —I am. An evaluation of the scheme by the Department of Trade disclosed that about 50 per cent of the claimants who drop out of the scheme after three grant years have generated little or no export sales. Indeed, it is possible under the scheme for a claimant to receive up to the maximum grant of $200,000 a year for three years without ever producing any export revenue. This finding indicates that the scheme is either being aimlessly or frivolously used or being abused by a large number of claimants. It also shows that the recent report of the National Export Marketing Strategy Panel, the Ferris Report, was correct in its conclusions that existing export incentives were badly designed and there is a need for significant reforms of the scheme to provide a positive inducement to genuine exporters in a cost effective and measurable way. The Government's decisions on the scheme have been directed to ensure that there is an incentive for firms to expand their export activities and that this scheme is now targeted towards committed small and medium exporters who are in most need of government assistance. The Government's decisions, particularly the decision to amend the scheme as from 20 May, have also been influenced by the need to restrain government expenditure and reduce the deficit. Mr WRIGHT —Is the Minister for Arts, Heritage and Environment aware of statements by the Queensland Minister for Tourism, National Parks, Sport and the Arts, Peter McKechnie, that Queensland should be granted an increased kangaroo kill quota for 1985? What action does the Minister propose to take regarding this matter? Mr COHEN —The Federal Government has made it clear that the kangaroo management program, which involves the culling of kangaroos, is a means of maintaining the population of kangaroos at an acceptable level so that they do not reach plague proportions. The most common species of kangaroos-the eastern and western greys, reds, wallaroos and whip-tailed wallabies-are culled in all States except Victoria and the Northern Territory. In recent years the States, together with the Commonwealth Scientific and Industrial Research Organisation and the Commonwealth kangaroo monitoring unit, have continually refined the aerial and on-ground surveys to determine the kangaroo population and to determine annual culling figures. Culling is seen by the Commonwealth as a tool of the management plan. It is not, and while I am the Minister for the Environment never will be, a means of providing meat and skins to the kangaroo industry. In 1984 the culling figures for Queensland were 845,000 out of an Australian total of 1.988 million kangaroos. On 12 March 1985 the Queensland National Parks and Wildlife Service informed the Australian National Parks and Wildlife Service that it had exceeded the 1984 quota by 14,944. How that happened I do not know. The Service is supposed to issue tags only up to the number of the cull quota. In 1985 the Queensland National Parks and Wildlife Service requested a quota of 1.5 million. I announced in February that the quota for Queensland would be 1.08 million, an increase of 235,000. Since then Mr McKechnie has been attacking the Federal Government for not acceding to Queensland's request. I am concerned for a number of reasons about Queensland's whole approach to this subject. Mr McKechnie informed me some weeks ago that he had already allocated at least 60 per cent of the tags with only three months of the year gone and that he was concerned that unless the industry got the requested increase it would be in serious trouble later in the year. Firstly, as I have said over and over again, we are deadly serious when we say the cull is a means of conservation, not a means of providing the industry with its demands. A situation may occur when drought requires that the culling be totally suspended. If our population figures showed that that had occurred, it may be that for some time in the future there would be no skins or meat for the kangaroo industry. But our primary concern is the preservation of all existing species in adequate numbers, not in providing pet meat, skins or fur. My next concern with Queensland is the wildly differing figures on the population of kangaroos. The 1985 quota was set taking into account numbers provided by Mr McKechnie's own Department, the Australian National Parks and Wildlife Service and the CSIRO. He now claims, only three months later, that kangaroo numbers are far in excess of all previous estimates. I am told he has used a figure of 40 million. That is four times the figure he gave us. If kangaroos are indeed in plague proportions, the cull quota can be reconsidered. I will be going to Queensland later in the year and I will review the position then. I can see about 30 we could start culling right away. Any decision must be based on at least reasonably reliable estimates. I am unconvinced right now that such a situation is warranted. It may be of interest to honourable members to know that the European Parliament is now looking with renewed interest at proposals to prohibit imports of kangaroo products. Allegations are, once again, circulating that we are over-culling. It must be clear that unless we demonstrate that all Australian agencies are pursuing a reasonable and responsible approach, the matter may be taken from our hands. A total ban of kangaroo products going to Europe is not impossible. The ban would not be imposed by us; it would be imposed by the European Parliament. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —For the information of honourable members, I present the annual report of the Corporate Affairs Commission of the Australian Capital Territory for the year ended 30 June 1984. Mr KEATING(Blaxland-Treasurer) —Pursuant to section 11 of the Life Insurance Act 1945, I present the Life Insurance Commission's annual report for 1984, together with a half-yearly financial and statistical bulletin. Mr KERIN(Werriwa-Minister for Primary Industry) —Pursuant to Section 6 of the Egg Export Legislation Repeal Act 1984, I present the final report of the Australian Egg Board for the year 1984-85, together with the text of a statement relating to the report. Motion (by Mr Young) proposed: That the House take note of the papers. Debate (on motion by Mr MacKellar) adjourned. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs) —For the information of honourable members and pursuant to sub-section 49 (2) of the Audit Act 1901, I present an outline explaining a proposed amendment to the format of the monthly statement of Commonwealth financial transactions. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs) —For the information of honourable members, I present a statement on expenditure from the Advance to the Minister for Finance for March 1985. Mr SCHOLES(Corio-Minister for Territories) —For the information of honourable members, I present the Christmas Island annual report for 1982-83 and the annual report for 1983-84. Mr SCHOLES(Corio-Minister for Territories) —For the information of honourable members, I present the Canberra Theatre Trust annual report for 1983-84. Mr SCHOLES(Corio-Minister for Territories) —For the information of honourable members, I present the Building and Construction Industry Long Service Leave Board annual report for 1983-84. Mr SHIPTON(Higgins) —Madam Acting Speaker, I seek to make a personal explanation. Madam ACTING SPEAKER —Does the honourable member claim to have been misrepresented? Mr SHIPTON —I do. Madam ACTING SPEAKER —The honourable member may proceed. Mr SHIPTON —I refer to an Australian Associated Press report of yesterday called the 'Uluru AAP Newsfeature'. In a part of that report, which is on Uluru and Ayers Rock, the correspondent refers to my presence at a rally outside Parliament House earlier this week. He says of the rally-- . . . which at one point got out of hand at the appearance of Liberal Aboriginal affairs spokesperson Roger Shipton-- I deny the allegation in the report. I had been at the rally for some considerable time before I was engaged in dialogue referred to in the House earlier. I also claim to have been misrepresented in an article which appeared in the Melbourne Herald on Tuesday, 14 May under the by-line of Mungo MacCallum. He stated in that article that I had been 'haranguing' those present. That is not true. How could I harangue people when I did not have a microphone or a megaphone? It is a very selective report. He did not report what I said at the time-the fact that I was prepared to be at the rally whereas the Minister for Aboriginal Affairs (Mr Holding) was not. The article also says that I inflamed the situation, which I totally deny. I also claim to have been misrepresented in an article that appeared on page 3 of the Courier-Mail of 14 May-- Mr Hand —On a point of order, Madam Acting Speaker: There is so much overwhelming evidence in the media that the honourable member attempted to incite a riot outside Parliament House- Madam ACTING SPEAKER —Order! I point out to the honourable member for Melbourne (Mr Hand) that the honourable member for Higgins (Mr Shipton), with the indulgence of the Chair, has the right to make his personal explanation. The honourable member for Melbourne has every right to have a point of view, but the honourable member for Higgins may proceed with his personal explanation. Mr SHIPTON —Madam Acting Speaker, I ask you to ask the honourable member for Melbourne to withdraw those comments, which I find offensive. Madam ACTING SPEAKER —I am sorry; I did not hear those comments. If you find them offensive, I ask the honourable member for Melbourne to withdraw. Mr Hand —No, I am sorry, I cannot withdraw. Madam ACTING SPEAKER —But the honourable member for Higgins finds the remarks offensive. I am afraid I did not hear them; so I cannot judge for myself. Mr Hand —Well I did not find the remarks I made offensive. I find them truthful and I cannot withdraw them. Madam ACTING SPEAKER —I did not hear those remarks and I cannot hear the honourable member for Melbourne now. But I point out to him that if the honourable member for Higgins finds the remarks offensive-the remarks that I did not hear-he should withdraw them. Mr Kent —He finds everything offensive; he does it all the time. Madam ACTING SPEAKER —Will the honourable member for Hotham please be quiet. This is quite ridiculous. Would the honourable member for Melbourne please withdraw the remarks that the honourable member for Higgins finds offensive. The standing order is perfectly clear. Mr Hand —I am at a loss to know what I am supposed to withdraw. Could the honourable member please explain to me how I have offended him and then I will consider withdrawing the remarks. Madam ACTING SPEAKER —Order! I point out to the honourable member for Melbourne that he makes it extremely difficult for himself and for the Chair if he does not observe the Standing Orders. Mr Hand —I am happy to withdraw, but I am not sure- Madam ACTING SPEAKER —Thank you, that is all I need. I only need the honourable member for Melbourne to withdraw. Mr Hand —No. Mr McVeigh —Come on; name him! Mr SHIPTON —Thank you, Madam Deputy Speaker. Madam ACTING SPEAKER —I cannot hear the honourable member for Higgins when every other honourable member in this place attempts to direct the traffic. I ask honourable members to be quiet while I hear the honourable member for Higgins. Mr SHIPTON —Thank you, Madam Acting Speaker. I take it that the honourable member for Melbourne withdrew the comments that I found offensive. Mr Hand —No. Madam ACTING SPEAKER —The honourable member for Melbourne withdrew. The honourable member for Higgins will proceed. There is no need for him to be provocative. Mr SHIPTON —I have the greatest sympathy for you, Madam Acting Speaker. I take it that, as you stated, the honourable member withdrew. I was referring to an article on page 3 of the Courier-Mail of 14 May which said, amongst other things: The rally turned into a riot when Mr Shipton identified himself to the demonstrators, telling them he represented the Opposition Leader, Mr Peacock. I deny that report and I do not agree with it. The final misrepresentation is the one which appeared on page 3 of the Adelaide Advertiser on 14 May. It repeats a purported statement of the Minister for Aboriginal Affairs in the Parliament. He is reported as saying that I was at the rally and was inciting a riot. I deny that in the terms that I have denied it previously in this House. Mr MACPHEE(Goldstein) —I seek to make a personal explanation. Madam ACTING SPEAKER —Does the honourable member claim to have been misrepresented? Mr MACPHEE —I do. Madam ACTING SPEAKER —Please proceed. Mr MACPHEE —I was misrepresented by the Prime Minister (Mr Hawke) in Question Time when he asserted that I had a different view of the South Pacific nuclear-free zone treaty from that of the Leader of the Opposition (Mr Peacock). I make it clear to the House that the Prime Minister has quoted most selectively from both the speech of the Leader of the Opposition and the article in today's Australian Financial Review. If he were to read to the House carefully the arguments presented by the Leader of the Opposition on 31 May 1984 it would have been clear- Madam ACTING SPEAKER —The honourable member must show the House how he has been misrepresented. Mr MACPHEE —With great respect, I am doing so because I am showing how I have been misrepresented by the suggestion that I am at variance with my Leader. I make it clear that on that day my Leader stressed the Opposition's concern for any proposition which prevented the free access of nuclear capable vessels or nuclear-powered vessels in the South Pacific because, as he said, it would call into question the ANZUS Treaty. My statement is precisely consistent with my Leader's remark. What the Prime Minister did not read from today's Australian Financial Review was the relevant parts of the article. I now read them: We are committed to it, we have always been. It was the Fraser Government which was at the first South Pacific Forum meeting which agreed that a draft treaty should be drawn up. In a sense its a misnomer-- and this is extremely important-- because the treaty is only aiming to essentially stop all nuclear testing and dumping of nuclear waste. It will specifically allow for the free travel of the United States nuclear-capable vessels . . . we are not going to embrace the treaty sight unseen. When it is available in draft form it will be looked at by governments for another 12 months and there will be plenty of time for debate. I then go on to say: As I understand, the ASEAN States are looking at something very similar, but it will still guarantee the smooth working of ANZUS. It is abundantly clear that the reservations that the Leader of the Opposition expressed a year ago were precisely the same reservations that are contained in the article today. There is no difference between us. The Prime Minister has greatly misrepresented me by leaving out the quotation about the misnomer and leaving out the reference to nuclear-capable vessels. Mr BRUMBY(Bendigo) —Madam Acting Speaker, I wish to make a personal explanation. Madam ACTING SPEAKER —Does the honourable member claim to have been misrepresented? Mr BRUMBY —I do. In the House on 13 May I referred to an article in the Bendigo Advertiser of last Saturday, 11 May. According to that article, the Leader of the Opposition (Mr Peacock) claimed that I was not present in the House during the debate on the assets test. During a personal explanation on 13 May I indicated that that claim by the Leader of the Opposition was incorrect, false and misleading, and that I was in this House during the whole of that debate. I have now had an opportunity to read the daily Hansard of 13 May and I see that in response to my personal explanation the Leader of the Opposition said: I would affirm that the honourable member for Bendigo (Mr Brumby) was not in the House during the debate. That is absolutely and totally false. I am astounded that the Leader of the Opposition can continue to make claims that have no basis in fact. I was in this House during the whole of that debate and again I urge him to have the courage and integrity to withdraw his false accusation. Mr YOUNG(Port Adelaide-Leader of the House)(3.03) —by leave-I move: That standing order 48A, as amended by sessional order, relating to the adjournment of the House, and standing order 103, 11 o'clock rule, be suspended for the remainder of this period of sittings. It is true that the amount of legislation coming before the House between now and when we rise next week is making this a busy period. It is not uncommon for this to occur after an election. The fact is that the Government will be involved in the Premiers Conference the week after the House rises, so it is not a question of looking at longer sittings. I have attempted to make sure that honourable members opposite get the opportunity to speak as much as possible on the more controversial Bills, as was demonstrated last night when in debate on the dairy Bills no honourable member's right to speak was restricted. I thought that legislation was important to both the Opposition side of the House and ours. That will be the attitude of the Government to other controversial legislation that comes before the House, and which indeed is before the House at the moment. It is not a question of sitting after 11 o'clock every night. Hopefully, we can avoid that, but it will need a fair amount of the co-operation between the Whips that has been evident since we started sitting in February. I hope we will be able to restrict the number of evenings on which we sit after 11 o'clock. I know honourable members on both sides of the House are not happy about the exercise. Mr Cadman —It just proves how hopeless you are. Mr YOUNG —Well, it is just one of those experiences. The honourable member has been yelling out for 10 years and he is still one bench from the back. He will be all right; he should just keep yelling so that his Leader can see and hear him. I hope we will not have to sit after 11 o'clock on most evenings unless it is necessary for the legislative program to be completed. Most of the essential legislation has been identified and is known to the Opposition, and it also knows the Government's legislative priorities. Mr SINCLAIR(New England-Leader of the National Party of Australia)(3.05) —The Opposition opposes this motion. Over the last few weeks we have seen the Government getting to the point of having the legislative crunch at the end of the session that we all said would happen. We told the Government that it was necessary for the Parliament to sit longer and that it was not sufficient for the Parliament to be expected just to sit for the very brief period that has been prescribed simply to meet the whim of Ministers. Frankly, this motion indicates the degree to which the Government has allowed the business of the Parliament to take a secondary place in its consideration. One of the things it wants to do in the fast approaching winter recess is hold a tax summit. We all know that the Government intends to invite non-elected people into this place to deliberate on matters that are essentially the responsibility of those who have been elected. While I know the traumas going through the Left, the Right, the Centre Left and the left right out as to what sort of tax package the Government will present, it is not sufficient that-- Mr Keating —Come on, Ian. Mr SINCLAIR —It is appropriate that the Treasurer is here. He is probably suffering more than most. The Treasurer is telling me to hurry up. Why does he want things hurried up? He wants to get back to his office. He is not interested in being in the Parliament. This is really about the Parliament. I know how much the Treasurer (Mr Keating) enjoyed the Parliament when he sat on this side, where he will soon be returned. It is important that he recognises the concern we have to see him in this chamber, to hear those dulcet tones, and occasionally to hear the words of non-wisdom that emanate. He must be a bit frustrated because the Minister for Defence (Mr Beazley) has blown his gaff. We were told last night that there was to be a budget cut in defence expenditure but today we have learnt that there is to be a Budget increase of between $250m and $300m. So the Treasurer has a few problems in trying to persuade anyone that he is genuine. I can understand the reason he does not want the elected members of the House to be here for the tax summit. We are being told by the moving of this motion to expect late night sittings. That means that there will be fewer sittings. Fewer sittings means that we will not be in the Parliament, and if we are not in the Parliament we cannot consider the wide range of legislation the Government has allowed to accumulate towards the end of this session. It is not good enough. I believe, quite seriously, that honourable members do not want to sit late every night. Last night we rose at about 1 o'clock. I suspect that that will happen night after night. We on this side of the House oppose the idea of passing a motion that allows the Government to introduce new business after 11 o'clock at night. That being so, we intend to vote against this motion. We hope that the Leader of the House (Mr Young) might recognise the concern of those on both sides of the House that we do not stay here until all hours every sitting night. Question put: That the motion (Mr Young's) be agreed to. The House divided. (Mr Deputy Speaker-Mr J. C. Mountford) Ayes . . . . . . . . . . . 72 Noes . . . . . . . . . . . 60 —— Majority . . . . . . . . . 12 —— Baldwin, P. J. Jacobi, RBeazley, K. C. Jakobsen, C. A.Beddall, D. P. Jones, BarryBilney, G. N. Keating, P. J.Blanchard, C. A. Kelly, R. J.Blewett, N. Kent, L.Bowen, Lionel Keogh, L. J.Brown, John Kerin, J. C.Brown, Robert Klugman, R. E.Brumby, J. M. Lamb, A. H.Campbell, G. Langmore, J. V.Charles, D. E. Lee, M.Charlesworth, R. I. Lindsay, E. J.Chynoweth, R. L. McHugh, J.Cleeland, P. R. McLeay, LeoCohen, B. Maher, M. J.Cross, M. D. Martin, S. P.Cunningham, B. T. (Teller) Mayer, H.Dubois, S. G. Milton, P.Duffy, M. J. Morris AllanDuncan, P. Morris, PeterEdwards, Ronald O'Neil, L. R. T.Fatin, W. F. Price, L. R. S.Fitzgibbon, E. J. Punch, G. F.Free, R. V. Saunderson, J.Gayler, J. Scholes, G. G. D.Gear, G. Scott, J. L.Gorman, R. N. J. Simmons, D. W.Grace, E. L. Snow, J. H.Griffiths, A. G. Staples, P. R.Hand, G. L. Theophanous, A. C.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. Adermann, A. E. Hunt, R. J. D.Aldred, K. J. Jull, D. F.Andrew, J. N. Katter, R. C.Beale, J. Lloyd, B.Blunt, C. W. McArthur, F. S.Braithwaite, R. A. McGuaran, P. J.Brown, N. A. MacKellar, M. J. R.Cadman, A. G. McVeigh, I. M.Cameron, Donald Macphee, I. M.Cameron, Ewen (Teller) Miles, C. G.Cameron, Ian Millar, P. C.Carlton, J. J. Moore, J. C.Cobb, M. R. Nehl, G. B.Coleman, W. P. Porter, J. R.Connolly, D. M. Reith, P. K.Conquest, B. J. Robinson, IanCowan, D. B. Rocher, A. C.Downer, A. J. G. Ruddock, P. M.Drummond, P. H. Shack, P. D.Edwards, Harry Sharp, J.Everingham, P. A. E. Shipton, R. F.Fife, W. C. Sinclair, I. McC.Fischer, Tim Slipper, P. N.Fisher, Peter Spender, J. M.Hall, Steele Sullivan, K. J.Halverson, R. G. Tuckey, C. W.Hawker, D. P. M. Watson, DavidHicks, N. J. (Teller) Webster, A. P.Hodgman, W. M. White, P. N. D.Howard, J. W. Wilson, I. B. C. Mildren, J. B. Dobie, J. D. M.Hayden, W. G. Burr, M. A.Jenkins, H. A. Smith, W.Dawkins, J. S. Goodluck, B. J.Darling, E. E. Hodges, J. C. Question so resolved in the affirmative. 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 assembled in Parliament. The Petition of certain citizens of Australia draws to the attention of the House that: (1) Imports of frozen peas from New Zealand and elsewhere have increased from 4.8% of the Australian market in 1979/80 to an estimated 20% in 1984/85-from 2.2 million kilograms to 8.0 million kilograms. (2) As a result of these escalating imports, in 1985: Growers are faced with cuts of up to 30% both in contract tonnages and prices, Hundreds of jobs in the processing industry will be lost, with many hundreds more under threat in downstream industries, Millions of dollars will be lost from sensitive regional and State economies. Your petitioners therefore request that: The Australian Government: (1) Reject the recommendation of the Industries Assistance Commission Interim Report on Frozen Peas that no assistance be provided to the industry. (2) Support the proposals made by grower organisations and trade unions for import restrictions and other measures of support for the Australian frozen pea industry. And your petitioners as in duty bound will ever pray. by Mr Burr,Mr Reith and Mr Sharp. 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 and Mr Macphee. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: 1. That the overwhelming majority of Australians are completely satisfied with the existing Australian National Flag. 2. That we are totally opposed to any change in the Australian Flag as provided in Section (3) of the Flags Act, unless such proposed change is first voted on by the people of Australia and passed by a majority of voters in a majority of States. And your petitioners as in duty bound will ever pray. by Mr Fife. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of certain citizens of Australia respectfully showeth that the current policies of the Community Arts Board of the Australia Council are disadvantaging regional residents (country and outer metropolitan) with regard to the provision of witness to art forms, in particular to tours of professional performing arts. Your petitioners, therefore, humbly pray that the Federal Government will allocate sufficient funds to the Australia Council specifically to ensure ongoing funding to State Arts Councils to enable those organizations to maintain access to performing and other arts activities in country and outer metropolitan areas, and your petitioners, as in duty bound, will ever pray. by Mr Brumby. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. We, the undersigned, are deeply concerned that Australia's great farm potential is being shackled by unnecessarily rising production costs. Many Federal and State Government regulations, excessive taxes and charges are damaging the ability of agriculture to compete on world markets, are increasing food costs for Australian families and creating widespread unemployment in both the country and cities. The undersigned humbly petition the Parliaments of Australia, its States and Territories, to take all measures within their powers to reduce the burden of imposed costs and regulation, allowing Australian farmers to unlock farm potential so the nation as a whole can share the benefits of the resulting growth and prosperity. And your petitioners as in duty bound will ever pray. by Mr Tim Fischer. 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 effect on the living standards of the average wage earner of this country. Your petitioners therefore pray that your Honourable House will: Propose and pass a motion that the price of petrol be reduced by 3c a litre in line with a commitment given by the now Prime Minister of Australia during the 1983 election campaign. And your petitioners as in duty bound will ever pray. by Mr Goodluck. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That in the light of the Labor Government's failure to act to correct the many anomalies in the Assets Test on pensions brought to its notice, the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners. Your Petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of the Labor Government's iniquitous and unfair Assets Test. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. 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. 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. To 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 in 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 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 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 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. Petition to the Honourable Speaker and Members of the House of Representatives. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned shows: That we condemn that Australia should assist the United States of America by participating in the testing of MX Peacemaker Missiles, or any similar weapons, from Australian shores. Your petitioners request that the House of Representatives, in Parliament assembled, should- 1. seek to reverse this deplorable decision, and 2. 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 of the House of Representatives in the Parliament assembled. The petition of concerned people respectively showeth their desire to have the brumby declared a protected species. Your petitioners therefore humbly pray that your Honourable House follow the example of President Nixon in the U.S.A. by declaring our wild horses protected from industry and indiscriminate slaughter. And your petitioners as in duty bound will ever pray. by Mr 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 Leader of the Opposition (Mr Peacock) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The failure of the Government's economic management. I call upon those members who approve of the proposed discussion to rise in their places. More than the number of members required by the Standing Orders having risen in their places- Mr PEACOCK(Kooyong-Leader of the Opposition)(3.18) —The Opposition brings to the Parliament today for discussion this matter of public importance: The failure of the Government's economic management. Let me just put a few things in context. I will be making some reference to the statement that was made last night. Honourable members will recall that last year during the election campaign the Prime Minister (Mr Hawke) said that we had the fastest growing economy in the world. What has transpired to bring about these structural problems that are allegedly there now? Not only the Prime Minister but also the Treasurer (Mr Keating) told us during the election campaign that interest rates in 1985 would come down. They have gone up. What did we have last night? We had what was in essence a mini-Budget. What were we told previously? We were told: 'There will be no mini-Budget'. That is the context of that statement last night. But there is a further context about that statement that ought to be considered as well. There are a lot of cuts in last night's statement which will hurt many people. But at the end of the day at least $3 billion will be added to outlays in the next financial year. Some cuts in expenditure! 'Cutting it to the bone' was what the Treasurer said the other day. It must be the bone the Aboriginal people are pointing at the Minister for Aboriginal Affairs (Mr Holding). All I can say is that the only worthwhile element to come out of this statement for honourable members opposite, judging by the faces of gloom as it was being brought down last night, is that in going home with their little media kits to try to sell the statement to their constituents it will be a nice dry run for them to learn what it is like when they have to go back later on and sell the capital gains tax that is down the line. They can get a little bit of practice on that. At the end of the day the Government will have additional outlays of at least $3 billion. Some cutting by this Treasurer! In terms of the Treasurer and his economic management, one must bear in mind that the statement last night, which was allegedly to cut $1.2 billion, was made in a financial year in which new expenditure items of $1.2 billion were introduced in the Budget for the financial year. The fatal flaw in what transpired last night was that again the hands of the trade union officials wrote elements of that speech. This Government fails not only in monetary policy, where it has abandoned monetary targeting, and budgetary policy, but also in wages policy. Last night's statement placed further emphasis on its failure in the wages policy area. We are already hooked to the spiral of wage indexation which is making industry uncompetitive and costing jobs. On top of that, there is no discounting for depreciation of the dollar and deferral of alleged productivity gains and the claims that will be made there. On top of that, we have the demands for superannuation and a shorter working week. The wages policy will be the undoing of this Government; but worse, it is contributing to the undoing of the Australian economy. Last night the Government had the opportunity to regain some kind of grip on the direction of the Australian economy. It had the opportunity to outline a clear economic position with a major statement and that opportunity has been wasted. Tomorrow night, rather than in the short 15 minutes that are made available to me today, I will detail a much fuller response to the Government's statement last night. But the Opposition, through myself and the Deputy Leader of the Opposition (Mr Howard), was not prepared to allow this day to go by without drawing attention to the flaws in this statement and the flaws in this Government. What was and remains clearly needed in this country is the restoration of confidence. We needed substantial genuine cuts in outlays and a wages policy which would enable Australia to take the benefits of devaluation, and the Government has failed to deliver the goods. The statement on outlays is a mixture of deferments, vague promises on saving operational costs and small, but hurtful, cuts across a whole range of items for people who will see at the end of the day that there is no saving at all. They suffer, but there is no saving. Where are the major cuts in ideological ministerial programs that are required to reduce significantly the structural deficit? They are not there. Where are the real cuts in ideological ministerial programs that are required even to begin to compensate for the irresponsible spending sprees in the 1983-84 and 1984-85 Budgets? It was those spending sprees which led to the Forward Estimates for 1985-86 being $4.3 billion higher than those for 1984-85. What do we have at the end of the day? We have an alleged cut of $1.2 billion from the bloated $4.3 billion. The Treasurer remains the highest taxing, biggest spending Treasurer in Australia's peacetime history. If he cannot cut expenditure, he will not be able to give people real tax relief, and he knows it. Anyway, the way the tax summit is going at present, it will turn into a revenue raising expose with the trade union movement. I am not surprised that the Minister for Foreign Affairs (Mr Hayden) has been sent to Nepal. He is probably trying to recruit a couple of Sherpas to help the Government up the summit. At present it is all over the place. If the ordinary Australian were to try to implement last night's approach and say it was a saving, a cut in expenditure, his bank manager would laugh him out of the office. Yet this is the type of illusion that the Treasurer is trying to pass off as real. Let us look at the alleged $1.2 billion cut in another way. In 1983-84 the Government's new spending programs added almost $2.5 billion to the deficit. In 1984-85 the Government added another $1.2 billion in new spending programs. Yet, confronted with this, the Treasurer tried to tell us that these cuts are real. Let us look at last night's alleged cuts in yet another way. When the Government cut expenditure by $1.2 billion in 1983-84 it then, as I said, proceeded to introduce new spending programs costing $2.5 billion. Again in 1984-85 the Government trumpeted its cuts of $0.5 billion, but proceeded to introduce new policies costing $1.2 billion. Those previous cuts proved to be illusory and, whichever way one approaches last night's alleged cuts, they are just as illusory. Last night it would have been so easy for the Government to commit itself to rejecting any new spending proposals for 1985-86 and succeeding years, but it blatantly avoided any commitment, because the Treasurer knows that in the face of pressure from the Australian Council of Trade Unions and the Left, the Government will cave in yet again. We said before last night that this Government is being seen increasingly as nothing but a trade union government, manipulated by trade union officials. They have got the Government again. In the wages policy spelt out last night by the Treasurer, the Government, by turning its back on discounting and merely deferring approaches for alleged productivity gains-where one can find any, I do not know-revealed that it is subservient to the demands of the trade union officials, as it has been to date on the taxation summit. Every day we read of trade union officials, or the Left, or the Centre Left, or the leftovers-if the taxpayers have anything left over, I would be surprised-demanding a different position, whether or not they are in the Ministry. The disarray that was evident and is evident over the tax summit is evident now in the way the Government has sought to establish this charade of a cut. Let me show again how illusory the alleged cuts are. I quote from page 8 of the Forward Estimates, which states: . . . it is estimated that about $1b would be added to the existing . . . . . . forward estimates, if expiring or certain reducing programs were to be held at the same real level budgeted for 1984-85. Of that $1 billion, over $500m is the cost of keeping tax sharing grants to the States at the same real level as 1984-85. The Deputy Leader of the Opposition exposed the Treasurer on this issue last night, and he has not been able to recover from it or explain it in terms that even he comprehends. If in fact the States receive the same real increase as local government-I would not be surprised if there is some in principle Cabinet decision saying that the States will receive the same treatment as local government, 2 per cent-it will add about $730m to the Forward Estimates, leaving only $530m of the alleged outlays cut last night. Mr Beale —That was all capital, anyway. Mr PEACOCK —And within it there was capital, fraud, better administration and better management-all the wishful thinking that is there in relation to the wish list anyhow. The Prime Minister (Mr Hawke) and the Treasurer have been caught out on this, and they know it. That is why they obfuscated when the Deputy Leader of the Opposition raised with them in debate the issue of payments to the States. The Treasurer has tried to wriggle his way out of his misleading statements. He made an amazing claim this morning, which the Deputy Leader of the Opposition raised at Question Time, and honourable members heard the nonsense in response from the Treasurer. He said that he could guarantee the States that there would be savings in the forward estimates from his negotiations with the States. I wish that it were true. Those forward estimates clearly show tax sharing grants to the States in 1985-86 remaining at the same level in money terms as they were in 1984-85. So the Treasurer is talking about cutting the grants to the States in 1985-86 by at least 5 per cent in real terms. If we take a more realistic inflation figure of 8 per cent, the Treasurer is talking about a real reduction in grants to the States of over 8 per cent. We said three weeks ago-I said it myself-that what Australians want and what they deserve from this Government is the truth, not the bluff and bluster and the occasional eschatology from the Treasurer, and not evasion and the rhetoric from the Prime Minister with his bolero performances in this House-just the plain, simple truth. Whichever way one looks at last night's alleged $1.2 billion saving, it is illusory. I say 'alleged' because when we look at the cuts in detail we must ask: How courageous are they? The fact is that when we add together the items in the statement which represent deferrals, increased charges, moving government commitments off-Budget-those which have been previously announced and those which are so vague as to be doubtful-we are left with a level of cuts in outlays which will be wiped out by the probable grants to the States. Let us not forget what else still needs to be added to the forward estimates. In last night's statement the Treasurer made no attempt to allay fears about those additions. In fact, the statement was more notable for what it failed to say than for what it said. It does not tell us a target for further cuts. It does not tell us what new expenditure decisions have already cost. It does not assure anyone that the Government will defeat any new expenditure proposals. It does not assure us that since the Estimates there has been no blowout in areas such as Medicare, and it does not tell us what type of non-policy parameter changes there have been since the Budget. Let us again put the alleged cuts in perspective in light of the brevity of the remarks today. Just weigh it against the $2 billion that Medicare has added to the Budget in just two years. Just weigh it against the increase in 1984-85 of $1.3 billion in the interest on public debt. The fact is that the Government has tried to fool the Australian community into thinking that these cuts are a real attempt to regain control of the economy. No longer is it a case of the Prime Minister worrying about committing political hara-kiri over the question of the tax summit. I told him that in that regard he should remember the blade always enters from the left. It is not a question of political courage; it is a question of whether the Government has political honesty. As I have said, I will go into this matter in much greater detail tomorrow night in the House. Before I conclude, I leave the House with one thought. How does an economy which the Prime Minister says is so fundamentally strong come to rely on a single statement to save its currency when, already over the last year, Australia has by far the largest trade weighted exchange rate depreciation of any country in the Organisation for Economic Co-operation and Development? Mr DEPUTY SPEAKER(Mr Mountford) — Order! The honourable member's time has expired. Mr KEATING(Blaxland-Treasurer)(3.33) —The total economic incompetence of the Leader of the Opposition (Mr Peacock), which we have known about in this House for years-he never at any stage got near a domestic economic policy until he blew wages out in 1981-was again revealed starkly just a moment ago. I will correct the Leader of the Opposition on a number of points. Firstly, he talked about a mini-Budget. Let me explain to him what a mini-Budget is. A mini-Budget is a Budget which involves changes to outlays and receipts to alter the direction of government policy. We are not altering the direction of the 1984-85 Budget. We are not altering government policy. We have made an announcement of savings in outlays for the next financial year's Budget. It is not a mini-Budget. For those who are so dense as not to understand, it is not a mini-Budget; it is simply an exercise in savings to grant the full year effect in the next Budget, not this Budget. That is the difference between a mini-Budget and a savings exercise. That is the first lesson I wish to give the Leader of the Opposition. Opposition members interjecting- Mr KEATING —The Leader of the Opposition was heard in peace. Honourable members opposite should do me the honour of letting me be heard in peace. The second thing that the Leader of the Opposition did was to make the foolish comment that the proposed cuts could not be regarded as such because there was still another $3 billion to be added to outlays. This tomfoolery comes from the Leader of the Opposition taking the forward estimates papers and looking at the Budget Estimates of $63,948m for this year. He looks at the forward estimates figure which is $68,264m. He is now saying that the only way we can get genuine savings is by not adjusting the Budget for inflation at all. He is saying that we ought to hold the Budget estimates for 1985-86 at the same level as that of 1984-85. That is where the figure of $3 billion comes from. The stupidity of the Leader of the Opposition's comment is just unbelievable. I ask honourable members to imagine any government saying: 'We are going to see real cuts to welfare, to social security, to education, to every other area of the Budget that matters, to try and squeeze expenses for 1985 into costing the same amount of money spent in 1984-85'. That is where the difference of $3 billion comes in. The figure is actually $4 billion but the Leader of the Opposition has taken the $1 billion saving, deducted it and come back to $3 billion. He made a stupid comment about the Government saying it would give savings but he said it would still have outlays going up by $3 billion more than last year. Of course we will. That is why the implicit price deflator of 5 per cent is allowed for. Expenditure will rise next year because it will compensate for that inflationary adjustment. But it will not rise by as much as it would have risen as a result of last night's saving exercise, and that is the point. But the Leader of the Opposition fails to recognise it. The Leader of the Opposition made the inane comment that the cuts were small but hurtful. Then he said that they were vague and were really no cuts at all. How could cuts be small and hurtful yet vague and useless? He talked about the size of the Commonwealth Budget deficits for the last couple of years and again misled the House by saying that the Government spent $2.1 billion in 1983-84. He failed to recognise that had he turned to the reconciliation statement on pages 256 and 257 of the 1983-84 Budget Papers he would have seen that the net effect of the program decisions was estimated at $6,481m of new spending. He failed to mention, of course, the massive switch of tax expenditures to outlays. We took the obscene housing reduction for interest rates as a tax item, and gave it as an outlay in the first home owners scheme. He failed to mention the loss of $600m in medical rebates in the tax expenditures which were transferred to an outlay under Medicare. He failed to mention the $320m payment to the States we had to make because of the massive recession which his Government inflicted upon them and the fact that the States could not cope in 1983-84. When we look at the tax expenditure change in outlays we see that the net expenditure was $648m, not the $2 point whatever billion he said it was. He went on to make much the same claim for 1984-85. If he were to look at page 272 of the 1984-85 Budget Papers, he would find that the net policy decisions allocations, post-forward estimates, stand at $582m. So we had a rise of roughly $500m or $600m in each year but the Leader of the Opposition said it was $2 billion in each year. How does one make statements like that? What sort of a dummy is he that he cannot even read a Budget Paper? Another point to be made is that the Leader of the Opposition presumes that we are debating the matter on his terms, as though the smallest Budget deficit is the right Budget deficit. The right Budget deficits were the last two deficits. That is why the economy grew by 10 per cent through 1984-85. That is why we have had 5 per cent growth this year. That is why we have created 310,000 new jobs. That is why we had 5 per cent inflation. The Budget deficits were the right deficits. The previous Government for years said a lot about cutting Budget deficits, but it could not do much. It kept up the rhetoric and had an erratic monetary policy and an erratically draconian fiscal policy. Where did the Opposition get it? When will honourable members opposite wake up to themselves? Their Government put the economy into the recession. It gave us double digit inflation and unemployment yet honourable members opposite are telling us about the state of economic policy. The former Treasurer, the honourable member for Bennelong (Mr Howard), is always talking about how much outlays have grown three times under us. He finds some percentage point and multiplies it by three. He was the most creative accountant that the Commonwealth ever had. This is what the honourable member for Bennelong did with his outlays. As Treasurer, this is what he put off Budget during the Fraser years: Telecom Australia, Australia Post, Trans Australia Airlines, and Qantas Airways Ltd. He squeezed the States and the Northern Territory. Some of this might have happened in the year before he became Treasurer, but this is what his Government did, and most of it was done by him. State and local borrowings rose from 1.8 per cent of gross domestic product in 1977-78 to 3.1 per cent of GDP in 1982-83-from $1,591m to $5,050m. In other words, talking about low numbers of growth, this great fiscal lion was shunting all the stuff off the Budget. He was cheating. He squeezed the States and said: 'You take the responsibility and raise the revenue yourselves'. But they did not. They raised loans. In a cowardly way, the previous Government gave the States the borrowing approval to raise the necessary loans. That is the story of the Fraser years. That is the story of fiscal management during the Fraser years. Under the razor gang exercise, there were to be savings of $600m, savings which took 18 months. We have already had savings of $2.5 billion in outlays and tax expenditures in our first two Budgets, and we announced savings of $1.2 billion last night. Either one believes the individual items that are set out in the document presented last night or one does not. Either one can read or one cannot. One cannot say that the savings announced are small but hurtful and in the next breath say that they are vague and do not mean anything. I do not mind getting up here every day to respond to these inane propositions, but it is hardly worth the effort to reply to the sort of drivel that has been put to me. The fact is that this Government has subjected itself to a very rigorous policy in respect of outlays and receipts. We have made it quite clear that we intend to bring down the Budget deficit in money terms. Honourable members opposite should ask themselves what the business and financial communities think of them as opposed to what they think of us. Today, the Prime Minister (Mr Hawke) read quotations from spokesmen for the business community. They see some coherence in the Government's policy. They see savings being made where they are required. They see the Budget deficit being reduced-the disastrous fiscal inheritance from the previous Government. At that time it was potentially nearly 5 per cent of GDP, which we brought in at 4.5 per cent. We will reduce it this year to about 3.3 per cent, and next year we will take it to well under 3 per cent. What is the Opposition saying? Is it saying that in some way it could have done better? Is it saying that in some way the business community thinks honourable members opposite could do better than us? Some of them ought to get around the business community. They will find that they are held in contempt by it. Honourable members opposite should not talk about the financial markets. They did not hit their monetary policy target once in six years. Last year we brought the money supply in on target for the first time in six years. This year we have the complication of the deregulation of the financial market, which the previous Government never had the courage to introduce. The market now recognises its error and concedes that monetary conditions are firm, as we said they would be. No doubt there were some misleading signs, due to the Public Service dispute pushing down cash rates in the early days after we suspended the monetary target, but that policy is now firm, and the market recognises that. Looking across the board at fiscal policy, monetary policy and now at wages policy, the Leader of the Opposition (Mr Peacock) said that the Government had no wages policy. He is the individual who gave us a 17 per cent wage increase in 1981. Talk about people in glass houses! The previous Government had no wages policy. The Deputy Leader of the Opposition, to his credit, has said on a number of occasions that the greatest weakness of the Fraser Government was that it had no incomes policy, no wages policy, nothing to set policy by. That is true. This Government has such a policy. Last night I went into an exposition of wages policy for the foreseeable future, given the depreciation. I indicated again that there is a coherence of policy, a framework, which the market respects. Do honourable members opposite think that the market is going to accept this nonsense about deregulation of the labour market, this simple analogy between the deregulation of the financial market and deregulation of the labour market? The Australian labour market is not organised to operate as a market. We do not have discrete industry organisation in trade unions. We do not have enterprise organisations. We cannot get these changes. We have the British craft union structure across industries. If one moves, they all move. The Australian labour market is not organised to operate as a market. To say that we can simply decree from this place that suddenly it will operate as a deregulated market is nonsense. Just imagine what would happen to wages in some of the industries which are at a record production, such as the motor industry, without this policy? The effect would move to the metals industry, to the construction industry, to the metals-construction awards. How would the Opposition hold wages under its policy? Yet Opposition members stand back and say: 'This is what we call a free market-a free for all'. What would be the rate of inflation? Is there anyone who does not understand that? The business community understands it properly. If one looks at the three arms of policy-wages policy, fiscal policy and monetary policy-one finds that the Government has a coherent position, and that coherence was expressed in last night's document. It took two months of effort sitting around the table, poring over hundreds of Cabinet submissions and combing through the outlays and programs of the various departments, to get those savings. That is how illusory it is. There is a simple view that one has only to cut off one major program, as the Leader of the Opposition has tried to imply, to salve some ideological pre-occupation the Party has. The fact is that nobody trimming down a business would simply hack off a division. It would spread efficiencies across its divisions. In the same way, that is what we have done in the Commonwealth of Australia in the areas where, in the Government's view, there had to be a decline in the call on financial markets. We have announced savings of $1,250m. The business of the States and the Forward Estimates arises once again. Let me put it again to the Deputy Leader of the Opposition, for the fifth time. There is $1,000m in the economic statement for the conservative bias. The Deputy Leader of the Opposition says that a 2 per cent increase to the States would total $700m. There are, savings available off the $1,000m in the negotiations with the States. Those savings do not negate the announced last night savings, they are savings in addition to last night's savings. I would have thought that the Deputy Leader of the Opposition would have known that. I explained it to him last night. That should have guaranteed that this morning he would have known it, and passed it on to his lame-brained Leader, so that he also would have known it. The Government understands the economic illiteracy of the Leader of the Opposition and we do not expect much from him. However, his Deputy, at least, should have a fundamental understanding of a Forward Estimates document. Do not tell me that he has forgotten so much of the Treasury portfolio that he cannot understand the official documentation. However, it seems that he has. There will be savings against the Forward Estimates for the States. By that stage the Government will have a forecast for the economy and will be able to make a judgment about receipts. It will then have some snapshot of the likely deficit outcome. If it is insufficient to reduce the Budget deficit below the 1984-85 outcome, we will be making some more savings. It will be on again, and the Opposition will read about it in the Budget. We reject absolutely this trite nonsense from the Leader of the Opposition and his Deputy. This Government is going about its business. It is honouring its commitments. It is laying the groundwork for a continuing strong, private recovery in the economy, continuing strong investment and employment growth. We will see those things come through this year as a result of the economic statement and the Budget policy. Mr DEPUTY SPEAKER(Mr Mountford) —Order! The Minister's time has expired. Mr HOWARD(Bennelong)(3.49) —I have absolutely no quarrel with the need for major expenditure reductions. I have no argument with the proposition that the Prime Minister (Mr Hawke) enunciated a few weeks ago that this country is clearly living beyond its means. That statement was about the economic administration of this country under his prime ministership. Let that be remembered. The qualification and the reservation that the Opposition has about last night's economic statement is whether it will match the rhetoric with which the Treasurer (Mr Keating) clothed it. I refer to page 48, the peroration of the Treasurer's speech, in which he uttered these brave and rhetorically ringing words: 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. That was the rhetoric in what we heard from the Treasurer last night. We would, therefore, have imagined that we would have been found from looking at last night's statement that it was without parallel in terms of stringency and was the best exercise in expenditure restraint ever undertaken by a government, at least for the last 10 years. But what does it reveal when examined? We find that what the Treasurer has done is to reduce the Forward Estimates of expenditure by a bare 1.8 per cent-and that is whether or not one takes it with a conservative bias. Let us have no confusion about conservative biases. One can throw that in and it is still a reduction of only 1.8 per cent. What do the Forward Estimates reveal? Where do they put that 1.8 per cent? Let us go back to 1977-78, to the second Fraser Government Budget. What was the reduction then from the Forward Estimates? It was 6.6 per cent. What was it in 1978-79? It was 3.6 per cent. What was it in 1979-80? It was 2.1 per cent. So has this brave, courageous Treasurer taken the axe to anything? Has he cut it to the bone in a way that no one else has done previously? On three occasions the extent of expenditure restraint and the level of reduction-that is, between the Forward Estimates and the Budget Estimates-was much greater than what he achieved last night. That is accepting that $1,259m has been taken off the spending aspirations of Ministers. That is what happened last night; it was not an actual cut. A lot of nonsense is talked in many discussions and debates about spending reductions. The fact is that every government in Australia since the end of World War II has presided over an actual increase in the absolute levels of government spending. Some, relatively speaking, have done better than others. Despite all the nonsense and rhetoric from the Treasurer, the Prime Minister and others opposite, and whatever they might say and whatever they might dump upon its shoulders, the former Liberal Government had a better record of expenditure restraint than any government of any political colour in this country since the end of World War II. The Treasurer has a very long path to tread before he can match the level of expenditure restraint that was exercised by the former Liberal Administration. So let us have none of this nonsense about how he has taken the axe to spending programs and has cut everything to the bone. He has taken 1.8 per cent off the Forward Estimates, whether or not one adds in the conservative bias. That is a mile behind what we did in three out of our seven Budgets-and that is on the basis that every dollar that he took off last night will stick. What guarantee is there that it will stick? It did not stick in 1983-84. We all remember that that was the year in which Labor inherited that dreadful deficit, that unmanageable level of expenditure. It was so unmanageable that honourable members opposite struggled and tried very hard, and they manfully increased it by 3.6 per cent. It was so dreadful and so onerous that they had to increase it by 3.6 per cent. So at least it can be said that on this occasion they were not as bad as they were in their first Budget, when they wilfully added $4 billion to the largest Budget of the previous coalition Government. So to the extent that honourable members opposite are now struggling to reduce deficits and to reduce the demands on capital markets, they are struggling to reduce their self-generated problems and problems which have been generated by their own profligate spending decisions. I condemn the statement of last night as an unconvincing exercise in expenditure restraint. The Government has made the mistake of not abolishing programs. There is great potential for many of the savings that were made last night to creep back in as we get closer and closer to the Budget and to election time. I do not pretend that that has been an exclusive folly of one side of politics, but, in relative terms, our expenditure restraint record was better. The Treasurer talks about the courage of the decisions that have been taken. He talks about the courageous decision in the area of privatisation. The Government has decided to sell the Belconnen Mall. Fred Daly knocked it down to 25c at an auction, as I understand it. But is the Government really interested in privatisation? I believe that a great change has come over Australian perceptions towards privatisation, for which there is a great deal of support in the community. I predict that at the time of the next election the coalition will be presenting a very detailed and imaginative set of proposals for privatisation. If the Government really wants to do something, why does it not look at some of the great instrumentalities? The Treasurer complained that I took Telecom Australia and Australia Post off Budget. I reckon they ought to be taken right out of the Government account, so that we can really do a proper job of it. Perhaps the Government would be willing to do that. Perhaps it would be willing to do the sort of thing that Margaret Thatcher did so successfully. That is a beautiful illustration of what can be done. Despite the opposition of the British trade unions to the privatisation of British Telecom, no fewer than 92 per cent of the employees of British Telecom were prepared to take up shares in the privatisation. So let us have none of this nonsense and phoney scorn from the Treasurer about privatisation. We shall be having a great deal more to say about privatisation as the months go by, because this subject illustrates one of the great differences that exist between us and the Labor Party. It illustrates the much greater commitment on our side of politics to accepting the operation of market forces and to a belief that to privatise is to benefit the consumer, and that in privatising some of the great utilities one is not getting rid of the assets of the Australian people but is taking the Australian people into the ownership of those assets by offering them a ride in the way that the British Government did concerning the privatisation of British Telecom. I notice that the Treasurer had something to say about wages policy. I know that he is a bit sensitive about the fact that he is hailed as a great deregulator in the financial markets area, but he is criticised because he has increased the level of regulation of the labour markets. The great weakness of last night's statement was the capitulation to the Australian Council of Trade Unions that it represented on the subject of wages policy. The Treasurer made all the right noises. The Prime Minister made all the right noises in his speech in Perth, and on some other occasions. But when it actually came to the decision, he squibbed it. He said that we have had this great depreciation. In fact, it is the greatest depreciation that we have had for about 30 years. The Prime Minister has rightly said that it gives to our exporters and to our local manufacturers a potential gain in their competitive position. But there is a great proviso to that, which is that that competitive gain should not be squandered in wage increases which will have to be paid by those same exporters and manufacturers, thus cancelling out the competitive gain that they get in their prices against their trade competitors. If that happens, the competitive edge will be immediately lost. Was there any assurance in the statement of last night that that would not happen? Was there any assurance in the statement that the Government would face that reality, that it would go to the Australian Conciliation and Arbitration Commission in September and thereafter and say that whatever the accord might say, whatever might be its fine print, it is in the national interest that the reduction-temporary though it is hoped it is-in our standard of living brought about by the depreciation must be shared throughout the community? To maintain full wage indexation in the wake of this depreciation is to say to the rest of the Australian community that they must cop an even greater reduction in their standard of living in order to prevent any real reduction in the standard of living of wage earners and salary earners. That is an economic nonsense, and it is a notion that will completely destroy the competitive gain that our industries have received from the depreciation. It is on that issue, above everything else, that last night's statement completely fails. Mr DEPUTY SPEAKER(Mr Mountford) —Order! The honourable member's time has expired. Mr ROBERT BROWN(Charlton)(3.59) —It is rather incongruous that the Opposition should take advantage of the day after the evening on which the May economic statement was presented to raise a matter of public importance of this kind. It is doubly incongruous to have the matter raised in the first instance by the Leader of the Opposition (Mr Peacock). On two previous occasions, he has had something significant to say about the Australian economy. Let me refer to those occasions. The first occasion was in the lead up to the 1983 elections, when the Leader of the Opposition, then a retiring Minister in the previous coalition Government, took advantage of the opportunity to sabotage the Australian exchange rate and, in the process, to sabotage the external stability of Australia and its trading position, and to betray Australian interests to international financial speculators. That was precisely the position which he adopted on that occasion when he was prepared to go out in front of the Australian people and speculate about what would happen to the Australian dollar. That is an example of his absolute and shameful disregard for Australia's interests then and for Australia's interests subsequently. The other occasion is particularly enlightening, in view of the fact that the Leader of the Opposition referred to the fiscal competence of this Government. I am sure that honourable members will recall some of the promises of the Leader of the Opposition during the Budget session in 1984. During that Budget session, with the Budget deficit which we were providing for of about $6.7 billion, the Leader of the Opposition was in the process not only of claiming that we should be reducing that deficit to about $6 billion but of simultaneously going around Australia making the most extravagant, wild promises to the Australian people which would have amounted to additional expenditure at that time of $10,655m. That was in addition to the Budget deficit for which we were providing. What does that mean in terms of the total Budget strategy that we could have expected from the Opposition had it had the responsibility at that time to provide the Budget strategy? On the basis of the commitments, the undertakings and the promises made at that time by the present Leader of the Opposition, and in the face of the $6.7 billion deficit for which we had budgeted, the Opposition, had it been in government at that time, would have provided for a Budget deficit of no less than $17.4 billion. I know that the honourable member for Berowra (Dr Harry Edwards) has an understanding of the absurdity and the horrendous nature of that and the very serious economic implications that a Budget deficit of those dimensions would have had. Yet the Leader of the Opposition has the gall and the impertinence to come into this chamber today and, by way of what he calls a matter of public importance, refer to the alleged failure of the Government's economic management. Has it indeed been a failure, considering the situation that we inherited? For example, the Fraser Government inherited from the previous Labor Government an unemployment level of about 4.6 per cent. But, when we took over the reins again, we inherited from the Fraser Government an unemployment level which had shot into double figures, to 10.4 per cent. Not only that, on every day of the last year that it was in government, during which it had the responsibility for economic management in this country, on average the number of unemployed people grew by 750. In the last 12 months of the previous Government the number of unemployed increased by 750 people each day, day after day. The Leader of the Opposition has the gall to come in here and talk about the failure of this Government's economic management. What have we done? From an employment level of 10.4 per cent, we have brought it down to 8.6 per cent. From that increase of a quarter of a million additional unemployed people during the last 12 months of the previous Government, we have been able, in our period of office, to bring about a situation in which, as a result of economic growth and the sane policies of this Government, in excess of 300,000 new jobs have been created. The Opposition talks in terms of failure in economic management. Let us look at one of the other important economic indicators. Let us look at what happened to inflation during the last three years of the previous Government. I will give an example of what happened. In 1980-81, the inflation rate in Australia, created by the previous Government, was 9.4 per cent. The following year, in 1981-82, the second last year of that Government's economic management, the inflation rate had risen to 10.7 per cent. The last year that it was in office, it reached 11.5 per cent. It was more than twice the average rate of our major trading partners. It was more than twice the average rate of the 23 most developed countries in the Western world, the member countries of the Organisation for Economic Co-operation and Development. What is the inflation rate today? We have brought it down by more than half. At present the rate is about 5.5 per cent. That excludes the effect of Medicare. That is the underlying inflation rate in Australia. It is 5.5 per cent, compared with the horrendous level of inflation that we inherited from the previous Government of 11.5 per cent. Let us look at another of the economic indicators-economic growth. It is a matter of fundamental and continuing importance to the material welfare of the Australian people, to all of those people who during those seven horrendous years of Liberal-conservative-tory government in Australia were forced to carry the burden of that Government's ineptitude and incompetence. Let us look at the way in which economic growth declined during the last three years of that Government. In 1980-81 the growth rate was 3.6 per cent. The next year, 1981-82, it had dropped to 2.5 per cent. In 1982-83 it had become negative, dropping to minus one per cent. That was the situation that we inherited. We have been magnificently successful in being able to turn around this total situation. What happened in our first full year of government? From the negative economic growth that we inherited from the economic ineptitude of the previous Government, during the first full financial year of the Hawke Labor Government, June on June quarter, we achieved the most rapid economic growth-10 per cent-that had been achieved in any country in the world. It was the most significant rate of economic growth of any developed country in the world in the post-war period. It had never been secured at any time before in Australia. Year on year the rate of real economic growth was 6 per cent, 4 per cent of which was in the non-farm sector. We can leave out the recovery of the rural sector, the breaking of the drought and all of those factors that influenced the progress and growth of the rural sector, and look at the non-farm sector. In our first year we achieved real economic growth of 4 per cent. What is the position at present? Economic growth is still moving up. At present in the non-farm sector real economic growth is running at the rate of 5 per cent, so it is still improving. This is further testimony of the economic competence, the economic understanding and the capacity for economic management of this Government. Opposition members come into this place and talk about the failure of this Government's economic management. That previous Government, that tory Government, was an absolute disaster. It was worse than a failure. If it had just been a failure and failed to achieve any significant improvement, things would have remained static. But they did not even remain static; they actually went into a state of free fall. The previous Government was not a failure; it was an absolute disaster. Mr Hollis —It was an unmitigated disaster. Mr ROBERT BROWN —As the honourable member for Throsby said, it was an unmitigated disaster. Why would the Australian people not have made the judgment that they made? On two occasions now they have made it and they will continue to make that same judgment well into the future. Mr DEPUTY SPEAKER(Mr Drummond) —Order! The honourable member's time has expired. The discussion is concluded. Mr NEHL(Cowper) —On behalf of the Joint Committee of Public Accounts, I present the 230th report of the Committee entitled 'Auditor-General's Report 1980-81-Response'. I seek leave to make a short statement. Leave granted. Mr NEHL —Report No. 230 contains the response to the Committee's 209th report, in the form of a Department of Finance minute sent to the Committee by the Minister for Finance (Senator Walsh). Honourable members will recall that the Committee's 209th report, which examined reports of the Auditor-General for 1980-81, was tabled on 8 November 1983. The Committee's conclusions and recommendations concerned the Audit Act requirements regarding the Governor-General's warrant and the administration of the Department of Social Security's national benefits system and homeless persons assistance program. The Committee is satisfied with the responses provided by the departments concerned. As a result of the Committee's recommendations, the Department of Social Security and the Department of Housing and Construction have developed a new formula for assessing subsidy levels for proposed facilities; replaced the homeless persons assistance program with the supported accommodation assistance program; completed and printed the homeless persons assistance program guidelines; provided, under the new crisis accommodation program, housing capital funds for supported accommodation assistance program services; and stated their willingness to undertake regular evaluation studies on existing homeless persons facilities to assess past design decisions. The Department of Social Security responded to the Committee's recommendations regarding the national benefits system by instituting a project control system and investigating its use to ensure proper recording of resource utilisation. In addition, a national back-up computer strategy has been implemented. The Department of Finance, in consultation with the Auditor-General, is considering simplification of the warrant procedures, to be introduced during 1985. I commend this report to honourable members. Bill presented by Dr Blewett, and read a first time. Dr BLEWETT(Bonython-Minister for Health)(4.13) —I move: That the Bill be now read a second time. By this Bill the Government proposes to amend the National Health Act and the Health Insurance Act. The amendments to these two Acts are part of the package to settle the doctors dispute in New South Wales. This Bill is a clear demonstration of the Government's conviction that disputes can be resolved only through consultation and negotiation, and not by confrontation. It is a substantial response to the concerns put forward by the medical profession about the impact of Medicare. Some of these changes would have been implemented as a matter of course in the coming months, as the Government assessed Medicare's operations over its initial 12 months. The community should deplore the actions of a militant minority of procedural specialists in New South Wales who created considerable pain and suffering in pursuing their political aims. Fortunately they have not been successful. The changes put forward in this legislation are all sensible and rational changes to health insurance policy, and the basic principles of the Medicare program have not been altered. All Australians are still entitled to the 85 per cent Medicare benefit for private medical services, and to free accommodation and treatment in public hospitals. The additional cost of the Medicare program remains substantially funded through the fair, income-related levy. I believe that the package to settle the doctors' dispute in New South Wales will ensure that the public hospital system continues to provide the best care by the best health care professionals. The great majority of doctors clearly support the Medicare arrangements as well as the package to end the dispute. This is evidenced by the national 75.6 per cent vote for a return to normal services in the Australian Medical Association plebiscite of all doctors, and the number of doctors who have now returned to work in New South Wales public hospitals. One of the major points of contention between the Government and the medical profession in the past 18 months has been the existence and purpose of the amended section 17 of the Health Insurance Act since the Health Legislation Amendment Bill 1983. That amendment required that an agreement approved by the Commonwealth Minister for Health must be in force for Medicare benefits to be payable for prescribed services provided in public hospitals. The concern of the medical profession has generally not been what the Minister did with these powers, but the potential for what he could do at a future date. Despite the excellent recommendations on this matter put forward by the Committee of Inquiry into Rights of Private Practice in Public Hospitals and achieved by Professor Penington, the existence of it became a much misinterpreted symbol, around which unnecessary concern was generated. In substance the major provision implemented through section 17 was to oblige the charging of the schedule fee for prescribed radiology and pathology services provided in public hospitals. This was to be further modified by the specific Penington recommendations in relation to billing review committees that would have provided peer review of hospital doctors' billing practices. In order to assist in resolving a dispute that had become stalemated, at great human cost to patients in New South Wales, the Government is moving in clause 7 of this legislation to repeal all of the amendments to section 17 that were made as part of the Medicare legislation. The Government greatly appreciates the work undertaken by Professor Penington and his Committee of Dr Cashman and Dr Kearney, many of whose recommendations will be incorporated in the legislation or taken up in consultation over the Medicare agreements with the States. For example, negotiations are being conducted with the States to amend the Medicare agreements to allow for the automatic classification of privately insured patients as private patients unless they specifically opt to be Medicare patients. This will address the problems being encountered under existing hospital admission procedures regarding patient election for private treatment which were addressed in Penington's recommendation No. 29. Similarly, the Medicare agreements are to be amended to accommodate recommendation No. 32 which identified the need for new equipment in teaching hospitals. The Government's proposal to spend $150m over three years is clear evidence of its recognition of the position of teaching hospitals as the base of the health care system. This injection of funds into teaching hospitals will help to correct the appalling legacy of inadequate funding left by the previous Government when it abandoned the hospital cost sharing arrangements and left no constructive arrangements in their place. States will be required to continue at least their current levels of capital funding to teaching hospitals and the public hospital system generally to ensure that the effects of additional Commonwealth support are not diminished by reducing funding by the States. At a time of severe economic stringency, this allocation of extra capital works funds underlines the Hawke Government's unshakeable commitment to upgrading our public hospital systems. Provision is also made in the Bill to accommodate recommendation No. 6 of the Penington report. This will enable the annual review of fees on which Medicare benefits are based. The Government considers that it is important to adjust those fees regularly to encourage doctors to charge the schedule fee, thus ensuring that there is no widening of the patient gap payment. At the heart of the dispute is the concern of doctors as to losses of income arising from the increased numbers of Medicare hospital patients in public hospitals and reduced numbers of private patients. The Medicare compensation arrangements with New South Wales will incorporate proposals to share the cost of bringing the funding base for the payment of visiting medical officers on to a par with those enjoyed by other States under the former cost sharing arrangements. The sum of $10m per annum will be provided towards meeting 50 per cent of the costs of sessional payments to visiting medical officers who currently provide honorary services without charge and for the extension of fee for service remuneration to country hospitals where there is no resident medical staff. The Commonwealth has also indicated that it is prepared to meet the additional costs flowing from the introduction of modified fee for service remuneration for the treatment of public patients in all but teaching hospitals. The modified fee for service remuneration is to be offered at the following rates: Eighty-five per cent of the schedule fee, where there are no resident medical officers or registrars at a hospital; 70 per cent of the schedule fee, where a hospital has resident medical officers, but not registrars; and 60 per cent of the schedule fee, where there are registrars in the same discipline at the hospital. Each of the broad disciplines of medical staff will be able to choose a remuneration method between modified fee for service and sessions, within each of the major country and metropolitan district hospitals. The New South Wales Government has already offered a $12.50 interim increase in the sessional rate to $62.50 an hour. Any further increase in the level of the sessional fee can be made only through the established arbitration procedures. However, the New South Wales Government has an adequate fund available to provide an increased number of sessions for medical staff in recognition of the increased number of public patients. The total package provides the New South Wales Government with an additional $16m per annum from the Commonwealth for paying doctors, on top of the estimated additional $27m per annum provided for doctor remuneration under the Medicare agreement with New South Wales. The additional State and Commonwealth funding brings the total amount of remuneration available for the treatment of hospital or non-chargeable patients in public hospitals in New South Wales to $105m per annum. I believe that both governments have acted fairly and decisively in addressing any reduction in incomes that could have occurred because of the shift from private to hospital patient status in public hospitals. The Bill provides for amendments to the National Health Act for the introduction of a more comprehensive hospital table to replace the existing basic table. The new basic private table will cover: Accommodation charges in public hospitals as at present; the difference between the Medicare benefit and the schedule fee for private medical services in hospitals; benefits for a defined list of surgically implanted items, such as replacement joints, cardiac pacemakers and the like; and a new 'single day' hospital benefit for patients not required to stay overnight in hospitals and certain day hospital facilities. The amendments to the National Health Act allow private health funds to offer insurance up to the level of the schedule fee for medical services provided in hospitals. This change recognises that people entering hospital for an operation as a private patient could be faced with a significant payment because of the multiple 'gaps' involved in a range of medical procedures. The medical profession regarded this as a significant disincentive for people to choose to be treated privately. The risks of this additional coverage leading to overutilisation and increased charges for medical services is much less in the hospital setting. Peer review of medical procedures is well established in many hospitals, and billing practices for hospital based services will be closely monitored. Both of the recent substantial examinations of aspects of health care in Australia-the Jamison and Penington reports-have been clear in their opposition to the introduction of a general form of 'gap' insurance. It is viewed as undesirable because of its effect both on the utilisation of medical services and on doctors' billing practices. The authors of the reports would no doubt be less opposed to 'gap' insurance if it could be guaranteed that doctors would abide by a set level of fairly arbitrated fees. However, in the Australian situation where doctors are able to set their own level of fees, 'gap' insurance would in most cases simply shift the 'out of pocket' payment from the difference between the Medicare benefit and the schedule fee, to a payment for charges in addition to the schedule fee. For these reasons this legislation permits 'gap' insurance only for medical services provided in hospitals, and the Government would strongly oppose its further extension to cover all medical services. The current Medicare benefit arrangements, which provide for benefits at 100 per cent of the schedule fee after 'gap' payments of $150 per person per annum are met, will continue in respect of non-hospital medical services. Clause 11 of the Bill also provides for the inclusion of benefits under the new basic private table for specified surgical implanted devices. This provision was recommendation 33 of the Penington report. Presently, implanted devices are provided free of any additional charge to public and private patients in public hospitals. For private patients, surgical devices are regarded as part of the 'all inclusive' public hospital accommodation fee, whereas they are charged as additional items by the private hospital or the specialist concerned, where the procedure is performed at a private hospital. The Medicare agreements will be amended to allow public hospitals to raise separate charges for the specified implanted devices, which will be fully covered by benefits from the basic private table. Waiting times in public hospitals for these procedures should be significantly reduced because budgetary constraints on the supply of implanted devices in public hospitals will be reduced. Because insured patients in private hospitals will be able to obtain benefits for implanted devices, a possible financial barrier to private hospital treatment will also be removed. The introduction of the 'single day' hospital benefit within the new basic private table follows arrangements that already apply in South Australia and the Australian Capital Territory. Extension of these arrangements to all States should assist in stabilising contribution rates by encouraging free standing day care facilities and day care in existing hospitals. The establishment of surgical day centres has been a significant element of overseas strategies for reducing hospital costs, most notably in the United States of America. Until now this worthwhile innovation has been substantially discouraged by the insurance arrangements in Australia which provided benefits only to hospitals. The Government is also taking this opportunity to co-ordinate fund benefit payments with Commonwealth bed day subsidy payments for private hospitals. In future, the new fund day care benefit will apply to all non-overnight stays, while a full fund benefit and Commonwealth subsidy will apply to overnight stays. Those people who wish to have private hospital health insurance cover should be able to obtain it at affordable contribution rates and on reasonable terms and conditions. The only way this can be achieved is through the principles of community rating which ensure that the good risks assist in carrying the bad risks to equalise contribution rates. For this to occur there must be an adequate pool of good risks, and the costs of health care must be contained. The Government has been concerned that the principle of community rated health insurance under which organisations registered under the National Health Insurance Act are obliged to operate, is being steadily eroded by cheaper 'risk-rated' insurance being offered to good risks by insurers not registered under the National Health Act. The threat to the community rated insurance not only comes from the risk rating life and general insurers but also from registered funds opting out of community rated insurance because of their concerns at the loss of good risks. The Government recognises that, in most areas of insurance, risk rating is an appropriate commercial practice. However, health insurance has important social welfare implications that other forms of insurance do not have. The Government is committed to the concept of community rated health insurance, and for this reason clause 15 of this Bill requires all health insurers to comply with the requirements of the National Health Act. In clause 16 legislative changes are proposed to facilitate the registration of commercial insurers. In particular, they will retain the right to distribute profits to shareholders. Mr Deputy Speaker, I do not believe that any existing risk rated insurer who chooses to register will be disadvantaged in complying with the statutory requirement of maintaining reserves equivalent to at least two calendar months' contribution income. This should be well within the working capital capacity of any viable business undertaking. Similarly, I do not consider that the registration requirements of the National Health Act will place any administrative burdens on the insurers. If a body registers under the National Health Act, its health insurance activities will be subject to that Act only. The legislation also allows commercial health insurers to continue with contracts which are not cancellable and to discharge their normal liabilities. This will minimise any disruption to their policy-holders. I draw the attention of the House to the provisions of the Bill which will allow registered health insurers to offer front-end deductible tables as an option to the new basic hospital table. This will be particularly attractive to those who now have similar cover with non-registered insurers, and to those who wish to undertake to meet the first part of the costs of illness in return for considerably lower health insurance premiums. The lower contribution rates currently offered by commercial insurers derive from two major factors. Firstly, their membership is restricted to people below a certain age and those with chronic conditions are not admitted. The Government believes that these practices are discriminatory and totally undermine community rated health insurance. As I have indicated, these practices will not be permitted following registration under the National Health Act. The second factor that gives rise to reduced liability for the insurer is that commercial insurers require policy-holders to meet the 'first part' of their health costs, as set out in the terms of the insurance policy. This is a reasonable insurance practice that could contribute to some overall reduction in health costs, and the Government believes that it should be open to all health funds to offer this type of cover. As this front-end deductible insurance will, in future, be offered through registered insurers, any profits that accrue from this form of business can be used to subsidise the basic table that most people will continue to insure under. In this way the benefit will not be lost of having the young and healthy contributing to the same risk pool as the elderly and the sick. Of course, it may be expected that some risk rated insurers will not seek registration. As part of the arrangements to minimise any difficulties for those persons transferring from non-registered to registered insurance and to assist others who may wish to contribute to private health insurance, the Bill provides that the general two-month waiting period for basic table benefits to new fund members will be waived for a period of three months from 1 September 1985. The current maximum exclusion from benefits for pre-existing illness will be reduced from two years to one year. Medibank Private will totally waive the pre-existing ailment rule for three months to any of their former contributors who may wish to rejoin. Other health funds will be encouraged to do the same. The main financial impact of the package to settle the doctors dispute will be from increased payments to the States-$16m per annum to New South Wales for increased remuneration to visiting medical officers and $150m to be spent over three years to upgrade the facilities and equipment in Australian teaching hospitals. Additional costs of Medicare medical benefits will be incurred as a result of any increase in the numbers of private patients in public hospitals and a greater use of private hospitals. However, these will be more than offset by savings in Medicare compensation grants to the States arising from any shifts back from public to private status in public hospitals, largely because of the altered patient classification arrangements. It is not possible to estimate with any degree of accuracy because of the numbers of variables involved; however it could be expected that net savings to Government would result from any substantial movement back to private health insurance usage. Moreover, savings arising from the 'single day' hospital benefit, and from increased numbers of good risk contributors, are expected to dampen any increases in private health fund premiums. Most health funds are achieving surpluses on their operations and nearly all have reserves in excess of the statutory minimum. Accordingly, many will be able to absorb at least some of the additional costs stemming from the changes to the basic table. I believe that the Health Legislation Amendment Bill and the non-legislative changes to the Medicare arrangements announced by the Prime Minister (Mr Hawke) on 2 April 1985 provide the right balance between maintaining the fundamentals of Medicare and recognising the legitimate concerns of the medical profession. The overall package to settle the doctors dispute allows flexibility of choice for patients, provides the opportunity for doctors to treat patients on a private basis, but ensures that there is no basis for discrimination against Medicare patients in terms of both the quality and availability of care in public hospitals. I commend this Bill to the House. Debate (on motion by Mr Porter) adjourned. Bill presented by Dr Blewett, and read a first time. Dr BLEWETT(Bonython-Minister for Health)(4.32) —I move: That the Bill be now read a second time. This Bill gives legislative effect to the Government's decision, announced in August 1984, to support the transfer of basic nurse education from hospitals to colleges of advanced education at diploma level. The purpose of the Bill is to provide financial assistance to the States and the Northern Territory for the transfer of nurse education and to empower the Commonwealth Minister for Health to make agreements with the State Health Ministers on the terms and conditions related to that assistance. Nurse education has traditionally been carried on in hospitals, with the students forming an integral part of the hospital work force. The responsibility for nurse education has therefore clearly rested within the States' area of responsibility. Nursing, like all health care, is currently undergoing a profound change. This change began with the drug revolution of the 1940s. Together with constantly changing medical technology, the effect of this on all fields of health care has been to develop a concept of health as an entity. The concept and practice of illness care is now only one part of health delivery. The recognition that health can be taught and can be promoted by education, that illness can be prevented, that hospitals, whether psychiatric or general, should be used as crisis intervention centres only, and that patients should be rehabilitated in their own environments, is part of the new patterns of health care promoted since the 1940s and 1950s. They are also in accord with the Government's policy on health care. All this has required a rethinking by the health professionals of their role in health care. Professional nursing representatives have constantly stated that the traditional hospital-based education for the nurse was becoming too narrow and inadequate to meet the changing health needs of our society. Furthermore, in the highly complex atmosphere of acute care, many have considered that patient care requirements were too sophisticated to permit student nurses to practise total individualised care and that, therefore, patient care was being fragmented. The Sax report on nurse education and training to the Commonwealth Tertiary Education Commission in 1978 addressed this change and advised that the professional functions of the registered nurse included being able to: Plan, implement and evaluate the nursing care appropriate to the nursing needs of individuals; accept individual responsibility and accountability for nursing practice; function independently with other health professionals; communicate effectively with patients or clients, their families, and other members of health teams; appreciate the place of research in nursing practice and participate in nursing research projects; and undertake continuing education. The nursing profession has consistently maintained that such professional functions require the nurse to have received a tertiary education. Over the years, professional nursing organisations have constantly pressed the Government of the day to make the move from hospital-based education to tertiary institutions. The New South Wales Government announced, in November 1983, its decision to transfer nurse education to colleges of advanced education between 1985 and 1987, involving an estimated 7,500 students. The Commonwealth Government was aware of the vital contribution of the nursing profession to the health services of this country and recognised the importance of improving arrangements for their education and professional development. Following the Commonwealth Tertiary Education Commission's report in May 1984, the Government therefore set up an interdepartmental committee on nurse education to report on the education of nurses, taking into account not only the health and education factors but also the status of women, employment, industrial relations and costs. The Committee consulted closely with representatives of all State and Territory governments and the then Capital Territory Health Commission, representatives of nursing organisations, the Royal Australian Nursing Federation, the Hospital Employees Federation, the New South Wales Nurses Association, the Australian Congress of Mental Health Nurses, the Queensland Nurses Union of Employees, the College of Nursing, Australia, the New South Wales College of Nursing, the New South Wales Nurses Union, and the Health and Research Employees Association of Australia. After consideration of the IDC report on nurse education, the Federal Government announced on 24 August 1984 its in principle support for the full transfer of nurse education to colleges of advanced education from hospital-based schools of nursing, with the last intake into hospital-based courses in 1990 and the full transfer completed by the end of 1993. The Government's commitment to the transfer is in full accord with its priorities and policies in the health and education areas. We are looking to the colleges of advanced education to provide a better educated and more flexible nursing work force. The transfer will also increase the educational and employment opportunities, particularly for women, and enhance the professional studying of nursing. In agreeing to support the transfer of nurse education the Government was conscious of the significant ramifications that the transfer would have in both the health care and education sectors. Special features of the transfer required that the assistance provided for the transfer be structured to address those features. A major objective of the Commonwealth is that the transfer proceed in a planned and orderly manner, thereby minimising the potential for disruption in the health care and education sectors. The Commonwealth's assistance to the States for the transfer has therefore been structured not only to achieve this objective but also to take account of special features. The States' responsibility for nurse education, the hospital work force implications, and differences between the States, made continuation of the States' responsibility crucial to a smooth transfer. It has been made clear to the States that the Commonwealth Government sees itself as responding to State initiatives on the transfer, particularly in relation to the rate of the transfer. To achieve the national objectives of responsible national nursing work force planning and minimising the disruption in the health care and education sectors requires a co-ordinated and co-operative approach developed jointly between the Commonwealth and the States. This Government's financial assistance to the States has been based on a co-operative effort to provide support for the transfer in a way that is both responsible and financially sound. The Commonwealth Government has taken the view that, as hospital-based nurse education is currently funded by the State and the tertiary education sector is Commonwealth funded, nurse education, at least over the transfer period to 1993, should involve an element of cost sharing. Over this period there will also need to be close co-operation between the Commonwealth and State health and education authorities, together with the colleges of advanced education, in the provision and funding of the nurse education courses. An important constraint on the rate of transfer is the supply of registered nurses. Over recent years there has been a marked reduction in the number of nurses being trained. This has meant that the transfer must proceed at a rate which does not generate demand at a greater level than the supply. There is already evidence of increased demand for reasons other than the transfer. Data is being collected to provide relevant monitoring of the nursing labour market. This is a joint Commonwealth-State activity. Similarly, we are concerned that an influx of nursing students into the tertiary education sector-and remember we are talking about some 18,000 students-does not disrupt or displace other students, through their impact on either teaching resources or facilities. Such displacement would bring the transfer into conflict with other important education objectives of the Government. The financial assistance to the States will be on a uniform student basis, the level of the grant being determined by the agreed number of students entering basic nurse education courses at colleges of advanced education. The agreed number of students will be determined on a triennial basis after consultation with all the States and Territories. In the current triennium the agreed national program will be 1,000 students in 1985, 2,700 in 1986 and 5,000 in 1987. The program will increase each year to approximately 18,000 students in 1993. These places are additional to the 1,200 college of advanced education places already totally funded through the Commonwealth Tertiary Education Commission for those basic nursing courses already in existence within the colleges of advanced education. The level of financial assistance proposed by the Commonwealth is not intended to meet the full cost of the transfer. As I said before, the transfer needs to be a co-operative effort between the Commonwealth and the States, and this applies financially as well as administratively. Costs of hospital-based nurse education vary substantially from State to State, depending on factors such as the structure of the training, the number of hours of theory taught and the size of the school of nursing. As the costs vary, so will the savings that accrue to the health sector when the training ceases. The major factor that differentiates between the cost levels appears to be the extent to which student nurses are used as a part of the hospital nursing work force. Where the students perform a substantial work force role the costs of the training and the consequential savings are lower. The Commonwealth level of financial assistance is uniform across the States and is pitched at providing needed assistance to most States but without providing a financial bonanza to those States which will accrue substantial savings from the transfer. Many of the costs being associated with the transfer are costs that would in any event have been incurred by the States as a result of inevitable changes in nurse education. The payment will be a grant to the States of $1,500-in December 1983 prices-per student. The level of grant will be indexed using the Commonwealth Tertiary Education Commission's indexation arrangements for advanced education recurrent funding. Students undertaking a basic nursing diploma course at a college of advanced education will be eligible for Commonwealth tertiary education assistance scheme allowances on the same conditions as other tertiary students. There will be cost penalties imposed on those States which exceed the level of transfer agreed to by the Commonwealth. Both TEAS and the per capita grant are subject to the condition of the State agreeing to fund a tertiary education capital program at a level acceptable to the Commonwealth. Details of the terms and conditions relating to the payment will be incorporated in agreements between the Commonwealth and the States, rather than in this legislation. These agreements are provided for under clause 4 of the Bill. These agreements will provide the terms and conditions of the financial assistance and the administrative mechanisms related to payment of the assistance. As the Commonwealth is responding to State government initiatives on the transfer, the approach taken, the timing and the rate of the transfer will differ from State to State. The agreement will reflect those differences. I previously mentioned the requirement that the States fund an acceptable capital program for nurse education over the transfer period. The Government is looking both to protect the interests of the existing college students and to ensure the States continue to carry the responsibility they would have met, had the transfer not gone ahead, of providing the nursing students with adequate facilities. In a number of cases facilities associated with existing hospital-based schools of nursing will be accepted as part of that capital program. There will be consultations with the States on all aspects of those capital programs as part of discussions on the agreements. The Bill also requires the States to provide financial information on the funding of basic nurse education courses at the colleges of advanced education. The funds to be provided by the Commonwealth under this Bill will be additional to the normal ongoing provisions under the programs of the Commonwealth Tertiary Education Commission made available through the States Grants (Tertiary Education Assistance) Act 1984. There are, however, consequential changes required to clarify accounting requirements to be met under that Act. The States Grants (Tertiary Education Assistance) Amendment Bill (No. 2) 1985, which will be debated cognately with this Bill, will effect these changes. Nursing Work Force Shortages During the transfer negotiations between State and Commonwealth officers, the Commonwealth Government has become increasingly aware of emerging nursing work force shortages. Although these shortages are the consequences of State Government decisions, they may well be exacerbated by the additional demand for nurses created by the transfer, as nursing students have traditionally formed part of the hospital labour force, and in some States they have formed a substantial part of that work force. In March, as a separate measure, the Federal Government announced that it would provide almost $2m for major training programs in New South Wales and Western Australia to encourage over 900 qualified nurses to return to the workforce. The programs will operate under the Federal Government's skills in demand program and will be jointly funded by the Federal and State governments. In New South Wales, the Federal Government will provide up to $1.5m during 1984-85 and 1985-86 to enable 675 qualified nurses to undertake refresher training. In Western Australia, the Federal Government will provide $448,219 for refresher training for 240 qualified nurses during 1985. Training will be provided in the metropolitan area and in a number of country centres. The re-training program complements the transfer and makes possible the replacement of the student nurse work force with a qualified nurse work force. This move reinforces the Government policy that patient care requires qualified nursing personnel. Discussions are under way with a number of the other States concerning the development of similar refresher programs. Financial Impact Statement With regard to the approved number of student places, the estimated cost of the indexed $1,500 per capita grant will be $1.62m in 1985, $4.43m in 1986 and $8.2m in 1987. Although the Government has not yet determined the transfer program for the following trienniums, I should mention that the estimated cost for the 18,000 students in 1993, on completion of the transfer, is $29.5m in June 1985 prices. The funds required will be appropriated annually in the normal manner. The framework of the transfer program will however be as set out in this Bill and in future amendments. The transfer will also impose an additional cost on the Commonwealth, through the tertiary education assistance scheme, of the order of $2.5m in 1985, because of the additional number of students likely to be eligible for TEAS allowances. This decision by the Commonwealth to assist the transfer of nurse education has been widely supported by the nursing profession. The decision was made after many years of indecision by earlier governments and marks an important and historic step for the nursing profession in Australia. Benefits that will result from the transfer will include not only increased employment opportunities but above all will improve the quality of nursing care for all members of the community by reducing its fragmentation. At the same time, the disadvantages suffered by nurses because of the disparity of their education compared with that of other health professionals will be rectified. I commend the Bill to the House. Debate (on motion by Mr Porter) adjourned. Bill presented by Dr Blewett, and read a first time. Dr BLEWETT(Bonython-Minister for Health)(4.50) —I move: That the Bill be now read a second time. This Bill provides for amendment of the States Grants (Tertiary Education Assistance) Act 1984 to clarify the accounting requirements to be met under that Act consequential upon the provisions of the States Grants (Nursing Education Transfer Assistance) Bill 1985. This Bill does not alter the grants appropriated under the States Grants (Tertiary Education Assistance) Act. There is therefore no financial impact from this Bill. I commend the Bill to the House. Debate (on motion by Mr Porter) adjourned. Bill presented by Mr Howe, and read a first time. Mr HOWE(Batman-Minister for Social Security)(4.52) —I move: That the Bill be now read a second time. This Bill is an omnibus Bill which amends 19 Acts. It contains measures which are designed to improve efficiency in the administration of Commonwealth programs and to improve the quality of services delivered by the Commonwealth. It also contains a number of amendments of a law revision kind which update and simplify legislation and remove minor anomalies and deficiencies. These developments will have no significant costs, and many will result in some administrative savings to the Commonwealth. I now turn to the major measures in the Bill. Compensation (Commonwealth Government Employees) Act 1971 Three important changes will be made to the legislation covering workers compensation for Commonwealth employees. First, compensation cover will be extended to ordinary recesses and authorised absences from employment. In addition, journeys to or from employment during such recesses and absences will be covered. The Government considers that the Commonwealth should be responsible for the welfare of its employees in such situations, which are closely related to their employment. Secondly, the Act will be amended to provide that if an employee who is partially incapacitated for work has taken all reasonable steps to obtain work but has failed to do so he or she will be paid compensation as if totally incapacitated for work. This amendment is intended to ensure that a complete exposition will be found in the Act of the circumstances in which an employee who is partially incapacitated for work will be entitled to compensation as if he or she were totally incapacitated for work. Thirdly, lump sum compensation will now be payable to employees who suffer injuries which result in partial loss of the genitals or, in the case of female employees, the loss of one or both breasts. Social Security Act 1947 Some significant amendments will be made to the Social Security Act 1947. First, the Act will be amended to consolidate and rationalise the rules which treat a child as a dependent child of a person. The new rules clarify that if a person looks after a child without having legal custody, the child can still be regarded as a dependent child of the person for the purposes of additional pension or benefit, or family allowance. Secondly, the Bill will facilitate the implementation of the new enterprise incentive scheme, for which the Minister for Employment and Industrial Relations has responsibility. The objective of this scheme is to create new employment opportunities by providing non-means tested income support and training to those unemployed persons who have the capacity to establish a small business. The Bill will exclude NEIS payments from the current income test for social security pensions or benefits. Instead, the amount of a NEIS payment will be deducted from a pension or benefit on a dollar for dollar basis to avoid dual income security payments. The reason for this treatment is that receipt of a NEIS payment will not, of itself, exclude a person from a social security income security payment. Of course, a person who is participating in NEIS will not qualify for unemployment benefit as he or she will not be unemployed. Thirdly, the Bill provides that persons charged with major offences under the Social Security Act shall be tried by summary proceedings. In doing so, it implements a recommendation of the report of Special Prosecutor Redlich. Fourthly, the Bill precludes payment of pensions and benefits to mentally ill persons who are confined without being convicted of an offence. The Act will treat such persons in the same way as a person who is imprisoned in connection with his or her conviction for an offence. Finally, the Bill makes a large number of amendments of a law revision kind which will clarify the operation of the Act, and remove a number of anomalies. Child Care Act 1972 The Child Care Act 1972 has not been substantially revised since its inception. The Bill will update the Act, and simplify and clarify its operation. In addition, a legislative base will be provided for Commonwealth-State agreements which relate to grants to the States for the development of child care centres. A number of aspects of the children's services program will also be brought within the Act, to provide a specific legislative base for them. I will mention three of them. First, the Act currently enables the Commonwealth to fund centres only in respect of pre-school aged children who attend the centre on a regular basis. Children who do not fall within this category, such as children of school age and children who attend on an occasional basis, have instead attracted funding under the children's services program. This has led to administrative complexity, as a single child care centre has often received funding from two sources. The Act will be amended to insert a specific provision by which a child care centre can be funded in respect of school age children and occasional attendances, provided that the main type of care provided by the centre is regular care for pre-school aged children. Secondly, the Act will enable the Commonwealth to approve grants towards the salary or wages of a person who is employed to make a new child care centre operational. Such grants are made for a period of up to six weeks prior to the opening of a centre, and are designed to ensure that it gets off to a good start. Thirdly, the Act will specifically deal with the provision of grants to child care centres which provide fee relief for children who are in economic need. Repatriation Legislation I move now to amendments of a number of Acts relating to repatriation matters. In general, the changes are designed to correct minor drafting errors in the Repatriation Legislation Amendment Act 1984. That Act provides for a new system for determining repatriation pensions, with effect from 1 January 1985. The Bill ensures that claimants who had a right of appeal under the previous system will have a right of review in the new system. It will also clarify the jurisdictions of the Veterans' Review Board and the Administrative Appeals Tribunal, to ensure that all outstanding appeals from the previous system are dealt with by the new review bodies. Further, the Bill clarifies that where a determination which relates to an existing entitlement to pension is reviewed, and the Repatriation Commission varies that determination, there is a right of external review. In addition, the Bill modifies arrangements for persons whose dual entitlements to a repatriation service pension and a social security pension has been saved since 1973, when dual entitlement was abolished. The rate of the person's saved pension will be frozen at the rate of payment being made immediately before the commencement of the assets test, and it will be regarded as income in calculating the rate of the person's other pension. National Health Act 1953 The Bill amends provisions of the National Health Act 1953 concerning nursing care arrangements which are administered by the Minister for Community Services. It will make minor changes to legislation which was passed last year, but has not yet been proclaimed, which enables the Commonwealth to pay nursing home benefits for patients who are temporarily absent from nursing homes. The changes will also facilitate the admission to nursing homes of respite care patients who take the places of patients who are temporarily absent. The opportunity has been taken to amend the law to ensure that, for the purpose of charging fees to nursing home patients, the day of admission and the day of discharge will be counted together as one day. This amendment will ensure that nursing home proprietors who charge fees for the day of discharge or death of a patient do not charge for the day of admission. Other Measures Two minor changes will be made to a number of other Acts administered by the Minister for Community Services. The first of these will enable terms and conditions accepted by an organisation which receives a subsidy to be varied by subsequent agreement between the Commonwealth and the organisation. This measure will apply to organisations which receive subsidies under the Aged or Disabled Persons Homes Act 1954; the Aged or Disabled Persons Hostels Act 1972; the Child Care Act 1972; the Delivered Meals Subsidy Act 1970; the Handicapped Persons Assistance Act 1974; and the Homeless Persons Assistance Act 1974. The second change will improve arrangements by which the Commonwealth can approve the transfer of subsidised property to a new organisation and transfer the original organisation's obligations to the new organisation. This measure will apply in relation to property subsidised under the Acts which I have just mentioned, apart from the Delivered Meals Subsidy Act 1970. The measures contained in this Bill will improve the efficiency of administration of a number of Commonwealth programs, and will remove a number of anomalies and deficiencies from welfare legislation. I commend the Bill to the House. Debate (on motion by Mr Braithwaite) adjourned. Bill presented by Mr Duffy, and read a first time. Mr DUFFY(Holt-Minister for Communications)(5.00) —I move: That the Bill be now read a second time. The purpose of this Bill is to implement a number of recent Government decisions regarding the revision of broadcasting legislation to relate it to services rather than to technologies; the licensing of services to outback areas utilising Aussat satellites-the remote commercial television and remote commercial radio service, RCTS and RCRS; changes to the Australian Broadcasting Tribunal's inquiry procedures additional to those passed in 1984; the extension of some rights of appeal against decisions made under the Act; and the deletion of some obsolete provisions of the Act. I shall introduce shortly related amendments to the Broadcasting Stations Licence Fees Act 1964 and the Television Stations Licence Fees Act 1964, as well as amendments to several other Acts consequential upon these amendments to the Broadcasting and Television Act. The proposed amendments can be summarised as follows: In relation to the service-based revision, the Bill will implement a Government decision to change the basis on which broadcasting licences are granted from a technological basis to a service basis; in other words, services will be licensed, and not stations. This will remove the need for extensive amendments to cope with any new technological development, a situation which in the past has militated against the introduction of new services. Honourable members will recall that amendments to the Broadcasting and Television Act were passed last year to streamline the Australian Broadcasting Tribunals inquiry procedures by the automatic extension of licence periods pending completion of a licence renewal inquiry, and the formation of divisions of the Tribunal with power to make decisions on behalf of the Tribunal. The further amendments now proposed set out the framework of uniform procedures for Tribunal inquiries, with details to be prescribed in regulations. The Tribunal will be empowered to dispense with a public hearing where no substantive issues of public concern are raised. There will be provision for area inquiries so that the Tribunal may hold public hearings into the adequacy and comprehensiveness of licensed broadcasting services in an area, having regard to the diversity of interests of the area. As a consequence, separate licence renewal hearings will be necessary only if substantive issues have been identified. The Administrative Review Council has reported on rights of appeal against decisions made under the Broadcasting and Television Act, and the Government has decided to bring forward amendments to implement two of its recommendations. The Bill will also delete obsolete provisions in the Act, which regulate the rebroadcast and publications of broadcast matter and the broadcasting of coded material. The amendments contained in this Bill will not greatly alter either the costs or revenues of the Commonwealth. Initially the Australian Broadcasting Tribunal will have to meet additional costs relating to changes in procedures and in complying with the new public access requirements, but in the long term the Tribunal will be enabled, by these amendments, to use its limited resources more efficiently and effectively. Likewise, the major revision of the Act to relate it to broadcasting services rather than the technological means of delivery of broadcasting signals will obviate the need to license subsidy transmitters and translators. The savings in bureaucratic work load for applicants, the Tribunal and my Department are obvious, but once again are difficult to quantify. There is expected to be an increase in Commonwealth revenue arising from the creation of additional categories of licences for remote radio and television services. However, it is not possible to provide a realistic estimate of the extra revenue which may be obtained as the future revenues of remote licensees, which determine the amount of fees payable, is unknown. The other amendments which I have briefly outlined will not result in any significant costs, revenue or savings for the Commonwealth. This Bill, particularly its service-based provisions, is the culmination of a substantial period of development and consultation which commenced in November 1983. Last year my Department distributed several discussion papers to the Broadcasting Council and industry organisations. Discussions ensued with the industry bodies and representatives of consumer and employee associations. A number of the important provisions of the Bill will come into effect on proclamation and a significant amount of the procedural detail will be in regulations. Consistent with the consultation approach, my department will be conducting a seminar on the Bill, in the near future, to explain its provisions and to provide a further opportunity for public and industry input. I now turn to the detail of the proposed amendments. Service-Based Revision I am sure I do not need to remind honourable members of the complexity of the Broadcasting and Television Act. Indeed, it is often referred to as one of the Commonwealth's most complex and difficult pieces of legislation. One of the reasons for this is that the legislation deals with difficult and often conflicting concepts of public interest and access to the limited public resource of the broadcasting spectrum for an industry of great influence in modern society. Given these circumstances, legislation must necessarily be complex and detailed to protect both public and private interests. The other reason why this Act is so complex and imposes unnecessary burdens on all who attempt to interpret it is because it is technology-based. It was originally drafted to cover radio, and has had successively added to it provisions for television, subsidiary transmitters, public broadcasting, supplementary licences, and so on. The result has been an Act which is unnecessarily confusing and repetitive. The amendments contained in the Bill will go a long way towards removing much of the present unnecessary complexity. The Bill changes the basis of the legislation from technology to service. From its inception the Broadcasting and Television Act 1942 has been a technology-based Act directed towards licensing and regulating various classes of radio and, later, television stations, each defined by reference to their technical characteristics; that is, the stations themselves, not the services they provide, are licensed. It has become apparent, however, that placing legislative emphasis upon licensing broadcasting-radio and television-services for defined areas will remove unintended planning impediments, simplify and make more coherent the provisions of the Act, and facilitate the introduction of legislative provisions for new services arising from new technology including satellite technology. The cornerstone of the service-based concept for planning and licensing is the service area for a licence; that is, the area containing communities which the licensee is authorised to serve. From the licensing viewpoint, whether the broadcasting service is delivered by means of one transmitter, or a combination of transmitters, will be largely irrelevant. Emphasis will be placed upon the nature and purpose of the licenced service and the nature and interests of the communities in the service area. These concepts are already present in the licensing requirements of the Australian Broadcasting Tribunal. Broadcasting transmission facilities needed to provide adequate reception within the service area will be authorised merely as technical conditions on the operation of the transmission facilities. This change in the concept of licensing will remove the present duplication of planning and licensing procedures, which places an unnecessary administrative burden on licensees, the Australian Broadcasting Tribunal, and my Department. For example, under present arrangements, where a licensed station needs subsidiary transmitters to improve reception within its determined service area, translator station licence applications must be invited by the Minister and considered by the Tribunal. The existing Act in some circumstances prohibits translators even within a licensee's service area. This Bill allows changes to a licensee's transmitters to be authorised by the Minister as part of the technical conditions associated with the licence. The supplementary licence provisions of the Act are already based on the concept of licensing services to a specified service area. Every effort has been made in the drafting of the service-based licensing provisions of the Bill to make as little change as possible to the policy effect of the current Act. As far as these provisions are concerned the objective of the Government is to change from a technologically-based licensing system to a service-based licensing system and not to introduce changes which are not consequential to the adoption of the service-based licensing system. The main features of the service-based amendments are as follows: Broadcasting-radio and television-is to be regulated by reference to broadcasting services provided to communities within service areas rather than by reference to broadcasting stations defined by their technological characteristics. The Minister will be empowered to designate (a) classes of licenses by reference to the nature of the service, for example, commercial radio licence and commercial television licence, among others; (b) a service area or areas for the licence; and (c) all broadcasting transmission facilities necessary to ensure adequate reception by communities within the service area of the licence. The technical specifications for the service area, the transmitters, frequencies, and so on, are to be included in a warrant which is issued by the Minister. The licence to provide the service is issued by the Australian Broadcasting Tribunal. The Bill provides for a person other than a licensee to be authorised to operate one or more broadcasting transmitters specified on the licence warrant. However, I should emphasise that this third party authorisation can be given only with the consent of the licensee. The effect of this provision is to shift responsibility from the licensee to the third party for a deliberate breach of technical conditions if the third party is not subject to control by the licensee. Service areas will be determined by the Minister and notified to the Tribunal. Changes to service areas may be made by the Minister after the publication of a notice of intention, which must also be served on the licensee concerned. The Minister will be obliged to take into account any comments received on the intended variation. Because of the perceived importance of this definition of these areas, the Minister will publish and table guidelines which will be used in the determinations of service areas. While the Bill does not specifically provide for the guidelines or their publication, a further amendment will be considered if it is found to be desirable to formalise the guidelines. The forthcoming seminar could consider this question. The Bill creates a new category of licence to be called remote licences. These licences will enable licencees to provide commercial radio and television services to the estimated 650,000 people living in outback Australia by means of the Aussat satellites, due for launch later this year. The licences to provide for remote commercial services will differ in a number of ways from the existing licence provisions. Firstly, these licences relate to broadcasting services which are to be provided by the use of an Aussat satellite. Secondly, the public interest criteria which the Australian Broadcasting Tribunal may apply to the granting or renewal of a licence are more widely expressed. The Tribunal is, for instance, obliged to take into account, when considering the 'public interest', factors such as the desirability that all Australians have the opportunity of receiving a commercial radio and television service, relevant government policy statements, matters prescribed in the regulations and such other matters or circumstances that the Tribunal considers relevant. There is also the usual fit and proper person with the necessary financial, technical and management capacities concept, as well as a prerequisite that remote licences may be granted only to an Australian company with a share capital or a consortium of such companies. There is no absolute prohibition on the concentration of ownership, although the Tribunal must consider the need to avoid an undue concentration of ownership and control in the service area concerned, subject to the objective of ensuring that all Australians have the opportunity to receive both a commercial radio and television service. Two other new categories of licence, rebroadcast licences and retransmission licences, should also be noted. Rebroadcast licences will enable bodies such as self-help community groups to install transmitters to obtain or improve reception of one or more existing broadcasting services, while retransmission licences will enable persons to install cable distribution systems to provide improved reception. This Bill also creates the opportunity for licensees to provide a proportion of local programs and advertising on transmitters within their service area. Honourable members should note that this amendment is a change to existing policy in that at present all subsidiary translator stations are required to retransmit the same signal as the principal transmitter. The proposed change is consistent, however, with the Government's policy of localism whereby broadcasting services should serve the needs of local communities. I expect that local origination will become an important part of programming for remote broadcasting services which will use the satellite to broadcast programs to widely separated communities. Some concerns have been expressed about local origination, and to answer these concerns I make these three points. The Tribunal will approve of local origination for a licensee only following application by the licensee and following the normal consultation process, which will enable interested parties to put their views before the Tribunal. The fact that a licensee has not provided locally originated programs will not be a ground for censure of the licensee for not providing an adequate and comprehensive service. The local origination provisions are subject to proclamation at a later date, and there will also be separate proclamation in respect of local origination for each licence category. This will allow the Tribunal time for consultation with industry and the public in the development of its policies and procedures. Australian Broadcasting Tribunal Procedures As I mentioned earlier, two recommendations of the Administrative Review Council regarding Australian Broadcasting Tribunal procedures have already been enacted. These concern automatic extensions of licence periods pending completion of licence renewal inquiries and the formation of divisions of the Tribunal with power to make decisions on behalf of the Tribunal. The Government now proposes to implement other recommendations of the Administrative Review Council on the Tribunal procedures. There are three significant features of the proposed amendments. Inquiries into the exercise of any of the Tribunal's substantive powers will be conducted in accordance with a uniform inquiry procedure, the detail of which will be prescribed in regulations. The uniform inquiry procedure will allow the Tribunal to dispense with a public hearing where no substantive issues of public concern are raised. There is provision for area inquiries so that the Tribunal may hold public hearings into the adequacy and comprehensiveness of licensed broadcasting services in an area. The principal purpose of an area inquiry will be to enable the Tribunal to assess the performance of broadcasting licensees in meeting their obligations, firstly, to provide an adequate and comprehensive service to the area, having regard to the nature and the diversity of the interests of the community in the area. Secondly, such inquiries will enable the Tribunal to consider the extent to which licensees providing the services encourage the broadcasting of programs wholly or substantially produced in Australia and the extent to which they encourage the use of Australian creative resources. To fulfil the first of these aims it is expected that the Tribunal will seek information from the Australian Broadcasting Corporation and the Special Broadcasting Service on their services in a particular area to allow the Tribunal to assess the total broadcasting services in the area. Area inquiries are linked to licence renewal inquiries in several ways. Area inquiries will normally be held every three years, prior to the expiry of broadcasting licences in a particular area. It will, therefore, be desirable for the expiry dates of licences, both commercial and public in each area to be synchronised. However, this will take some time and will not be possible in all cases, for example, where the Tribunal decides to renew a licence for less than the normal three-year period. The Tribunal will normally commence an area inquiry after applications for renewal of licences in the relevant area have been received and after the closing date for submissions. All renewal inquiries will then be suspended until the area inquiry has been completed. The area involved will be any area that the Tribunal considers appropriate but would normally be expected to correspond to service areas which are defined by the Minister. The flexibility is necessary to cater for area inquiries which may be desirable prior to the definition of all service areas and to permit the Tribunal flexibility in the interests of efficiency. The Tribunal will not be empowered to exercise any of its regulatory licensing powers during an area inquiry other than those which are necessary for the conduct of the inquiry. It cannot, therefore, determine whether or not, for example, a licensee has contravened a licence condition without holding a separate inquiry under the uniform inquiry procedure. Once the area inquiry has been completed, the renewal inquiries will be recommenced. If there are any substantive matters outstanding in relation to a licence, the Tribunal will hold a public hearing into the renewal of that licence. In other cases, the licence can be renewed without any further hearing. The Tribunal will have a wide discretionary control over the conduct of area inquiries. Procedures will be similar to those already followed for inquiries directed by the Minister. The objective is a minimum of formality. Area inquiries will be held in public. The Tribunal will be required to report to the Minister on each area inquiry and may include recommendations to the Minister on any matter arising from the inquiry. These may relate to undertakings made by licensees, the need for new or different types of services, changes in service areas or a need to improve reception. The provisions relating to area inquiries will be subject to a proclamation date separate from the remainder of the Act, to allow time for consultation with the industry and for the Tribunal to put the new procedures in place. The consultations will include the issue of whether there will be area inquiries into the adequacy and comprehensiveness of services provided before existing licences are made subject to the new licensing arrangements. Rights of Appeal against Decisions Made under the Act The Bill incorporates measures to implement recommendations by the Administrative Review Council that appeals should be allowed to the Administrative Appeals Tribunal against ministerial decisions on two matters. These relate to the installation of beacon lights on transmitter masts and the preservation of records of historical interest. Honourable members should note that the Government has asked the Administrative Review Council to review its recommendations that licensing decisions made by the Australian Broadcasting Tribunal should be subject to appeal to the Administrative Appeals Tribunal. The Government has sought this review because the Australian Broadcasting Tribunal's procedures have changed substantially as a result of recent amendments, and will change further if the amendments contained in this Bill are accepted. The introduction of this Bill's uniform inquiry procedure is expected to provide adequate safeguards against arbitrary decisions, or undue influence by particular groups. If the Government had accepted the Administrative Review Council's recommendations outright, there would almost certainly have been a far greater number of appeals lodged, many of which would have been unnecessary or intended to delay implementation of a decision for commercial, political or strategic advantage. The Government is committed to making the Tribunal's procedures as streamlined and efficient as possible. Communities throughout Australia are anxious for new or improved broadcasting services, but the implementation of such appeal provisions could have led to serious delays in making decisions about licences which would have been to the detriment of both the general public and the industry. The Administrative Review Council's recommendations that appeals to the Administrative Appeals Tribunal be allowed against ministerial planning decisions have been rejected by the Government because such decisions involve complex issues relevant to general broadcasting policy. It would be inappropriate to allow decisions concerning elements of major government policies to be subject to such external review. Appeals on questions of law are, of course, available. Deletion of Obsolete Provisions of the Act Sections 120, 121 and 123 of the present Act are no longer necessary, and it is proposed that they be deleted. Sections 120 and 121 regulate the publication or re-broadcast of broadcast material. Section 120 constitutes an unnecessary restraint on freedom of communication as licensees cannot authorise publication of their broadcasts without Tribunal approval. In regard to section 121, the Copyright Act 1968 already provides adequate protection, and one effect of this section has been to make uncertain the Tribunal's power to use videotapes as evidence in its hearings. Section 123 of the present Act regulates the broadcast of encoded material. This provision was enacted during the Second World War, and no longer serves any useful purpose. The Australian Broadcasting Tribunal's powers to make program and advertising standards have recently been thrown into doubt by a Federal Court decision. It had been the Government's intention to bring forward amendments at this time to clarify and affirm the Tribunal's powers to make standards. Because of concern about the possible effects of such legislation expressed by some sections of the broadcasting industry, I have decided not to delay the amendments I am now presenting by waiting for standards provisions to be finally settled. The Government considers that it is important that the provisions of the current Bill on service-based licensing and the new uniform inquiry arrangements be introduced now to give some relief to the Australian Broadcasting Tribunal by providing for a more efficient system. Further, and most importantly, the Government considers that the new remote, or satellite licences should be provided for as soon as possible as Aussat's first two satellites are scheduled for launch in some three and six months respectively. To introduce new remote technology based licences in the absence of the service-based system would be technically very difficult and wasteful. I now give notice, though, that it is the Government's firm policy that the Tribunal should maintain its powers to set both qualitative and quantitative broadcasting standards or conditions. I intend to bring forward amendments in the Budget sittings to give legislative effect to this policy. In the meantime, because of the Government's commitment to a viable and flourishing Australian film and television production industry, I assure the industry and this House that the Government will take all necessary steps to maintain the industry. Should this require making the proposed legislation effective from today's date, we will not hesitate to do so. The Bill provides a scheme for the progressive conversion of old system licences to the proposed service-based licences. The provisions of the present legislation will continue to apply to existing licences until they are converted, as it will take some time for service areas to be defined for all licences. When the service area has been determined, the Minister will direct the Tribunal to grant a new licence without the need for a fresh inquiry. The expiry dates of existing licences will not be affected. Inquiries into the renewal of 'old' licences commenced before the commencement of these amendments will continue and be concluded under the provisions of the present Act. Special provision has been made to require the Tribunal to grant a remote licence to persons recommended by the Tribunal pursuant to the inquiry directed by the Minister on 7 October 1984. In the process of conversion of service areas, where the Minister proposes a service area not substantially co-extensive with the area presently served, the Minister will be required to publish a Commonwealth of Australia Gazette notice of the proposed service area variation, invite public and licensee comment and consider those comments. These amendments repeal provisions for repeater television stations, consistent with the service basis of the new arrangements. The repeater provisions will continue to apply, however, to existing repeater stations. It is expected that licences for repeaters will not be renewed when the remote radio and television services are broadcast by a combination of satellite and terrestrial transmitters. Honourable members should also note a change to the ownership or control provisions resulting from the licensing of services rather than stations. The Act will continue to limit the services or licences which can be held in each State. Under present arrangements the location of a station is easily determined by the location of its principal transmitter. Under the proposed system, the Minister will publish a Gazette notice identifying the State of each service which overlaps State borders. In doing so, the Minister would have regard to the State of residence of the majority of people living in the service area. I commend the Bill to the House. Debate (on motion by Mr Braithwaite) adjourned. Bill presented by Mr Duffy, and read a first time. Mr DUFFY(Holt-Minister for Communications)(5.27) —I move: That the Bill be now read a second time. These amendments are purely formal and flow from amendments to the Broadcasting and Television Act. For an explanation of those amendments, I refer honourable members to my second reading speech on the Broadcasting and Television Amendment Bill 1985. The changes to other Acts consequential upon proposed amendments to the Broadcasting and Television Act are terminological rather than substantive. Thus, for instance, references to stations are changed to licences, and the tautological 'broadcasting and television' is reduced simply to 'broadcasting', which applies to both radio and television. I commend the Bill to the House. Debate (on motion by Mr Braithwaite) adjourned. Bill presented by Mr Duffy, and read a first time. Mr DUFFY(Holt-Minister for Communications)(5.28) —I move: That the Bill be now read a second time. I foreshadowed this Bill in my second reading speech on the Broadcasting and Television Amendment Bill 1985. As I explained in that speech, amendments to the Broadcasting and Television Act will convert licensing and regulation from a technology basis to a service basis. As a consequence references in this licence fees Act to 'stations' will be anomalous. This Bill will amend the principal Act to relate fees to licences for broadcasting services. Consistent also with the proposed amendments to the Broadcasting and Television Act, 'broadcasting' will encompass both radio and television services, which, where appropriate, will be separately specified. The substantive provisions of the Act, that is, the levels of licence fees, will continue unchanged. As a transitional provision, the Bill provides for the existing licence fees Act to continue to apply to existing station licences until they are converted to licences for broadcasting services. I commend the Bill to the House. Debate (on motion by Mr Braithwaite) adjourned. Bill presented by Mr Duffy, and read a first time. Mr DUFFY(Holt-Minister for Communications)(5.30) —I move: That the Bill be now read a second time. I foreshadowed this Bill in my second reading speech on the Broadcasting and Television Amendment Bill 1985. As I explained in that speech, amendments to the Broadcasting and Television Act will convert licensing and regulation from a technology basis to a service basis. As a consequence references in the Television Stations Licence Fees Act to 'stations' will be anomalous. This Bill will amend the principal Act to relate fees to licences for broadcasting services. Consistent also with the proposed amendment to the Broadcasting and Television Act, 'broadcasting' will encompass both radio and television services, which, where appropriate, will be separately specified. The substantive provisions of the Act, that is, the levels of licence fees, will continue unchanged. As a transition provision, the Bill provides for the existing Television Stations Licence Fees Act to continue to apply to existing station licences until they are converted to licences for broadcasting services. I commend the Bill to the House. Debate (on motion by Mr Braithwaite) adjourned. Bill returned from the Senate with an amendment. Ordered that the amendment be taken into consideration in Committee of the Whole House at the next sitting. Bill returned from the Senate without amendment. Debate resumed. Mr DEPUTY SPEAKER(Mr Andrew) — Before the debate is resumed on this Bill, I remind the House that it has been agreed that a general debate be allowed covering this Bill and Sales Tax Assessment Bill (No. 10) 1985, Sales Tax Bill (No. 10A) 1985, Sales Tax Bill (No. 10B) 1985, Sales Tax Bill (No. 10C) 1985 and Sales Tax (No. 5) Amendment Bill 1985. Mr BRAITHWAITE(Dawson)(5.33) —It is not difficult to speak to the Sales Tax Laws Amendment Bill. There is an unchallenged opportunity to speak to this legislation because the Act is certainly diverse and difficult to understand. It is complex and, as has already been said in the debate, it contains many anomalies. I am sure that the Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer (Mr Hurford), who is at the table, would agree that very few practising accountants around Australia would profess to have a sound knowledge of it. Mr Hurford —Except you and me. Mr BRAITHWAITE —The Minister excepts himself and me, but I must dissociate myself even from that. In my years as a practising chartered accountant, I found this to be a very difficult area. It was difficult to get interpretations and consistency. As a result most of the interpretations came from the Australian Taxation Office and there was very little that one could do about it. The Sales Tax Laws Amendment Bill aims to correct some anomalies in the Act. But adding pieces of paper to an Act can only add to the difficulties of interpretation of that Act and to its complexity. The Sales Tax Act is an Act which should be brought up to date. It should perhaps be more specific in the manner in which we can determine a value at which wholesale tax is charged so as to remove many of the problems. Many of the problem areas relate to exemptions, concessions and the manner in which certificates are dealt with. Dealing with the point of being able to establish a wholesale price brings me to the point made by Mr Eric Risstrom who is Secretary of the Australian Taxpayers Association. He once indicated to me that the government of the day should legislate for a fixed price so that there would be no variation in price, irrespective of where an article was eventually sold. That brings me to the point mentioned earlier today about the sales tax on the freight component. It is interesting to note that the legislation aims to calculate a notional figure of profit to a wholesaler because there has been an area of evasion whereby, on an agency basis, manufacturers have transferred goods to an agency at less than the normal wholesale price. One area mentioned related to royalties. The other related to transfers at a figure which does not allow profit to the manufacturer. I understand-perhaps the Minister will explain this when he replies-that this implies a notional manner of determining a profit. What I ask is, if it is possible to do this, why is it not possible to determine some notional figure which excludes the freight component in the sales tax arrangement? I do not blame this Government or anyone else, except to say that for a couple of decades there have been complaints about this particular part of the legislation massively disadvantaging people out in the bush who are the furthest away from the manufacturers. I ask that the Minister and in particular the Government try to come to grips with this problem now that they are able to apply themselves to the calculation of a notional profit of a wholesaler. If that calculation can be done for a wholesaler, surely it is not too difficult to produce a notional figure that excludes the freight component. I know that the argument from the Taxation Office has been that the Act does include as a component of manufacture the freight component of an article. I will give a very simple example of how this is a disadvantage. I take the example of a soft drink manufacturer in a centre where all the components are readily available and thus freight costs are not a great issue in bringing together the necessary items for production. But, if all of those components had to be freighted 400 or 500 kilometres-that is, the essences, the sugar and all the other components-when those components were eventually mixed together and manufactured there would be an additional cost on which sales tax would have to be paid. I ask the Minister to look very carefully at this. This is one of the great issues in the bush. Nobody has ever calculated the amount of this disadvantage. Perhaps it is not a great amount. But it is a disadvantage and people in the bush consider it to be detrimental to them. Mr Lloyd —Labor promised to abolish it. Mr BRAITHWAITE —Labor promised to abolish it, but it also found out during the Whitlam years and during its present two years in office that there are difficulties. Now that an escape clause has been found to be able to assess notionally a profit for a wholesaler, it should be possible to do the same for this. I refer to another issue in this current tax debate and indicate to the Minister that a consumer tax-I suppose one would say that a wholesale tax is a consumer tax-or a retail turnover tax also has the same degree of disadvantage for country people, particularly those away from the point of manufacture. I just use the example that, if Sydney is the point of manufacture where an item can be retailed at a price of, say, $10, by the time that article reaches Mount Isa or Darwin it will include a freight component, a storage component and a component for expectation of extra profit because there is a smaller sales market in which to distribute, and that $10 could quite easily become $15. That is no exaggeration. In that case, a person in Mount Isa or Darwin would be paying, on a 10 per cent consumer tax basis, $1.50 compared with $1 for Sydney. We have the basis of a wholesale tax Act before us. I do believe that we should be able to clean up that Act and use it, with refinements and suggestions such as those of Mr Risstrom, to put such a consumer tax into place. The Bill addresses itself to overcoming certain evasion practices. It is said that an extra $200m in tax could be collected in this way. According to the ministerial statement of the Treasurer (Mr Keating) last night, the administration of the social security system will be improved to the extent that savings of $25m are envisaged. Obviously that relates to the fraud area. As I understand it, the extent of fraud in the area of social security amounts to between $100m and $300m, so the $25m is not a large saving. I am not sure how that money will be saved. I do not know whether it will be by way of new mechanisms through the use of a computer or whether other practices will be involved. If it is to be by the use of a computer, I would point out that a computer system is already in place in the Taxation Office and I do not believe it is being used to its fullest potential. I understand that there was an efficiency audit report which stated that data collected all around Australia in the taxation area is not being used to its fullest extent. I turn to the report of the Auditor-General on efficiency audits in the sales tax area. It indicates that certain practices have to be undertaken in the Taxation Office in order to improve the administration of the Act. It is obvious that improvements in some areas would result in more tax being paid. Included in these areas is the consistency of application of procedures from one office to another. I think it would be of particular advantage to look at the unnecessary costs incurred in the processing of nil returns. There should be a common approach right throughout and a clearer policy should be enunciated. This would result in an improvement in the administration and must reduce the costs. Indirectly, this would mean that more tax would be collected. For instance, one of the complaints was that the application of the additional tax for the understatement of net taxable sale value following investigations varies amongst officers and is not in accordance with Head Office guidelines. While we are looking at the $200m lost to the public through fraudulent practices, perhaps we ought to be looking at this other area also. The reference to extra collections of sales tax provided for by the legislation before this House is a reminder to us of the immediate effect of such consumer taxes. The devaluation of the dollar over the last few months has meant indirectly a windfall profit not only in tariffs and excise but also in sales tax on goods imported from overseas and taxed before they fall into the hands of the consumers. I am not sure of the actual amount, but I understand that, because of devaluation, the increase in the import parity price of fuel and sales tax, the amount is approximately $1 billion right across the board. In talking about the difficulties faced by country people, the people in the bush, regarding the sales tax component on freight, I point out this area is only one of the many areas where these people are disadvantaged by the taxing policies of the Government. Fuel tax is the most notable. Over the last two years of office of the Labor Government the price of fuel has gone up, as I understand it, by some 12c to 15c per litre. That is a massive disincentive for an industry competing on the world market. Australians have to realise that Australia has to trade competitively if we are to survive and maintain our standard of living. Tariff protection, which has been valued at $7,000 per farm unit right around Australia, is another disadvantage for them. There has been the withdrawal of certain tax allowances and allowances for depreciation, the revamping of the average, and the withdrawal for the income equalisation deposits. The assets test must also be included in the items that affect the rural people more than they affect other people. I will mention a few other items that have apparently escaped the attention of politicians and the Taxation Office. While talking in terms of how much it costs the Taxation Office to administer Acts and collect taxes, we often overlook how much extra work is involved for businesses to provide the records kept so that people can have the privilege, or otherwise, of paying that tax. I instance the item of a nil return being perpetuated over a period of 12 months by a business. Even though that business is not paying tax, there is the cost of the processing. Particularly with respect to the wholesale tax, whereby records have to be kept, I believe that we must take into account the cost to businesses of the payment of the tax. Anything we can do to simplify forms and proceedings to relieve the pressure on those people will be a great advantage insofar as their profit capacity is concerned. That is one example. The second example concerns the 21 days allowed for payment. I have taken up this matter with the various governments of the day on many occasions. The reply that always comes back is that sales tax is basically levied on goods which are sold for cash. If the main component of a tax collection comes from the sale of motor vehicles, transport vehicles, tractors and so forth, obviously the cash is in the hand and these people actually have that money in the hand until the end of the month and 21 days afterward. I would like thought to be given to the minority group, that is, those people who sell goods on credit. Credit was formerly extended over 30 days. Businesses are being pressured to increase it to 90 days in some cases, and many deals eventually end up in a bad debt situation. I believe we could structure a two-tier system. There could be one tier for the cash payments and they probably could be placed into the hands of government more quickly than 21 days into the following month. The other tier could give small business-the people who are financing increasing stocks and increasing debtors-the opportunity of selling the goods and getting the money in before the sales tax is eventually to be paid. I believe that this is one of the main things that could contribute to better liquidity in business and also a better profit margin at the end. We must bear in mind that those businesses have to survive and they have to profit if we are going to take tax from them. It is better to take a limited amount of tax on a deferred basis from a profitable business than have the tax listed as a bad debt because the business has gone into liquidation through being pressed too far as far as liquidity is concerned. Another aspect of sales tax is the exemption of governmental bodies and associations that are allowed to go into competition with private enterprise. I mention the difference between contractors in the private sector having to pay the full amount of sales tax on their equipment and having to pay payroll tax compared with a local council or a government authority being allowed to tender and compete with these people without the sales tax factor on the equipment, for instance. This does put contractors in private enterprise at a disadvantage when they are competing against such benefits that local government and other statutory bodies derive. They are responsible for showing a profit margin to their shareholders, whereas the statutory bodies engaged in that type of competition do not have to show such a profit. As both the shadow Treasurer, the honourable member for Bennelong (Mr Howard), and I have said, this is a complex Bill and it has been rushed to us with little time to spare. The only saving grace we find in it is the fact that when the shadow Treasurer was Treasurer he made some of the same recommendations. It has taken this long for them to come to us. I have mentioned the inability to assess the actual ramifications of the Bill and I ask the Minister to look very carefully at my comments. I make them sincerely in the knowledge that the people I represent believe that they are being disadvantaged by the sales tax on freight component, the payment of sales tax and its competitive nature and cost. This could be alleviated if the forms were made simpler and the Act were not so complex. Mr PRICE(Chifley)(5.51) —I wish to respond to a previous speaker, the honourable member for Mitchell (Mr Cadman). It is true to say that I sought to restrain, in a gentlemanly way, what was obvious gilding of the lily or poetic licence. I felt a certain responsibility to do so because the honourable member seeks to be seen as a member of the group of outer western Sydney members. Unfortunately, the honourable member would not be constrained or restrained by the truth. He was making the point that the Sales Tax Laws Amendment Bill and cognate Bills were premature, if the Government were to change this tax as a result of consultations with the Australian Council of Trade Unions and the tax summit. I disagreed then that they were premature and I disagree now. I have no brief for tax avoiders. I have no record of supporting the tax avoidance industry by advocating delay or creative inertia. I believe that action should be taken against tax avoidance as this Government is doing in these Bills. Substantial sales tax evasion has come to light based on abuses of the present procedures for registration of sales tax payers and their right to obtain goods free of tax by quotation of a certificate number. Other schemes, known as agency schemes, are based on the wholesaler appointing a normal retailer as his agent. As a result, the wholesaler technically becomes the retailer for the purposes of the sales tax law. Another variation is where the wholesaler obtains permission to use a section of the retailer's store from which the wholesaler's goods are sold direct to the public. Of course, the buying public cannot distinguish between the retailer and the wholesaler. Through these Bills the Government will recover some $420m. I remind the House of the tax reform record of this reforming Labor Government. It has introduced the prescribed payments system in an attempt to reduce the level of tax evasion. It has reduced the unwarranted tax concessions applying to income taken in the form of lump sums. It has repaired, in a large number of ways, weaknesses in specific tax provisions, such as the existing capital gains provisions, short term life insurance, leasing arrangements, film tax concessions, friendly societies' superannuation schemes, trust stripping and deferred interest securities. It has dramatically increased penalties for tax offences and has begun a program of strengthening the compliance capacities of the Taxation Office. Had these measures not been taken it is estimated that some $2 billion of losses would have been incurred. We are dealing with sales tax and I would like to point out that it is a Federal tax on goods going into consumption. It applies to both imported goods and goods manufactured in Australia. It applies only to new goods and it does not apply to services. Originally, sales tax was introduced during the Great Depression as an emergency measure and it is interesting to reflect that the rate was one per cent and that very few exemptions were made. Today, there are some five major classifications and tax rates. There is an exemption list of goods and the other rates are 7.5 per cent, 10 per cent, 20 per cent and 32.5 per cent. I draw the attention of the House to the list of key exempt goods and I think this is rather interesting. For example, aeroplanes are exempt and I suppose one should be able to make a good argument about the exemption of agricultural machinery and implements. Building materials are exempt, buses seating 12 people or more are exempt, as are commercial ships and vessels. Floral tributes and plain wedding rings are also exempt. Mining machinery and equipment are exempt. I have not quoted all the key items but those are just a few. Let us look at the luxury items-those that are taxed at 32.5 per cent. The list includes cosmetics, furs, jewellery, photographs, precious and semi-precious stones, records and audio cassettes, shaving equipment, suntan lotions-I am sure a number of honourable members opposite will be very upset at the luxury status of that necessity- television sets and recorders, but not video recorders. Unfortunately, the list of luxury items was devised during the Second World War and it had little to do with luxury and more to do with items that were in short supply. I do not support this form of indirect taxation which collects something like $4.5 billion. Given the reforming record of this Government, I would like to see this tax abolished. It is fair to say that the Opposition, whilst in government, had plans to extend this tax. It is an unfair and discriminatory tax. I note that a lot of people who are very concerned about the possible introduction of a consumption tax never refer to this existing tax and its inequities. I think there are a lot of benefits in having a wider based tax. For example, this sales tax does not tax services. There is an argument, I believe, that services are consumed more by the wealthy in our community than by the poor. I would like to make a couple of comments about the tax mix. Unfortunately, I believe our taxation system-particularly in relation to personal income tax-is reaching crisis point. Some time ago it may have been fair enough to say that the rorts on the tax system or the minimisation and avoidance schemes were being conducted by few taxpayers. Unfortunately that is not the case today. I can understand that people try to minimise 46c in the dollar or 60c in the dollar tax rates. In fact, it is more profitable to spend more time examining and managing one's tax affairs than going out into the world and producing things. I welcome the commitment of this Government to reform this situation after consultation. In addition, I should point out, as the Treasurer (Mr Keating) has pointed out, that there are something like 2.25 million taxpayers who are paying tax in excess of the 46c or higher marginal tax rates. That means that a hell of a lot of ordinary workers, small businessmen, farmers-any member of the community one cares to mention-are in that tax bracket and are shouldering an unfair burden of our tax system. Unfortunately, those in the highest tax brackets have the greatest ability to minimise their tax and so arrange their affairs. For example, in the marginal tax rate of 60c in the dollar, only $400m of the $30,000m that is contributed comes from that tax bracket. That means that these people are not paying their fair share. I feel that a broadly based consumption tax would allow the Government to reduce the marginal rates as well as provide some equity by abolishing this existing indirect tax, this existing consumption tax and making it fairer. If we are to introduce a consumption tax-I am only expressing a personal point of view-it should have fewer exemptions than exist in the present wholesale tax, and preferably no exemptions at all. I would also like to see the number of tax rates reduced to no more than two. A recent research library paper argues that an indirect consumption tax can be a progressive form of taxation, particularly when there are differential rates so that a higher rate applies to luxury goods. I regret that the Opposition parties have chosen not to participate in the tax summit. One big difference between this Government and other Labor governments is its recognition that it cannot govern for just one section of the community without the support of all other sections. This Government has gone out of its way to consult the business community, farming organisations, and trade unions. There is no doubt that tax reform will be set back perhaps 15 to 20 years if this consultative process on which the Government is embarking, both with the Australian Council of Trade Unions and with the tax summit participants, fails to reach consensus on tax reform. I say respectfully to Opposition members that if they boast to their constituents and supporters that they have held back tax reform by 15 to 20 years, they will be in a lot of trouble and their constituents will support this Government even more. I ask for a little bipartisanship which perhaps has not yet been exhibited. It takes a degree of courage to embark on an issue as sensitive as tax reform but, in an electorate such as mine, a strong economy with fuller employment than we have now is the best form of social security I can provide for my constituents. I strongly support the Government's economic plan and its taxation proposals. I would like to point out that social welfare recipients are perhaps the easiest people in the community to compensate for any inflationary effects of introducing a consumer tax or extending an indirect tax. I would like to see those people not only compensated but perhaps over-compensated. When we introduced the $1.5 billion tax cut during the last Parliament the average worker got $7.60, a disproportionately larger benefit, and there is every reason to expect that our reforming will remain intact and will continue. Mr TUCKEY(O'Connor)(5.53) —When speaking to the Sales Tax Laws Amendment Bill and cognate Bills the Deputy Leader of the Opposition (Mr Howard) brought to the attention of the House the problems the Opposition and the community in general are having with the very speedy program set down for the Bills. It is far too quick for Bills of such complexity. I sincerely hope that the Government will listen to what we have to say and take note of some of the examples I will give of problems that may arise, because we believe that some of the Government's actions have stretched further than its intentions. It is probably worth reminding the Government members that if they were to read the Hansard of the many debates we had on the introduction of various forms of assets testing, they would see that the Opposition did raise a lot of matters and did say that certain things would occur. Now the Government has discovered that they have occurred and it is embarrassed. The honourable member for Capricornia (Mr Wright) this morning raised the disproportionate effect of sales tax on people in rural areas. He made a compelling, if somewhat inaccurate, case. It was inaccurate because present sales tax is levied at the logical point of wholesale, which in many cases is in the capital city. Although many country people are convinced, often by politicians, that they pay additional sales tax because sales tax is applicable to freight, they overlook the fact that the retailer supplying them has probably bought at city wholesale prices and the tax has been levied at that point. In fact, they are no worse off than the person who makes a similar purchase from a retailer in the city because the sales tax is applied at that stage. One thing that concerns me about this new legislation is that it sets out to deem the point of wholesale. I really do not think the definitions in the legislation are good enough. I pose to the Minister Assisting the Treasurer (Mr Hurford) a situation which I think is most likely to occur in both country and city areas. I use the simple example of a motor spare parts and accessories dealer who has chosen not to have a sales tax number because of its complexities. One day a motor mechanic, who charges for his services and who proposes to install certain spare parts or equipment in a client's vehicle, comes in and makes a purchase. Under the present rules, nobody would argue that that was a retail sale. That sale would have been taxed at some previous point and the person operating this smaller business probably does not have a sales tax number, and consequently does nothing about the matter. The person who takes the part away eventually sends an account to his client that includes an account for the spare parts. That creates a situation where this small retailer of accessories and parts has become a wholesaler. As I interpret the second reading speech, there will be great difficulties for such people. What is more, the Bill goes to some pains to point out that sales tax certificates will be harder to get. It seems to be a case of 'you'll be damned if you do and you'll be damned if you don't'. The Government is saying that a person will break the law if he fails to charge sales tax on a wholesale transaction of the type I have suggested. Of course, that dealer may go to the Commissioner of Taxation and say: 'I do a bit of wholesaling every now and again'. The Commissioner could say to him: 'Well, your business is a very small one and we are not really sure of your bona fides. We think that, in accordance with the legislation, you had better lodge a $25,000 deposit'. The dealer cannot afford that. He is not really sure when he makes wholesale sales and when he makes retail sales, but he will be chased all over the place. If he has been lucky enough to get a certificate, he is likely to find himself the chief keeper for the Commissioner of Taxation. Not long ago I raised with the Prime Minister (Mr Hawke) the problems of a wholesale sales tax-the problem of people having to collect the tax and pay it, often before they have collected it, and other problems with bad debts. My reading of this legislation tells me that this problem is to be made even worse because now that retailer, who acts as an unpaid tax collector for the Commissioner and the Government, has to collect the money from someone else, if he is lucky enough to be able to do so. I note with interest that this type of person is referred to in the second reading speech as a registered taxpayer. In other words, the Government makes no secret of the fact that he is the taxpayer. He is now being told that he had better not make any mistakes in his busy business, which might employ a lot of staff. He has to examine his employees to the nth degree and make sure that sales tax numbers are legitimate. What more should retailers have to do than they do now? The person lodging the order will be called on to provide a certificate which states: 'I am the holder of sales tax number so and so'. I agree that it is pretty simple for someone who has the gall to write in his telephone number, but there has to be some better way of controlling this situation than putting all the onus on to a retailer, who already has enough to do protecting his own business and looking after his own affairs. He does not want to be a tax collector for the Government, but it is forced on him by legislation of this nature. Now, as a small businessman with limited resources, he is being told that the situation will become worse. He has to be a policeman of sorts and there are penalties if he fails to do that. On some sales, particularly in the car industry and other such industries, quite substantial sums of money are involved. We wonder what the situation would be in relation to the scandal that struck the other day in which unauthorised purchases of motor cars were made by the National Aboriginal Conference. I presume that, like most other government entities, the National Aboriginal Conference does not pay sales tax and that a certificate would have been provided. What is the position under this legislation of the car dealer who provided those cars when it was found that they were not approved by government? One might even ask whether, when they were eventually sold to the members of the NAC, sales tax was charged. If those sales were made improperly, under this legislation will the provider of the vehicles be asked to pay the sales tax because the certificate provided by the NAC was not the proper certificate? The Minister for Aboriginal Affairs (Mr Holding) admitted this morning that that is exactly what happened. Who is the onus going to be on in those circumstances? Surely it cannot be on a businessman who, as I have said, does not want this type of burden. These various situations concern me considerably. I think the suggestion of the honourable member for Bennelong, that more time should be given for this, could be very much in the Government's interest. It is typical of a situation where we get a form of avoidance and that avoidance results in draconian measures being brought in to overcome it. Such measures are probably not necessary. I think there could be other ways by which it could be resolved. It might be, of course, that the Commissioner himself could look at some of the methods by which people operate in this area. I suggest that this legislation will have an effect on country businesses. It was suggested earlier that one of the great problems facing small businesses is the add-on cost situation of applying sales tax down the line. The Treasurer (Mr Keating), in his second reading speech, talked of the competitive advantage of people who, if I may say so, 'cheat'. There is great pressure on people to cheat in this area because once they move outside the metropolitan area it is almost impossible these days for them to operate as wholesalers because they have to pay sales tax on the freight and the additional mark-up. That has meant that people in most country towns have been unable to operate wholesale businesses. I am aware of a wholesale business that was closed down today because this legislation was the last straw. The firm used to have a sales tax certificate but it abandoned it and found it more appropriate, both from an administrative point of view and a cost point of view, to pay its sales tax in Perth. It is recognised that it on-sold its goods to other retailers and it now believes that it would be seen as carrying out a form of tax avoidance if it continued its activities. I am advised that that business has ceased operating forthwith. It was not a large business and there are other businesses associated with it. I do not think a great many jobs were lost because of its closure, but it is this sort of pressure which causes such closures. I ask the Government please to look at this situation as I think there are problems with it. I think it will affect the competitive position of smaller businesses and create a situation of wholesale retailing being the only profitable way to go. I am sure if this legislation were looked at a bit more closely we could do a better job. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(6.14) —I would like to thank all honourable members who have taken part in this debate. There has been a responsible approach from members of both sides. They have applied themselves to the particular measures in the Sales Tax Laws Amendment Bill. I want to do them credit by answering specific points brought up in the debate. The Government, of course, rejects the Opposition amendment. In a perfect world we would have liked longer for the consideration of this measure but we cannot postpone it for two weeks, as was suggested by the Deputy Leader of the Opposition, the honourable member for Bennelong (Mr Howard). Frankly, most honourable members have already made arrangements to be elsewhere from the end of the next week onwards. Some are not so busy and some may be here to be closer to the action during the Premiers Conference which will take place in this chamber in a couple of weeks. This is a difficult country to govern in this cumbersome Federation of ours. That Premiers Conference is essential. It will look at drawing up a new Commonwealth-State financial agreement. Therefore we are under an obligation to get this Bill through right now so that it can go to the Senate and come back here, if necessary, if the Senate has any amendments in mind. I hope the Senate has not, for reasons I will outline now, because the Government sees it as very important indeed that this Bill be passed as soon as possible. Why is this? It is because the package of Bills to amend the law in the sales tax area is designed primarily to prevent significant revenue loss from sales tax evasion and avoidance practices. There is haemorrhaging going on. So far as the particular evasion practices covered by these Bills are concerned, it has to be recognised that the persons engaged in these frauds-and that is a correct description of many of the things being addressed in these Bills-are criminals. Make no mistake about it, I use that word advisedly to describe these people who are engaging in these practices; they are criminals. The amendments to curtail these evasion activities by strengthening the registration and quotation procedures cannot apply until the Bill becomes law. Any delays, therefore, in enacting these measures simply means that these criminals can continue to engage in their fraudulent activities for a bit longer. This Government is not in the business of handing out bonuses to those engaging in these practices. I trust the Opposition is not either. I believe that when I point that out to the Opposition it will realise that putting the Bill to a Senate committee would indeed allow the criminals to continue to haemorrhage the sales tax area. Mr Tuckey —No, that is not so. Mr HURFORD —It is as I have explained, because the registration can apply only until the Bill goes through. The Deputy Leader of the Opposition suggested that by deferring the passage of the legislation the revenue will not be at risk because the law could apply from the date of the introduction of the measures into this Parliament. That may be an acceptable approach when dealing with certain income tax avoidance arrangements, but unfortunately it is not an approach that can be applied when legislating against these particular sales tax avoidance arrangements. Because of technical requirements in the sales tax law relating to the registration of taxpayers and their legal obligations to quote certificates when purchasing goods, the proposed amendments can apply only prospectively, not retrospectively, from the date of royal assent. The effect therefore of what the Opposition contends would be a further delay in enacting measures that are designed to curtail tax avoidance practices that are costing the revenue some $200m a year. That is almost $4m a week. Every week's delay in enacting this legislation will cost the Australian taxpayer $4m. If the amendments in the Bill directed at evasion practices are added to that, the cost increases to $8m a week. So the delay of two weeks suggested by the Deputy Leader, apart from raising the question of whether passage could be achieved during these sittings-that would be very much in doubt-would mean a massive $16m loss in revenue. As I suggested it is even more important that this be understood in the Senate. To put a Bill to a Senate committee without passing it would cost the genuine, honest taxpayers of this country $8m a week. I make a plea that if that is to be done, if there is to be a reference of this Bill to a committee, it should be the reference of the Act once the Bill has been passed. That applied in the case of the prescribed payments tax. A senate committee looked at that Act, as it was applying, after it had been brought into operation. That was a fairly valuable measure. I do not think there is the same need for it in this case, but if the Senate is so of the mind that it wants to refer this legislation to a committee, let it do so after it has become law. Let it look at it in its operation. The honourable member for Bennelong also mentioned a telex from the Readers Digest organisation. That organisation was one of the parties to the arrangements considered by the High Court of Australia in the RCA Ltd case. It was on the basis of the decision by the High Court in that case that the arrangements in the recording industry eliminating sales tax on royalties were devised. It may well be that that organisation and others in a similar position would like more time to study the implications of this proposed legislation. As I pointed out a few moments ago, for every week that this legislation is delayed it will cost the Australian taxpayer $8m. I will be seeing people from the recording industry next week, and I know that officers of the Treasurer's office and officers of the Taxation Office possibly could be seeing them tomorrow. It is not as though we are ignoring them or the points they have to make, but we believe this legislation should not be delayed. Originally, the royalties measure was to apply from 20 August 1981, when the Deputy Leader of the Opposition as Treasurer announced the proposed amendments. However, on 6 January 1982 he announced that the measure would not apply from that date. The announcement apparently followed extensive consultation with those using these arrangements. As a result, those engaged in these practices have been able to continue to avoid tax on royalties under these arrangements from January 1982 until last Thursday. In case there are those who would ask why this measure can be made to apply from the date of introduction of the legislation, whereas other anti-tax avoidance and evasion measures cannot, the answer lies in the fact that these amendments affect the sale value of goods on which sales tax is payable, while the measures I referred to earlier relate to the registration and quotation procedures. On the question of consultation, these amendments are essentially of an anti-tax avoidance nature. The Government does not accept the practice of consulting with those who have taken advantage of loopholes in the law when deciding on legislation to curtail such activity. The honourable member for Mitchell (Mr Cadman) also made some comments that require answers. He raised two matters: Firstly, proposed sub-section 3 (3) of the Sales Tax Assessment Act (No. 1). He suggested that it amounts to a reverse onus of proof provision. Let me say that the proposed sub-section does not amount to a reverse onus; it simply requires a vendor not to accept a quotation where the vendor-the next few words should be underlined-has reasonable grounds to believe that the person should not be quoting a certificate. The provision contains certain matters to which a vendor needs to have regard. They are set out in the Bill and the explanatory memorandum. The vendor must have reasonable grounds to believe that the quotation is invalid. In practical terms, this does not mean that the vendor is required to establish positively that every quotation is valid if there are no grounds to believe otherwise. For example, most vendors deal regularly with established clients whose quotations would never give rise to any suspicion in the mind of the vendor. However, where a vendor enters into a contract to sell goods tax free-that is, under a sales tax quotation-with an unknown purchaser for a substantial sum in cash, that would be a situation about which a vendor should be suspicious. That is, of course, nothing like a reverse onus of proof provision. Before the Commissioner of Taxation could require payment of sales tax by the vendor, the Commissioner would have to establish that the vendor had reasonable grounds to believe that the quotation was invalid. The next matter raised by the honourable member for Mitchell was that the definition of royalty contained in proposed section 3A of the Sales Tax Assessment Act (No. 1) was so broad as to raise some uncertainty as to the scope of its application. Let me address that. The definition of royalty contained in proposed section 3A is, as the honourable member pointed out, a broad definition insofar as it includes any amount paid by way of royalty or like payment, however that payment is described, computed or paid. The honourable member then referred to comments reported in an article in the Australian Financial Review by Mr Damian Walsh, of Arthur Young, to the effect that the definition of royalty was so broad as to lead to confusion as to its scope. Unfortunately, the honourable member did not read Mr Walsh's comments in full. Mr Walsh prefaced the remarks quoted by the honourable member by saying: The definition of a royalty is extremely broad but, importantly, only royalties paid in respect of goods are subject to the new tax. This is the real crux of the matter which seems to have eluded the honourable member for Mitchell. The definition of royalty applies only to royalties paid in respect of goods. It is worth mentioning that a royalty paid in the form of a franchise fee would be subject to the net tax, but only to the extent that the fee is in respect of goods. Under the amendments before the House, a franchise fee simply for the right to use a particular trading name would not be subject to tax unless the fee were in respect of goods-and only then to the extent to which it was so attributable. I can assure the honourable member for Mitchell and all other honourable members, however, that the new tax will not affect the price of McDonald hamburgers, as food is exempt from sales tax. Then we had the contribution from the honourable member for Dawson (Mr Braithwaite). We are all interested in sales tax on freight. I think the honourable member for O'Connor (Mr Tuckey) also raised this question. The question of excluding the freight component from the taxable sale value of goods subject to sales tax is a matter that has exercised the minds of honourable members on both sides of this House for no less than about 30 years. It was also considered many years ago by a Senate select committee. No one has yet been able to devise appropriate amendments to the law to achieve the elimination of freight from the sales tax base. The matter is not as straightforward as the honourable member for Dawson suggests, because freight costs can be incurred at many stages of the production and sale of goods. For example, the transporting of the raw materials to the manufacturer's premises is one area where freight is involved in the input into production. It is not, therefore, a simple matter to exclude all freight components from the taxable value of goods even if, as a matter of policy, a government were to decide to do so. However, the honourable member seems to be under the impression that the Bills before the House adopt some notional or special value for imposing sales tax. He used that as a reason for suggesting that a notional value could therefore be put on freight. I have to disabuse his mind that there is any notional value involved in this; it is just not the case. The present Bills will do no more than adopt, in the case of agency and similar arrangements, the existing sales value provisions of the sales tax law. There is sadly, no magic formula in these Bills to solve the problems seen by the honourable member. I repeat that for 30 years we have been looking for it. The desire is there on both sides of the House. I believe that there is an inequity in sales tax being applied to freight, but I wish that the officers of the Taxation Office and I could find some way to administer some changes to remove that inequity. In any event, many manufacturers or wholesalers now arrange their transactions, when dealing with country clients, for property in the goods to pass f.o.b. I wish that there was more of that. The freight cost does not form part of the cost of the goods and, therefore, is not subject to sales tax. Let there be more of those sorts of arrangements. The honourable member for O'Connor mentioned the matter of spare parts sales by garages, and I would like to do him the honour of responding to his remarks. The matter mentioned by him in relation to sales of spare parts by garages to mechanics is not too clear to us. However, the situation is simply a retail sale of the spare parts. Nothing in these Bills before the House will alter that situation. Moreover, even if the supposed sales were between two garage owners, who, owing to temporary shortages of stock, supply each other with stock, that situation is specifically deemed by the current law to be a retail sale. Again, nothing in these Bills affects that situation. I thank all honourable members for their contributions. I will be opposing the amendment and I commend the Bills to the House. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Hurford) read a third time. Sitting suspended from 6.29 to 8 p.m. Consideration resumed from 9 May, on motion by Mr Keating: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. The Bill. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(8.00) —I move: Clause 2, page 1, line 7, omit ''9 May'', insert ''10 May''. The amendment I have moved on behalf of the Government is of a technical nature. The Bill as introduced will ensure that royalties paid in connection with the manufacture, sale or lease of goods, but under arrangements that have the effect of excluding such royalties from the taxable sale value of the goods, will not escape the payment of sales tax. The measures contained in the Bill are intended to apply to royalty payments made after 9 May 1985, that being the date the measures were announced when the Treasurer (Mr Keating) introduced the Bill into the Parliament. However, under section 3 (2) of the Acts Interpretation Act, unless the amendment is made, the Bill would have effect for the whole of 9 May. That is not the intention of the Government. The amendment, which has been circulated, substitutes 10 May for 9 May. It will correct this error. The amendment will mean that the Bill will apply only to royalties paid on or after 10 May 1985. I commend the amendment to the Committee. Mr MacKELLAR(Warringah)(8.03) —The Opposition accepts the amendment, but it demonstrates that the Government really has had some difficulty in coming to terms with details of the legislation. Unfortunately, it is characteristic of the Government that details such as this seem to escape the attention of a whole collection of Ministers. I do not wish to trespass on the good will of the Committee, but when we look at the range of measures introduced into the House last night I am sure we will again find that details will have escaped the attention of individual Ministers. As I have said, the Opposition has no objection to the amendment which has been moved at this stage by the Minister for Immigration and Ethnic Affairs (Mr Hurford) except to say, in the kindest possible sense, that we hope in future a little more attention will be paid so that amendments of that nature will not be necessary. Amendment agreed to. Bill, as amended, agreed to. Bill reported with an amendment; report-by leave-adopted. Bill (on motion by Mr Hurford)-by leave-read a third time. Consideration resumed from 9 May, on motion by Mr Keating: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Hurford) read a third time. Consideration resumed from 9 May, on motion by Mr Keating: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Hurford) read a third time. Consideration resumed from 9 May, on motion by Mr Keating: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Hurford) read a third time. Consideration resumed from 9 May, on motion by Mr Keating: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Hurford) read a third time. Debate resumed from 9 May, on motion by Mr Lionel Bowen: That the Bill be now read a second time. Mr N. A. BROWN(Menzies)(8.09) —This Bill makes three changes to the law relating to telephone interception and the Opposition does not oppose them. Nevertheless, several points about the Bill should be brought to public notice. In substance, what the Bill consists of is one significant provision dressed up with two other provisions to give it an air of respectability. Without those two other provisions, the Bill would certainly be revealed as nothing more than a belated attempt to rectify an error that was apparent when the telephone interception legislation was last before the Parliament on 28 March and which could have been rectified then. The Telecommunications (Interception) Act, which is the Act that governs telephone tapping in Australia, came before the House on 28 March, when the Government amended it to enable the Stewart Royal Commission of Inquiry into Drug Trafficking to examine the New South Wales police tapes. The amendments had the effect of enabling unlawfully obtained material to be handed over to the Stewart Royal Commission. Those amendments were needed because the tapes were illegal and, if they were handed over to anyone, that also would be illegal. An amendment was put on 28 March so that certain unlawfully obtained material, or illegal telephone tap material, if you like, could be handed over to the Stewart Royal Commission. That unlawfully obtained material was defined as being information coming from unlawful telephone taps that disclosed an offence or a possible offence against a law of the Commonwealth or a law of a Territory. It should be noted that the changes that were then made to the law did not allow taped material to be handed over to the Stewart Royal Commission if what it disclosed was an offence against the law of a State. This was curious, of course, because what the Stewart Royal Commission is supposed to do with the material is to see whether it shows that a crime has been committed, not only against Federal law but also against the law of a State. So the ludicrous situation that resulted from the Government's amendments was that the Stewart Royal Commission was to examine the tapes and transcripts, see whether they disclosed any offences against State law, and then get things moving to have somebody prosecuted. Yet the law did not allow the tapes and transcripts disclosing breaches of State law to be handed over to the Royal Commission to start its examination. How on earth, one could ask, was the Stewart Royal Commission to decide whether a tape or transcript related to the commission of a State offence or was evidence of the commission of a State offence, if it remained illegal-even after the amendments were passed-to hand to the Royal Commission a tape or transcript that disclosed the commission of a State offence? The inadequacy in what the Government was proposing to do-it is the basic point the Opposition wishes to make about this matter-was specifically drawn to the attention of the Attorney-General (Mr Lionel Bowen) in the debate on the Bill on 29 March. The honourable member for North Sydney (Mr Spender) described the situation I have just outlined as a blunder, and a blunder it clearly was. There was no reply from the Attorney-General, no explanation of how the Bill would work, no defence of his Bill at all-just the normal indifference to constructive and sensible attention being drawn by a member of the Opposition to a patent defect in the Bill the Attorney-General was promoting. What has happened since then? Has the Government simply discovered its mistake? We are now told by the Attorney-General and his explanatory memorandum that the Bill we are debating tonight rectifies what he calls an omission from the March Bill, simply an omission. No further explanation is given. The Opposition puts it that the Government owes this House more of an explanation than this simple brush-off, and when the Attorney-General, or the Minister on his behalf, replies we will expect some more substantial explanation than the one we have had so far. The matters of law enforcement we are debating, of which the Bill before the House tonight is a typical example, are of real significance. They are not just some of the hobby issues that the Attorney-General seems concerned to pursue. They are issues of great significance to the Australian people which pose a threat to the existence of our very society and its foundation. We are dealing with real criminals, drug running, official corruption and, as we see from the Sydney scene in recent weeks, gangland bosses killing each other. The legislation we are concerned with tonight is intimately bound up with those matters, which should be of enormous importance to every Australian citizen. They deserve far more serious attention than the Government, and the Attorney-General in particular, have given them on this occasion. Simply to introduce an important piece of legislation of this sort and then come back a few weeks later and say 'there was an omission', without any explanation being given as to how the omission arose or what has happened since the omission took place, is a thorough and complete dereliction of duty. The Government should be condemned for its off-handed brush-off so far as this amendment which has now been put to the House is concerned. We can assume only that the Government is making further amendments to the Telecommunications (Interception) Act today for some good reason. My guess is that the tapes that have been examined reveal that State offences have been committed and that the change to the law is needed so that the tapes can lawfully be handed over to the Stewart Royal Commission. We are certainly not going to stand in the way of that being done. We simply say that if the Government had had its wits about it in March and amended the law as it should have done, it would not now be necessary to come back here and seek a further amendment to the Act. One would think that the Government would have the good grace to admit its mistake, either that, or one would expect the Government to tell us that the law really must be changed because evidence has now come to light that the tapes reveal that offences against State law have been committed. We will certainly expect a full accounting from the Government of how these amendments have been put into practice, what State offences have been revealed-obviously the situation relates to New South Wales-and what action has been taken to prosecute those responsible. If the Government does not give this accounting, it will have only itself to blame, as it does now for the public thinking on so much evidence that the Government is lukewarm in at least some areas of law enforcement relating to the suppression of organised crime. As I have said, this is the real substance of the Bill. Although it is buried both in the Bill and in the second reading speech, this omission, as the Attorney-General describes it, is the real substance of the Bill. The other amendments to the law contained in the Bill have simply been put in to dress it up and give it the appearance of a genuine piece of reform by the Government. Let me make it perfectly clear that the Opposition accepts both of these two further amendments. The first amendment is to enable Telecom to intercept telephone calls if it will prevent someone from dying or being seriously injured. That sort of telephone tapping is justified by the overriding benefit of saving life and limb and should be allowed. The second amendment will allow the prosecution in a narcotics case to tender a certificate by the Managing Director of Telecom Australia to the effect that Telecom has carried out the phone-tapping warrant, rather than have the Telecom employees who actually did the work go into the witness box and give oral evidence of having done the job. Apparently, Telecom's employees who do this work, who execute telephone interception warrants, are reluctant to be identified publicly, which, of course, they would be if they went into the witness box and gave their names and addresses, and gave evidence of the interception work they had engaged in pursuant to the warrant. They are reluctant to be identified publicly. They say that they fear for their own safety and that of their families and their fellow workers. Let me say that I find that quite understandable. It is appropriate that some action be taken to avoid what would be a matter of very great concern. However, I have doubts about whether this amendment will achieve what the Government wants it to achieve. It is the Government's problem to tackle that as best it may. I have doubts about whether the amendment will achieve what the Government wants to achieve for the simple reason that it may not be enough, as the amendment provides, to include in the certificate the matters that the Managing Director of Telecom thinks are relevant and necessary to prove some of the constituent elements of the offence or the necessary sub-stratum of evidence for the offence. It may not be enough for him simply to say what he thinks is significant. There may be a vast difference between what he thinks is relevant and what is necessary to prove that the interception took place. Nevertheless, the amendment that is proposed in the Bill tonight is the Government's solution. We see no reason at this stage why the Government should not be entitled to have that solution and to see whether it can be made effective. However, we shall be looking closely at the report that has to be tabled in the Parliament on the operation of these new provisions. As will have been noticed, the Bill requires a report on the operation of these new provisions to be made to the Attorney-General, and it requires the Attorney-General to table the report in the Parliament. We expect to see the full operation of this provision reported upon in that report and we will be giving particularly close attention to what is revealed in it. I have referred so far to these other two amendments which have been put into the Bill to dress up the Bill and give it an air of respectability, to cover up, in effect, the omission-as the Attorney-General calls it-which is the real reason for introducing the Bill only a few weeks after he had his most recent go at amending the law on this subject. Neither of these amendments go to make up the real reason why the Bill is being promoted. It is being promoted because the Government was negligent when the Act was last brought before this House, on 29 March, and the Government should admit it. If it will not admit it, we are entitled to assume that the Government really intended to exclude State offences from its most recent Bill, the one that was debated on 28 March, and that what has happened is that the authorities have now examined the tapes and have found that they reveal offences against State law. No doubt what the authorities have been asking is, 'What do we do with them now? What do we do with this material that reveals offences against the State law?'-presumably the State law of New South Wales. They probably go on to say: 'We cannot hand them to Stewart because it would be illegal to do so. We can do that only if the tapes reveal Federal crimes'. So the law has had to be changed yet again. By this casual way of saying that there was just an 'omission' from the previous Bill, the Attorney-General has added more questions to the growing list of questions about law enforcement in this country and he has added to the lack of confidence that the public now has in his performance and the Government's performance. Mr Hurford —Absolute rubbish. Mr N. A. BROWN —The Minister says 'Absolute rubbish', so let me just list some of the evidence in support of that proposition-the proposition being that the Government has now lost the confidence of the people, as has the Attorney-General, in his performance and the performance of the Government in the fight against organised crime. The people are entitled to feel that lack of confidence. The Minister says that that is rubbish- Mr Robert Brown —Of course it is. Mr N. A. BROWN —So let us look at some of the evidence. I ask a Government back bencher, the honourable member for Charlton (Mr Robert Brown): Where is the report of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union, which the Government has had since October last year? Where is the Government's response to the Costigan report? Why has the Government not acted on the recommendations of the Stewart Royal Commission? If what I am saying is rubbish, what is the answer to those questions? Why has it taken over a year for the Government to legislate to give the Director of Public Prosecutions his power to bring civil proceedings, which he has said months and months ago is an essential power? There is a whole series of unanswered questions, of which they are simply three, and they arise out of the very matters that we are debating today, because they are intimately related to the fight against crime, as is this Bill. Frankly, I cannot understand, as I have said before in this House, why it is that Government back benchers sit by and do nothing when there is a report of enormous significance, the Costigan Royal Commission report, which the Government, after eight months has still not tabled in the House-an insult to every honourable member on both sides of the House. It is an insult that eight months after the Government received the Costigan report we have still not heard its response to the recommendations in the report. As I say, there is a whole series of unanswered questions in this field, of which they are three. But there are questions in addition to those which arise out of this very Bill and the situation that arose in March when the Bill was presented to the Parliament to make the initial amendments to the Telecommunications (Interception) Act. Let me mention three of the questions which emerge from the Bill and the environment that existed when the Bill was promoted in March. The first question arises in this way. The Attorney-General said in the debate on 28 March that the terms of reference of the Stewart Royal Commission would be changed to enable it to inquire into and report on whether the Age tapes disclose offences against the law. Well, we can ask: Where are the terms of reference? Have honourable members on the Government side seen these terms of reference, which were held out by the Government as being the great new ambit which would be used to fight organised crime? Are these terms of reference buried in some Government gazette? Do we have to go hunting for them and drawing them out as though we were drawing teeth? Why is the Parliament not shown these terms of reference? Is the Parliament never to be shown the new terms of reference, which were trumpeted in such glowing language by the Attorney-General as recently as 28 March? That is one of the reasons why we say that the Government's conduct in this matter is an insult to the Parliament and to honourable members on both sides of it. That is the first question: Where are the terms of reference of the new Stewart Royal Commission? The second question relates to the indemnities. Part of the Government's terms of surrender on 28 March, when it gave up the fight on this issue, when it was seen that its case was utterly threadbare and indefensible, was that it would give indemnities to the New South Wales police whose evidence was required to prove the making of the illegal tapes. Those police officers were given 28 days to come forward to the Royal Commission and give their evidence. The Attorney-General made it quite clear on that day that there were 28 days in which the police officers had, in effect, to put up or shut up. The way he put it, in his own words, was as follows: I make the point that we would expect all police officers concerned to come before the Commission within 28 days from this date. We see no reason for any longer period. Mr Robert Brown —Hear, hear! Mr N. A. BROWN —The honourable member says 'Hear, hear!', and, with respect, I agree with him to that extent. They should have been required to act. But if words mean anything at all, the statement by the Attorney-General means that the police officers had 28 days from 28 March to come forward. We ask: Have they done so? Will the Attorney-General leave this matter of enormous public significance up in the air and never tell us what has happened? Have they come forward? Have they asked for indemnities? Have they made available evidence going to the root of organised crime in this country? Indeed, have they accepted the terms of the indemnities that the Attorney-General offered, or the terms of the indemnities that Senator Gareth Evans offered, which were somewhat different? Have the police accepted the terms of the indemnities with the gloss that Senator Gareth Evans put on the indemnities, which was a gloss to the effect that they could actually be revoked, believe it or not, after the policemen had given evidence that he had engaged in illegal phone tapping? That is the indemnity that Senator Gareth Evans was holding out to the police when he was speaking on that subject in the Senate. They would be very brave souls indeed if they had accepted such an indemnity. But all that we want to know is whether they have accepted the terms of the indemnities and whether any indemnities have been granted. This is a matter of considerable public interest on which the Parliament is entitled to be informed. As the 28 days have now well and truly expired, has some extension been granted? If so, we are entitled to know about it. When I say 'we', I do not mean simply Opposition members; I mean the House as a whole. The Attorney-General simply cannot bury this matter or wave it away as if it is something that will just go away. So that is the second question that arises out of the legislation before us. The third question is: What about illegal phone tapping in the future? The Attorney-General said in his speech on 28 March that there would be no protection for illegal phone tapping by police in the future. He said that it was to be limited as from that day. I think that he was right in saying that. He must have been right. The Attorney-General said that we would not be countenancing any further interception merely because the Bill was being introduced on 28 March. He made it quite clear that the Government was drawing the line at 28 March. In effect, he was saying to police officers in New South Wales: 'Do not come running to us about indemnities for illegal phone tapping in which you engage after this date, because from this date the grille comes down'. In my speech on 28 March I pointed out that the Bill did not say that at all. I pointed out that the Bill referred to 'unlawful interception whether before or after the commencement of this section'. The Attorney-General responded by saying that he conceded the point; he described it as a good point. But he said that it was to be controlled in the new letters patent of the Stewart Royal Commission. That is another reason why we are entitled to see the new letters patent of the Stewart Royal Commission. If those letters patent, by implication or expressly, give a blank cheque to police to engage in illegal phone tapping in the future, that is utterly reprehensible and something that the Attorney-General should stamp on promptly. But the point, for the purposes of the present debate, is that we are entitled to an explanation and as yet we have not had an explanation. Where are the letters patent? When can we debate their adequacy? In any event, now that the Act is back before us tonight, why can we not amend it in the way that the Attorney-General conceded that it would have to be amended? Why do we not do that? Is this another omission? Will legislation be back here again next week, or perhaps in August, for us to debate another amendment to this Act? I hope not, but I have my suspicions because the whole thing has been dealt with in such a sloppy way that I doubt whether the Government, even at this late stage, has got it right. The most pressing question comes from the same point that I have been making: What has happened to the Government's undertaking to give phone tapping powers to the State Police in narcotics cases? What has happened to that power? Of course, on 2 April, after the drug summit, the Prime Minister Mr Hawke got up on his high horse. He was quite specific. He said: 'Look at the amazing things that we are going to do to stamp out the traffic in narcotics in this country'. He said that we would have a uniform national drug law and this and that. One of the things he said was that the essential phone tapping powers in narcotics cases would be given to the State Police. There was no qualification about that. Yet we hear rumours up and down the corridors of the Parliament that the Government cannot carry out this commitment. It cannot get approval through its own Party. It has been abandoned. The left wing has had another victory. Whether the left wing has had a victory or not, the Prime Minister has been rebuffed yet again. But there is a simple way of testing this and I will outline the test- Mr Hurford —Don't waste the time of the House with rumours. Mr N. A. BROWN —The Minister says that it is a rumour. In that case, the Minister will have no difficulty in voting on an amendment to the motion for the second reading of the Bill. Indeed, he should speak in support of the amendment because it will be specifically in line with the view of the Government which was promoted by the Prime Minister on 2 April. Mr MacKellar —It was a commitment. Mr N. A. BROWN —It was a commitment with no qualifications. It was a clear commitment. If the Government stands by that commitment, let us have a clear declaration from the Attorney-General here and now, if and when he turns up in the chamber tonight, on how the Government will extend those powers to the States. If that is now subject to qualifications, let us hear what those qualifications are. The commitment was given after the drug summit and without any qualifications. We are entitled to know whether this is still the Government's position. It was certainly held out on 2 April as a significant weapon in the armoury that the Government would draw upon in the fight against organised crime, particularly that part of organised crime relating to drug offences. We intend to give the Government an opportunity to live up to the commitment it made at the drug summit. That opportunity will be given by our moving an amendment to the second reading motion. Of course, the Bill will remain intact. Let there be no doubt about this proposition. The Opposition's position is simply and clearly that the Bill should be given a second reading but, at the same time, the Government should say by its vote on the amendment whether the Government still adheres to the view expressed as recently as 2 April that the power to intercept telephone calls should be given to State police forces in narcotics cases. It was a clear commitment. We want to know whether it is the Government's position as of today. The Government has a tattered record on this whole matter. At least it can redeem part of its reputation by supporting the amendment which will enable it to keep its Bill intact and yet add to it a firm expression of view on legalising phone tapping by State police in narcotics cases and subject to safeguards. We will see the colour of the Government's money later tonight and we will see how much of a deep and serious commitment it really has to the fight against organised crime. I conclude by saying what I have said in a different form during my remarks tonight. These are matters which go to the very root of our society. They are matters that should have the utmost priority given to them by the Government and particularly by the Attorney-General. We suggest that the Attorney-General should spend less time on his hobbies that seem to mesmerise and pre-occupy him-the hobbies of fanciful and foolish suggestions of people's constitutional conventions, absurd use of the Human Rights Commission to overrul State laws passed by State parliaments, preoccupation with legal aid being given to Mr Maher and all the other hobbies that the Attorney-General pursues with such relish and enthusiasm. Mr Hurford —You are demeaning yourself. Mr N. A. BROWN —These are side shows, side issues, when compared with the great significance of the matters concerning organised crime. We are dealing with official corruption and murder. As honourable members have probably read in the newspapers today, we are dealng with the deaths of hundreds of young people in this country as a result of drug abuse. The Minister should not give me the nonsense about me demeaning myself. It is the Attorney-General who is demeaning himself by his flippant preoccupation with hobbies and his absolute dereliction of duty on the far more significant matters relating to the fight against organised crime in this country. This amendment is to be seconded by the honourable member for Warringah (Mr MacKellar). I move: That all words after 'That' be admitted with a view to substituting the following words: 'whilst not declining to give the Bill a second reading, the House is of the opinion that (1) telephone interception powers can be a valuable aid in the investigation of drug trafficking; (2) the Commonwealth should extent such powers in relation to drug trafficking to the States, subject to stringent controls being exercised over their use, and (3) those controls should include a requirement for judicial warrants'. Mr DEPUTY SPEAKER(Mr Drummond) — Is the amendment seconded? Mr MacKellar —I second the amendment and reserve my right to speak. Mr SPENDER(North Sydney)(8.38) —We have an empty chair in this House. The empty chair is that at the table which should be occupied by the Attorney-General (Mr Lionel Bowen). He has sent someone else in his place. Given the Attorney-General's record for ineptitude, incompetence, indolence and confusion in the handling of this matter, I can well understand why he should do that. The Attorney-General is a most likable man. Mr Hurford —Have you found out why he is not here? Mr SPENDER —No, I have not been informed why he is not here. I would very much like to see him here. Mr Hurford —Why didn't you ask? Mr SPENDER —As he is in charge of the arrangement of Government Business and so is the Minister for Immigration and Ethnic Affairs, who is at the table, it could have been arranged for him to be here. Why does not the Minister keep quiet until the end when he can have his own say, pitiful though it will be. I return to the real issue which has been put to the House so eloquently by the honourable member for Menzies (Mr N. A. Brown). I was not here all the time but I heard his speech. I concur entirely with it. What are we faced with? We are faced with an amendment which should have been made when the original amendment to the Telecommunications (Interception) Act was introduced back in March of this year. Let me just run over a few of the facts so that there can be no doubt as to the reasons why we are here. It has been dressed up, of course. One or two other reasons have been given, but we hope that the heart of the matter is that this Government is interested in the pursuit of organised crime, although curiously enough it is so interested in the pursuit of organised crime that not one single member of the Labor Party is listed to speak. I wonder why? Is it because they are not interested, or is it because they have been muzzled? We probably will not learn. I do hope one or two of them stand up because I have respect for quite a number of the members of the Government. I have a real liking for the Attorney-General, but his record in this matter has been lamentable. Honourable members should remember what took place. On 28 March a Bill was introduced and scant notice was given to us. The Attorney-General in his second reading speech referred, amongst other things, to his consultations with the New South Wales Government. He said: The course of action which has been arrived at- Mr N. A. Brown —He has arrived. Mr SPENDER —I am very glad to see him, because I would much rather say these things to his face than when he is not here. He said: The course of action which has been arrived at, in agreement with the Government of New South Wales, is as follows- He then sets out the course of action. That course of action related to the granting of indemnities and the enlargement of Mr Justice Stewart's terms of reference. He says: Mr Justice Stewart remains satisfied at the conclusion of the inquiry that the actions of the person concerned were carried out for the sole purpose of gathering information for use only in the investigation of crime. He was referring to the police officers who apparently continued to monitor and intercept telephone calls up until some time in 1984. He went on to say, in talking of the terms of reference: New South Wales will establish terms of reference for Stewart J. similar to the Commonwealth terms but in respect of State offences. The proposed Commonwealth terms of reference have been discussed with the New South Wales Government- It no doubt crossed the Attorney-General's mind and that of his advisers that since what the police were concerned with was the interception of telephone calls taking place in New South Wales and since this had apparently been taking place over many years, was systematic, highly organised and for the purpose of finding out what was going on in the criminal world and, no doubt, of gathering evidence, the offences with which the police were likely to be concerned were offences against New South Wales law. I pointed this out to him. During the debate I pointed out that there was a deficiency in the definition of the kind of information which could be handed over by the police to Mr Justice Stewart. I stated: That material is further defined as meaning: . . . a document of information . . . that discloses the commission of an offence or the possible commission of an offence against a law of the Commonwealth or a law of a Territory. I went on to say: In passing, I ask why do we not have the words 'a law of a State' in there as well, since we are, after all, concerned with that when we come to section 7BA (4). If honourable members look at section 7BA(4) of the amendment which was introduced on that day-that is on 28 March-they will see that there is a reference there to offences against laws of States. I went on to say: Putting that blunder to one side, the question that needs to be asked is: How is a person in possession of material that Mr Justice Stewart should see going to make for himself the decision as to whether or not that material discloses the commission or possible commission of an offence? Members of the House will recall that the definition which appears is a constrained definition. But the plain fact of the matter is that the legislation was intended to be aimed at the supplying of material to Mr Justice Stewart that was relevant to evidence concerning the commission of offences against the laws of a Commonwealth, the laws of a Territory and the laws of a State. A first year law student could not, one would think, have made the kind of blunder that was made by the Government in introducing this legislation. The Attorney-General was here. He commented upon the speeches that had been made; he commented upon my speech and he said-I will remind him of it later-that if there were further amendments that needed to be made in one respect he would bring the Bill back to this House. It is difficult to conceive how such a fundamental and basic error could have been made by anybody with any grasp of what he was seeking to achieve. But it is precisely that achievement, one of glittering eminence, which the Attorney-General managed. Now we are being told that one of the reasons the Bill is before the House is contained in the following passage of the second reading speech: The Act also makes a number of minor amendments. Honourable members should note the use of the word 'minor'. The passage continues: The first is to rectify an omission in the Telecommunications (Interception) Act 1985 passed by the Parliament earlier this year. The amendment in question referred to documents or information which may be given to the Stewart Royal Commission of Inquiry into Drug Trafficking. It included a definition of unlawfully obtained material, as meaning certain documents or information which disclosed the commission or possible commission of an offence against a law of the Commonwealth or a law of a Territory. This Bill adds to that class certain documents which disclose the commission, or possible commission, of an offence against a law of a State. That is the whole purpose of this Bill and the rest, as has been pointed put by the honourable member for Menzies, is sheer window dressing. If one excluded the ability to use the information that will be given to Mr Justice Stewart for the purposes of prosecutions against a law of a State and in particular I would think the law of the State of New South Wales-a State which, I regret to say, must be regarded as the crime State of the Commonwealth-effectively this whole exercise which the Government has been forced into of enlarging Mr Justice Stewart's terms of reference and of providing indemnities to police would have been frustrated. Yet reading the second reading speech one would have thought it was just a small oversight, one that had come to the notice of the draftsman afterwards, a matter which was nothing more than a technical matter, a small matter, a trivial matter and one that we should accept and not comment upon because, after all, we all make mistakes. It is perfectly true; we all do make mistakes. As I said about the Attorney-General before he came into this House, he is one of the most likeable people here, but his record in this matter is perfectly appalling and the record of his Government is perfectly lamentable. No excuse has been given and no excuse has been sought to be given for the reason why, when the error was pointed out by me in the course of debate in the clearest of possible terms, an amendment was not produced, circulated around the chamber and agreed to. We would have agreed to it instantly because it is the desire of the Opposition to ensure that Mr Justice Stewart's Royal Commission and his National Crime Authority operate with the greatest of expedition and in the most rigorous manner. What do we have? We have an excuse which does not even have with it, one might say, the courtesy or the courage of acknowledging that what took place was not just an omission, that it was sheer incompetence and that there was an inability to recognise in the course of parliamentary debate that a blunder had been made. But there was an opportunity to retrieve with grace that blunder and to say: 'Yes, I acknowledge that a mistake has been made. I thank you for pointing out that a mistake has been made. We will deal with it now'. As it is, the time of this House has to be occupied by debate on a Bill that has been brought forward for one purpose only and that is to overcome a central deficiency in the legislation that was proposed on 28 March 1985 and to add to it one or two pieces of window dressing to try to convince the House and the public that there is really something more to the Bill than an attempt to gloss over the ineptitude of the Government, the Attorney-General, and all those involved in the drafting of that Bill. I pass to one other matter which was treated with a little scorn by the Attorney-General. I ask him this time to listen very carefully to what I have to say. I drew his attention to the fact that the High Court had split on the question of whether illegally obtained intercepts were to be allowed to be used in evidence. In Mr Hilton's case the High Court split 3:2 on that issue. I pointed out to the Attorney-General, and I point out again, that we are here concerned with organised crime. We are here concerned with intercepts that stretch over a number of years. We are here concerned with matters we can only assume are related to very serious criminal activities. Does anyone in this House believe that a person charged with a serious crime will stand by and allow himself to be convicted on the basis of intercepted telephone calls, when he knows that the split was 3:2 in the High Court and that the chances of the High Court allowing the question to be reopened must be excellent because of the high importance of the question and the narrowness of the decision? He knows that if he is successful and the High Court determines that the minority view is correct, he will escape. For that reason I ask the Attorney-General to accept an amendment that has been circulated in my name. I shall deal with the amendment at the Committee stage, but the effect of it is to make plain that, in the case of evidence that is unlawfully obtained but is unlawfully obtained within the confines of the particular amendments that have been made to the Telecommunications (Interception) Act, that evidence may be used in criminal proceedings for the purposes of prosecutions in a State or Territory or against a breach of Commonwealth law. The law would not otherwise be affected as to admissibility of evidence. On the basis of the amendment I propose, it would still be entirely a matter for the court as to whether or not on other grounds, which have been laid down by the High Court, evidence that has been illegally obtained should be excluded. The amendment gets over the problem we will face-that the matter will be re-argued in the High Court, that is, the question as to whether evidence that has been illegally obtained through intercepted telephone calls may be used. It will also get over the possibility that the High Court might reverse its own decision on that point. The Attorney-General made this very clear in the course of his answer to me on page 1092 of House of Representatives Hansard on 28 March. When I said there might be a full High Court hearing, he said: There might be, but I will give him an undertaking that if we find any difficulties in this area we will bring the matter back. Must we really face the prospect of having this matter brought back again? Why cannot we once and for all overcome all difficulties that may lie in the way of the use of the intercepted material so that Mr Justice Stewart can get on with his business, the law enforcement authorities can get on with their business, and those who deserve to go to gaol, go to gaol. I am reminded of a Press release by the Attorney-General. I read it with some irony. It is rather in the Harry Truman style that 'the buck stops here'. The Attorney-General made this Press release on 27 March 1985, in relation to Mr Trimbole. He called it 'The Liberals' Lost Treaty'. We are all glad to know that since Mr Trimbole has left Ireland we now have an extradition treaty with Ireland. That is of great use. I believe we also have one with Finland, and one can only say that that is an achievement of the first magnitude. The Attorney-General said: The draft treaty died a slow death under the Liberals. He went on to say that he did not blame the Department officials for the blunder-the blunder of the first order which appeared in the legislation of 28 March-and he added bravely, courageously and directly: It is a matter of who is the boss-the Minister at the time. The Attorney-General was the boss, he was the Minister at the time, it was his blunder, and I would be glad to hear him admit it with grace and courage, directly to us all. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(8.57) —I thank the honourable member for North Sydney (Mr Spender) for his remarks. I am quite happy to admit that there was an omission in the Telecommunications (Interception) Act and that it should have included reference to the law of the States. That is true and that is why we are bringing in the amendment now. We are not bringing it in for all the extraordinary reasons that were advanced by the honourable member for Menzies (Mr N. A. Brown), who suggested that we have something to hide and that something has suddenly been discovered. Quite frankly, this was an arrangement made with Mr Justice Stewart, pursuant to letters patent, to enable him to carry out further investigations because of allegations that police in New South Wales had information. That is the position and, quite frankly, there is also a State Commission which has letters patent, issued simultaneously. That was why there was a need for urgency with the legislation. The letters patent in the State refer to offences committed within the State. Let us make it very clear that the letters patent for this area relate to matters where offences can be against the law of the Commonwealth or a Territory. I will take the responsibility for not putting it in the legislation, but in fact the draftsman was following the terms of the letters patent. Honourable members must understand that. It is a matter of whether there is an offence relating to the Commonwealth, a Territory or a State. It is for better that we have put in here the word 'State'. I admit that. The honourable member for North Sydney raised the matter and he is fully entitled to the praise. The Leader of the Opposition did not and no amendment was moved in the House, but I am not criticising that. The honourable member for North Sydney raised it and he goes to the top of the class for thinking of this matter. However, the issue at the moment is what sort of material should be made available. It is a question of whether unlawfully obtained material should be made available. As the honourable member is so anxious to refer to the Hilton case, he will know why by a majority of 3:2 the High Court in that case also said that from the point of view of illegally obtained material, there was really no offence. If, in fact, that material was illegally obtained it could be transmitted. If the honourable member wants to argue this from the point of view of transmission of material to Mr Justice Stewart, then that is all it is-the transmission of material to Stewart. One could say that, technically, there is no need for this provision if one follows the decision in the Hilton case. I am not here to argue that position. The term of the definition here is for better assurance, so that we might clearly indicate that Mr Justice Stewart can ascertain, pursuant to indemnities-the honourable member has overlooked the whole concept of what he is about-firstly, what evidence there is and, secondly, what it leads to in terms of an offence. It must lead to the question of a criminal offence against the law of the Commonwealth, a Territory or a State. Mr Spender —Or a State. Mr LIONEL BOWEN —That is true. Probably, both. There has been an extraordinary amount of extraneous debate today about what has happened in a number of areas. Mr N. A. Brown —What are the answers? Mr LIONEL BOWEN —If the honourable member wants to know more about organised crime I ask him how Mr Trimbole was able to leave the country in his Government's period of office? Perhaps he will give an explanation. Mr N. A. Brown —Yes, we will have a debate about that. Tonight? Mr LIONEL BOWEN —No, we cannot afford to have it tonight. Honourable members opposite want to raise the issue of organised crime and the honourable member for North Sydney is anxious to talk about the treaty with Ireland, which of course relates to Mr Trimbole. It is all very well for those opposite when in government to allow such things to happen then to suggest, now that we are in government, that we should fix it. Why do they not face up to the fact that most of these problems arose during their period of office. Mr N. A. Brown —Such as what? Mr LIONEL BOWEN —Such as the offences we are talking about. Those opposite can have as many debates on this matter as they like. We are talking about a rather simple amendment to alter the provisions already passed as a matter of urgency to comply with Mr Justice Stewart's request that this sort of information be made available to him. At this stage I do not know what information has been made available to Mr Justice Stewart as he has not yet reported. That might answer the honourable member's other question as to whether we could supply further information. There might not be any; I do not know. That is a matter for him. The letters patent that the honourable member also wanted to know about are in the Commonwealth of Australia Gazette. Mr N. A. Brown —We will have to go and find them. Mr LIONEL BOWEN —I could easily give the honourable member a copy; there is no secrecy about it. Let us make that very clear. I have no objection to accepting the honourable member's second reading amendment. The offer was made to the States and they have not taken it up. It is as simple as that. Mr DEPUTY SPEAKER(Mr Drummond) — The original question was: That the Bill be now read a second time. To this the honourable member for Menzies has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is: That the words proposed to be omitted stand part of the question. Those of that opinion say 'aye', to the contrary 'no'. I think the ayes have it. Mr N. A. Brown —No, the noes have it. The amendment has been accepted. Mr Lionel Bowen —The ayes have it. Mr MacKellar —The noes have it. Mr Lionel Bowen —The ayes have it. Mr MacKellar —No, they do not. Mr DEPUTY SPEAKER —The amendment is accepted; but there seems to be some confusion. Mr N. A. Brown —The Attorney-General has accepted the amendment, so the words proposed to be omitted are in fact omitted. But the ayes have it, by consent. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. The Bill. Mr SPENDER(North Sydney)(9.05) —I move: Page 2, after clause 5 insert the following new clause- Amendment to section 7BA-Stewart Royal Commission '5A. Section 7BA of the Principal Act is amended by adding at the end the following sub-section: '(6) Notwithstanding any other provision of this Act, but subject otherwise to the rules as to admissibility of evidence, documents or information falling within sub-section (1) may be admitted in evidence in proceedings the prosecution of an offence against a law of the Commonwealth or of a State, or of a Territory.'.'. I referred the Attorney-General (Mr Lionel Bowen) to two cases. I referred to one case by the wrong name. It should have been Bunning v. Cross, not Bunning v. Wong. The other was the Hilton case. The point I seek to make-and I wish to make it as simply and clearly as I can-is that I have a concern that the provisions which have been introduced by the Government should act according to the Government's intention. I assume that the Government's intention is as it appears in the speeches of the Attorney-General and as it appears from the Bill-namely, that certain material should be made available to Mr Justice Stewart and that he in turn will be able to make that material available to law enforcement authorities, including State and Federal law enforcement authorities. There are two principles at which one must look when one refers to the question of illegally obtained evidence. The first is that which was dealt with by the High Court of Australia most recently, I think, in the case of Bunning v. Cross. Very simply, the High Court said, as I recall, that it is a question in the public interest as to where illegally obtained evidence should be allowed to be used. On the one hand one must look to the interest that evidence which is illegally obtained should not be encouraged and, on the other hand, one must look to the public interest of securing the conviction of criminals. That is one principle and my amendment does not touch on that principle. My amendment is designed to overcome, as I sought to make clear at the end of my speech on the second reading of the Bill, the contingency which is highly likely to arise, in regard to the whole question of whether material which has been intercepted illegally may be used in evidence. Organised criminals have deep pockets. They will test the matter again. Those are the probabilities. What I seek to do-although the Attorney-General has given an undertaking, which I certainly accept, that he would bring the matter back if we had the problem in the future-is to overcome that problem before it can arise so that unlawfully obtained material which is within the confines of the precise definition which appears in the Telecommunications (Interception) Act, as amended, may be used without there being any legal challenge to its use, so long as in all other respects it is admissible. I do not facilitate its being used in evidence. All I seek to do is to overcome an interpretation of the Telecommunications (Interception) Act which would prevent it from being used in evidence and which would compel this Government to bring back the matter once again to the House. Mr Robert Brown —If we accepted that, you might regret it at some time in the future. I hope you realise the implications of it. Mr SPENDER —I appreciate the interjection. I have thought about it carefully. I do not like, as a general principle, the use of evidence which has been illegally obtained. I think we all realise that we are facing a very peculiar and special set of circumstances. It is the intent of this Bill and of what we are now considering that such evidence that has been illegally obtained should be made available and should be used. Indeed, the Attorney-General made it plain, in an undertaking recorded in Hansard, that that is his intention. I would therefore ask the House to accept the amendment, which was proffered in a bipartisan manner for the purpose of seeking to achieve what I believe we all hope to achieve. Lastly, to answer just one interjection, we must all make a balance when it comes to civil liberties and the balance is sometimes a difficult one to make. I think the Government has made the right decision in finally coming to give indemnities. I have been critical of the Government's conduct, but I do not want to go over that. I am simply asking the House, in a spirit of goodwill and commonsense, to make sure that we do not have to come back here again and to accept the amendment which I have had circulated. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(9.11) —We cannot accept the amendment for this reason: It suggests, notwithstanding any of the provisions in the legislation, that any evidence obtained in this way can be admitted in other proceedings. Let me make that very clear. The court itself has said it will use a discretion, whether it be Bunning v. Cross or the Hilton case, notwithstanding that it is illegally obtained. But in this case we have a royal commissioner who will go through the process, firstly, of ascertaining whether there is any evidence, and, if there is, of giving an indemnity. Once that is the position and a criminal prosecution follows, the person who was aware of the offence would be actually giving the evidence. It would not be a question of evidence of a document or other information; it would be a question of evidence of the most primary kind. It would be evidence, obviously, as to what the witness is able to say at first hand happened. Mr Spender —Which he heard. Mr LIONEL BOWEN —Not only that. The mere fact of hearing it would not be evidence of the commission of the crime. There would have to be further evidence of the commission of the crime. The mere fact of hearing something as such would not lead to evidence of the crime. It might lead to information that would relate to evidence of the crime. Mr Justice Stewart, I am sure, will pursue these matters further. Having got the preliminary information, if it is available, that there has been some evidence given by a police officer as to the position, the police officer would surely go on to say, of course, that there is other evidence that relates to the commission of an offence. A charge would then be laid and that police officer or other police officers, I would think, would be able to give evidence of the commission of the offence. That is the position. So we would not be relying merely on the fact of a voice being heard on a tape; we would be talking about the real issue of a commission of an offence. That is the distinction. Whilst the honourable gentleman is anxious to say that the tape can always be admitted in evidence-that is basically what he is saying-although it might have been illegally obtained, I make the point that what Mr Justice Stewart is doing is saying that the person concerned can in fact come along to court and be given an indemnity on the basis that he did an intercept but the evidence now is that he knows, following that intercept, of the commission of an offence. It is the offence itself that we would be concerned with, not so much the fact that there was secondary evidence supported by a conversation. If the court felt that it was not convinced that that was sufficient and it wanted to hear the tape, it would be a matter of discretion as to whether it would be admitted. From my point of view, it could not be admitted here on the basis of a blanket provision that we are now going to alter the whole concept of illegal intercepts on the understanding that because there is an amendment before the chamber they can be admitted in evidence, bearing in mind the whole concept of section 7BA at present is to enable material to be given to Mr Justice Stewart so that he can commence an inquiry as to whether there is any criminal offence that can be proved. I make the point that it would not be just by admitting a tape as evidence, which is what the honourable member seems to think is what is needed. I put it to him that it would be on the basis of having evidence given by a person not only related to what he might have heard over a telephone intercept, but also as to the facts of the commission of the offence, which would be really the issue that related perhaps to the telephone conversation, not the conversation itself. From that point of view, I do not accept the amendment. Mr SPENDER(North Sydney)(9.15) —I do not want to take up time on this matter as the Government has a very firm view on it, but I wish the Attorney-General (Mr Lionel Bowen) to understand the purpose of the amendment, which perhaps I have not made clear. I would like to try again. The whole purpose of the exercise is to produce proof of the commission of an offence. The offence may be conspiracy to murder or drug-running. For the purposes of securing a conviction, it is often highly material to have a conversation between the defendant and another witness, when a witness comes along and says: 'Yes, I heard X and Y say that they intended to murder Z'. After all, this is characteristic of the way in which matters are proved in criminal courts. One starts with a substantive offence and then thinks about how one goes about proving it. There is no better evidence than a document which a man has signed-we do not have that case here-and little better evidence than a conversation recorded between two individuals in the course of which they set out, for example, the details of a criminal enterprise which they intended to engage in and which is subsequently engaged in. It facilitates the proof of an offence and it may be central and essential to the proof of an offence. I am not seeking in any way to affect otherwise the admissibility of evidence. I point out to the Attorney-General that the mere fact that indemnities have been given has no bearing one way or the other on the question of whether the High Court of Australia might say that illegally obtained evidence-that is, evidence obtained through intercepts which are contrary to the Act-cannot be admitted in evidence. That is all I seek to overcome and I would have thought that the Minister's advisers would seek to overcome that too. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(9.17) —The letters patent make it very clear, first, where there is any evidence, and the only suggestion that there is any evidence is a suggestion made by certain people in New South Wales that there may be tapes of intercepts. It is also known at present that a version of what are called the tapes, then known as the Age tapes, has been made available to Mr Justice Stewart and it does not disclose any offence. That is the problem-the tapes do not disclose any offence. Mr Spender —There are the further tapes, in the two or three years since. Mr LIONEL BOWEN —I was asking whether there were any. That is not known as they have not yet, so far as we are aware, been produced. But the whole concept is to say that if there are tapes and they lead to information, Mr Justice Stewart will be able to get that information by giving the indemnity. The point on which I disagree with the honourable member for North Sydney (Mr Spender) is that if they lead to information and to the suggestion that there has been the commission of a criminal offence, in my view, that evidence has to be led in the sense of a witness coming forward, not the tape itself. That is the point. I cannot afford to have an amendment admitted here to the effect that any evidence at all-documents or information-can be admitted. I think that is far too wide. The question at the moment is: Is there evidence before Mr Justice Stewart? We still do not know. If there is and he says that there is evidence that would lead to a belief that there was the commission of an offence, the evidence would not be solely related to hearing a conversation but, in my view, to the police officer being able to say that, having followed the matter up, he had other evidence; he had interviewed certain people; he had admissions or otherwise from them; he had other evidence in support of what was obviously intelligence information gathered by listening into this intercept. That is the point. In many cases criminal proceedings have taken place following illegal intercepts. Never once in those instances was it necessary to talk about the tape. It was necessary to use the intelligence then to go and get the evidence. That in fact has already happened. Amendment negatived. Bill agreed to. Bill reported without amendment; report adopted. Motion (by Mr Lionel Bowen)-by leave -proposed: That the Bill be now read a third time. Mr N. A. BROWN(Menzies)(9.20) —There was some difficulty in the procedural aspects of the motion put with respect to the second reading amendment. Despite that, the substance of the situation that emerged was quite clear. I think that the Attorney-General (Mr Lionel Bowen) said: 'We accept your amendment'. We note that the Attorney-General has said that he did accept our amendment. That indicates that the Government still maintains its position that it will give, in narcotics cases, the power of phone taps to State police, subject to stringent controls, exactly in the words used by the Prime Minister (Mr Hawke) after the drug summit. I note that and I note also the Attorney-General's position that this power has been offered to the States and they have refused it. I assume by that that he means all States. Mr Lionel Bowen —That is not so. You have got it wrong. Mr N. A. BROWN —We understand that the Government's position is that it is prepared to accept our amendment and its position is exactly as the Prime Minister stated on 2 April after the drug summit. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(9.22) —I want to make an explanation. I said that it has been offered to the States and they have not taken it up. I do not know why the honourable member for Menzies (Mr N. A. Brown) did not get that right. He said that they have refused it. They have not taken it up. On the question of procedure, there was some confusion because the amendment stated: 'That all words after ''That'' be omitted'. That meant that 'the Bill be now read a second time' was omitted. The Clerk and I have been in a state of confusion ever since. I will admit that the Clerk is not confused, but the Parliament was in a state of confusion as to how we could get approval to read the Bill a second time when we had agreed to the Opposition's amendment. Having agreed to that amendment, the Bill still had not been read a second time. That is the problem we seemed to face. I know that the Clerk does not agree with me, but the fact that the Opposition's amendment omitted all words after 'That' meant that the Bill was not read a second time. We were all agreed that it should be read a second time with the Opposition's addendum. Maybe that would have been a better way to put it. Perhaps some day the procedures of the House can be brought up to date so that we can at least agree to a Bill being read a second time with an addendum as to an expression of sentiment which will in no way affect the Bill. Mr N. A. Brown —As in the Senate. Mr LIONEL BOWEN —Yes. Question resolved in the affirmative. Bill read a third time. Debate resumed from 9 May, on motion by Mr Young: That the Bill be now read a second time. Mr MacKELLAR(Warringah)(9.24) —The National Crime Authority has had to begin its work in conditions which have not truly reflected the very keen public desire to see the practitioners of big crime and corruption brought to heel. I think it is fair to say that the nation has been generally bewildered by the vast range of allegations about the activities of major criminals, particularly in New South Wales, the multiple number of inquiries and the even greater number of reports and findings. I guess many people will wonder why today, after two years of Labor Government, we have yet further legislation to bring the National Crime Authority into greater effectiveness. The story of the need for the National Crime Authority to deal with big crime goes back to the Royal Commission on the Activities of the Federated Ship Painters and Dockers Union conducted by Mr Costigan, QC, on behalf of the Victorian and Federal governments. The royal commissioner discovered, of course, corruption on a massive scale. What was especially important about the Costigan inquiry-this explains the significance of the legislation before us-is that it discovered the need to follow the money trail left by the corrupt and criminal elements. The trail was one which could be best followed through the taxation records and the banking system. Thus Costigan virtually proceeded not so much in the way of an ordinary commission of hearing and taking statements and testimony, rounding off with a report. Rather he proceeded as police or an investigative authority-tracking criminals through many aliases, subtefuges and rackets by the processes of seeing where the money went. Mr Costigan's investigations remained, for the greater part, confidential. They provided material which needed to be tested for its usefulness in a prosecution. Of course, there were gaps in the work but the hard fact was acknowledged. Costigan would have made little progress if he had not had, as a royal commissioner, the power to look at the taxation records. At the same time as Costigan was conducting his investigation, a royal commission set up by the Commonwealth, New South Wales, Queensland and Victorian governments went to work on investigating the drug scene and the crime associated with it. In 1982-three years ago-the Fraser Government proposed legislation to empower a Federal crime commission with powers similar to those which are before the Parliament. Mr Justice Sir Edward Williams was appointed to run the new National Crimes Commission. Before he took office an election was held and an Australian Labor Party Government was returned. The Fraser Government was keen to act on the work unfolded by the Costigan and Stewart inquiries. But one of the first actions of the then Special Minister of State was to suspend the Fraser legislation. As I have said, the legislation was designed-as we find the legislation before us is designed-to follow the money trail. The Minister, with the powerful support of the New South Wales Labor group, wanted to build in delays. The Government set aside consideration of legislation for six months-I repeat that that consideration was set aside for six months-while it made a new assessment. We all know that the delay meant that the legislation to succeed the Crimes Commission was weaker in its effect and was guaranteed not to be effective in creating a well-oiled administration to take over from Commissioner Costigan. The debate on the matter went on at a national level and right through the elections. The Opposition has been persistently consistent in saying that the National Crime Authority would be toothless if it did not have adequate power. Certain added powers are being given to it by today's legislation. So we have had a delay built into the national attack on crime, a delay, let me remind the House, built in by this Government. The Government's indecisiveness is explicable only in terms of pressures from the New South Wales ranks of the Labor Party. They seemed unwilling to endorse Mr Costigan's approach. While Mr Costigan was active Mr Justice Stewart was also vigorously pursuing a separate line of approach in the Royal Commission of Inquiry into Drug Trafficking. This was illustrated by the action this parliament had to take last year to make the passport system less susceptible to use by criminal operatives. The Stewart Royal Commission's seemingly marginal inquiry into passports uncovered a history of criminal misuse of the passport system by such people as Robert Trimbole and associates and by the notorious trafficker Terrence Clark and associates. Mr Justice Stewart pointed out that most heroin was smuggled into Australia by individual carriers using aircraft. In chapter 4 of the report of Mr Justice Stewart's inquiry into passports we read that Clark killed in the course of his activities. The inquiry was assisted by Queensland secret tape recorded evidence. I just remind the House of that-that inquiry by Mr Justice Stewart was assisted by Queensland secret tape recorded evidence. Last year the Parliament had before it this report of the Stewart inquiry, associated as it was with the new passport legislation. In view of the discussions we have had tonight and previously, it is interesting to note that the use of Queensland police tapes was not reprehended, and the report was available at a time when resistance to the New South Wales police tapes was being mounted by the then Attorney-General. After much public agitation and pressure from the Senate, all of the New South Wales police tape material, held up for public suspicion so unreasonably, is in the hands of Mr Justice Stewart, who is conducting a special inquiry in the capacity of a royal commissioner. This episode is an unpleasant piece of history for this Government's reputation. It is a history of delay. It is a history of specious argument. It is a history of manoeuvres by certain sections of the New South Wales Australian Labor Party to railroad pressures for an inquiry. Such pressures still monitor and influence the operations of the New South Wales Government which, through its membership of the Inter-Governmental Committee, has the power to influence the initiatives of the Crime Authority. As a result of the activities of Mr Justice Stewart and Mr Costigan, the Fraser Government had enough terrible evidence of major crime operating through our national institutions that the case for some special process of attack needed to be put in hand. The machinery of ad hoc royal commissions and the ordinary powers of police enforcement simply were not adequate. Mr Costigan had clearly justified the need to follow the money trail as an essential part of a new investigative process. That is the subject of the legislation before us today. I am interested to note that he was not alone. I am indebted to Senator Missen for drawing attention to the fact that Mr Justice Moffitt, when President of the New South Wales Court of Appeal, and a man with considerable experience as a royal commissioner investigating organised crime in New South Wales, argued the case for the kind of legislation we have before us. In a paper delivered to the Fifty-third Congress of the Australian and New Zealand Association for the Advancement of Science in 1983, he said: Great damage to the economy, to the fabric of our society and to government's institutions and individuals is already flowing from organised crime. On the economic side there are the losses suffered by individuals and by institutions such as banks and insurance companies as a direct or indirect result of this class of crime. Most of these losses flow onto the public generally. There are also great losses to persons operating legitimately caused by unfair competition. So the negative economic effect of big crime, which is so easily overlooked, cannot be dealt with except by following a process of inquiry down that money trail. This legislation amending the Taxation Administration Act waives the refuge to criminal activity afforded to legitimate activities by the taxation legislation. It denies to the criminal the protective aspects of the legislation. This aspect should be borne in mind also in respect of the powers of the Director of Public Prosecutions. It is important that the resources are there not only to discover the criminal process but also to deprive the criminal of his ill gotten gains. Mr Justice Moffitt went on to emphasise the terrible effect on morale and business behaviour when national standards are eroded by master criminals in pursuit of ensuring immunity from their corruption. He said: Where the crime goes unchecked, there is a temptation to businessmen to do things they would not otherwise do in order to compete or stay in business. Quite apart from loss of tax from the tax evasion crimes, large losses of tax occur from ordinary organised crime, as no tax is usually paid on the profits earned. This increases the burden on other taxpayers. Great personal loss and suffering is caused to victims and persons drawn into its operation. Once within it, it is difficult to escape from it. Fear, violence and death and the corruption of many sections of the community weaken the social fabric of the community. Corruption of officials undermines public confidence in public offices. Such corruption and inactivity or fancied inactivity undermine public confidence in governments, political parties and persons generally in authority. The extent of the damage is in my belief very great, but it is not possible to quantify it. So it was not only Mr Costigan who argued strongly for powers to follow that money trail. The Government has so pursued its course against the careers of big criminals that it has created a deep national suspicion about the seriousness of its resolve to follow up on the work of the Costigan Royal Commission. The fact remained that the Government suspended the Fraser legislation and was not to succeed in getting its weak substitute legislation through the Senate. The Senate Standing Committee on Constitutional and Legal Affairs went through the legislation thoroughly. In respect of taxation the Committee in 1983 said: The Bill should be redrafted to provide for the Authority, in exercising its ordinary functions and powers, to receive from the Commissioner of Taxation information relevant to taxation or tax-related offences. In May 1985 we see the realisation of that recommendation. It has been a very slow process indeed and it is no wonder that the Government's position on this matter has been noted in public opinion for its reluctance and its evasiveness. One important clause which is omitted from this legislation but which existed in the Fraser legislation concerns the capacity of the Authority to co-ordinate its activities with activities of authorities overseas performing functions similar to those of this Authority. It is difficult to see why the power to interact with similar bodies overseas has been removed by this Government. It is obvious that the Authority will be the custodian of important Australian experiences which might assist other countries fighting the same criminal network or its like. The fact is that big crime lives off international connections and the more the Authority can co-ordinate its efforts with other overseas bodies with similar functions the better. It would be interesting to have the explanation of the Special Minister of State (Mr Young) about the argument put to him for omitting this function. Such an explanation will throw the first available light on it. Maybe there is no serious explanation at all. But if there is, the House should know of it. It seems to me then that the legislation as it stands is deficient in one important aspect. I will return to that matter shortly. The Act, through the Schedule, lists Acts with secrecy provisions which could conflict with the powers of the Authority to compel information. In the original Act of 1984 the Schedule was confined largely to taxation Acts. The effect of this Schedule is to permit any officer of the Commonwealth to respect the secrecy position if, in his judgment, it is not appropriate to respond to the Crime Authority. There is a test of reasonableness in the Act and it has been worded in this Bill as follows: (4) Subject to a prescribed provision, but notwithstanding a secrecy provision . . . a person shall not, without reasonable excuse, refuse or fail to comply with a notice served on the person under this section. Clearly, though, the weight of authority lies with the public servant obliged to defend his information under the secrecy provisions of the Act for which he is administratively responsible. He is less concerned to oblige the Authority. He is answerable for creating precedent for breaking the secrecy provisions of his Act. He will obviously be cautious about doing that. He is not allowed by this legislation to do this to a point of unreasonableness. But how is that to be tested? Who judges whether it is appropriate not to give information? Who judges that a refusal is unreasonable? The Authority has the power only to make a request. It does not have the power to determine its outcome. Who does have that power? The Minister, in his second reading speech, said: Guidelines will be developed, in consultation with the NCA and the various agencies concerned, covering the types of information which could be released and which ought not be released. The guidelines could, for example, indicate that in relation to information under the Health Insurance Act, patient medical histories ought not, as a general rule, be released; whereas details of a person's name, address and whereabouts could be released. The Minister will be responsible for authorising guidelines to narrow the discretionary powers of the officers responsible for upholding the secrecy provisions of the legislation entrusted to their administration. Guidelines, we are told, will be negotiated. We can all just imagine the bureaucratic infighting which will go on here, infighting between bureaucrats of which the Minister, of course, will remain largely innocent. Then presumably the guidelines will have a dual effect. They will virtually say what the Authority cannot ask for and what the officers responsible for the legislation should not unreasonably refuse. So here we have a process: The Schedule to the Act lists legislation with secrecy provisions, the effect of which could, if upheld, impede the Crime Authority in its work. The Schedule is quite lengthy. It covers a considerable range: The Administrative Appeals Tribunal, air navigation, the Australian Security Intelligence Organisation, conciliation and arbitration, the Freedom of Information Act, various health Acts, price surveillance, social services, the Reserve Bank of Australia, et cetera. Let me point out that the Schedule has decreased the access of the Authority. It may well be correct to do so. A balance has to be struck. But I underline that it cannot be done without the effective involvement of the Minister. In relation to this point we note and underline the Minister's undertaking given in his second reading speech: After one year, the Authority will report to me on requests made under the proposed section 19A, including on the number, nature and outcome of requests, the information obtained and the use to which it has been put. A copy of the report will also be forwarded to the Parliamentary Joint Committee on the National Crime Authority. I believe that the Minister has clearly placed himself under a sensible and responsible obligation to ensure a reasonable compliance with the needs of the Authority. I would like him to acknowledge that that is his intention. I note that he does so. Mr Young —And the Joint Committee. Mr MacKELLAR —It is also the intention of the Joint Committee. I thank the Minister for that added underlining. It is obviously reasonable to predict that the Parliamentary Joint Committee will follow up the matter very closely. Indeed, I see value in the guidelines also being made available to the Committee. It is very live in the minds of people on this side of the House that New South Wales opposed the Fraser legislation and, later, the National Crimes Commission. I think the New South Wales Attorney-General at that time was Mr Walker. Victoria was watchful about legitimate State interests. The other States were co-operative. The essential ingredient of the Fraser Government's legislation was that it upheld the responsibility of the Federal Government to investigate breaches of the Federal law. No other government can be asked to take that responsibility. If governments cannot be asked to accept that responsibility, they certainly should be given no power to detract from the exercise of that responsibility. The power conferred on the Authority was free from all the ifs and buts of the present legislation. The operative sentence is that the functions of the Commission are '(A) to investigate of its own motion or at the request of the Attorney General'. The Commission was obliged to keep the Attorney-General informed of its operations. Provision was made to confer on the Commission an authority to investigate offences against State laws if the State so chose to confer the power of investigation. The Commission would work in co-operation with all police officers, both State and Federal. The Attorney-General of the Commonwealth could not, without the authority of the State concerned, give directions where the Commission was performing functions pursuant to State request. That arrangement empowered a Commonwealth body to defend Commonwealth law and empowered the Commission to accept State tasks by arrangements under wholly proper conditions, protective, of course, of State rights. The important thing is that the Fraser Government Commission could initiate investigation of its own motion and it had the power to compel evidence. What we have in the Crime Authority is something quite different. We have a Commission which cannot initiate investigations into Commonwealth breaches on a basis where it can compel evidence to be submitted to it. Before it can get into that situation it has to get a reference from an inter-governmental committee, even in respect of an investigation into solely Commonwealth legislation. That is the price paid by this Government because of the agitations in the New South Wales Labor Government and the New South Wales Labor Party to confound the attack on crime. We on this side of the House have felt very concerned from the very beginning about this situation. The desire to involve the States to the maximum is understandable, but the powers of the Inter-Governmental Committee are too great in respect of the Authority's responsibility to investigate Commonwealth law. It requires a system of notification and discussion which would alert any major criminal system which had acquired the power of intimate knowledge of government decisions. Clearly, the power of the Authority to investigate of its own motion as well as the power to act on behalf of Federal and State governments is vital. The Leader of the Opposition (Mr Peacock) has been defeated in his efforts to strengthen the legislation to create the conditions for the Authority to be less governed by the Inter-Governmental Committee. He was concerned to put the Authority in a position to initiate its own inquiries using the power to compel evidence. Such powers are only now available in circumstances where the Committee gives a reference. The Leader of the Opposition expressed his concern that lack of coercive power vested in the Authority as of right slowed down the follow-up to Costigan. That is a point which has been debated and defeated by the Government simply on the numbers. I do not intend that we resume this matter by attempting to resubmit the amendment proposed by my Leader but it remains on the table as the policy of the coalition. I would, however, invite the Minister to consider the need to strengthen the power of the Authority to co-ordinate its activities with other governments. Accordingly, as I mentioned earlier, I intend to move an amendment at the Committee stage to increase the functions of the National Crime Authority. This function was included in the original Fraser Act. I hope that the Government will support us on this amendment as it will greatly assist the Authority in its tasks. To sum up, the tortuous, laborious road the Government has taken to face up to major crime in this country is demonstrated by the process by which the Government has moved since it came to power. It hopped in immediately to consign the Fraser legislation to the waste paper basket and then, starting afresh, it has to be pummelled into getting a meaningful Act through the Labor Caucus and the Parliament. We have made considerable progress, not least as the result of the embarrassment suffered by the Government during the recent election campaign. That process of public debate increased the public and political awareness of the urgency of the problem. In 1983 Mr Justice Moffitt said: Time is short. Five years, may be less, could be too late to launch any effective defence against it. Two years of that five have been spent trying to get the legislation right. The Government is entirely responsible for that slow outcome. It is now also recognised that for the National Crime Authority to be effective in working to a result, the Director of Public Prosecutions should have the power to make a professional judgment and to act on it to pursue a remedy for the recovery of tax, duty, charge or levy. In an important way, with the amendment to the Director of Public Prosecutions Act, the National Crime Authority can process its investigations into the money trail, into civil prosecutions. Such prosecutions will enhance the prospects of success in the fight against major crime and limit its pervasive spread through the country. The Opposition has consistently pressed for active involvement and for active powers to be conferred, firstly, by setting up a commission, which was scrapped by this Government, and, secondly, by trying to get the Authority into a workable and reasonable form. These amendments go some way towards that. I hope that the Government will accept the amendment to the functions of the Authority which I propose to move at the Committee stage. All of us, particularly those on this side of the House, want to see action against organised crime pursued at the most rapid rate, and not, as has been the case, after two years of delay. The Government is only now bringing forward amendments which will add to the capacity of the Authority to pursue organised crime successfully. Mr GRIFFITHS(Maribyrnong)(9.49) — Once again, we have heard the charade of the Opposition indicating what it would do were it the Government. With the benefit of hindsight, the Opposition ought to be considering what it should have done whilst it was in government. If one takes a chronological perspective of the reports of the Stewart Royal Commission of Inquiry into Drug Trafficking, the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union and so on, it is quite obvious that organised crime became institutionalised not when the Australian Labor Party formed governments in this nation but when the present Opposition did. The honourable member for Menzies (Mr N. A. Brown) indicated what should be done. Of course, he was an Attorney-General in a previous conservative administration. It may have been that the Wilsons, for example, would not be pushing up daisies had that administration then set about its role a little more effectively than it in fact did. We might discount for a bit of hyperbole coming from the Opposition, but I hope that no government of Australia would be prepared unilaterally to tear up 600 years of the development of common law and basic civil liberties to attack any major issue. It is simply something that must be addressed in some sort of perspective. Where we have the major issues that are involved in organised crime, and where we have suggestions that on a whole range of fronts governments intrude into individuals' personal lives in the legitimate attempt to ensure that organised crime not only does not grow but is minimised, we must exercise a very great deal of care. There are two things which have manifested themselves in terms of this Government's approach. First, this Government has set about this matter in a disciplined way. We have set up a range of legislation which was missing under the previous Government. It is all right for Opposition members to make some cheap political points by pointing out that only now are certain amendments coming in. The reality is that we set up the legislation. We indicated at the time that if need be there would be further amendments not only to the National Crime Authority legislation but also to a whole range of other legislation to ensure that the fight against organised crime would be effective. A second fundamental point ought to be stressed. This Government is not about hyperbole. This Government is not about simply having reports gather dust on the shelves. This Government is about admissible evidence that will result in the people who are involved in organised crime being put behind bars. At the end of the day, it is only by having people put behind bars that there will be a realistic approach to preventing organised crime growing. Looking at the Opposition's seven years in government, one finds that it was consistent and it stands out for one glaring fact: Very few people indeed ended up behind bars. It is my confident assertion that at the end of this Government's reign-that will be a long way down the road-there will be many more people behind bars for their engagement in the various aspects of organised crime. Mr Blunt —They are all from New South Wales. Mr GRIFFITHS —We might have interjections from Anthony's Blunt, from someone who distinguished himself at Question Time today by his inability to come to terms with his portfolio. If he is going to interject on major issues such as organised crime, I hope he spends a little time informing himself of the issues. I now address myself more specifically to the National Crime Authority (Miscellaneous Amendments) Bill. The powers that have been established for the National Crime Authority will allow it to gain access to information from a range of government agencies. When the legislation was first introduced there was a legitimate debate about the extent to which that ought to apply. The Authority has proposed a number of amendments to the legislation. After careful consideration, the Government has acted upon those proposals, and it is my hope that over the next couple of years the Government will be in a position, together with the Joint Statutory Committee on the National Crime Authority, to weigh up the efficacy or otherwise of the various proposals that have been enacted, and perhaps also to address some of those areas that have not been acted upon. I do not claim-nor should anyone in this House-to be the sole repository of wisdom in terms of what is the best approach to take in an effective fight against organised crime. But I do claim-I hope other people will also claim-to have the ability, after having addressed the role of the National Crime Authority, after having its various powers tested, after analysing the competing objectives of the strongest fight against organised crime and trying to ensure that basic civil liberties are adhered to, to strike some realistic balance between ends and means. That has been a consistent theme in terms of the Government's approach to this legislation. The honourable member for Warringah (Mr MacKellar) raised the Costigan contribution in terms of the pursuit of the money trail. Of course it will not go unnoticed that the Government has acted upon his recommendations. Later this evening one of my colleagues will discuss the amendments to the deputy public prosecutor legislation. The DPP will be allowed to take civil action to ensure that funds do not escape the Government's- Mr McGauran —Deputy? Mr GRIFFITHS —Director of Public Prosecutions, I am sorry. Mr MacKellar —Perhaps he means the Deputy Director of Public Prosecutions. Mr GRIFFITHS —My old legal days are coming back to me. I should do what my colleague the honourable member for Warringah did, and that was to read exclusively from notes. Mr McGauran —That would probably be more accurate. Mr GRIFFITHS —It would certainly be more accurate. The various amendments to the National Crime Authority legislation are an attempt to ensure that there is some balance between the need for the National Crime Authority to obtain information from various government agencies and, as I indicated earlier, an attitude to ensure that basic private information or basic confidential business information remains out of reach of the National Crime Authority unless, of course, in certain circumstances there are compelling reasons why it should have that information. The mechanism is there to allow that in certain circumstances. In terms of sensitive personal information such as medical records, commercial information-for example, information obtainable under the Prices Surveillance Act, the Reserve Bank of Australia regulations and so on-and privileged information provided to courts and tribunals, specific protections have been built into the National Crime Authority Act and so they should have been. The desirability of extending the number of Acts not subject to request by the NCA is self-evident in terms of the protection of civil liberties that I have adverted to. However, there is a case to be made for extending into all legislation a very broad-brush approach, one that inherently opens up some dangerous areas. To some extent the legislation will provide that agencies, which are not covered by the legislation, may, by request of the National Crime Authority, make available at their discretion certain information that will assist in the investigation of organised crime. So to a very real extent the Government is now in a position where many of the objections to our original approach have been tried and proven false. There are other areas in which we are now acting and that is why this legislation is before the House. Over the next couple of years the Joint Committee on the National Crime Authority-it is a multi-party committee of course-and the Government will be assiduously monitoring the role of the National Crime Authority to ensure that, where practicable, amendments might be made to ensure that the fight against organised crime is carried out efficiently. There are a range of other comments I would like to make but I conclude by again making this point: There is no Utopia in terms of striking a balance between the pursuit of organised crime and protecting basic civil liberties. No one person in this House will be the repository of all wisdom in terms of where we strike that balance. The Government is ensuring that over a period, by trial, and, I submit, sometimes by error, we will become better informed on what is the most efficient and effective response to these issues, while at the same time retaining our traditional sensitivity to basic civil liberties. I conclude by referring to the proposed amendment of the honourable member for Warringah. It seems to me to be somewhat redundant, at least to the extent that the Australian Federal Police now has liaison with authorities and individuals overseas. Mr MacKellar —That is its second hat. Mr GRIFFITHS —That information, nevertheless, is available to the National Crime Authority. I will wrap up my comments by pointing out that mechanisms are in place to ensure that that sort of liaison is conducted. To the extent that over time there may be a case made out for the National Crime Authority to have those sorts of powers, I am sure that the Joint Committee on the National Crime Authority will at some future stage take that on board, if indeed the National Crime Authority believes that is appropriate. It has not indicated that to date. Mr N. A. BROWN(Menzies)(10.02) —I wish to draw attention to only two aspects of the speech of the honourable member for Maribyrnong (Mr Griffiths). I do not know whether to describe the first as a reference to his offensive or ludicrous suggestion that there was attached to me as Acting Attorney-General in 1982, and presumably also to Senator Durack, some responsibility for the murder of Douglas and Isabel Wilson. If it were not such a ludicrous and absurd suggestion, I would ask the honourable member to withdraw it. I put to the honourable member and to the Government that this sort of absurd attitude in some cases of members-not in all cases-on the other side of the House has ludicrous consequences. It means, for instance, that Mr Trimbole, who is still walking free somewhere in the world, unapprehended- Mr Gayler —You let him go. Mr N. A. BROWN —Yes, all right, I accept that. But, if the honourable member will listen for a moment, the simple fact is that Mr Trimbole may well have disappeared from this country during the term of office of the previous Government, but this Government had a fighting chance to bring him back to this country when he had been located and was actually behind bars. If the Government is trying to attach some absurd blame to me for the murder of Douglas and Isabel Wilson, which I understand is what is being implied, let us take this to its logical conclusion which, presumably is that the present Government is responsible for all crime occurring today. The Government members should not put up such absurd, stupid and utterly offensive suggestions. They make fools of themselves in front of those on their own side. Furthermore, and more importantly, they denigrate what is a very serious problem facing this Government which it has, I concede, on occasions tackled honestly and responsibly. Unfortunately, I have to say in the course of this debate that there are other occasions when it has fallen short of the mark. But let us get this into perspective. It is not even a party matter. It is a matter of concern to every citizen in this country regardless of political allegiance. Let us first of all get that guideline straight. The second aspect of the honourable member's speech to which I wish to refer is the astounding proposition that this Government is not about receiving reports and allowing them to gather dust. Oh no, this Government is concerned not about letting reports gather dust; this Government is concerned, the honourable member said, with establishing new structures and organisations and arming them all with great powers so that they can go relentlessly on the march against organised crime. I ask the honourable member, as I did in a previous debate this evening-I know I ask it as if to a brick wall: Where is the report of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union? It was received by the Government eight months ago. How much more dust does the Government want to gather on the Costigan report before we have it tabled in this House of the Parliament and before we have the Government's considered response to the Costigan Royal Commission recommendations? The Government had it eight months ago, and yet the honourable member for Maribyrnong says that the Government does not allow dust to gather on reports. What an absurd suggestion. Where is the response of the Government in a detailed way to the Redlich report? Has the honourable member for Maribyrnong read it? There is no answer from the honourable member. It is presumably still gathering dust down the corridor somewhere. What about the details of the response of the Government to the report of the Stewart Royal Commission of Inquiry into Drug Trafficking? Senator Gareth Evans has let fly on occasions but there has been no detailed response to all of Mr Justice Stewart's recommendations. Indeed, when the Australian Labor Party first come into Government, Mr Justice Stewart recommended that something very drastic should be done about our extradition treaties. However, it was only when Trimbole walked free that the Government set up this so-called task force on the extradition laws in this country. It is a ludicrous suggestion. If there were ever a government that was preoccupied with allowing dust to gather on reports in the field of organised crime, it must surely be this Government, so let us get that in the right perspective. This is a debate of a cognate nature and I want to address some remarks to the Director of Public Prosecutions Amendment Bill. One can safely say that this Bill marks another of the Government's death bed conversions to the cause of doing something practical and positive to fight organised crime. As usual, it has done it late and it has done it reluctantly. It has done it after mounting a feeble argument as to why it could not be done and why it should not be done. It has done it only after the Opposition, public opinion and the opinions of many commentators and authorities pushed it into taking positive action that it could not resist taking any longer. That is why the amendment is before the House tonight-not because of any great zeal on the Government's part. It is before the House tonight because the Government could not resist taking action any longer. This is now becoming a regular pattern. We have seen it with the demand to grant indemnities to New South Wales's police so that they could achieve even that most modest of objectives on the part of the police, namely to give evidence of the commission of crimes so that criminals might be convicted. The Government fought that demand every inch of the way until its threadbare case collapsed. We have seen the same pattern of obstruction with the demand for a royal commission into the Age tapes. The Government fought that proposal also until it could no longer sustain its threadbare case. We have seen it with the need to amend the phone tapping legislation, where as late as today the Government is still struggling to get it right. As the honourable member for North Sydney (Mr Spender) quite rightly pointed out, we will be back again before we get this legislation straight. We will probably be back in August with yet another amendment. We are still in the process of seeing the same pattern of reluctance and of taking action only when the Government is bludgeoned into taking action that I have described. We have seen that pattern with the Government's response to the Costigan Royal Commission report. Let me say again that the Government has had that report since last October and yet it has still not been tabled in this House. Not only has it not been tabled, but the Government has not given a detailed response to any of the recommendations in the report, or indeed any response at all-not even a syllable of response to some of the recommendations of Mr Costigan. In all of these areas that I have mentioned-the indemnities, the phone-tapping law and the Costigan Royal Commission report-the Government has been paralysed into inactivity and has had to be pushed and pulled every inch of the way into taking even the most limited of action. Therefore, we should not be surprised that today we are again seeing the same pattern in relation to this Bill to give power to the Director of Public Prosecutions to bring civil proceedings. Let us look at the history of this matter for a few moments. The Government's paralysed progress is at long last today at the point where we are able to discuss this reform, a reform which should have been implemented many, many months ago. When did the Director of Public Prosecutions tell the Government? In September last year. Eight months ago the Director of Public Prosecutions said to this Government, which is so preoccupied about not letting dust gather on reports, that if he was going to carry out his functions properly he needed the power to bring civil proceedings. He said then in his annual report that eight months ago it was essential-he used the word 'essential'-for two reasons: Firstly, to protect the revenue, which one would think would be a matter of very great concern to the Government; and, secondly, to ensure, to use his own words, 'that the criminal does not profit by his activities'. What conclusion can we reach then other than that the Government has stood by and done nothing while the revenue has been at risk, as Mr Temby said it would be in September last year, and while criminals during that period have been profiting from their activities? What other conclusions can be reached on the facts? I would suggest none. The Director of Public Prosecutions, as if that were not an adequate warning to the Government, went further and drew to the attention of the Attorney-General (Mr Lionel Bowen) something that one would think would fill the Attorney-General with alarm and galvanise him into activity. What he said then was not just a general warning to the Government to take some action. He put a specific case to the Government. He said that the office of the Director of Public Prosecutions was 'not in a position to carry on many of the matters previously pursued by Special Prosecutor Redlich'. That was a warning to the Government and specifically to the Attorney-General that because the Director of Public Prosecutions had not been armed with adequate powers there were many actions Special Prosecutor Redlich had started to recover money for the Government and for the people which were stymied. They could not be proceeded with because the Director of Public Prosecutions had not been given adequate powers. Did that galvanise the Government into action, this Government that is so concerned about dust not gathering on reports? Of course not. That is the reason why we are debating this Bill today and not eight months ago. Despite the warning that was given, the Government did nothing for eight months. Those same cases previously pursued by Mr Redlich have languished. Criminals have been at large to hide their assets and spirit them away overseas, as Clark did. If honourable members read Mr Justice Stewart's report, they will see what Clark did about this. May I ask whether the Government, and particularly the Attorney-General, believe that criminals since then have obligingly kept their assets in Australia, obligingly and helpfully kept their money in bank accounts, in the State Savings Bank under their own names, so that the Government can get its teeth into them and get a fair chop when the eventful day of reckoning comes? If they believe that, they will believe anything. They have no concept of the way in which organised criminals work if they believe that during the period of inactivity from which this Government has suffered those who are going to be convicted eventually have done nothing but leave their assets in the country. Honourable members have only to read the reports that they are so concerned do not gather dust on the Government's shelves to see that that is entirely correct. That is eight months of delay for a start. If it turns out that the Commonwealth has lost revenue during this time, that assets have disappeared, that records have been destroyed and witnesses are no longer available, then to quote the Attorney-General's own words. It is the boss of the Department who is responsible, it is Ministers in this Government who are responsible, and they should be condemned for it. It is not as if there were only an eight-month period of delay. Special Prosecutor Redlich reported to the Government in July of last year. He also made the recommendation that the Director of Public Prosecutions should be able to bring civil proceedings free of the shackles this Government had imposed on him. That was 10 months ago-10 months of delay and no action. No one can read Mr Redlich's report without being seized of the urgency there was to have the Director of Public Prosecutions armed with this power and without sensing the force of the basic point Mr Redlich made over and over again. Government members should try to get it into their heads that it was a matter of urgency for the Director to be armed with power to go to the courts and make out a case, if he could, to prevent assets being dissipated or spirited away overseas. I venture to suggest that that is exactly what has happened in this period of delay. Mr Redlich said that it was trite to observe that for civil proceedings to be effective consideration must be given to such remedies at a very early stage. It may have been trite, but not trite enough, apparently, for this Government which stood idly by, despite Mr Redlich's report, and did nothing. If anything the previous Attorney-General did could be called a response, he responded to the Redlich report in September last year. He took up this proposal of giving the Director of Public Prosecutions civil proceedings power. He said that he would take it to Cabinet-I use his own words-at the earliest opportunity. That was in September last year. What has happened since then? There has been no explanation for this delay. There has been no explanation as to whether assets have been spirited away or whether records have been destroyed or whatever; no explanation at all. Mr Redlich went further than that: Not only did he report in July last year on the necessity of giving this power to the Director but he also expressed the same view in September, 1983. That was one year and eight months ago. How much notice and how many warnings of the urgency does this Government need? Even the Costigan Royal Commission has not stirred the Government into action. Costigan recommended likewise. He recommended in October last year that this power to take civil proceedings be given to the Director of Public Prosecutions. When one thinks about the fact that the Government has had this report for seven months and has done nothing about it whatsoever, one cannot help observe what a contrast there is between the Government's breakneck enthusiasm to close down the Costigan Royal Commission and its elephantine progress in implementing or even responding to Costigan's recommendations. How keen the Government was to bring his investigations to an end and how reluctant it was to do anything at all about implementing his recommendations. Who can forget that fulsome statement by the then Attorney-General on 18 December last year when he said that one of the first priorities of the Government was the consideration of the Costigan report? Heaven help those items on the Government's agenda that had a lower order of priority than the Costigan Royal Commission report. One of the first priorities indeed! Five months have passed by and that report has still not been tabled in this House, which is as much an insult to Government members as it is to Opposition members. The former Attorney-General said on 18 December in any event that he had advice, to use his own words, on every recommendation made. He had advice as early as December last year on the implementation of these recommendations but it is only now in the middle of May, that this legislation has been introduced and we have an opportunity to debate it. The Government, on any test whatsoever, has been delinquent on this issue for 20 months, since September 1983 when Mr Redlich alerted it to the need to do something in this field and to do it urgently. In the meantime assets have almost certainly been dissipated and hidden away, records have almost certainly been lost or destroyed and witnesses have vanished and have probably by now had those convenient lapses of memory which we all know so well. Where does the blame lie for the loss of revenue, for the vanished assets and for the difficulties now put in the way of the Director in resurrecting those actions that Redlich started and which have been languishing, gathering dust in the Director's office, presumably, in the meantime? The blame lies with the Government itself and particularly with those Ministers who have a particular responsibility in this field. Who can forget those lofty principles which were paraded in this Parliament and in the Press in 1982, day after day, when the then Opposition hounded the Attorney-General at the time, Senator Durack, and then me, and said: 'Don't blame officers of the Department; if something goes wrong, it is the Attorney-General's fault, because that is our system of constitutional government'. Frankly, we say the same thing to this Government today. Why has the Government acted so late in the day? Why has it been prompted into action now? Let me remind the House with some modesty that the Opposition announced on 23 February this year that I would introduce a private member's Bill to effect this change to the law. Indeed, I gave notice on 25 February that I would do exactly that. What a remarkable coincidence occurred three days later. Three days later the Government sprang into action and the Attorney-General announced that he also would legislate and give the Director of Public Prosecutions this power. What a remarkable coincidence! Mr McGauran —It is the best form of flattery. Mr N. A. BROWN —Yes, indeed; it probably is. At least we have prompted some action by the Government and we give it perhaps three marks out of 10 for taking this action, albeit at such a late stage in the day. So the power is there and we wish the Director of Public Prosecutions well in exercising it. It will be a useful power and it will enable him to go to the courts and apply for injunctions to freeze assets, if he can make out a case, and it will enable him to do what he can in the interests of the Australian public at least to prevent to some extent criminals escaping with their ill-gotten gains. We wish him well in the exercise of that power. Finally, I thank the Attorney-General because it is appropriate to thank him for accepting the merit, the thrust or the substance of two amendments that we had proposed to move. As I understand it, the Attorney-General will move amendments in the Committee stage to adopt the substance of our intended amendments. The first is that there is to be a report by the Director to the Attorney-General on the operation of these new powers after two years. Our amendment was to the effect that that report should also be tabled in the Parliament. The second is that there should be a power given to the courts to withhold the publication of evidence which might be contrary to the proper administration of justice and fairness in the conduct of these proceedings. We are satisfied that the Government will produce amendments-although I have not seen them-that will contain the substance of our amendments and we are prepared to rest on that. Mr GRIFFITHS(Maribyrnong)(10.22) —Mr Deputy Speaker, I wish to make a personal explanation. Mr DEPUTY SPEAKER(Mr Andrew) —Does the honourable member claim to have been misrepresented? Mr GRIFFITHS —I do. Mr DEPUTY SPEAKER —The honourable member may proceed. Mr GRIFFITHS —The honourable member for Menzies (Mr N. A. Brown) indicated that I had alleged that he was, in some way, involved in a conspiracy that resulted in the murder of the Wilsons. I did not, of course. To do so would be absurd. I was simply asserting the self-evident fact that the Attorney-General, during his period in office, could legitimately be accused of inactivity and/or incompetence. Mr GAYLER(Leichhardt)(10.23) —It was somewhat enlightening to sit here and listen to 20 minutes of huffing and puffing by the honourable member for Menzies (Mr N. A. Brown), who had a vacation from this House, but who before having that vacation was, in fact, a former Attorney-General. I noted with some interest that the speeches of Opposition members in relation to the National Crime Authority (Miscellaneous Amendments) Bill and the Director of Public Prosecutions Amendment Bill and also the Telecommunications (Interception) Amendment Bill (No. 2) had one common thread and that was the inactivity of the Government. Honourable members opposite say that we have done nothing, but one could look at what they did under a microscope. However, there is one thing that the Fraser Government did in relation to crime in its time in office, and it was a singular thing. By mistake and, of course, much to its regret later, that Government introduced the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. What the Fraser Government would have done with Costigan's final report would have been a lot less than we have done. There was one thing that happened in relation to crime during the seven years of Fraserism-and the honourable member for Menzies was Attorney-General for part of that time. During that time-and let the record show this clearly-crime became organised, because the Opposition, then in government, did not have the gumption or the ability to take on the problems that confronted it. The best that the Fraser Government could put forward was the band-aid treatment of the Special Prosecutor. It was a pathetic approach. Previous Opposition speakers have said tonight that the only reason things have not occurred is the inactivity of this Government. The honourable member for Oxley (Mr Hayden) referred to the honourable member for Menzies in certain terms the other day. I certainly will not get involved in that debate. However, the honourable member, in his address this evening, talked in glowing terms of the contribution of the honourable member for North Sydney (Mr Spender). I will bring to the attention of those present what the honourable member for North Sydney said while the honourable member for Menzies was still on vacation in November 1983. We are led to believe by those opposite that they were, to use the words of the honourable member for Menzies, galvanised into activity. Mr Webster —They probably won't rust. Mr GAYLER —The honourable member will have a chance to speak later. I know that he will make a positive contribution because he has done nothing since he has been here. Somewhere along the line, he will break his duck. It has been suggested that the honourable member for North Sydney has made a positive contribution to the fight against organised crime. He spoke in the debate on the Director of Public Prosecutions Bill on 30 November 1983, shortly after it had been first introduced and while the honourable member for Menzies was still on vacation. I will speak slowly, especially for the honourable member for Gippsland (Mr McGauran) because he will speak at some stage about the sheep Act and so on. I am sure it will have a lot to do with organised crime. I remind honourable members that the honourable member for Menzies told us all what a wonderful contribution the honourable member for North Sydney has made in debates in this place on organised crime. I might do best by starting with his final comment. The honourable member for North Sydney, talking not about a Bill introduced by the Fraser Government but one introduced by this Labor Government, said in November 1983: . . . I think the Bill is a commendable attempt to improve the operation of the Federal and criminal laws. Mr Robert Brown —Who said that? Mr GAYLER —The honourable member for North Sydney said that. It is here in black and white. If honourable members think that he said that just to commend the Bill to the House, I will go back a little further in that speech. He also said: We still have a vast distance to move to improve the adequacy of our system of law enforcement. We would not deny that because, after all, in 1983 we came to power following seven years of total inactivity when, as I have said, crime became organised. The honourable member for North Sydney continued: I am glad to see that it has been acknowledged that the actions of the previous Government . . . At least he carried out some band-aid treatment by making particular reference to the appointment of a Special Prosecutor. I further quote this honourable member, who has made such a positive contribution in this place towards combating organised crime. He said: No dramatic changes can be made which will bring us into any kind of a brave new world. In the nature of things, improvements in the Law are usually of an incremental nature. One moves ahead bit by bit. Certainly, I think that is true in the case of the prosecution of criminal cases. Mr Griffiths —What happened to him? He was sacked. Mr GAYLER —All I can say is that he went from the front bench back to the second row. Now we have a total condemnation of this Government's attitude and approach to combating organised crime. I do not wish to refer to the National Crime Authority legislation this evening because it has been very adequately handled by the honourable member for Maribyrnong (Mr Griffiths). I would like to make some comments in relation to the Director of Public Prosecutions Amendment Bill. Mr McGauran —You have read it? Mr GAYLER —Do not worry about that; we have read it, all right. I note the interjection and, as I said, the honourable member will talk about stock brands and sheep grids later, because that is the extent of his ability in the criminal field. Of course, he was not a member of this House when crime became organised in Australia. Most probably his colleagues have not told him how it prospered under their administration. Anyone who has very close contact with senior officers in the Office of the Director of Public Prosecutions will know that those senior officers have indicated that they are so pleased with the support that has been given to them by the Attorney-General (Mr Lionel Bowen) in regard to funding and staffing of that Office that they now feel that they are an adequate force to become involved in the combating of organised crime. Of course, the real reason for the introduction of the Bill being debated in this place this evening is so that there can be an extension of those powers. I challenge honourable members opposite to indicate that any of their speakers have indicated that they are opposed to the extension of those powers; they are not. They cannot be because by the extension of those powers we will combat crime in a much better way and a much more efficient way than has been done in the past. The extension of those powers to civil remedies, of course, is something that not even honourable members opposite are against. It is a clear indication that honourable members opposite are in favour of these changes. I challenge Opposition members who will speak later to indicate whether they are opposed to the extension of those powers to the Director of Public Prosecutions. The Office of the DPP has not only fulfilled its charter, but also established itself as an office of integrity. That goes without saying. But members of the Opposition are not prepared to admit that that is so. They want to be critical and negative. They make no positive contribution to this debate. But it has become an office of integrity and I say that without equivocation. It is an office of independence and I have every confidence that it will become a major force under this legislation and the amending legislation that will follow in years to come. This Government will pursue by every means possible the small minority in our community who regard Australia, not as a great and free society, but as a supermarket-that was what occurred in the Fraser years-for their anti-social activities. Mr YOUNG(Port Adelaide-Special Minister of State)(10.33) —in reply-I welcome the support of the Opposition for the National Crime Authority (Miscellaneous Amendments) Bill 1985 and the Director of Public Prosecutions Amendment Bill 1985. I will deal very briefly with the question of access to tax information which was raised by the honourable member for Warringah (Mr MacKellar) to correct something he might have said about the similarity between Commissioner Costigan and the National Crime Authority. Commissioner Costigan, of course, had access only to income tax information. The National Crime Authority, under the legislation that was introduced last year, had access to income tax information. It was an integral part of the Bill. The amendments that we are considering tonight in regard to the Taxation Administration Act are to extend the income tax access arrangements to other tax information. To that extent, of course, this amendment is very much a first. The honourable member is quite correct in regard to his amendment. It was contained in the original Act which was introduced by the Fraser Government and it is not contained in this Bill. I advise him that one of the reasons why I will not accept the amendment is that the National Crime Authority has asked us to look at it and we are doing so. My Department has sought comments from other departments and it could well be, having regard to some of the comments that we have received, that it is already covered by section 19 of the National Crime Authority Act which deals with the incidental powers of the Authority, and which states: The Authority has the power to do all things necessary to be done for or in connection with, or reasonably incidental to, the performance of its general functions or of its special functions . . . People might argue that it is already covered. We will have the comments from the people we requested comments from prior to the next Inter-Governmental Committee meeting in Perth on 30 May, and they will be discussed there by the representatives of all the jurisdictions. One of the undertakings we have given with regard to this legislation is that there will be discussion with the other representatives of government prior to any amendments being made to the Bill. It is correct that members of the Australian Labor Party, the backbench, had a great deal to say about the formulation of the National Crime Authority legislation when it was first put before the Parliament. I do not see anything very strange about that. As I understand the operations of the Liberal and National parties, they discuss matters in the party room to sort out an attitude, and that is exactly what we did. Different people have varying views. As the honourable member for Menzies (Mr N. A. Brown) would well know, there are many people in his profession who are completely opposed to the establishment of the National Crime Authority, but there are others at the other end of the spectrum who want to give it the ultimate power. Hopefully we have struck something in between that can work successfully. It is not true to say that in terms of references passed by the Commonwealth to the National Crime Authority we create any hurdles with the IGC. We merely informed it of our reference rather than seek a discussion on whether other members of the IGC happen to agree with the passing of that reference to the National Crime Authority. Mr MacKellar —Would you start an investigation before they had been informed? Would you start a reference? Mr YOUNG —No, we would not because the undertaking is that we will inform the IGC of the fact that a reference has been made to the National Crime Authority. Indeed to date all the references made by the Commonwealth have been at the request of the National Crime Authority and have been looked at by our police and law enforcement agencies because, as honourable members know, under the Act a reference can be accepted only where normal police power would not be sufficient to do the job. We do go through the procedures as laid down in the Act before the reference is given. The National Crime Authority will have other matters before the IGC on 30 May, in addition to those things which it sought at the end of 1984. I know the honourable member for Menzies keeps telling us that he has not seen the report of the Costigan Royal Commission of Inquiry into the Activities of the Federated Ship Painters and Dockers Union but I am pretty sure he has a couple of copies, probably one in his Melbourne office and one in his House of Representatives office. It is true that the report has not been tabled here, but it was tabled in other parliaments at the end of last year. It was also tabled in the Senate. It has been freely available to honourable members for a long time. Copies have been made public. A series of volumes of the Costigan Commission, which have been coming to us over the last four years, were kept confidential both by the Fraser Government and the Hawke Government, as recommended by Commissioner Costigan. But even in those cases where we have had requests for specific purposes, as in the last reports, several volumes were made available to the Queensland and New South Wales governments as a result of investigations being carried out. Three of the four references sought by the National Crime Authority already are matters specifically appertaining to the Costigan Commission recommendations. I think on 13 December last year Mr Justice Stewart, in a public hearing, outlined the activities of the National Crime Authority in relation to all 42 recommendations of the Costigan Commission. I think it is worth referring to the way in which he saw them. I think it is also true to say that as far as a snapshot of criminal activity in Australia over the last decade is concerned, by and large our citizens would not be too happy with the politicians who have served this country. I do not think it is a question of scoring points off this Government or being able to say that the previous Government should have done more. The previous Government did a deal, whether by accident or design, to give great exposure to that criminal activity. In some cases it floundered because no one could have guessed that when the Fraser Government set up the Costigan Royal Commission to look at the painters and dockers it was going to get the reports on criminal activity which came to light as a result of that Royal Commission. Indeed I think if Malcolm Fraser ever writes his memoirs he will tell us how shocked he was to receive the reports of the Commission, having set up what he considered to be a rather limited Royal Commission into the activities of a very small union which was carrying out some criminal activities on the wharves of Melbourne. We now know that there was a great deal of criminal activity in the period of the previous Government. We do not believe that it stopped on 5 March 1983 when we were elected any more than we believe it started on 5 March 1983 when we were elected. The member for Warringah (Mr MacKellar) does not attract to himself any prizes for believing that criminal activity can be designated as existing in one State, one locality or one suburb. All the reports over the years-the Woodward Royal Commission into Drug Trafficking, the Moffitt Royal Commission on Alleged Organised Crime in Registered Clubs in New South Wales, the Stewart Royal Commission of Inquiry into Drug Trafficking, and the Costigan Royal Commission-tell us that criminal activity not only has no respect for State borders but also has no respect for national borders. I do not know that the honourable member for Menzies is correct in saying that something might have happened in the last few months whereby criminals would have got their money out of Australia. They have been on warning for some years, and there is plenty of evidence in the Mr Asia and Trimbole revelations to show how easy it was to get in and out of Australia, and how easy it was to get their money in and out of Australia in the years of the Fraser Government. I do not for one moment believe that we have come up with all the answers to stop these things, but it behoves us to look more seriously at this criminal activity because the people in the community are extremely concerned about what has been occurring. There has been no delay in dealing with Costigan because, within two days of receiving that report-48 hours-the total report, without anything being taken out of it at all, was handed over to the National Crime Authority. The honourable member for Menzies talks a great deal about how slow the Government was to move on the phone tapping exercise in terms of the powers of the States. I know that sometimes people in Australia have been rather bewildered that the Federal Police have had powers to chase criminals involved in drug trafficking and that the same powers have not been available to the State police where most of the drug offences occurred. That recommendation was made to the Federal Government back in 1979. From 1979 to 1983 the Fraser Government decided not to do much about it. I see from the minutes of the Police Ministers Council that the matter got some discussion there. The police forces of Australia have always been keen to have the powers, but the various governments of the day, including the Fraser Government, did not seem to give it a great deal more consideration than a rather casual look. So the matter has been with us for some time. It has not cropped up under this Government. That is a matter we must be aware of. The honourable member for Warringah raised a legitimate point in relation to the matter that is now before the House-trying to decide what information is available to the National Crime Authority. I would have thought that anybody acting on behalf of an agency that has a request for information from the Authority dealing with an investigation would be hard put to refuse that information. I would also believe that many people in the community, including, one hopes, members of the Opposition, would not like to see the Authority adopt a jackboot approach where it could march in on any agency and seek any sort of information it may desire, whether or not it be personal or related to an investigation. To that extent I think that we have taken the right attitude. Again, there is a safeguard not only in terms of the report to me about how it will work over the next year, but also in the establishment of the Joint Committee on the National Crime Authority of which I was not a keen supporter during the initial debates on this subject a couple of years ago. However, it will be able to monitor how well this position works in the future. I welcome the Opposition's support for the Bill. For the reasons I have given, the Government will not accept the amendment. If it is of any benefit to the honourable member for Warringah, I can assure him that I will advise him as to the outcome of the discussion about the amendment and the request from the National Crime Authority on this matter. Question resolved in the affirmative. Bill read a second time. The Bill. Mr MacKELLAR(Warringah)(10.45) —I move: Page 2, after clause 4 insert the following new clause: Functions of Authority ''4A. Section 11 of the Principal Act is amended by adding at the end of sub-section (1) the following word and paragraph: '; and (e) as required, to co-ordinate its activities with the activities of authorities and persons in other countries performing functions similar to the functions of the Authority.'.''. I am disappointed that the Government will not accept the amendment. Whilst it is true that some people can suggest that section 19 of the National Crime Authority Act may allow the National Crime Authority to do what the amendment proposes, I was surprised that the Special Minister of State (Mr Young) did not mention section 17, because it is also suggested that by working through either the Australian Federal Police or State police forces contact is established with overseas authorities. The fact of the matter is that it is not clear, and it would seem to me to add to the status of the National Crime Authority to put this issue beyond all doubt if this very simple amendment could be agreed to. I fail to see why we have to go through this process of legal boffins trying to make a decision as to whether or not this authority is contained within section 19 of the Act. The amendment seems to be a very sensible way of clarifying the situation. The point at issue is that the Authority really does require this function to be written down and clarified, because, whilst it is true to say that Australian police forces do have contacts with overseas police forces, I do not think it can be argued that the police can speak at the same level as, for instance, a commissioner in overseas contacts. In many cases authorities operating overseas may not be as closely in contact with their police forces as would be necessary for correct up to date information to be provided through Australian police forces to the Authority. We should not forget that the National Crime Authority was set up simply because police in various States and at the Commonwealth level could not do their job in relation to the problems they were confronted with concerning organised crime. There are authorities of a similar nature in other countries which work with and beyond the police forces of those countries, dealing with matters which are tremendously germane to the problems faced by the National Crime Authority. The Special Minister of State seems to me timid in the extreme-and one has never thought of him as being an especially timid person. He is displaying a rare reluctance in relation to this particular matter. This amendment is presented not in any partisan way whatsoever. It simply clarifies a situation. In my view, it enhances the status of the Authority and makes it perfectly clear to people, both here and overseas, that the National Crime Authority has been vested with this additional function which clarifies its role and the very high status it enjoys in relation to the activities with which it is concerned. There are some other matters I would like to deal with briefly. The Minister in his reply to the second reading debate suggested that it had been unfair, in a sense, that criticism offered by the Opposition was not really justified. I point out to the Minister and to the chamber that in fact it was under the previous Fraser Government that a National Crimes Commission was established. It was in place and its powers were set out. It was scrapped by the present Government as soon as it came to office and it is only now, over two years later, that we are getting back towards a situation which was in place in the latter stages of the Fraser Government. So do not for a moment let it be suggested that the Fraser Government was not acting on the evidence that had been revealed not only by the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union but by a whole series of other commissions as well. Mr Griffiths —A bit slow out of the starting blocks. Mr MacKELLAR —Why was it necessary, in the Government's view, for a commission which was in place and which was designed to do the job this Authority is designed to do to be scrapped immediately? We have had a delay of over two years. The honourable member talked earlier about things gathering dust. Two years ago there was in place a body which had the capacity and authority to undertake the sorts of tasks the Authority will do now, and two years later we get to this. So the honourable member should not suggest for a moment that there was any delay on the part of the previous Government. I sum up the Opposition's support for the amendment I have moved by urging the Minister once again to be a little bold at this stage and accept a proposition that is clearly self-evident and does not detract from and in fact enhances the Bill. It enhances the status of the Authority. It does not challenge anybody else's authority. It clarifies the functions of the Authority. In all essences the amendment clarifies in my view, a highly desirable function. I see no reason why we should go through a tortuous period of waiting, with Government getting back to me at some time with the results of deliberations. I can see lawyers around Australia trying to work out whether the substance of the amendment is covered by section 19 of the Act or is dealt with in section 17. Why not be bold, clarify the situation, add to the functions, and prove that the vicissitudes of the past have not whittled away the Government's initiative? Mr YOUNG(Port Adelaide-Special Minister of State)(10.52) —The amendment moved by the honourable member for Warringah (Mr MacKellar) may be all the things he said it is, but I think I will get a second opinion. As I have said, we have this proposal before us and we are getting views from the various departments that could be affected by it. I say to the honourable member for Warringah that this is not a one-track thing. When he says the National Crime Authority can co-operate with other bodies, it may be that one would seek the okay from those other bodies around the world before one actually set in motion the procedures whereby the proposal is put in legislation. I also say to the honourable member that we have followed on the practice of the Fraser Government. It placed a few liaison officers from the Australian Federal Police in some parts of the world. We have just about doubled that allocation in our couple of years in office, so there is quite a contingent of Australian Federal Police in most of the major centres where intelligence can be passed on to Australia. That information obviously would be available to any investigation held by the National Crime Authority anyhow. I see no major objection to the Opposition's amendment, but we are working on it. It will go before the Inter-Governmental Committee for discussion on 30 May. The honourable member also said that we are getting back to the original Fraser Bill. That is not quite true. There are major differences between this and the original Fraser Bill. We are co-operating extensively with all the States. All the States are represented on the IGC. Of course, that would not have been the case with the Fraser Government. It was going to act quite unilaterally. Speaking on a personal level, my experience from being the Minister in charge of the police for a couple of years is that co-operation and co-ordination with other jurisdictions is absolutely essential. If ever I had any doubts about the wisdom of attracting to the IGC the co-operation of all the States, I have certainly dismissed it since I have had the experience of working with them and have seen a great deal more of the criminal activity in Australia and what needs to be done to overcome that problem. Also, of course, there is a difference between the Opposition's attitude on the use of the coercive powers by the National Crime Authority and our attitude. The Opposition would just give it a carte-blanche in terms of the use of coercive powers. That is not the case in the terms of the operation of our legislation. We will be judged by how well it works. For the time being, I can assure the honourable member for Warringah that the commissioners are satisfied with the basic structure of the legislation. We have said previously-this amendment arises as a result-that we will try to deal expeditiously with the requests from the National Crime Authority for amendments to the Act. That is exactly what we are doing tonight. Amendment negatived. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Mr Young)- by leave-read a third time. Debate resumed from 8 May, on motion by Mr Lionel Bowen: That the Bill be now read a second time. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(10.56) —I wish to reply formally to the matters that were raised by the honourable member for Menzies (Mr N. A. Brown) in the cognate debate on the National Crime Authority (Miscellaneous Amendments) Bill and the Director of Public Prosecutions Amendment Bill. Two amendments have been circulated by the honourable member, which we accept. If he does not mind, the drafting has been slightly amended. There has been some heat in this debate because it was felt that this matter could have been dealt with a lot earlier. I would have thought that it was well known that the reports of Special Prosecutors Gyles and Redlich dealt with similar matters. It is also a matter of record that the powers of the Director of Public Prosecutions were limited. It was recommended as far back as 1982 that the Director of Public Prosecutions be given the powers proposed in the Bill. I do not think there has been any delay in pursuing the recovery of the assets of criminals. This Bill will give added weight to the power of the Director of Public Prosecutions. Honourable members should bear in mind that the civil remedy is always related to a Commonwealth liability in relation to the Australian Taxation Office and other matters. What is being proposed in this Bill is a more efficient and effective way of guaranteeing that assets are available to comply with the payment of debts that are due to the Commonwealth and in particular to the Taxation Office. There is one matter which the honourable member took great pride in announcing: In February of this year he issued a Press statement that he would bring in a private member's Bill to do the same thing as this Bill. Mr N. A. Brown —I gave notice. Mr LIONEL BOWEN —I know that. I just want to give the honourable member notice that I understand that he had a discussion, which he was entitled to have, with the Director of Public Prosecutions just prior to the date when he gave notice of the Bill. The Director of Public Prosecutions told the honourable member that the Government intended to bring forward this legislation. Mr N. A. Brown —That is quite untrue. Mr McGauran —It was a private conversation. Mr LIONEL BOWEN —Was it a private conversation? I say to the honourable member that as a matter of courtesy the honourable member for Menzies asked whether he could have a conversation with Mr Temby and, naturally, I agreed. It was not really a private conversation. I am surprised if the Director of Public Prosecutions did not tell the honourable member that the Government was proceeding with this matter. I assume that they had a conversation but did not discuss this matter. I accept the honourable member's statement that he was not told at that stage. If that is so, he obviously had some intuition as to what the Government intended to do, and he nods his head accordingly. I was interested that his Press statement was issued so soon after he had seen the Director of Public Prosecutions. Question resolved in the affirmative. Bill read a second time. The Bill. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(11.00) —by leave-I move: (1) Clause 3, page 3, at the end of the clause add the following sub-clause: '(3) Where the Director furnishes to the Attorney-General the report required by sub-section (2), the Attorney-General shall cause a copy of the report to be laid before each House of the Parliament within 15 sitting days of that House after the Director so furnishes the report.'. (2) Clause 5, page 4, lines 8 and 9, omit', or of information that might enable a party or witness to be identified,', substitute', or of particular information,'. Let me place on record that the amendments I have just moved are the amendments suggested by the honourable member for Menzies (Mr N.A. Brown) slightly altered in wording. There is no objection whatever to them. The Bill provides for a report to be given to the Attorney-General and it would be appropriate that that be tabled in the Parliament. Accordingly, that first amendment is accepted. The idea behind the second amendment is to give the court the discretion not to disclose the identity of any person if that disclosure might affect that person. The words to be deleted include the words 'that might enable a party or witness to be identified', but a better effect is achieved by deleting those words and then making it very clear that the court can make an order prohibiting or restricting publication of particular evidence or of particular information. In other words, the court has a complete discretion-not limited to identity-in relation to any other matter relating to information. That is the suggested appropriate way to word the amendment. I understand that the honourable member for Menzies agrees with that. Mr N. A. BROWN(Menzies)(11.02) —I had originally proposed these amendments myself but, as the Government has adopted them and put them in its own words, we are prepared to accept them; and I do not wish to address any remarks on that. I simply want to take the opportunity at the Committee stage of clarifying something, because it is relevant to the Bill as a whole, as to the Opposition's position in giving notice of a private member's Bill and the steps associated with that. The Attorney-General (Mr Lionel Bowen) seems to be delinquent in his memory or is misleading honourable members on what happened in that case. In the first place, I did not ask for a briefing from the Director of Public Prosecutions. He rang me and said that he wanted to see me. I did not go running to the Director of Public Prosecutions asking for a briefing and I did not ask the Attorney-General whether I could see him. If I wanted to see him I certainly would have every right to do so without asking the permission of the Attorney-General. The fact is that the Director of Public Prosecutions rang me and asked to see me. I agreed to see him and had a conference with him. Secondly, it is true that the subject of his civil proceedings power was raised in that conversation. I am not going to go over the details of what I regarded as a private and confidential conversation with the Director of Public Prosecutions. I content myself by saying, not to the Attorney-General but to the Director of Public Prosecutions through Hansard which I hope he subscribes to and reads, that if this is the way in which he is going to conduct his business, spilling out the details of private conversations he has had with me or other people, he had better very promptly pull his socks up or start looking for another job. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(11.03) —In fairness- Mr N. A. Brown —It was a gross abuse of confidence. Mr LIONEL BOWEN —I do not think the honourable member should take it that way, but if he does that is his privilege. He has now made an accusation under the privilege of this Parliament which the Director of Public Prosecutions, of course, cannot do anything about. Mr. N. A. Brown-I will say it outside. I will accommodate him if that is what he wants. Mr LIONEL BOWEN —It is a matter of common interest to me that the honourable member was able to issue a Press statement as to what the Government intended to do because he had a conversation with the Director of Public Prosecutions. I would not want him to withhold any information from the honourable member. But it is significant that the honourable member had a conversation with him-and I do not mind him having as many conversations with the Director as he likes-and that when he got the information that the Government was going to proceed along these lines, he took the initiative of issuing a Press statement saying that he was going to do it. Mr N. A. BROWN(Menzies)(11.04) —I did not want to delay the Committee by going into the details of this matter. Let me simply say this: I have already made it plain that I do not propose, as apparently the Director of Public Prosecutions has no qualms about doing, to repeat the details of a private conversation. I regard what he did-obviously he relayed it to the Attorney-General-as the grossest abuse of confidence and very disturbing indeed. Secondly, although I repeat that I am not going to divulge the details of a conversation I had with the Director of Public Prosecutions, I am bound to say that I got the distinct impression from him that he was getting absolutely nowhere with the Attorney-General and the Government insofar as the Government giving him these powers was concerned. Let him deny that. The definite impression he gave me was that it was a power he wanted and that he was not getting very far with the Government. The Director of Public Prosecutions put the merits of the argument to me. I listened to him. What did I do then? I did not rush off and issue a Press release divulging the details of the conversation. I thought about the issue. I considered it and discussed it with Senator Missen. I discussed it with some of my colleagues. I prepared a draft submission for our shadow Ministry. I took the matter up with shadow Ministers. They argued it out, back and forth, on its merits. We were not terrorised by what the Government was going to do. I then took the matter to our Party room. It was for that succession of reasons that we decided to introduce a private member's Bill. I then gave notice that a private member's Bill would be introduced. By the most extraordinary, the most amazing coincidence, three days after I gave notice of our intention to introduce a private member's Bill, the Government announced publicly in a Press release in February-it has done nothing since then on this matter until today-that it also would legislate on this matter. So let me make it perfectly plain that the Director of Public Prosecutions did not say to me that the Government was going to introduce this legislation. He gave me the distinct impression that he was getting absolutely nowhere with the Government which could not care tuppence whether he had that power or not. I repeat: I hope that the Director of Public Prosecutions in future conducts his business so far as private considerations are concerned with more decorum and responsibility than he seems to have done in this case, judging by what the Attorney-General has said tonight, repeating the conversation. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(11.07) —I have no quarrel with what the honourable member for Menzies (Mr N. A. Brown) does with the Director of Public Prosecutions. However, I thought it significant that the Press statement was issued so close to when the conversation took place, whatever was said. It is also a matter for the record that the Redlich report recommended to the honourable member for Menzies, when he was Attorney-General in 1982, that he establish the office of Director of Public Prosecutions. Amendments agreed to. Bill, as amended, agreed to. Bill reported with amendments; report-by leave-adopted. Bill (on motion by Mr Lionel Bowen)-by leave-read a third time. Debate resumed from 8 May, on motion by Mr Lionel Bowen: That the Bill be now read a second time. Madam ACTING SPEAKER —I understand that it is the wish of the House to debate the Companies Amendment Bill 1985 concurrently with the Companies (Fees) Amendment Bill 1985. If there is no objection, the Chair will allow that course to be followed. Mr N. A. BROWN(Menzies)(11.10) —The Companies Amendment Bill and the Companies (Fees) Amendment Bill and their purpose have already been explained accurately by the Attorney-General (Mr Lionel Bowen) in his second reading speech. There is really nothing of substance that we wish to add. The Opposition supports the two Bills. There were two defects in the Bills when they were originally revealed for public discussion, the first being that the new short form of company return would apply to exempt proprietary companies. We said that that was an unjustified increase in the paperwork burden imposed on small companies. Many members of the professions expressed a similar view. The Government is not proceeding now with that aspect and, therefore, that objection is removed. The second objection that a number of people had to the legislation, and again the professions had to the legislation, was that it reduced the time within which annual returns had to be filed. Likewise, the Government has, I think correctly, changed its position on that. The Ministerial Council for Companies and Securities has endorsed the view of the Government, as I think it should have. So that objection, likewise, is removed. Beyond that, I really do not have very much to say except that the changes to the companies law are, I think, desirable. They will in toto reduce the paperwork burden on companies and that is a good thing. Let me simply say in addition that there is the question of a Senate committee that should oversee the uniform companies and securities system. I believe that that question should be pursued. Secondly, there is a question of very great concern to the professions; that is, the annual wallop of amendments which are made to the companies laws which are regarded as not being very desirable by those who have to work within the scheme. I hope that between us, in a spirit of co-operative federalism, we can find some way of avoiding this succession of dray loads of amendments to the legislation that seem to come along at regular intervals. Mr SLIPPER(Fisher)(11.12) —I rise to speak to the Companies Amendment Bill and the Companies (Fees) Amendment Bill representing the National Party of Australia. Like many other members, I had anticipated that this debate would take place this morning. And what a fine morning it was! Canberra was carpeted in autumn leaves, the sun shone brightly and it was relatively warm. It was almost the last gasp of summer. There was hardly a cloud in the sky and it was difficult to believe that Australia was languishing under a socialist government. Even so, it would have been a fitting time to bring in one of those rare species of Bills which enjoy the support of all parties in this place. It seemed as though the sunshine and agreeable climate outside would have penetrated these hallowed walls. Even now, at almost 11.15 p.m. on a bleak, cold, near winter night when skies have opened and Canberra is being lashed by ice-cold rain, when we are being treated to an example of government by exhaustion and when it is easy to believe Labor is still in office, we in the National Party along with the rest of the Opposition still intend to support the Bills. These Bills, which were approved by the Ministerial Council for Companies and Securities following its consideration of public comments that were made on the earlier draft of each Bill, have been submitted to the Federal Parliament in accordance with the Commonwealth's obligations. The hour is late and the time for debate has been reduced. As the honourable member for Menzies (Mr N. A. Brown) has very adequately explained the position of the Opposition, I do not intend to delay the House further. The National Party fully supports the Bills. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(11.14) —in reply-I welcome the support for the legislation by the honourable member for Menzies (Mr N. A. Brown) and the honourable member for Fisher (Mr Slipper). I was a bit mystified by the remarks made by the honourable member for Fisher. He seemed to be forecasting the weather rather than discussing the matters contained in the Companies Amendment Bill and the Companies Amendment (Fees) Bill. To allay his fears, I make the point that this legislation was approved by the Standing Committee of Attorneys-General and we really have no power to do much about it. He will be delighted to know that the Queensland Attorney-General fully agrees with the contents of the legislation. Obviously, that will make other people worry. I make the point that some day, somewhere along the line, we might be able to unscramble the egg that we now have in going through a Federal co-operative scheme which means that this Parliament has no contribution to make. The honourable member for Menzies hinted that in the future we might be able to get to a relative understanding of our respective responsibilities under the Constitution and we might be able to legislate respectively for those matters that concern the States and those matters that concern the Commonwealth. The Business Committee is very anxious to see less regulation and a more efficient administration. I think that that will be the way to go, but it will take time and some discussion with and persuasion of a number of the States. Perhaps honourable gentlemen opposite can use their powers to so persuade respective State governments to assist in a uniform legislative approach to this problem. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Lionel Bowen) read a third time. Consideration resumed from 8 May, on motion by Mr Lionel Bowen: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Lionel Bowen) read a third time. Debate resumed from 23 April, on motion by Mr Beazley: That the Bill be now read a second time. Madam ACTING SPEAKER —I understand that it is the wish of the House to debate the Petroleum (Submerged Lands) Amendment Bill 1985 concurrently with the Petroleum (Submerged Lands) (Royalty) Amendment Bill 1985, the Petroleum (Submerged Lands) (Registration Fees) Amendment Bill 1985 and the Petroleum (Submerged Lands) (Retention Lease Fees) Bill 1985. As there is no objection, the Chair will allow that course to be followed. Mr LLOYD(Murray)(11.16) —The Petroleum (Submerged Lands) Amendment Bill 1985 and cognate Bills propose a number of amendments to the Petroleum (Submerged Lands) Act and incorporated Acts. The purposes of the Bills are to: Provide for the granting of retention leases over currently non-commercial discoveries and setting of fees for such leases, revise the registration provisions of the Act to take account of the recommendations of the Royal Commission on the Activities of the Federated Ship Painters and Dockers Union and consequential amendments to fees payable on registration, revise the administrative processes for the making of regulations and directions and for the service of directions which control off-shore petroleum exploration and development operations, extend the scope of access and special prospecting authorities, provide for early release of basic data and interpretive information supplied by titleholders to the Government, enable review by the Administrative Appeals Tribunal of decisions made by the Commonwealth Minister in relation to retention lease applications and release of information, waive a proportion of the Commonwealth's share of royalties to be derived from the North West Shelf project, in a favour of the Western Australian Government, and provide for any petroleum produced from the Territory of Ashmore and Cartier Islands adjacent area to be exempted from royalties. The Opposition supports the aim of the provisions in the Petroleum (Submerged Lands) Amendment Bill 1985, the Petroleum (Submerged Lands) (Registration Fees) Amendment Bill, the Petroleum (Submerged Lands) (Retention Lease Fees) Amendment Bill and the Petroleum (Submerged Lands) (Royalty) Amendment Bill, to facilitate and improve the administration of off-shore petroleum exploration and development. Retention leases will allow explorers to retain tenure over discoveries until they become commercial. This should encourage companies to explore in deep water or gas-prone areas. The Government has given no estimate of the level of revenue likely to be raised by the introduction of retention leases. The proposed retention lease fees for discovered but as yet uncommercial oil reserves are set at a mid-point between the existing fees applying to exploration permits and production licences. The coalition is concerned that the level of fees does not prove prohibitive. The registration provisions of the Bills seek to clarify and streamline the process of registration of transfers and dealings affecting petroleum titles. These provisions are an attempt to protect the interest of investors and potential investors by ensuring that the register is kept up to date. They are a legislative response to the recommendations of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. However, it is not clear that the Bill will streamline the process of registration. We are concerned that the extra requirements for registration do not increase compliance costs. The coalition parties see the new provisions of the Bill which seek to facilitate the service of documents, enable codes of practice and standards to be adopted from time to time as they exist, and enable the directions and regulations to control activities as desirable amendments to the existing legislation. We note that the amendments are the subject of continuing consultation with the industry. We also support the access and prospecting provisions which aim to facilitate the granting of exploration permits to companies and to increase the amount of exploration information available to the industry through the provisions allowing for early release of basic data and interpretative information supplied by title-holders to the Government. The provisions of the Bill also allow for the protection of the interests of concerned prospecting companies with regard to the early release of information. The Liberal and National parties support the provisions which extend the appeals process. The amendments will enable review by the Administrative Appeals Tribunal of designated authority decisions made by the Commonwealth Minister or his delegate in relation to retention lease applications and the release of data and information supplied by title-holders. The provisions extend the appeals process to the areas adjacent to the Commonwealth Territories or in relation to the release of data and information supplied by title-holders. The provisions also set out the way in which the Minister may review decisions taken by a delegate. The provisions to waive royalty payments to the Commonwealth from the North West Shelf project in favour of the Western Australian Government to assist that State to meet its obligations indicates the level of government commitment to the success of the project and the degree of government involvement in commercial negotiations over the project. Given the subsequent takeover of Woodside Petroleum Ltd by Broken Hill Proprietary Co. Ltd and Shell Australia Ltd it is not clear whether previous government assurances about the viability of the project were adequate or whether the Government is now committed to further open-ended assistance to the project. The Bill provides for any petroleum produced from the Territory of Ashmore and Cartier Islands adjacent area to be exempt from royalties and this will be supported by the Opposition. However, it should be noted that developments in these areas are subject to the provisions of the proposed petroleum resource rent tax. The proposal to remove royalties in certain areas may appear to provide an incentive to exploration and development but the abolition of royalties will apply only where the proposed resource rent tax will apply. Considerable uncertainty as to the final form of the resources tax still exists. This may well inhibit exploration and development in the nominated areas. The coalition has consistently opposed the introduction of a resources rent tax. The Fraser Government considered, but rejected, proposals to introduce a resources rent tax in 1976. The current provision presumes that the resource rent tax legislation will be passed through the Parliament. Given that the legislation to introduce a resource rent is yet to be introduced into Parliament, it may be inappropriate to pass what amounts to consequential amendments at this stage. An anomaly will exist if the current provision is passed and the resource rent tax is not passed. I move: That all words after 'That' be omitted with a view to substituting the following words: 'whilst not declining to give the Bill a second reading, the House is of the opinion that excessive fuel price increases under the Labour Government are unduly penalising fuel users, especially primary producers'. Last night this House was advised that spending cuts in a wide range of areas would save $1,260m in the coming financial year. One of the very real cuts to bite from next Tuesday is the axing of the petroleum products freight subsidy, a subsidy which has helped to ease a small part of the cost burden of living in areas remote from the major metropolitan cities. Once again, the country Australian gets it in the neck from the Australian Labor Party. The decision will increase fuel prices in country areas by up to 4c a litre when it takes effect from Tuesday. Mr McVeigh —That is on top of the 4c increase already imposed. That makes 8c. Mr LLOYD —That is right; that totals 8c. The honourable member's arithmetic is spot on. For most regional areas the subsidy will disappear completely. For example, among the increases in the wheat belt of New South Wales will be Coonamble, 2.2c; Dubbo, 1.2c; Gunnedah, 0.7c; Inverell, 1.3c; Moree, 1c; Narrandera, 1.6c; and West Wyalong, 1.6c. This decision totally ignores the very serious deterioration in farm terms of trade. Even the devaluation has not been enough to reverse the long term decline. Next year, on present trends, we can expect a real blow-out in farm costs. Fuel is one of the major farm inputs. It is one of the major expenses for country people, who invariably need to travel longer distances than do their city counterparts. Let us look at the record under two years of hard Labor government. Labor has constantly hit fuel prices throughout its term of office. The Commonwealth excise per litre of petrol or diesel fuel has increased by 56.6 per cent or 3.486c in the period from 1 March 1983 to 1 April 1985. Only 1c of this is due to the Australian bicentennial road development levy. The combined effects of the 1 May 1985 fuel price rise of 4c a litre and yesterday's gutting of the petroleum products freight subsidy scheme will be devastating for many regional rural people, for farmers, especially those in the grain and sugar industries, and for the fishing industry. The Prime Minister (Mr Hawke) has constantly told the people of rural Australia that Labor is determined to maintain the viability of our great primary industries and rural infrastructure. In his 1984 rural policy speech, for example, delivered in Armidale on 18 November 1984, the Prime Minister stated: It is crucial that our rural sector be recognised for the fundamental contribution it makes to our economy and to our society . . . No sector of Australian industry is more important than our primary industries-still Australia's major source of export income. . . . . The needs of the four and a half million people who live and work outside the major cities are at the forefront of our Government's concerns. The Prime Minister has not lived up to any of those statements. Increased fuel prices do not help the rural sector in its contribution to the national economy. They do not help that sector's international competitiveness and they do not demonstrate a recognition by Labor of the needs of the four and a half million people living outside the major cities. In simple terms, since coming to office in March 1983, Labor has been responsible for petrol price rises of over 10c a litre. In March 1983, super grade petrol was 43.06c a litre wholesale. In other words, in just 26 months under Labor, petrol prices have gone up by more than 45c a gallon for all consumers. The latest gutting of the petroleum products freight subsidy scheme will mean an even greater increase in the price for many rural consumers. It is for that reason that I moved my amendment. Madam ACTING SPEAKER —Is the amendment seconded? Mr GOODLUCK(Franklin)(11.28) —I second the amendment. I believe that most honourable members on the speakers list have been cut off, so I will confine my remarks. The oil industry is a complicated industry and an everchanging industry. We now have amendments which we hope will assist future exploration. If they make certain things far more simple, so be it. I wish to support the amendment moved by the honourable member for Murray (Mr Lloyd). Mr McVeigh —He did it well, too. Mr GOODLUCK —He did. I can understand the reason why the country people of Australia feel so devastated about the latest fuel increases. As the price of fuel increases, the effect flows right through the economy and has disastrous effects, particulary for the country people. Mr McVeigh —It hurts the working man, too. Mr GOODLUCK —Of course, the working man, the average Australian and the average consumer are penalised as the price of petrol is increased. In 1979 Australia went to import parity pricing. Some of us had reservations about import parity pricing but we agreed with its introduction for two reasons: Firstly, we wanted future exploration; and secondly, we wanted alternatives. We thought that it was going to be in Australia's interests to be self-sufficient in oil. We did not want to depend on overseas countries for that 30 or 35 per cent shortfall. They were the reasons why we went to import parity pricing. All Australians supported it because they thought it was for the common good. Australians were prepared to put up with the penalty of paying a higher price for petrol because they thought it was going to be in the national good. It can be argued that the oil companies have jumped on the import parity pricing bandwagon, yet they have still been able to drop the price of petrol in the high volume areas of Australia, sometimes to the detriment of the country people and the consumers in the smaller towns. We become agitated when we find that the price of petrol in Hobart for example is 60 cents a litre while in Sydney it is discounted by 14 cents a litre. The oil industry needs to clarify that price differential. If, because of the devaluation of the dollar the Government finds it necessary again to increase the price of petrol to the consumer, I urge it to ensure that consumers, and that includes the country people, have an opportunity to buy petrol at a fair price. Mr McVeigh —And the Tasmanians too. Mr GOODLUCK —Of course, the Tasmanians too. Over the years I have talked about petrol ad infinitum. I was reared in the petroleum industry, so I know a little about it. If a can of oil is dropped on the floor it spreads and the floor becomes very dirty, and I am afraid that that is what the oil industry is all about. I hope that we can clear it up. I know that an honourable member from Queensland wants to say a little about petrol, but before he does I want to compliment him and his research officer on producing this very fine booklet. Mr McVeigh —A top job. Mr GOODLUCK —It is a top booklet setting out a little about the oil industry. A lot of people do not know very much about the industry. They do not want to get involved in it because it is too complicated. I think the Minister for Science (Mr Barry Jones), who is at the table, understands that. It is very complicated. Exploration is very complicated. When one visits other countries, particularly Korea and Japan, and sees cars everywhere powered by liquefied petroleum gas, one wonders what it is all about. We are talking about lead free petrol in Australia at the moment, which is going to cost the motorist a little more. However, at the same time the Koreans and the Japanese must be laughing all the way to the LPG cooker because they are using our LPG, our precious commodity, which is pollutant free. We now have lead free petrol in Australia, for which we have to pay an excessive amount. At the same time, other countries get our LPG at a very cheap price and are able to power their motor vehicles with it. There are certain things that need to be looked at. A lot of people are talking about deregulation. They believe that deregulation may result in cheaper petrol for Australians. I am yet to be convinced of that, knowing the oil companies, because deregulation will give them a free rein. We have LPG and we are 70 per cent sufficient in oil. What about that other 30 per cent? Could we not make up the leeway by asking the manufacturers of motor vehicles to convert to LPG? We should not do it in the silly way that Datsun did, by using only LPG, but by using a dual system whereby we can use petrol and LPG. Commonwealth cars are driving around Canberra on the best roads in Australia-flat bitumen roads-and they could easily be powered by LPG. There are thousands of cars in Australia today that could be powered by LPG and we could make up that 30 per cent leeway. I ask the Minister at the table, and I plead with all members of this Parliament, to consider this suggestion. A person living 20 miles from a city who travels 40 miles a day to work and home again at the moment is spending nearly $4 a day on petrol. We hear arguments about money in our pockets-look at the amount of money the ordinary worker is paying for his petrol. Look at what country people-I was going to say the cockies-are paying for their petrol. It costs them a lot of money. So we need to do all that we can for them. I hope that this Bill will assist Australia's explorers so that we can be self-sufficient and not dependent on the Arabs and other people in the world. I support the Bill. Mr IAN CAMERON(Maranoa)(11.35) —I would like to say a few words in support of my good friend from Tasmania, the honourable member for Franklin (Mr Goodluck). The Bass Strait field is still producing 80 per cent of our crude oil needs. At the first election Bob Hawke went to, he promised to reduce- Mr DEPUTY SPEAKER(Mr Drummond) —Order! The honourable member should refer to members of this House by their correct title. Mr IAN CAMERON —I am sorry. The Prime Minister (Mr Hawke), the fearless white leader of Australia, promised at the last election to reduce fuel prices by 3c a litre. What have we seen? We have seen a 10c increase in fuel prices since the Government came to office. It is a disgrace. This has affected the workers, the shearers and the wheat growers. How can Ben, the Whip, get around with a straight face? Ben is an ex-service station operator- Mr DEPUTY SPEAKER —Order! The honourable member for Maranoa will refer to members of this House by their proper title. Mr IAN CAMERON —How can the honourable member for Griffith (Mr Humphreys) possibly go to Brisbane with a straight face because the price of fuel has sky-rocketed through the roof? Fuel is now worth #1 a gallon. Mr DEPUTY SPEAKER —Order! Has the honourable member got his metrics right? Mr IAN CAMERON —Yes, #1 a gallon. Mr Deputy Speaker, since the Hawke Government came to office fuel has gone up 45c a gallon. Mr Chynoweth —Fair go! We have gone metric. Mr IAN CAMERON —This is true. I have used these figures because at least half the electors of Maranoa still work on the old imperial system. I have got to use these figures so that they understand how the Government has ripped them off. Fuel costs #1 a gallon. That is a disgrace. How does the Government expect the shearers in Maranoa to get around and do a decent job? They cannot even afford to drive their motor cars around. How does the Government expect the Aborigines out in Maranoa to get around? They have got to walk now. They are back to camels and walking. They cannot possibly do anything. They cannot afford to drive a motor car any longer. This is an absolute disgrace. When this Government came to office it said that it was going to revolutionise the country. The Treasurer (Mr Keating) has the audacity here to say that the economy is on the straight and narrow. It is not. Because of parity pricing, fuel has gone up and the dollar has dropped out of sight. We are back to US60c in the dollar. Because the dollar has dropped it has forced the price of our fuel up. Mr Barry Jones —Who introduced parity pricing? Mr IAN CAMERON —The Minister for Science, who is at the table, has some intelligence, thank goodness. He is the only Minister in the Cabinet who has some intelligence. When he goes back to Cabinet I expect him to ask the Cabinet to get off parity pricing. What gain will there be to the economy of Australia if, as the price of the dollar comes up, the price of fuel comes up. As the price of fuel rises, this affects the electorates of Maranoa, Cowper and Riverina-Darling. In inland Australia we see a compounding effect of the price of fuel. Mr Cadman —What did they do in the mini-Budget? Mr IAN CAMERON —The Government did nothing in the Budget. We copped a 4c a litre increase on 1 May and last night we copped an increase of 4c and more in some cases. That is a disgrace. The Minister will have to agree with that. What happened to the Commonwealth Scientific and Industrial Research Organisation? It got chopped back another $50m. That is disgusting. Let us say it got chopped back $25m. I hope the Minister voiced his disapproval in Cabinet because the CSIRO has now been reduced to an ineffective research organisation. I sincerely hope that the Minister will do a strong job and come August we will see an increase in that allocation and we will see the CSIRO working effectively. According to the statement made by the Treasurer last night the farm sector received a 75 per cent reduction in expenditure in proportion to other industries. It is an absolute disgrace. We copped 75 per cent of the burden of the increase in taxation last night. I do not believe that that is a very fair burden for us in the so-called cockies' corner to bear. I expect the Minister, as one of the Ministers who goes into the Cabinet room, to do a better job. I have been asked to limit my remarks about fuel. Since the proceedings are not being broadcast-and I would not really want to waste a lot of time speaking to the guys on the other side of the House because they would not understand what I was talking about anyway-and my electors in Maranoa unfortunately are not able to listen to me, I have decided to draw my remarks to a conclusion. The good member from Tasmania, the honourable member for Franklin, and the honourable member for Murray (Mr Lloyd) have both supported these amending Bills relating to petroleum and submerged lands. I have much pleasure in supporting the Bills. Mr BARRY JONES(Lalor-Minister for Science)(11.41) —I thank the honourable member for Murray (Mr Lloyd), the honourable member for Franklin (Mr Goodluck) and the honourable member for Maranoa (Mr Ian Cameron) Mr Dobie —Five minutes, Barry. Mr DEPUTY SPEAKER(Mr Drummond) —Order! I suggest to the Minister that he take no notice of what is going on to my left and that he speak for as long as he wishes. Mr BARRY JONES —Thank you for your generous invitation, Mr Deputy Speaker. I thank the honourable members for their contributions. For the benefit of a bemused House and those few listeners we had until a few minutes ago at this late hour, I remind the House of what this group of Bills is about. It is about petroleum and submerged lands, not petrol in the bowser or in the fuel tank. It creates a new form of title or retention lease enabling companies to retain tenure over promising petroleum discoveries which are not yet commercial but which are likely to become commercial within 15 years and-I say this for the benefit of the honourable member for Maranoa-likely to increase the total volume of available fuel. Who knows, at some future time, if we are able to get away from parity pricing, it might enable fuel prices to fall. It will provide for early public release of data and information obtained by companies in exploring for and developing petroleum. It provides that the Administrative Appeals Tribunal provisions will cover decisions made by the responsible Commonwealth Minister or his delegate alone and for the making of regulations controlling the way in which exploration activity is carried out in the context of matters such as worker health and safety, et cetera. The remaining provisions include revision of registration provisions; improved processes for issuing directions to companies undertaking exploration or development activities; extended access and special prospecting authorities to allow companies to undertake exploration outside title areas; the abolition of royalties in the Territories of Ashmore and Cartier Islands, and the sharing with Western Australia of Commonwealth revenues from the North West Shelf project. In other words, what we have been treated to in the amendment proposed by the honourable member for Murray is simply a bit of campaign oratory totally irrelevant to the Bills but reflecting the well-orchestrated and frequently heard complaints of members of the Opposition, especially the National Party which is the real Opposition in this place-there are not many Liberals here tonight-on the question of parity pricing. I need to remind honourable members opposite of something that they know and ought to have remembered. The principle of parity pricing of petrol was introduced by the Liberal Government. They all put up their hands in support of it-even, I venture to say, the honourable member for Franklin. They all accepted it. They may not have liked it but they went along with it. It has become a reality of life. It has become at this stage a very important- Mr Goodluck —I said that in my speech. Mr BARRY JONES —I concede that. I concede that the honourable member is ambivalent on it. He did not like it but he voted for it. Mr Ian Cameron —I did not support it. I expected you to get rid of it. Mr BARRY JONES —All right. But the question of fuel pricing is totally extraneous to the purpose of the Bills. I will take up with my colleague the Minister for Resources and Energy (Senator Gareth Evans) the points about liquefied petroleum gas made by the honourable member for Franklin, who certainly has shown a very consistent interest in the welfare of the industry. The Government rejects the amendment by the honourable member for Murray and I do not propose to detain the House any longer. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Messages from the Governor-General recommending appropriations announced. The Bill. Mr BARRY JONES(Lalor-Minister for Science)(11.47) —by leave-I move: (1) Clause 5, page 8, line 17, omit ''months' '', insert ''month's''. (2) Clause 17, page 16, at the end of the clause add the following sub-clause: ''(2) Section 77 of the Principal Act is amended by inserting after paragraph (a) the following paragraph: '(aa) a permit ceases to be in force in respect of a block in respect of which a lease is granted;'.''. (3) Clause 31, page 31, line 34, omit ''any such information'', insert ''any information contained in a document to which this section applies that has been furnished to the Designated Authority or has been made available to the Commonwealth Minister under sub-section (1) or (1A)''. (4) Clause 33, page 34, line 15, omit ''and WA2-L'', insert '', WA2-L, WA3-L, WA4-L, WA5-L and WA6-L''. The amendments to the Petroleum (Submerged Lands) Amendment Bill 1985 are essentially drafting changes which ensure that the original intent of the Bill is satisfied. The amendment to clause 17 will allow an entry to be made in the register of petroleum titles when a permit ceases to be in force over a block because a retention lease has been granted over that block. The amendment to clause 31 is to remove an ambiguity from proposed new sub-section 118 (5A) which deals with the release of interpretative information. The amendment makes it clear that the new sub-section refers to interpretative information supplied to the Government in accordance with sub-sections 118 (1) and (1A). The amendment to clause 33 is necessary to give full effect to the agreement between the Commonwealth and Western Australia on the sharing of royalties from the North West Shelf gas project. The addition of licences WA3-L to WA6-L is necessary to define fully the North West Shelf project which includes the North Ranking, Angel and Goodwin gas fields, with the latter two fields being covered by the additional licences specified in the amendment. Amendments agreed to. Bill, as amended, agreed to. Bill reported with amendments; report-by leave-adopted. Bill (on motion by Mr Barry Jones)-by leave-read a third time. Consideration resumed from 23 April, on motion by Mr Beazley: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Barry Jones) read a third time. Consideration resumed from 23 April, on motion by Mr Beazley: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Barry Jones) read a third time. Consideration resumed from 23 April, on motion by Mr Beazley: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Barry Jones) read a third time. Debate resumed from 8 May, on motion by Mr Young: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Drummond) — I understand that it is the wish of the House to debate the Supply Bill (No. 1) 1985-86 concurrently with the Supply Bill (No. 2) 1985-86 and the Supply (Parliamentary Departments) Bill 1985-86. There being no objection, I will allow that course to be followed. Mr WHITE(McPherson)(11.54) —In this debate on the Supply Bills I wish to make a few remarks about the mini-Budget introduced into the House last night. I think that most, if not all, honourable members appreciate seeing a government make an attempt to cut back on government expenditure. It is particularly appropriate that the biggest spending government in the history of this country should make such an attempt. But it is obvious now that that attempt is a failure and that those so-called Budget cuts are a fraud. There are two good reasons for saying this. The first is that, if we look at the figures, we find that only $1.2 billion has been taken off the Forward Estimates of $69 billion-that is, a reduction of about 1.4 per cent. In pure mathematical terms the Government can hardly claim that that is a determined attempt to reduce government expenditure. The second reason is that the Forward Estimates from which that money was taken are simply that-Forward Estimates, a guess as to what the expenditure might be. In other words, they are ambit claims. Of the total of $1.2 billion that was mentioned last night, it would seem to me at a rough calculation that about $230m might have concerned genuine cuts from existing programs, which leaves approximately $1 billion which does not concern cuts but which is simply a trimming of the Forward Estimates. This trimming would have occurred in any case because departments only put in figures which represent what they would like to get. They are simply putting forward proposals. So that $1 billion that was trimmed from the Forward Estimates is really a mythical trimming of a mythical figure. Today in the House the Prime Minister (Mr Hawke) was very keen to quote selectively the comments of various organisations and papers regarding the mini-Budget that was announced in this place last night. What he did not quote, of course, were some of the more adverse comments and, in my view, the more accurate comments. I refer, for example, to the headline in today's Australian Financial Review 'Another blunt razor'. I would be the first to admit that the last exercise in reducing expenditure which concerned a razor gang that was formed some years ago was also not terribly productive. Under the headline 'Unconvincing Knifework-Government Ducks Chance for Major Surgery', the article in the Australian Financial Review states: The Hawke Government has tried to dress up $1,259m in spending reductions and deferrals as deep Budget cuts and a shift in priorities. In fact, last night's May economic statement has trimmed the edges of some programs, ended an array of rorts and embarked on some necessary housekeeping. It . . . has ended in a plethora of small cuts with a careful eye trained on the potential political effects. It is on that point that I wish to say a few words, as to whether this petty pinching around the edges, compared with cuts in major programs, is really worth while. Last night the Government in many cases picked on the old, the disabled and the poor. Let me refer to a couple of instances. One instance concerns the veterans and war widows. It is absolutely beyond me why this Government or any government would want to pick on people who at this time, at their age-most of them are World War II veterans-are in need of these sorts of benefits. Also, why would any government want to pick on the servicemen of this country? There has not only been a reduction in the defence budget, but also a review of some of the benefits which have accrued over the years to servicemen. Those cuts will ensure that the exodus which is taking place from the Services will continue, at the very time when our Services in relative terms have never been weaker and we are looking for more and more independence in this country. Day after day in this place the Minister for Defence (Mr Beazley) tells us with righteous indignation what he is doing and what we did not do. The fact is that in two years this Government has done absolutely nothing except run the forces down. Mr Hollis —That is not true, and you know it. Mr WHITE —It has run the forces down. If the honourable member wants proof, he should read the remarks-if he has not read them-which have been made by the retiring Chief of the Air Staff and see what he says about the direction that the forces are taking in this country. He said, to paraphrase his remarks, that the forces were without direction, with no idea of where they were going. It is all very well to turn around for years and years and say: 'It is your fault'. How long will the Government keep telling that story? The fact is that the Government has been in office for two years and this rundown has continued. Last night's mini-Budget provided another kick in the teeth for servicemen which will only encourage them to get out of the Services. If the Government really wants to cut expenditure, let me suggest three areas in which it can do so. Mr Hollis —Here it comes. Mr WHITE —I can see the honourable member is waiting with eager anticipation. The first would be the area of unemployment benefit. Why does the Government not take a look at the rorts and frauds that are going on in that area? I would like to make a suggestion, at least for investigation, that it is time we took a serious look at this problem and that we adopted, or at least investigated, the American system whereby benefits are automatically cut off at the end of a 26-week period. That does not mean that people have to go without benefits after that period, but it would be sensible, I think, to call people in at the end of a 26-week period and to investigate closely what attempts they have made in that time to secure work. Mr Hollis —They have to go in as it is. Mr WHITE —It is not a meaningful investigation, and the honourable member knows that as well as I do. Another suggestion I would like to make is that we look again seriously at the question of identification cards. This subject has come up from time to time and it has been discarded for a whole lot of reasons, including the intrusion of privacy. The fact is that most of us now carry a whole range of cards. Medicare cards are carried by everyone. It would seem to be sensible at least to investigate again in a serious way the carrying of identity cards to try to stop the rorts and rip-offs that are happening in the area of unemployment benefit. I urge the Government, if it is looking for areas in which to make big cuts, to look at the community employment program because many people despite the cuts that were made last night, would question the validity of this program. It provides very little, if any, training and I suggest that most of that money would be better used in training programs rather than in the whole range of fairly useless projects on which the money is now spent. Mr Hollis —We will cut the ball out of your electorate. Mr WHITE —I would welcome that. Thirdly, if the Government is really serious about cutting costs, disregarding the sham about restricting Public Service growth to one per cent in the next 12 months-having extended it to something like 10 per cent for the last 12 months-why does it not keep it at zero growth and cut it off at the neck? As an aside, let me suggest one other area. Why does the Government not have a look at where the Australia Council is spending its money? Last year it made a grant of $10,000 to the Trades and Labour Council on the south coast to hire a cultural officer. Not satisfied with that, a month ago it made another $10,000 grant to that Trades and Labour Council branch to hire a resident musician for six months. Those are some examples of where, if the Government is serious, I suggest it can look at cutting costs. Finally I refer to the Supply (Parliamentary Departments) Bill which provides a grant of some $19.5m. Of that figure, $2.3m or about 13 per cent, is appropriated for the increase in the number of members of this Parliament. How does the Government expect to convince the people of Australia that it is serious about cutting costs when less than six months ago it embarked on an exercise to foist another 35 Federal politicians, costing about $50m, on the people of Australia. Yet the Government tells us it is serious about cutting costs. We all want to see a serious attempt to cut the range and expense of government. Last night we all hoped to see a firm start made on this program. It is becoming clear, now that people have a chance to absorb what the cuts mean, that it was not a meaningful start. I very much hope that in the Premiers Conference and in the Budget in August the exercise which the Government says it is about to embark on is actually implemented. Thursday, 16 May 1985 Mr ALLAN MORRIS(Newcastle)(12.06 a.m.) —I was expecting the honourable member for McPherson (Mr White) to finish with a bang rather than a whimper. The whimper was so wimpish that it was inaudible to those in the chamber. The fact is that in the last two years we have grown used to an Opposition which is big on rhetoric and big on words, but which trots out the same old tripe night after night until the early hours of the morning. Opposition members pretend that they are doing something, so that they can go back to their electorates and say: 'We have done all this work in Canberra'. When one analyses the work of Opposition members and compares it with their record and performance, one sees that all that is being achieved is a rerun. One has heard of reruns of movies, but here we are being exposed to a rerun of Liberal-National Party incompetence, certainly in the last two weeks. In the last few days it has been fascinating to listen to the promises by Opposition speakers. One harks back to a statement made in the Adelaide Advertiser in 1981, four years ago, when dealing with the then coalition Government and its Treasurer. The article said: Despite its bold words the Government is finding it difficult to contain its spending. This afternoon we heard the Minister for Defence (Mr Beazley) put depth and meaning into the phrase 'bold words'. The coalition Government spoke many bold words on many aspects on many issues, but when it came to the crunch what did it actually do? In recent days we have heard the shadow Treasurer asking how genuine the Government is, and suggesting that there is some uncertainty in that area. That is a substantial statement to make except when one realises who made it. Let us look at the five Budgets introduced by the Deputy Leader of the Opposition (Mr Howard). He has told the present Government that it cannot make predictions and that it is unreliable. Let us look at those five Budgets in detail and the variation in his predictions. He went from a low of $160m, as a mistake in his Budget deficit forecast, back in 1979-80 to a high of $2,799m in 1982-83. The deficit in Labor's first Budget in 1983-84 was the lowest variation from prediction in six or seven years. Therefore, on the first parameter as to projections of deficits, who is reliable? Clearly, the shadow Treasurer is totally unreliable. The same argument applies, though perhaps in a more tragic way, in the sleight of hand of the present Opposition in fiddling its unemployment figures over the years. The coalition Government projected a lower figure than the actual figure. It made out, firstly, that its Budget was more balanced than it was going to be and, secondly, that unemployment was not so bad as it appeared. In 1981-82 there was a 12 per cent variation from the estimates, which built up nicely to a variation of 44 per cent in 1982-83. On what standards, what criteria, what credibility does the Opposition expect the community of Australia to accept its projections or even its comments on the Government's performance to date? I know that the shadow Treasurer is psyched up right now because the other night I watched the turnout of the factions of the Liberal Party, the modest members club, in the members' dining room. The honourable member for Braddon (Mr Miles) was there in full glory. The modest members were there in full glory. I suspect deep down the shadow Treasurer now thinks he might have the numbers, hence his new-found confidence in saying what he can do. The fact is that he has not thought about the National Party, because the real wimps on firm government have been the members of the National Party-the agrarian socialists, our colleagues, our comrades, the ones who say that the Government is there to be milked by segments of the community, particularly their segment, and 'milked' is the operative word. Let us look at the positive side. The fact is that two years ago this Government gave a promise to the people of Australia. The promise was not a rosy one or a glorious one, but it suggested that there was a different way of proceeding. It suggested that it might be possible to guide Australia down a path that was, to some degree, unifying and strengthening. In fact, the people of Australia accepted that and for the last two years they have made one great commitment-a commitment to the future of this country. That commitment consists of things such as wage restraint, sharing the problems, sharing the burdens. That investment has been made and it has been a good investment. The returns are appearing and are now very visible, and that is what the Opposition is so concerned about. What is the nigger in the woodpile? What is the problem? What can destabilise? What can destroy the future, that two years investment? That one thing is fear. The great weapon of the conservatives of Australia is fear. Fear is nebulous and ephemeral, it does not need to be tangible. Jack the Ripper does not need to be a good arguer, he does not need to be logical, he just needs to know where to put the knife. The Opposition abounds with bodies. There is one Opposition member in the back row who has been a body more than once. The knives penetrated on more than one occasion. We have seen the victims of the knives of the Opposition. We have seen the knives wielded amongst Opposition members in the last seven years. The fact is that the people of Australia also have seen it. They will not fall for the fear campaign or for the tactics the Opposition has practised. The current Supply Bills and the Appropriation Bills are practical because the current economic strategy is appropriate. That is what hurts. Members of the Opposition could have done it themselves, but because of their internal conflicts and their inclination towards polarisation, they could not see the picture. Now, it is suddenly emerging that the strategy we have adopted is working. The recently released trade balance figures, the growth figures, the investment figures, the inflation figures, the days lost through industrial disputes figures, are all showing that we know what we are about. What is the final resort, the final tactic, of the Opposition? It is to bring on the tired old discredited ex-Ministers who are out of touch, not just with the portfolios but with reality. They think that if they scream and shout long enough and hard enough and often enough, they might just revive the fear syndrome, they might just be able to destabilise. They know that confidence in Australia is so strong that it is making the economic strategy work. It does not matter what figures they quote, their real objective is to engender fear. It has been a shabby, incompetent, poor performance by members of the Opposition. There was an option available to them. They could have gone back to their rhetoric of the last five years. They could have pointed to where they had made mistakes and to why things had happened and started to correct their thinking. But the fact is that the promises, the suggestions and the projections they are making now are no less rubbery than those famous ones made back in 1977 when the phrases were first coined. Where did the word 'rubbery' come from? It was not from the previous Prime Minister's knife but from his Treasurer's pen. The fact is that the people of Australia will not be gulled again. One can look at the statements and the efforts made in recent weeks in this chamber. I suppose that they are interesting for those of us who are relatively new. Certainly, after two years I am starting to say that I have seen it all before. I saw most of it in the first month. Since then there has been nothing else. To those who have joined us since last December I utter a word of caution: What they have seen in the last few weeks they will see again in August, September and October. The campaign by honourable members opposite to destabilise community confidence is working not against the Government, not against the parliamentary system, but against themselves. That is tragic. I do not doubt that the next aspect of their fear campaign will be suddenly to attack the unemployed and to suggest that unemployment will double and treble. They will try to frighten the same people whom they made fodder of in that famous 44 per cent blow-out in their horror Budget of 1982-83, a horror Budget not because it cut but because it was blatantly dishonest. Mr ROCHER(Curtin)(12.17 a.m.) —With all the rhetoric we hear from time to time about government initiated restructuring of Australian industry, no one on the Government benches will recognise or admit that the greatest restructuring of the Australian economy has occurred over the past ten or so years because of the growth of governments. It is as simple as that. Over the period 1973-74 to 1983-84 government spending has increased from $16.147 billion to $77.428 billion. Even after adjusting for inflation that is an increase of over 70 per cent in a period when economic growth was only 28 per cent. On top of that, over the same period government deficit spending grew from $745m to $14.807 billion. Escalation of those dimensions continued into 1984 and 1985 and will continue into 1985-86. In fact, during the three years of the Hawke Government the averages for the ten years to 1983-84 will be exceeded to an extent not experienced during the last 30 or more years. It must bring a wry smile to the lips of those who have watched industry leaders give fawning, if seriously qualified, support to the mini-Budget. Some of those spokesmen for industry and industrial groupings were the same people who attended the long forgotten National Economic Summit Conference and endorsed the equally forgettable communique. They may also be on the list to attend group therapy to be endured at the coming tax summit clambake. Some of the same people have often criticised the socialists' endorsement of unfettered wage increases, redundancy payments, non-contributory superannuation and other significant imposts on the costs of employment. They will have a chance to understand the con job of the mini-Budget. However, industry can be relied upon to absorb the implications of the mini-Budget which they have so far overlooked. It seems that changes in the complexion of outlays, of which the coalition parties have given warning over the past couple of years, continue to be overlooked by industry leaders and others. The import of these changes has certainly been overlooked. It might soon dawn on parties interested in the part government fiscal policies play in determining the conduct of their private and business lives that public debt outlays next financial year will account for 9.5 per cent of all Commonwealth expenditure. At 9.5 per cent, interest will take the fourth largest slice of each taxpayer's dollar-to pay for this element of the Government's fiscal ineptitude. Interest would have been No. 3 if it had not been for the Hawke socialist Medicare debacle, which will push expenditure on health up to 9.9 per cent of all outlays next year-just 0.4 per cent more than our interest bill. Social welfare payments and payments to the States are still the largest consumers of Commonwealth taxpayers' funds. Next comes health, closely followed by interest payments. Interest payments next year, probably for the first time ever, will exceed expenditure on defence. What an indictment! The Prime Minister (Mr Hawke) repeatedly says that our economy is strong, but if that is true why would there be the need for the huge Budget deficit of last year and the projected deficit for the year ahead? Governments do not have to overspend in good years. That is only a preferred option used as a temporary device in bad times pending economic recovery. The Government clearly does not believe its own rhetoric when it tells us that sound economic growth is with us and is here to stay. In its own disbelief the Government is at least on side with the coalition parties as well as those who placed a savagely reduced value on our dollar against other currencies of the free world. Because Australia under this Government seemingly cannot or will not tackle the real problem of reducing accumulated Commonwealth Government indebtedness, it has been judged by the international money market to be in something of an economic mess, and that is an understatement. That is not the only reason, but it is very important. Another problem is the burgeoning deficit on the current account of the balance of payments. Above all, Australia continues to practise its unique brand of economic hari-kari. We continue to pay the price for the Government's blind obedience to its union masters. If, as some believe, the Australian Conciliation and Arbitration Commission is the executive arm of the union movement, it is equally reasonable to conclude that the Australian Council of Trade Unions is the executive arm of the Hawke Government. In reality, no other conclusion is rationally possible. We should look at some of the products of the unholy alliance between the ACTU-the senior member of the partnership-and the socialist Government that we have today. It is pretty much conventional wisdom that the single greatest cause of both economic stagnation and extraordinary unemployment is the cost of employment to industry and business. It is not uncommon to find that employers have adopted a simple formula in the face of what is after all the next best thing to automatic wage indexation. They simply shed labour as they become obliged to meet the cost of wage increases forced on them regardless of their inability to recover the costs in the price of their product or service. If an employer is forced to pay the work force another 4 per cent and if labour costs amount to, say, 75 per cent of the total operating costs, 3 per cent of that work force can no longer be gainfully employed. It is simple arithmetic. When the accumulated wage burden becomes too much in a small business with one or two employees, the answer all too often is that one employee has to go and the proprietor works longer hours. When will the reality of these trends register with the unions? How long will it be before they and their executive arm, the Conciliation and Arbitration Commission, accept their civic responsibilities and make a contribution to the reduction of untenable unemployment levels? Must the unemployed and informed alike be condemned to despair for the remaining life of this Government before the necessary leadership is shown? It seems that despair is to remain with us, if the portents of the Treasurer (Mr Keating) in his mini-Budget statement prove to be binding. Full wage indexation will continue. The prices and incomes accord is alive and well. It is highly unlikely that there will be any discounting for the inflationary effects of the devaluation of our dollar. The productivity case will proceed and when it does, the Government will just as surely support it. The permission of the ACTU will continue to be sought before taxing or major economic decisions are taken. Subservience to the wielders of monopoly power controlling or determining the supply of labour will continue to be the order of the day under this Government. On another note, attention should be given to the inroads government has made into the private sector through the bureaucracy of the public sector. The staggering growth of the public sector over the past 13 years now warrants not so much a restructured manufacturing or other industry as much as a restructuring of and a reduction in the size of government. If evidence for that is needed we should look no further than the available statistics which tell us that more than 25 per cent of the Australian workforce is employed in the public sector. The equivalent percentage in the United Kingdom is only 21.7 per cent, while in the United States it is 16.7 per cent, in West Germany it is 14.9 per cent and in that most impressive of economic achievers, Japan, it is a meagre 6.6 per cent. Something like 533,000 jobs have been created in the public sector since 1974, while over the same period jobs in the private sector have increased by only 177,000. These are but the symptoms of the growth of government and government extravagance in recent times. There are other measures which I would like to cite but I have agreed to the Whip's suggestion that I curtail my speaking time. That is to be regretted. Given the mismanagement of the business by the Leader of the House (Mr Young) and the fact that we are experiencing Parliament by exhaustion in the last three weeks of sitting, I will oblige because I know that the honourable member for Groom (Mr McVeigh) wants to make a powerful contribution. Mr LAMB(Streeton)(12.27 a.m.) —I rise to speak in this cognate debate on the three Supply Bills before the House, in particular Supply Bill (No. 2) which seeks interim appropriations totalling $1,752m for the period 1 July to 30 November for capital works and services. Of that amount $93.5m is to meet Medicare grants for the States. It is about some of these Medicare arrangements that I want to talk tonight, including funding earmarked for formal Medicare public hospital arrangements. Almost all of this is for the continuing increase in the number of patients electing to be treated as public rather than as private patients under Medicare. The increase is not due to inflation but to the waiting lists. I have some figures which show that 25,000 people were on hospital waiting lists in Victoria at the end of March. They are not fully refined figures. They are possibly not accurate, but let us assume that they are around the 25,000 mark. These are the extra costs forcing the seeking of this appropriation. I guess that the main reasons for this are a recent greater measure of confidence in our public hospitals, a drop in private health cover so that more patients cannot opt for private health cover and a shortage of nursing staff. The reasons for this situation are quite clear, as I will point out, but they will not be acknowledged by members of the Opposition because they are interested only in attacking Medicare for political capital. They are not concerned for people. They are not concerned about health delivery. They are concerned about making cheap political points. Let us look at those reasons in more detail. First of all, I refer to the run-down in public hospitals over 30 or 35 years under a succession of Liberal governments which turned their backs on public hospitals and encouraged the proliferation and expansion of profit-making, entrepreneurial private hospitals. The changeover to Medicare, which quite properly provides universal compulsory insurance to provide access to public hospitals without a means test, would not have had undesirable effects such as these long waiting lists had we had a solid base-an extensive system of public hospitals. In contrast, the Liberal private health insurance system left two million people uninsured and uncovered for hospital treatment. It created what I can only describe as a two-class system of health care. It is no wonder that people deserted it in droves when the alternative of Medicare appeared on the scene. Many people who could have afforded to stay voluntarily with the private health funds have chosen not to do so. I point out that they made that choice against the Minister's own advice. He said that those who could afford to stay in the voluntary health funds should do so voluntarily. One doctor in my electorate said to me that everybody should have private health insurance, just as they take out car insurance and life insurance. I pointed out to him that those on very low incomes and fixed incomes who cannot afford car insurance, are the ones likely to have accidents and be in the position of having to fork out a lot of money for their own repairs and those of someone else. People on low incomes who are burgled or who have their houses burnt down often do not have sufficient insurance coverage. So it was with medical insurance coverage. Such people cannot afford it. They were forced to do so in the past by the lack of public hospitals and the second rate, shonky Liberal health insurance scheme. That is not so now. Another reason is the shortage of qualified nurses. I turn to a recent statement by the Victorian Minister of Health, Mr David White, who said: The increases in the waiting lists are largely because of the shortage of qualified nurses and industrial disputes over the past seven months which have seriously curtailed the normal operation of hospitals. The nursing shortage will be eased soon when 300 nurses join the hospital system. Between 90 and 100 of the new nurses are taking refresher courses before returning to nursing. A further 200 have been recruited from Britain. I know they are stop-gap measures, but stop-gap measures had to be taken. These waiting lists have been with us for a long time, right through the Fraser years. Let the Opposition not forget that. Simple attacks on Medicare do not provide any form of a solution. Medicare is the correct approach to health insurance. It underpins access by all to hospital and medical care. The Government recognises that any system requires continuous review. It will be fine-tuned. The Minister for Health has indicated some of the fine-tuning that will take place over the next few weeks. Medicare needs that fine-tuning to improve it further. Fine-tuning and improving suggestions about hospital health care delivery will come from both State and Federal Governments. Mr David White, the Victorian Health Minister, is reported as saying that the Victorian Health Commission has received 28 submissions from hospitals on ways to cut waiting lists and that a realistic strategy to reduce the list would be announced by the Government in June. A well thought through strategy is what is required-not firing from the lip, not attacks on Medicare. All the Opposition is looking for is cheap political capital. We want to deliver proper health and hospital delivery care. I now turn to a less well known Medicare arrangement with the States which is relevant indeed to what I have been saying, that is, allocations under the Commonwealth expansion program for community health centres. In 1984-85, $18m was provided by this Federal Government to the States for community health care. Six million dollars of that was provided to Victoria. The worth of community health centres is possibly widely recognised but not fully accepted by all the medical and paramedical personnel. Community health centres started overseas long before they did in this country, mainly in the United Kingdom and the United States of America. Mr Porter —Surprise! Under that nationalised health system. Mr LAMB —The honourable member talks about national health systems, but what he is not talking about are community health centres-a great demonstration of his ignorance in this area. He should listen carefully and find out about community health centres. Starting from single, specialist functions, such as baby health centres and those sorts of things, community health centres have developed into meeting a goal of providing an integrated medical service, providing comprehensive and personal care supported by allied health professionals. In 1972 Dr Sidney Sax, an adviser to the Whitlam Government, stated that a model primary care team should be set up in Australia and be capable of providing the three essential services of primary medical care, nursing care and social intervention. This was certainly the goal of the Whitlam Government in 1973, when that idea was set up. Those health centres have taken several forms-women's health centres, to treat the dissatisfaction with the male delivered health care met by many women; the Aboriginal health centres, to provide special attention to Aboriginal needs; and community based and community administered health centres. These centres have played a big role in preventive medicine, keeping people out of hospitals and keeping waiting lists down. I have pleasure in recalling that when I was the member for La Trobe during those Whitlam years we established the Mountain District Community Health Centre. An establishment grant of $7,500 was provided at that time. How it has grown over the last 10 years. The centre now has a staff of 17 and had a budget in the last financial year of $300,000. I could give the facts and figures for the last financial year. The centre treated many thousands of local patients in a most cost-effective way. The situation now is that the effective full time staff of three, filling five positions, currently funded under the expansion program under the Medicare arrangements, are in danger of losing their jobs. The Mountain District Community Health Centre has been able to extend occupational therapy and physiotherapy services to full time services because of the extension program. The Federal Government has pledged to continue this funding to the States in the next financial year, with the injection of $18m to which I referred earlier. This was a promise made under the 1983 prices and incomes accord to restore community health funding to the real level of funding in 1975 and so reverse the drop in real terms that occurred in the Fraser Liberal years. This Government's pledge is clear. I want to see those staffing positions maintained. Therefore, I call upon the Victorian Government to ensure that the portion of the funds it receives of that $18m is allocated to the Mountain District Community Health Centre to make sure that the people of that area-isolated as they are from hospitals-get that money, that the positions are maintained and that the waiting lists of the hospitals are kept down. Employees are already leaving that health centre. They are looking for other employment. They have families to keep and jobs and incomes to worry about. There should be an immediate indication from the Victorian Government that the funds will flow from 1 July so that this very important service can continue. Mr McVEIGH(Groom)(12.38 a.m.) —Supply Bill (No. 1) 1985-86 seeks an appropriation of $32m under the Department of Resources and Energy and reflects an arrangement with Queensland Mines Ltd to purchase that proportion of its total uranium production originally destined for export to the French authority, Electricite de France. This is a disgrace. It is a disgrace because this Government is paying $32m of public money so that it can pursue its foolish and irrational policy of banning uranium exports to France. Worse, this is only one of many appropriations expected to be made in the millions of dollars pay-off. The Australian taxpayer will be further punished as this Government continues this policy. It is a policy which penalises the Australian taxpayer, benefits the French Government by allowing it to purchase uranium more cheaply on the spot market, and is unenforceable because of the European Atomic Energy Community agreement. The Treasurer (Mr Keating) needs to explain to this House how much more this ludicrous policy is going to cost the Australian taxpayer and Australia's trading image. The French have just resumed nuclear testing in the Pacific; so are we right to expect that we will have to continue to compensate Queensland Mines? The Minister must explain how much more this will cost the Australian Government and how much it is likely to save the French Government. He must also explain whether he proposes to amend the Euratom Agreement so as to make the ban enforceable. Last night the Treasurer had an ideal opportunity to ditch some of Labor's ideological baggage and to remove the ban on the export of uranium to France. He patently refused to do this, preferring to opt for illusory cuts and cheap accounting tricks that would have had him investigated by the Corporate Affairs Commission if he had tried to do it as a director of a public company. For the Australian exporter, however, the follies of that statement were not confined to rubbery figures and Government timidity. The Treasurer's statement last night also had profound implications for Australia's international competitiveness. In stating that there will be no discounting for the effects of the devaluation on the consumer price index, and by promising only a deferral of the productivity case, he pushes the Australian economy into a depreciation-inflation spiral which will erode the positive benefits of depreciation being experienced by exporters. A devaluation of a nation's currency is a reduction in living standards whether we like it or not. To argue that one section of the community should be totally insulated from that reduction is to maintain that the rest of the community should bear the brunt of an even bigger reduction in living standards to compensate wage and salary earners. Mr Bill Kelty, the Secretary of the Australian Council of Trade Unions, while addressing the Socialist Forum earlier this year, boasted that full wage indexation was a luxury enjoyed by no other trade union movement in any country. He said that in 1985 Australian workers would receive wage increases unmatched by unionists in the rest of the world. This is the principal reason for Australia's declining international competitiveness. Particularly arising from a devaluation, it is imperative that any increase in prices not be passed on in wages by means of full wage indexation. If this occurs, any benefit to our competitive position will be lost and our trading position will, in fact, worsen. Confidence in the Australian economy will be lost by full wage indexation. Australia's inflation rate is still 50 per cent greater than that of our major trading partners and is headed upwards. Full wage indexation takes no account of the capacity of individual employers and enterprises to pay. As such it amounts to economic insanity. The Hawke Government is willing to destroy the competitive gain to our exporters and import-competing industries from a devaluation in order to appease the trade union bureaucracy and the wealth of left wing members in this Parliament. A depreciation of our currency is not costless. It represents a reduction in the value of our national assets. The only advantage is the competitive gain which the depreciation confers upon our export and import-competing industries. Those competitive gains will easily be lost or squandered if our exporters and import-competing industries are forced to pay wage increases to compensate wage and salary earners for the cost effects of the depreciation of our currency. Such wage rises will completely remove the competitive gains of the depreciation. Clearly, the vacillation of the Prime Minister (Mr Hawke) from one position to another over discounting proved that he lacked the authority within the Labor movement to impose a full discounting of wages. The Treasurer's statement last night confirmed that loss. As we are all aware, Australian business is showing an increasing wariness about the future. That mood will be extended by the weaknesses shown by the Hawke Government last night. One cannot proceed sensibly into positive business and investment planning unless one can perceive both the will and means to restrain wages enough to prevent them, in time, multiplying the impact of this devaluation on inflation. The less than ebullient current mood in business can be attributed to the simple mechanics of loss of competitiveness in Australia relative to the rest of our trading world. The Treasurer by his statement last night will not fool the business community by implying that a deferral of productivity increases will compensate for the failure to discount wage indexation for the depreciation. The simple fact is that there is no productivity increase that has not been used already in restoring profitability and creating jobs. The Treasurer's proposed actions, even in part, would only cost jobs, and competitiveness. Australia's international competitiveness has, unfortunately, deteriorated in recent years. The Government's stated policies are now inimical to improving competitiveness as it appears determined to offset any possible improvement. The Confederation of Western Australian Industry constructed indices of competitiveness of exports of manufactures, mining and primary production, and an index of the competitiveness of import-competing manufacturing. It showed that an increase in competiveness in 1983 was curtailed by the 4.3 per cent wage increase granted in October 1983. There has been larger wage growth relative to price growth in Australia's mining and primary export sectors producing compared with our competitors. The widening gap evident in the charts indicates a greater decline in wage competitiveness than price competiveness relative to our competitors. On the two aspects fundamental to international competiveness-cost structures and inflation rates-this Government is proving itself hopelessly inadequate. What this Government does not seem to realise is that success in an increasingly deregulated and competitive world requires decisive, political and economic leadership and most of all discipline and direction. The Government's Supply Bill and the Treasurer's statement last night show none of these qualities. Mr HOLLIS(Throsby)(12.46 a.m.) —I am pleased to speak on the Supply Bill (No. 1) 1985-86 and related Bills. I must say at the outset that I do not know why the Opposition, especially the honourable member for McPherson (Mr White), was screaming about the cuts in government expenditure announced last night. It is always the Opposition which is urging us to make cuts, and immediately we do, what does it do? It screams about them. The honourable member for McPherson talked about all the cuts that he wanted to make. He wanted to cut the Commonwealth Public Service and in the next breath he said: 'But we have to have an investigation into the unemployed'. How will he have an investigation into the unemployed unless more people work for the Commonwealth Employment Service? I suppose he will get some of his mates to work for the CES in their free time. That is the sort of thing honourable members opposite would do and would enjoy doing. Because of circumstances beyond my control this is the first opportunity I have had since the recent election to address the House, except briefly in an adjournment debate. Naturally I am pleased to exercise this right and, if I exercise the latitude permitted to me, I may range widely in some of my remarks. At the outset I congratulate Mr Speaker on his re-election to the high position he occupies in this House. I also congratulate and express my good wishes to the new honourable members on both sides of the chamber. I return to this House as the member for Throsby. The electorate bears the name of one of the pioneers of the area I now represent, Dr Charles Throsby. It covers the municipalities of Shellharbour and Kiama and Wingecarribee Shire. It is an urban and rural electorate. I am pleased to pass my former electorate to my colleague and friend the honourable member for Macarthur (Mr Martin). I know that he will make a significant contribution to this Parliament and through it to the good government of Australia. I take this opportunity to thank those loyal Australian Labor Party members of Throsby who worked so hard to ensure my return to Parliament. I especially thank my campaign director, Russell Hannah; secretary, Chris Cartledge; those who put me here as a representative of the working class and those who showed their confidence in me by electing me to represent the electorate of Throsby in the Federal Parliament. I especially thank the right honourable member for New England (Mr Sinclair), who, because of a visit to my electorate to campaign against me, guaranteed me a 3 per cent swing. There is no greater problem, economic or social, facing Australia than unemployment, especially endemic youth unemployment, something that every honourable member should ponder on in International Youth Year. The background to the unemployment crisis in the industrial Illawarra can be explained in terms of the economic structure of the region, the severity of the recession and the corporate strategy of Broken Hill Proprietary Co. Ltd, by far the dominant company in the region. All commentators agree that the region is vulnerable to fluctuations because of its narrow economic base, heavily concentrated around the coal and steel industries. It became apparent from the mid-1970s that the region was facing serious, long term structural problems. It required a large injection of Commonwealth and State funds and active participation by the private sector to revitalise its industries and encourage new economic activities. This was not forthcoming under the previous Liberal-National Party Government. The Commonwealth demonstrated its disdain for the people of Illawarra by handing out public funds to large companies for the purpose of retrenching workers. The conservatives, by refusing to acknowledge problems of specific regions in Australia, condemned the Illawarra to mass unemployment. It will require a major effort from all tiers of government to rejuvenate these regions. This process commenced during the term of the first Hawke Government and will continue. It was the Hawke Labor Government that brought the first glimmer of hope to the depressed Illawarra region. The Illawarra has an underdeveloped services sector and a long-standing backlog of social infrastructure. There is a high proportion of low-skilled workers, and education levels are low by Australian standards. Youth unemployment, as recorded by the Wollongong and Warilla offices of the Commonwealth Employment Service, has been the highest of any major centre of population in New South Wales since the mid-1970s. Many people have grown to adulthood without ever having regular employment. These are the young Australians who were put on the scrap-heap by Malcolm Fraser and his Government's disastrous management of the economy. This Government is determined to give these young people the opportunity to lead fulfilling lives and to find socially useful work. Women have always been particularly disadvantaged in the region. Some employment gains have been made in the past decade but the recession, technological change in the finance and retail sectors, centralisation of facilities, takeovers and falling sales have all but reversed these gains. The women's movement has struggled for many years to create employment opportunities for women in the male-dominated coal and heavy industries. Once again, the recession has denied women their rights to equal opportunity in employment. The Illawarra region is the most cosmopolitan in Australia. Thousands of migrants came to the Illawarra in the hope of a better life, with stable employment and opportunities for the future. Their hopes have been dashed by the collapse of employment in the region. As my colleague the honourable member for Macarthur said in his maiden speech, the Illawarra was developed around the coal, iron and steel industries. Given that the problems of these industries are central to the problems confronting the Australian economy, I wish to address these industries before outlining some of the employment options for the future of the region. The starting point is to ask what kind of economy we envisage for the year 2000. What kind of manufacturing sector will be capable of producing for local needs, as well as selectively competing in international markets? I do not accept that we must become a tourist haven for foreign visitors and be dotted from coast to coast with casinos and convention centres; nor do I believe that our only growth industries should be geared around leisure because there is no work to do. I would like to see more tourists and I would like to see people working shorter hours but the core of any economic strategy must be the development of a modern and sophisticated manufacturing industry and the expansion of opportunities for rational planned resource development. The Illawarra is in a good position to take advantage of these opportunities. The immediate problem facing the Illawarra is that, even with the national economic recovery, the region still remains heavily depressed. There is no resources boom, high technology or tourist-led recovery around the corner capable of creating the 25,000 jobs over five years that would bring unemployment in the region down to 5 per cent of the work force. Stimulation of the housing and construction industries has brought benefits to the region in terms of housing, but in the longer term there needs to be an economic program to revitalise the region, creating new jobs. Unlike the Fraser Government, whose economic policies widened the differences between rich and poor regions, the Hawke Labor Government is concerned with developing policies which are relevant to specific regions of Australia. We must no longer permit Australian to be put against Australian, group against group, region against region. There is no simple solution to the problems of the Illawarra. There are many creative community organisations, small businesses and trade unions in the region, and there needs to be greater democratisation of decision-making in enterprises. A number of overseas experiences have achieved positive results in creating jobs in depressed regions by establishing non-profit, neighbourhood-oriented organisations. They have been able to improve the skills of unemployed people and provide a number of services at the community level. Small ventures, such as community development corporations, co-operatives and small businesses, could contribute to employment growth in the Illawarra if care is taken to assess the prospects of new products, capital is sufficient during risky start-up periods, and people are given sufficient time to develop new skills, such as accounting and legal skills, as well as management expertise. The community employment program should encourage these kinds of initiatives. Government assistance is granted to corporations in return for agreement on employment levels, investment, technology, research and development and so on. The State bargaining approach would enable the Government, trade unions and corporations to sit down and negotiate planning agreements on industry development. Until governments and communities can influence decisions on investment levels to ensure re-investment takes place in communities, workers are pre-notified about employment changes, and trade unions and communities have access to corporate accounts and investment intentions, disasters of the scale that have beset the Illawarra will continue to occur. In conclusion, the Hawke Labor Government was returned last December because the people of Australia supported its policies and because only this Government has the policies to lead Australia to a better, more equitable future. Mr SPENDER(North Sydney)(12.57 a.m.) —We have heard from the honourable member for Throsby (Mr Hollis) the usual sort of cant that we expect to hear from the Labor Government, in particular when he talked about the Government being brought back into power, as it were, on a mandate of the Australian people-under what must have been one of the greatest confidence tricks of all history. Let us put that confidence trick to one side because we all know that this Government is stumbling, fumbling and lurching its way out of power-and its supporters know it as well. I wish to refer to a question which the Government very rarely addresses. When it does address this major question that we need to face it does so in a way that is designed to confuse the Australian public rather than to elucidate. That major question is the security of our country and our future. That brings me directly to defence policy and to foreign policy, as they are and as they may develop. I commence with a couple of quotations from that most attractive, ebullient and headstrong Minister for Defence (Mr Beazley), a man who sometimes lets his mind travel slightly behind his words and a man who I find is a most attractive person. I listened to the Minister this morning when he answered a question put to him by the right honourable member for New England (Mr Sinclair) on the subject of defence. There were two things that I picked up in an answer which was rambling and designed, I am sorry to say, to confuse and to mislead-perhaps not deliberately-rather than to inform. He said that it is this Government which seriously addresses the defence forces of the nation. He also said that it was the Opposition, the Fraser Government, that had depleted the defence forces. I should like therefore to address two questions: Capital equipment purchases, of which he boasted very highly, and the reserve forces of this country. On the subject of capital equipment purchases I am sorry to say that the Government's answers have been deeply misleading. On the subject of the reserve forces, its policies have been an unqualified disaster. On the subject of capital equipment expenditure, the Minister stated on 14 May 1985 in Hansard in answer to a question put to him by the right honourable member for New England: 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. A member of the public listening to that answer would think that the Fraser Government had done nothing and that all of the initiatives, all of the purchases and all of the decisions had come from this Government. What in fact is the record? Capital equipment acquisitions under the Whitlam Government fell to around 7 per cent of the defence vote. The lead time for procurement of new equipment, from decision to expenditure, is notoriously long, often as much as 10 years. Under the Fraser Government capital equipment expenditure was brought up to 17 per cent and when honourable members recall how far it had dropped under the Whitlam Government, they will recognise that that was a major achievement. The Minister's statement that I have quoted is correct as far as it goes, but I am sorry to say that he has employed one of the oldest and most debased of debating techniques. He has given half the story and not the other half. The reasons for boasted increases of capital equipment expenditure are not based on decisions made by this Government; they are based on decisions made by the Fraser Government which have been continued by the Hawke Government. There has been no major program on capital equipment acquisitions by this Government and no projects are currently attributable to signed contracts for either ships, aircraft or army weapon systems. Of the $1 billion and $3m calculated to be spent in these three areas during the 1984-85 financial year-I take these figures from the Additional Estimates-only 7.4 per cent, less than one per cent, is outlaid on projects initiated by the Hawke Government. So much for its initiatives; so much for its programs and so much for its vaunted obligations to the Australian people and to the defence of this country. The extent of the dominance of the equipment vote by projects initiated by the Fraser Government is shown by the planning for the 1983-89 five-year defence program. If the honourable member for Kalgoorlie (Mr Campbell) who is interjecting will listen, he may learn something. Of the $8 billion planned for expenditure on capital equipment, only $2.9 billion will or may be spent on programs initiated after June 1983, such as submarines-there is some doubt about that at the moment although we are always told that a decision is imminent-and helicopters, although we know that there is a cloud hanging over the helicopter decision. Contracts have not been signed for either of those projects. These are two of the major proposed expenditures, neither of which has been brought to the stage of signed contracts. After all, if we are going to look at capital expenditures we should look to the signed contracts and the real commitments. In sum, 64 per cent of all money spent on defence equipment between the first Budget of the Labor Government and 1989, is planned to result from decisions of the Fraser Government. I think every person in this House and in this Parliament will recall the way in which the Prime Minister (Mr Hawke) embraced the FA18 project. Indeed, he was there at the roll-out. He almost embraced the plane. One would have thought that it was something not merely conceived by his Government but invented by his own genius. As I say, the result flows from decisions made by the Fraser Government. That is something this country should not forget and it is something that the Minister and the Government should make perfectly plain when speaking on the subject of defence purchases. In the current 1983-89 five-year defence program of $8 billion, that program is based on a government policy predicted on growth in defence spending of 4.5 per cent per annum in real terms. What has happened? That has been trimmed. We all know that this is the government of trimmers and that the chief trimmer is the Prime Minister (Mr Hawke) himself. That figure is now down to 3.1 per cent. In short, the estimates are out of date and need to be reconsidered. What will be the result? First, the Government will almost inevitably be forced to defer new equipment programs. We have all seen a lot written in the Press about that problem. Secondly, in the next decade the severe effects on the defence equipment available for the armed forces will be felt. They will have resulted from the decisions made by this Government which so boasts of its commitment to a strong defence policy and which in opposition and during the last election so boasted of its capabilities in that area and of an independent foreign policy which was to be supported by a strong defence capability. So much for this Government's seriousness, dedication and determination in that area. It trims and it will continue to trim. As we all know, when it comes to trimming, the flim-flam man, the head of the Government, will be the chief of the trimmers. I refer now to the reserve forces of this country which are of great importance. They are of great importance because of the small size of our professional forces. Government policies in that area have been an unqualified disaster, first of all under Mr Scholes, as he then was, who has now been transferred to the portfolio of Territories. Mr Lamb —He still is Mr Scholes. Mr SPENDER —Oh yes, I am aware of that fact. I am also aware of the fact that he has been transferred elsewhere because even this Government could not put up with the ineptitude that he displayed. The disaster has continued under this Government. What have we seen? Since September 1984 there has been a drop in all three arms of the reserve forces of just on 25 per cent of force strength. It does not take much imagination to understand that that kind of drop in the reserve forces must have an immense effect on the capabilities of the forces and reflects a great drop in morale of the people in the forces. Why did they leave? Did they suddenly get tired of doing their duty for their country? No. They left directly because of the policies of this Government. Let me cite two that have had an immediate and lasting impact-first, the tax on reserve pay and, secondly, the reduction in training times. People who join the reserve forces give up a great deal. They join because they believe that they have a part to play in this country, because they think that this is a great country and that it is worth while putting something into it rather than just taking something out. We have had a vote of 25 per cent of the reserves saying: 'Thank you very much, we have given our time and our energies but in these circumstances we will not give them any more.' I should like to hear one member of the Government give any explanation for that drop other than the ones which I have given. Mr Cobb —It is a shameful situation. Mr SPENDER —It is shameful, it is dangerous and it results from a removal of incentives and opportunities for training, advancement and development of the qualities that reserve forces believe they should have. We all know that it is an old technique of governments-I will not say that this Government is the only government that has engaged in it-to bring on debates as late as possible, to push debates through so that no real opportunity is given to honourable members to make considered contributions. Nevertheless, I would like to say something about the ANZUS Treaty. We have had a flock of Government statements from various Ministers about the ANZUS Treaty-ranging from Senator Ryan, who thought that the whole thing should be looked at again, to the Prime Minister, whose stated support of the Treaty was coupled with his pusillanimous refusal to honour the inherent obligations of that Treaty. There was the small matter, for example, of the MX missile tests. This country was to provide some small logistical assistance to the testing of the MX missile. The Prime Minister had agreed to that. What happened? Apparently in the course of a collection of telephone calls from Brussels, or wherever it was that he was at the time, the Prime Minister was advised by Senator Richardson, his numbers man, that things were not all that good with the Left, and that he had better cave in. The pronouncements of the United States Government on the subject were benign, and those who sought to say that this has done us no damage miss entirely the obvious point. The obvious point is this: The US Government would see no particular reason to engage publicly in a dispute with the Australian Government at a time when the ANZUS Treaty was falling into a state, not just of disrepair, but of great and possibly lasting damage. On this side of the House, we know that there are those in the Government who detest the ANZUS Treaty, that there are those who detest any alliance with the United States and those who draw no distinction between the policies of the Union of Soviet Socialist Republics and the policies of the United States of America. We know the cost that the implementation of that kind of thinking would have for the Australian people. Some people in this House, and some in the country, entertain a fundamental fallacy that we can have things both ways. They believe that we can contribute little, that we can stand back from the ANZUS Treaty, that we can say 'No. We are not going to act as messenger boys for the United States Government' and 'No, we are going to put pressure on the New Zealand Government; we will simply stand by and see what happens when our vital interests are involved'. Our vital interests are deeply, immediately and in the future involved in the survival of the ANZUS Treaty. Some would say that we should simply have government to government arrangements. Let me remind the House of the very great distinction between government to government executive arrangements and arrangements entered into by treaty. The ANZUS Treaty was entered into in 1951. If it goes, what will replace it? The choice will lie between a new treaty, if one can be negotiated, and reliance on government to government arrangements. Under the United States Constitution, the treaty-making powers are vested in the President, who must have the concurrence of two-thirds of the Senate. The last major security treaty ratified by the United States Senate was the Manila Pact of 1954. The negotiation of the ANZUS Treaty was an arduous enough task. The climate of opinion in the United States has changed greatly since then. To get the support of the President and the Senate for a new treaty would, I should think, be an even more arduous task that it was in 1951. What kind of a treaty would it be if we were forced to look to a new treaty? What obligations would it contain and what obligations would it impose on us? The argument that one can have government to government relationships overlooks the fundamental difference between a treaty and those arrangements. Government to government security arrangements are quite different from a formal treaty. These arrangements are essentially between executives and are subject to change. They may be abrogated by an incoming administration or even by the administration that has made them. They lack in all respects the long term character and the binding force of a treaty entered into under a country's constitutional processes and the value that a treaty with the United States has in the eyes of the world. It is in the interests of every citizen of this country for us to maintain the ANZUS Treaty. We should do all in our power to maintain it because of the great difficulties that we may face if we have to negotiate a new treaty. We are not looking to the short term; we are looking to the long term. We are looking to the next 2 years, 5 years or 10 years; we are looking to the future security of our country, and that is a long term matter. We are looking to having the kind of treaty arrangements that will secure our future to the middle of the next century. We must have as part of that future a strong, binding treaty relationship with the United States. Many members on the Government side believe that the ANZUS Treaty should remain as strong as possible. Not only has this Government been derelict in its duty but also it has been cowardly in taking a short term view of what the Australian Labor Party's electoral prospects would be if there were a blow-up with the Left. Those kinds of party factions-factions which do not exist on this side of the House but which exist on the Government side-must be put to one side. There are now three entrenched factions. The members of those factions should wear badges-a red badge for those on the left hand side, pink for those in the middle and a slightly bluish badge for those on the Hawke side of politics. So let us think of our future and our treaty obligations. Mr DEPUTY SPEAKER(Mr Andrew) —Order! The honourable member's time has expired. Debate (on motion by Mr O'Neil) adjourned. House adjourned at 1.17 a.m. (Thursday) The following notice were given: Mr Scholes to present a Bill for an Act relating to repatriation and related matters. Mr Hurford to move- That, in accordance with sub-section 49 (2) of the Audit Act 1901, the House approves the variation to the form of the Statement of Financial Transactions of the Commonwealth presented to the House on 15 May 1985. Mr Young to move- That, unless otherwise ordered, the House shall meet for the despatch of business on the following days and at the times specified: Monday, 20 May, at 2 p.m. Tuesday, 21 May, at 2 p.m. Wednesday, 22 May, at 10 a.m. Thursday, 23 May, at 10 a.m. The following papers were deemed to have been presented on 15 May 1985: Defence Act-Determinations-1985- No. 24-Flying Allowance and other allowances. No. 25-Salary of Permanent Force Members, Pay to Reserve Force Members and other allowances. No. 26-Overseas Living Out Allowance and other allowances. No. 27-Overseas Living Out Allowance and other allowances. No. 30-Disturbance Allowance, Insurance on Removal Overseas and Overseas Rental and Utilities allowance. No. 31-Salary of Permanent Force Members. Lands Acquisition Act-Lands acquired for- Construction, maintenance and operation of pipelines or parts thereof under and in accordance with the Pipeline Authority Act 1973-South Australia. Office accommodation-Adelaide, SA. Seat of Government (Administration) Act-Variations of plan of lay-out of City of Canberra and its environs, dated 15 May 1985 (2). The following answers to questions were circulated: (Question No. 135) Mr Beddall asked the Attorney-General, upon notice, on 14 March 1985: (1) Has he considered increasing the penalties for the smuggling of hard drugs into Australia. (2) What steps has the Government taken to ensure that drug trafficking into Australia will be curbed. Mr Lionel Bowen —The answer to the honourable member's questions is as follows: (1) The Special Premiers' Conference on a National Campaign Against Drug Abuse held in Canberra on 2 April 1985 noted that the Commonwealth is developing model legislation in relation to drugs. The relevant provisions of the Customs Act 1901, which already provide heavy penalties for the importation of narcotic drugs, are being reviewed in the course of the development of the model legislation. (2) The Commonwealth announced at the Special Premiers' Conference a number of law enforcement initiatives directed at drug trafficking into Australia. These include: (a) provision of substantial resources-equipment and staff costing $5.5m over 2 years-to strengthen the capacity of the Australian Customs Service to interdict drugs entering Australia. Fixed barrier operations will be buttressed with additional surveillance, enhanced communication and x-ray machines. There will also be a revised Customs strategy for the North of Australia; (b) additional resources in the order of $1.5m over the next two years to enhance the capacity of the Australian Bureau of Criminal Intelligence to provide drugs intelligence to all participating law enforcement agencies; (c) the Commonwealth's decision in principle to introduce amendments to the Customs Act to clarify powers to detain and search persons concealing drugs internally to bring them into Australia; (d) preparedness to extend telephone interception powers to the States in relation to drug trafficking subject to stringent controls including warrants; (e) proposed legislation to create a new offence of sending illicit drugs through the mail and to enable the Australian Federal Police (AFP) to examine suspected mail. The Government has already taken a number of steps which will aid in the fight against drug trafficking including establishment of the National Crime Authority and references to the Authority of drug related matters, extension of the charter of the Commonwealth/NSW Joint Task Force on Drug Trafficking, revised and improved coastal protection arrangements and additional resources for the AFP including our election commitment of $7m for enhanced computer capacity and $10m on additional manpower over the next three years. The Special Premiers' Conference noted that the Australian Police Ministers' Council and the Australian Transport Advisory Council would be considering measures to upgrade waterfront security, including a recommendation for a new National Port Security Authority. It was also made clear that Australia's strong commitment to international efforts to combat drug trafficking will continue. Opportunities for increased co-operation with other countries on narcotics matters will be actively pursued. (Question No. 163) Mr Langmore asked the Minister for Territories, upon notice, on 19 March 1985: (1) What is the structure of the system of milk marketing in the Australian Capital Territory. (2) What are the sources of milk for the Australian Capital Territory. (3) How is the price of milk in the Australian Capital Territory determined. (4) Does the Government influence the price of milk; if so, what criteria are used for setting the price of milk. (5) What changes to the price of milk in the Australian Capital Territory have there been since 1 January 1980. Mr Scholes —The answer to the honourable member's question is as follows: (1) Under the Milk Authority Ordinance 1971, the functions of the Milk Authority are to engage in, regulate and control the supply, sale and distribution of milk in the Australian Capital Territory. In discharging its functions, the Authority has the power to enter into contracts for the acquisition, processing, sale and distribution of milk. Tenders for the supply of unprocessed milk to the Territory are invited by the Authority. Processing of the raw milk is undertaken by the Dairy Farmers Co-operative under contract to the Authority. Distribution of milk is carried out on behalf of the Authority by either licensed vendors who deliver to residential areas or by the Bega Co-operative Society which is licensed to deliver to non-residential areas, such as retail shops. (2) The following suppliers commenced their three year contracts on 1 July 1984: % Bega Co-operative Society (Bega) 40 Haberfields (Albury) 10 Perfection Dairies (Baulkham Hills) 5 Murray-Goulburn Co-operative (Victoria) 42.5 D M and M Stuart (ACT) 2.5 100.00 (3) Under section 16 of the Milk Authority Ordinance 1971, the Milk Authority has the power to set milk prices. The maximum retail price is determined by the Authority, having regard to the cost of unprocessed milk and cost based margins determined for the processor, non-residential distributor, residential vendor and the retail outlets. A small allowance is also made to cover the Authority's administrative costs. (4) See (3) above. (5) The following changes have been made to the retail price of a one litre carton of milk since 1 January 1980: 1 January 1980 45 cents per litre 11 July 1980 50 cents per litre 10 July 1981 56 cents per litre 15 July 1982 63 cents per litre 1 July 1983 66 cents per litre There has been no alteration to price since 1 July 1983. (Question No. 199) Mr Ruddock asked the Attorney-General, 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 ability 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 Lionel Bowen —The answer to the honourable member's question is as follows: (1) Nil. (2) A record is maintained of language skills of staff. (3) A register is maintained to identify staff with language skills. (Question No. 267) Mr Connolly asked the Minister for Housing and Construction, upon notice, on 21 March 1985: (1) What arrangements does the Minister's Department make for the production of films and videos for both internal and external use. (2) Is any production carried out within the Minister's Department. (3) How many films/videos were produced for or by the Minister's Department during 1983-84 and what was (a) the title and (b) the cost of each production. (4) What film/video production equipment is held by the Minister's Department and what is its primary use. (5) How many officers are employed in this area within the Minister's Department and what are their salaries. Mr West —The answer to the honourable member's questions is as follows: (1) Film and video for internal use is normally prepared using departmental resources. The Department normally uses Film Australia to prepare video and film for external use. (2) Yes. (3) Twelve. (a) and (b) (i) New Brisbane Airport Site Reclamation Film-revision (Film Australia) (ii) New Brisbane Airport 'In Flight'-revision (Film Australia) 26,083 (iii) New Brisbane Airport Progress Report First Stage Scripting (Film Australia) (iv) The Waterwitch Job (In-house and consultants) 1,336 (v) Don't Back Off-Safety film (In-house) 600 (vi) What about Asbestos-Safety film (In-house) 600 (vii) Sewermain inspections (Consultants) 9,000 (viii) Introduction to the Information Centre (In-house) 60 (ix) Computer Information Technology and the impact on Western Society (In-house) 60 (x) Commonwealth Furniture Range 80 (In-house and consultants) 2,100 (xi) First Home Owners Scheme Instructional Video (In-house and Film Australia) 12,655 (xii) First Home Owners Scheme National Advertisement Video (Film Australia) 32,364 4. The Department comprises a Central Office and six Regional Offices. In the Central Office the following equipment is held: 2 video cameras; 1 video recorder (3/4'' Umatic Porta Pack); 1 video editing unit (3/4'' low band); 1 video recorder (1/2'' Porta Pak). In the six Regional Offices a total of the following equipment is held: 3 video cameras; 3 video recorders (1/2'' Porta Pak); 1 video editing unit (1/2'' Porta Pak). The primary use of this equipment is to produce training and information videos for internal use (some may be used externally in public displays). 5. The Department does not have any full time employees in this area. A Senior Photographer Grade 1 (salary $19,979 pa.) is employed in video production for 25 per cent of his time. No other staff are specifically allocated to film and video production, but staff of the Public Relations Section assist in scripting and editing and staff of various Divisions may be involved on an occasional basis in production of video and films concerning their work. (Question No. 347) Mr Lloyd asked the Minister for Aviation, upon notice, on 21 March 1985: How many developmental charter dispensations or concessions have been granted by his Department in each of the last 3 years, to whom were they granted and for what purpose. Mr Peter Morris —The answer to the honourable member's question is as follows: Since the adoption of new standards for normal and developmental charter in December 1983 no concessions have been granted against either requirement. Prior to that time only two concessions had been granted, one to Lloyds Aviation to permit the operation of a Bell 412 helicopter in normal charter operations and the other to permit the operation of the smaller AS355F helicopter in similar circumstances by New World Aviation. (Question No. 397) Mr Hodges asked the Minister representing the Minister for Veterans' Affairs, upon notice, on 22 March 1985: (1) What percentage of patients treated at each of the hospitals administered by the Minister's Department are general public patients as distinct from veterans. (2) Is the treatment of general public patients affecting the standard of treatment received by veterans. (3) Would delays for specialist medical treatment and elective surgery be reduced if the general public were not treated at these hospitals. Mr Scholes —The answer to the honourable member's question is as follows: (1) The average percentages of patients who are not entitled Veterans or War Widows treated at the Repatriation Commission's hospitals since 1 July 1984 have been: RGH Concord (N.S.W.), 23 per cent; RGH Heidelberg (Vic.), 15 per cent; RGH Greenslopes (Qld), 18 per cent; RGH Daw Park (S.A.), 15 per cent; RGH Hollywood (W.A.), 16 per cent; RGH Hobart (Tas.), 7 per cent; Lady Davidson Hospital (N.S.W.), 9 per cent; Kenmore Hospital (Qld), 7 per cent. These percentages include veterans who do not have entitlements to treatment for the particular disability or condition for which they were treated. They do not include certain members of the Defence Forces who receive treatment. (2) Entitled beneficiaries receive priority for admission to Repatriation hospitals. Community patients are admitted only where spare capacity exists after the needs of entitled patients have been met. The priority for community patients is: Vietnam Veterans and/or their families not otherwise entitled but requiring urgent treatment, provided that facilities at the hospital are suitable; Veterans who do not have treatment entitlements; the general community. Repatriation General Hospitals have been developed as teaching centres affiliated with major Universities. To ensure that a sufficient clinical mix for the training of medical undergraduates can be maintained some community patients are required. The services provided at Repatriation General Hospitals have been developed in consultation with State health authorities to ensure that there is no unnecessary duplication of expensive facilities. In some instances where Repatriation General Hospitals have expertise the facilities are made available to the public. Similarly access by Veterans to State hospital units of acknowledged expertise is arranged. This policy of linking with State hospitals for the provision of treatment and the requirements of teaching hospitals leads to a need for admission of community patients within the limits of spare capacity. There are some instances, for example the Emergency Accident Centre which is operated at RGH Concord, where facilities are available not only for veterans but for residents from the surrounding areas. This adds to the proportion of community patients at that hospital. The admission of community patients to Repatriation General Hospitals has a positive impact on standards of care for veterans as it enables the maintenance of teaching hospital status which in turn enables the hospitals to attract specialists of high calibre. The intake of community patients in Repatriation General Hospitals is generally limited by the Repatriation Commission to 20 per cent. In Queensland the Repatriation Commission recently reduced the percentage of community patients at Greenslopes RGH from 20 per cent to 15 per cent for a trial period, in order to meet the high demand for treatment by entitled beneficiaries. (3) If community patients were not treated at Repatriation General Hospitals, delays for specialist medical treatment and elective surgery might be reduced in some disciplines in the initial stages but there would probably be no reduction in the long term since loss of community admissions would adversely affect the hospitals' ability to recruit and retain staff. The accreditation status of Repatriation Hospitals as teaching facilities could also be affected. Rationalisation arrangements with State hospitals would also need revision and this would be to the detriment of veterans and war widows. (Question No. 398) Mr Hodges asked the Minister representing the Minister for Veterans' Affairs, upon notice, on 22 March 1985: (1) How many medical specialists are employed at the Greenslopes Repatriation Hospital, Queensland, and in what fields are they employed. (2) Are delays for (a) medical specialist treatment and (b) common elective surgery, longer than at other repatriation hospitals; if so, what are the comparative delays. (3) Is the Minister able to say how these delays compare with delays for similar services in the larger public hospitals. Mr Scholes —The following answer is provided to the honourable member's question: (1) There are currently 18 full-time medical specialist staff and 87 visiting medical specialist staff engaged on a sessional basis at Repatriation General Hospital (RGH), Greenslopes, in the following fields: Anaesthetics, Cardiology, Dermatology, Ear Nose and Throat, Gastroenterology, Intensive Therapy, Medicine, Neurology, Respiratory, Rheumatology, Surgery, Ophthalmology, Orthopaedics, Pathology, Plastic, Psychiatry, Radiology, Rehabilitation, Renal, Thoracic, Urology, Vascular. (2) Delays for non-urgent elective surgery and non-urgent initial specialist appointments vary between States and disciplines. The current delays at RGH Greenslopes in the major disciplines are: (a) Non-urgent elective surgery-Urology, 7 weeks; Orthopaedics, 15 weeks; Vascular, 6 weeks; Plastic, 9 weeks. (b) Non-urgent initial specialist appointment-Urology, 5 weeks; Orthopaedics, 18 weeks; Vascular, 7 weeks; Plastic, 6 weeks. The delays at RGH Greenslopes are in most instances equal to or less than delays for similar services in other States. Where urgent treatment is required an earlier appointment can be arranged. (3) These delays at RGH Greenslopes are not excessive compared with delays for similar services in State public hospitals. (Question No. 399) Mr Hodges asked the Minister representing the Minister for Veterans' Affairs, upon notice, on 22 March 1985: (1) What are the (a) general practitioner/patient ratio, (b) administration staff/patient ratio, (c) domestic staff/patient ratio and (d) paramedical staff/patient ratio at Greenslopes Repatriation Hospital, Queensland. (2) How do these ratios compare with other repatriation hospitals. Mr Scholes —The answer to the honourable member's question is as follows: (1) The approximate staff/patient ratios for RGH Greenslopes are: (a) Medical-1:5.08*; (b) Administrative-1:2.01; (c) Domestic Services-1:2.36; (d) Technical Services-1:2.55* (e) Nursing-1:0.72; (f) Food Services-1:2.77; (g) Stores-1:25.79; (h) Miscellaneous-1:8.20. Notes: * General practitioners are not employed at Repatriation General Hospitals. Medical staff comprise specialists, specialists in training, residents and interns. The ratio given does not include Visiting Medical Specialists and other sessional paid professionals. * Technical Services staff include paramedical staff. (2) These ratios are broadly similar to those in other Repatriation hospitals. However, it should be noted that these ratios have little comparative value from one hospital to another because of the differences in the physical layouts of hospitals, case mixes, levels of support from Branch Offices, levels of services provided at each hospital, arrangements for rationalisation of services with State hospitals, the presence of an Emergency Accident Centre or day hospital and the number of Visiting Medical Specialists. (Question No. 404) Mr Wright asked the Minister for Primary Industry, upon notice, on the 22 March 1985: (1) What have been the tonnages of (a) beef, (b) mutton, (c) lamb and (d) other meat products, imported during each of the last five years and from where do the imports come. (2) What has been the value of these imports. (3) What trade barriers prevail to protect Australia's meat industries. (4) What limitations are placed by other countries on the export of Australian meat or meat products. Mr Kerin —The answer to the honourable member's question is as follows: (1) and (2) Details of the tonnages and value of meat and meat product imports into Australia during each of the last five years and the countries from where these imports came are outlined for: (a) beef-Table 1 (b) mutton-Table 2 (c) lamb-Table 3 (d) other meat products-Table 4 (3) Australia imposes some charges on meat imports. These include a customs duty of 2 per cent and a customs tariff on some minor meat imports such as fresh, chilled or frozen other meat (for example, venison) and edible meat offal (2 per cent), sausages (10 per cent) and other prepared meat and offal (10 per cent). These charges are low by international standards and do not apply to imports from developing countries, certain Pacific island countries, New Zealand and Papua New Guinea. (4) The import of Australian meat and meat products to many countries is restricted by a wide range of trade and other limitations. The limitations may include combinations of: (a) Import quotas which may be global, bilateral or linked to a particular tariff. These quotas limit the volume of meat that Australia can export to a particular country in any year. (b) Voluntary restraint agreements that also limit the volume of meat exported to a particular country but do not involve a formal quota declaration. (c) Tariffs or levies imposed on imported goods. (d) Customs duties which may realistically cover inspection costs or serve as an additional tariff, levy or tax. (e) Import certification charges or restrictions. (f) Prohibition on the imports of certain meat products. (g) Seasonal import restrictions on some meat products. While no direct trade barriers difficulties have arisen for Australian exporters from time to time as a result of the requirements of particular markets. These include: (h) Certification of authenticity on meat products. (i) Special labelling requirements on meat products. (j) Quarantine restrictions in the event of disease risks. (k) Specific health regulations involved in the production and/or processing of the product. This may involve certification of processing works. (l) Specific slaughtering and storage procedures that meet religious requirements. (m) Limited trading structures that prevent Australian exports freely competing in that market due to price markups by monopoly trade organisations in the importing country. (n) Tender specifications which preclude free market forces in the distribution of the exports and which can lead to prohibitive price markups. However, one of the most concerning disruptions to Australia's international meat trade is the distorting effect of the dumping of subsidised exports onto markets in competition with Australian meat exports. Table 1 BEEF IMPORTS-TONNAGE AND VALUE Source: Australian Bureau of Statistics 1979-80 1980-81 1981-82 1982-83 1983-84 Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value Country of origin tonnes ($A) tonnes ($A) tonnes ($A) tonnes ($A) tonnes ($A) New Zealand 1,501.7 5,541.603 2,176.2 5,867.692 1,646.5 4,009.927 3,583.5 9,489.833 1,788.8 5,021.103 Singapore . . . . 2.9 8,380 . . . . . . . . . . . . Total 1,501.7 5,541.603 2,179.1 5,876.072 1,646.5 4,009.927 3,583.5 9,489.833 1,788.8 5,021.103 Table 2 MUTTON IMPORTS-TONNAGES AND VALUE Source: Australian Bureau of Statistics 1979-80 1980-81 1981-82 *1982-83 *1983-84 Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value Country of origin tonnes ($A) tonnes ($A) tonnes ($A) tonnes ($A) tonnes ($A) New Zealand 0.8 953 . . . . 81.4 64,049 445.3 421,859 2,510.7 1,819,046 Total 0.8 953 . . . . 81.4 64,049 445.3 421,859 2,510.7 1,819,046 * includes imports of lamb Table 3 LAMB IMPORTS-TONNAGE AND VALUE Source: Australian Bureau of Statistics 1979-80 1980-81 1981-82 *1982-83 *1983-84 Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value Country of origin tonnes ($A) tonnes ($A) tonnes ($A) tonnes ($A) tonnes ($A) New Zealand 6.5 11,915 15.5 30.999 0.16 360 . . . . . . . . Total 6.5 11,915 15.5 30.999 0.16 360 . . . . . . . . * lamb imports for the period not separately recorded but are included in mutton import figures. Table 4 OTHER MEAT PRODUCTS IMPORTS Source: Australian Bureau of Statistics 1979-80 1980-81 1981-82 1982-83 1983-84 Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value Country of origin tonnes ($A) tonnes ($A) tonnes ($A) tonnes ($A) tonnes ($A) Canada 29.8 50,394 248.4 862,472 88.1 255,809 36.6 89,836 37.6 97,534 China 58.3 80,416 39.7 38,153 54.3 108,098 16.4 39,508 98.0 160,960 Denmark 48,6 149,665 62.2 188,852 . . . . 13.5 27,875 . . . . France 2.7 48,416 4.4 52,773 8.3 80,470 19.0 140,447 13.2 116,504 Federal Republic of Germany 2.9 17,146 11.6 42,995 11.6 54,900 59.4 187,926 58.0 220,248 Hong Kong 9.9 14,196 0.7 1,870 4.4 2,753 0.1 2,037 2.2 9,281 Hungary 36.3 57,321 21.2 34,518 3.6 6,098 12.6 27,303 14.8 27,212 Italy 482.9 730,846 38.7 147,503 51.7 89,343 144.0 299,960 71.2 296,043 Japan 85.9 54,208 10.8 62,332 58.7 125,373 14.1 78,265 15.0 70,343 Malaysia 1.5 3.272 0.2 652 . . . . 2.0 4,140 15.0 41,870 New Zealand 103.3 263,346 37.3 204,926 51.7 356,296 122.4 724,842 239.8 1,028,132 India 86.9 180,298 5.4 11,471 23.1 66,578 31.1 138,347 0.3 301 Norway 44.7 74,754 . . . . 12.9 26,000 31.2 95,926 44.5 111,250 Singapore 3.1 6,154 3.3 8,421 3.3 10,506 10.1 32,157 10.0 28,032 Spain 0.2 572 0.01 8 . . . . 60.7 183,053 0.2 259 Switzerland 12.4 24,253 11.9 28,417 3.2 7,594 7.4 21,768 19.0 76,744 Romania 309.1 826,613 321.7 967,739 55.5 206,388 . . . . . . . . Netherlands 0.6 1,973 . . . . 2.1 1,786 0.4 4,293 1.0 1,697 United Kingdom 667.1 1,297,127 206.5 483,661 346.0 700,384 474.7 1,048,993 652.7 1,504,715 United States 66.2 109,257 21.2 29,166 2.8 10,113 14.6 35,020 11.3 30,715 Yugoslavia 428.1 903,939 310.3 652,658 192.2 475,126 109.4 230,537 151.7 354,829 Belgium/Luxembourg 1.1 7,949 . . . . . . . . . . . . . . . . Thailand 0.2 414 . . . . . . . . 0.02 100 . . . . Portugal . . . . . . . . 1.0 1,857 . . . . . . . . Brazil . . . . . . . . 142.2 442,664 325.5 906,393 310.0 697,367 Israel . . . . . . . . . . . . 48.5 153,595 0.3 1,053 Taiwan . . . . . . . . . . . . 0.2 379 . . . . Fiji . . . . . . . . . . . . . . . . 0.2 873 Pakistan . . . . . . . . . . . . . . . . 0.1 296 South Korea . . . . . . . . . . . . . . . . 0.3 963 Bangladesh . . . . . . . . . . . . . . . . 6.1 32,306 TOTAL* 2,491.7 4,939,082 1,355.3 3,818,587 1,116.5 3,028,136 1,553.9 4,472,700 1,770.9 4,910,345 * Rounded Data (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. (Question No. 635) Mr Lloyd asked the Minister for Transport, upon notice, on 16 April 1984: Which container ports (a) are open 7 days a week and (b) are not open every day of the week, indicating on which days they are closed and why they are closed. Mr Peter Morris —The answer to the honourable member's question is as follows: (a) and (b) As a general rule Australian container terminals are available to service container ships seven days a week. The terminals may not be open at weekends when no ship is in port. Terminals normally receive and deliver container cargo by road five days a week, that is Monday to Friday. In major ports container terminals will receive or despatch cargo at weekends by arrangement with consigners or consignees, or when backlogs occur. In smaller ports this service would be provided at weekends where a considerable requirement existed. Major terminals generally provide facilities seven days a week to handle rail movements of container cargo. (Question No. 636) Mr Lloyd asked the Minister for Aviation, upon notice, on 16 April 1985: (1) When will Sydney's new international airport be completed. (2) What will be done to improve the aircraft landing and take-off capacity at Sydney (Kingsford-Smith) Airport, in the interim. Mr Peter Morris —The answer to the honourable member's question is as follows: (1) The current Second Airport Site Selection Program will select and reserve a site for a second airport. The question of the timing of the development of a second Sydney airport is a matter for Government decision at a later date. The role which a second airport would fulfill has also yet to be determined. (2) The Government is continuing with developments at Sydney (Kingsford-Smith) Airport. For example, taxiway works costing an estimated $16 million have been approved by the Government and are currently subject to consideration by the Parliamentary Standing Committee on Public Works which is expected to present its report to the current Parliament. These works will enable a more efficient flow of traffic, reduce delays to aircraft, as well as reduce the fuel costs involved in aircraft taxing. (Question No. 641) Mr N. A. Brown asked the Attorney-General, upon notice, on 17 April 1985: (1) When did the Commonwealth commence work on the model legislation package on drugs referred to in the communique issued on 2 April 1985, after the Special Premiers' Conference on drugs. (2) Have drafting instructions for the model legislation package been given to Parliamentary Counsel; if so, when were they given; if not, why not. Mr Lionel Bowen —The answer to the honourable member's question is as follows: The Commonwealth together with the States has given consideration to possible uniform legislation on drugs over the period since the Australian Royal Commission of Inquiry into Drugs reported at the end of 1979. Following a concerted effort over recent months, the Commonwealth made available to the States, in March 1985, draft model legislation (Australian Capital Territory Ordinance) covering the regulatory aspects (manufacture, distribution and medical use) of drugs of dependence together with draft provisions for diversion of offenders for treatment and an indicative legislative scheme for penal provisions relating to misuse of drugs. Departments are proceeding with the preparation of instructions for the further drafting of this legislative package by my Department. The package will be developed in consultation with the States. (Question No. 657) Mr Rocher asked the Minister representing the Minister for Community Services, upon notice, on 17 April 1985: How many people were employed full-time in each statutory authority for which the Minister is responsible in (a) 1983 and (b) 1984. Mr Howe —The Minister for Community Services has provided the following answer to the honourable member's question: There are no statutory authorities or appointments within the Community Services portfolio. (Question No. 668) Mr Rocher asked the Minister for Defence, upon notice, on 17 April 1985: (1) How many people were employed full time in each statutory authority for which the Minister is responsible in (a) 1983 and (b) 1984. Mr Beazley —The answer to the honourable member's question is as follows: (1) The statutory authorities for which for which I am responsible, and the numbers of full time employees in each statutory authorities for each of the last five years are as follows: Defence Forces Retirements Benefits Board-no full time employees 1980-1985 Defence Force Retirement and Death Benefits Authority-no full time employees 1980-1985 Royal Australian Navy Central Canteens Board-no full time employees 1980-1985 Royal Australian Navy Relief Trust Fund-one Chief Petty Officer and two sailors provided by Navy in 1980-1985 Australian Military Forces Relief Trust Fund-no full time employees 1980-1985 Services Canteens Trust Fund-one full time employee 1980-1985 Royal Australian Air Force Veterans' Residence Trust-no full time employees 1980-1985 Royal Australian Air Force Welfare Trust Fund-no full time employees 1980-1985 Army and Air Force Canteen Service- Number of full time Year Employees 1980 197 1981 182 1982 176 1983 163 1984 147 (Question No. 718) Mr Rocher asked the Minister for Defence, upon notice, on 17 April 1985: (1) How many (a) civilian and (b) Service personnel were employed full time in his Department in (i) 1983 and (ii) 1984. Mr Beazley —The answer to the honourable member's question is as follows: (1) As at 30 June 1983 the civilian full time staffing strength was 25,396 comprising: Full time operative PSA 23,911 NDA 851 Full time inoperative 626 8 24,537 859 (2) As at 30 June 1984 the civilian full time staffing strength was 25,122 comprising: Full time operative PSA 23,607 NDA 817 Full time inoperative 685 13 24,292 830 (3) As at 30 June 1983 the Service full time strength was 72,782 comprising: RAN 17,198 ARA 33,072 RAAF 22,512 (4) As at 30 June 1984 the Service full time strength was 71,642 comprising: RAN 16,692 ARA 32,278 RAAF 22,672 (5) These figures do not include Department of Defence Support civilian staff. (Question No. 858) Mr Downer asked the Minister for Primary Industry, upon notice, on 23 April 1985: (1) What funds have been made available through his Department to combat the problem of millipedes which is currently affecting large areas of south eastern Australia. (2) Has the Government considered establishing a joint task force between Commonwealth and State Governments to co-ordinate action in eradicating millipedes; if so, what action is planned; if not, why not. (3) Has his Department provided funding to any State departments to assist them in their efforts against millipedes. (4) Has he or his Department received any request for assistance, financial or otherwise, from any State Government to combat the problem of millipedes. (5) Will the Government provide assistance to the States on a matching dollar for dollar basis to help State Government's in their programs to eradicate millipedes. Mr Kerin —The answer to the honourable member's question is as follows: (1) None. (2) I am advised that the problem of millipedes, relates to a specific introduced species known as the Black Portuguese Millipede. It apparently has become a serious household nuisance in Victoria and South Australia, but is of no significance as an agricultural pest. I understand that the Commonwealth Scientific and Industrial Research Organisation has embarked on a joint study with the South Australian Department of Agriculture to find a natural predator for this pest, but I am unaware of any further co-ordinated action. (3) No. (4) No. (5) The Government has not received any request from the States for such financial assistance. (Question No. 59) Mr Leo McLeay asked the Special Minister of State, upon notice, on 22 February 1985: (1) Is it a fact that during the last election campaign the Electoral Commission sent people overseas to gather postal votes; if so, (a) what was cost of this exercise, (b) how many officers were involved and what were their classifications and positions, (c) where did each officer go and for how long, (d) how many votes were collected by each officer, and (e) what was the cost per vote of these votes compared with ordinary votes. (2) What was the expenditure on interpreter services and other assistance for ethnic voters for the last election. Mr Young —The answer to the honourable member's question is as follows: (1) I am advised by the Australian Electoral Commissioner that following approaches by shipping companies, an Assistant Returning Officer was appointed in respect of each of three ships which were at sea for most of the postal voting period. The decision had regard to the number of potential voters-the ships were carrying approximately 3,600 Australian passengers in total. (a) $6,629. (b) and (c) Three officers were involved: 1. Assistant Director, Field Operations, NSW (Clerical Administrative, Class 9) aboard the SS Canberra from Miami to San Francisco, 18 November to 4 December 1984. 2. Director, Operations, WA (Clerical Administrative, Class 8) aboard the SS Oriana from Fremantle to Singapore, 14 November to 22 November 1984. 3. Assistant Manager, Enrolment Processing, NSW (Clerical Administrative, Class 5) aboard the SS Fairstar from Sydney to Fiji, 20 November to 29 November 1984. (d) (1) 586. (2) 540. (3) 126. (e) The average cost was $5.29 per vote as against $3.32 in respect of an ordinary vote and $6.49 in respect of a postal vote at an overseas post. (2) I am advised by the Electoral Commissioner that expenditure by the Commission on interpreters during the election amounted to $11,668. This represents direct expenditure only and not the cost of employing bilingual polling officials in line with the Commission's policy of engaging officials competent in a relevant language in locations known to have a concentration of former migrants. In 1984, 674 of these were engaged with a coverage of 31 divisions and 333 polling places. Other assistance was provided in the form of advertising in the ethnic press the close of the Roll, absent and postal voting facilities, and the manner of marking a formal vote, at a total cost to the Commission of $73,871. Similar advertising on ethnic radio was provided free of charge by the Special Broadcasting Service using material supplied by the Commission. This latter figure does not include $155,596 spent on providing summaries of the Yes and No cases for the referendums in 25 languages. (Question No.88) Mr Spender asked the Minister for Defence, upon notice, on 25 February 1985: What have been the relative variations in (a) Royal Australian Air Force flying hours, (b) Royal Australian Navy Steaming time, and, (c) (i) Army track time, (ii) artillery ammunition firing allocations and (iii) training time, since 1972-73, using values for that financial year as base 100. Mr Beazley —The answer to the honourable member's question is as follows: Details of the various Defence Force activities questioned are set out in the Tables below in so far as records permit. In the case of RAN steaming time, figures are given for both the Destroyer Force and HMAS Melbourne, which together in recent years have consumed the larger proportion of the Fleet Fuel Allowance and so provide a good indication of overall Fleet activity for the period in question. Before 1982-83 the method of record keeping does not permit an accurate response to questions about the variations in total Fleet steaming time. Despite an extensive search of archival material, no information on Army training time for the period 1972-73 to 1975-76 is available. This lack is attributed to changes in responsibilities within Army Office, and the relevant table is appropriately annotated. Variations in activities from year to year are normally dictated by the level of Government funding together with endeavours to achieve the optimum use of assets within the amounts allocated to operating costs. A number of factors are relevant: Government guidelines on total expenditure; Government and Departmental guidelines on the distribution of total expenditure; eg, to give greater emphasis to long-term capital investment; Single Service policies on optimisation of allocated funding; Variations in the size of the various force elements brought about by short term considerations such as ship refits or aircraft grounding for safety reasons; National commitments which introduce short term tasks; Major international exercises not occurring on an annual basis. RAAF FLYING HOURS Against base Financial year 1972-73 1972-73 100.0 1973-74 90.3 1974-75 90.7 1975-76 97.9 1976-77 101.5 1977-78 98.8 1978-79 98.4 1979-80 96.3 1980-81 97.2 1981-82 92.3 1982-83 93.6 1983-84 89.2 1984-85 (a) 95.1 (a) 1984-85 is authorised rate whereas previous years are achieved rates. RAN STEAMING TIME (Destroyer force and HMAS Melbourne) Destroyer force Days Total underway/ HMAS Total days available Melbourne Financial year available (a) underway unit (b) (c) 1972-73 7.2 100 100 100 1973-74 7.9 106 97 130 1974-75 6.0 82 98 66 1975-76 7.0 117 121 6 1976-77 6.1 100 119 124 1977-78 6.6 103 113 101 1978-79 6.8 95 100 15 1979-80 6.0 87 104 89 1980-81 6.0 92 110 110 1981-82 6.0 113 112 35 1982-83 7.2 118 111 . . 1983-84 7.4 98 96 . . 1984-85 (d) 8.9 111 109 . . (a) Units not refitting or conducting intermediate dockings (b) Variations due in part to refit/docking cycle (c) Decommissioned 30 June 1982. (d) Based on achievements to 30 March 1985, and estimates to June j1985 (Question No. 228) Mr Blunt asked the Minister for Sport, Recreation and Tourism, upon notice, on 20 March 1985: (1) What are the criteria for appointment to the Australian Sports Commission. (2) Who assesses whether a prospective Commissioner satisfies these criteria. (3) On what basis is an offer of appointment as a Commissioner made. (4) What are a Sports Commissioner's obligations. (5) What remuneration and compensation for expenses does a Sports Commissioner receive. (6) What is the term of appointment of a Sports Commissioner. (7) How often are meetings of Sports Commissioners held. (8) What constitutes a quorum for a meeting of Sports Commissioners. (9) When is he expecting to appoint more Sports Commissioners. (10) Why does he require more Sports Commissioners. (11) What is the budget allocated for meetings of Sports Commissioners. (12) Which Commissioners hold office on national sporting bodies and what are the details of their office. (13) What sporting bodies have been funded as a result of recommendations of the Australian Sports Commission since its inception and what were the terms of the grants. (14) Are Commissioners entitled to travel; if so, what provision is there for reimbursement of costs incurred. (15) What are the role, functions and powers of the Sports Commission. (16) What departmental functions were transferred to the Sports Commission when it commenced operations. (17) What duties were assigned to the people in his Department who previously performed these functions. (18) Will he table in the House the 1983 report of the interim committee proposing guidelines for the establishment of the Australian Sports Commission; if not, why not. (19) What is the Sports Commission's relationship with (a) him, (b) his Department, (c) sports bodies or associations, (d) the Confederation of Australian Sport, (e) institutions, such as the Australian Insitute of Sport, and (f) other levels of government. (20) Has the concept of ''sports profile'', used for determining a sportsperson's suitability for funding, been developed or discussed by the Commission. Mr John Brown — The answer to the honourable member's question is as follows: (1) and (2) As with all Government appointments to Boards and Commissions, an assessment is made of the potential contribution that could be made by the individual concerned to the work and activities of the organisation. The appointment process for the Australian Sports Commission is outlined in the Australian Sports Commission Bill 1985 (the Bill). (3) Offers of appointment are made on the basis of specified terms of office and remuneration conditions. (3) Offers of appointment are made on the basis of specified terms of office and remuneration conditions. (4) Commissioners are obliged to undertake their duties to the best of their ability and to serve the best interests of the Commission, the objects and functions of which are outlined in the Bill. (5) Commissioners are currently paid the following fees and allowances as determined by the Remuneration Tribunal (i) Sitting Fees-Chairman $286, Deputy Chairman $211, Committee Chairman $180, Member $131. (ii) Allowances-All Commissioners receive a common rate of travelling allowance of $125 a day for each day away from home. (6) Currently Commissioners are appointed for three years and the Chairman and Deputy Chairman for five years. The length of appointments to the statutory authority, when formed, is outlined in the Bill. (7) The Bill provides that the Commission shall hold such meetings as are necessary for the efficient performance of its functions. Currently, meetings of the full Commission are held about every three months. Committees have been established to examine specific priority areas and they meet more frequently between full Commission meetings. (8) This is provided for in the Bill. In the meantime, the Commission agreed at its first meeting to adopt an interim rule that a quorum consist of 8 members. (9) and (10) Unless unforeseen circumstances occur, I do not expect to appoint additional Commissioners for some time after the current appointments are confirmed following passage of the enabling legislation. (Question No. 251) Mr Jacobi asked the Minister representing the Minister for Resources and Energy, upon notice, on 21 March 1985: Following the amended River Murray Waters Agreement and the recent publication entitled The River Murray Commission, will the Minister request the Commission to be specific in issuing a clear public statement which explicitly states the extent of its role, particularly in relation to recreation and environmental issues and its role generally in multiple use planning and research of the River System, and how this new role interfaces with that of relevant government departments and agencies. Mr Barry Jones —The Minister for Resources and Energy has provided the following answer to the honourable member's question: Under the Constitution, primary responsibility for recreation, environmental and multiple-use planning issues associated with the management of the River Murray system rests with the individual States. Under the new River Murray Waters Agreement, the Commission is empowered to make representations to governments on these matters particularly insofar as they have a significant impact on water quality and quantity in the River. A number of advisory committees and working groups, comprising representativies of the four governments from relevant agencies, has been established to advise the Commission on its new responsibilities, including the matters referred to above. In this context, the recent appointment by the Commission of an education officer, the increased incidence of Commission-sponsored public meetings at various locations along the River and the release by the Commission of discussion papers and press statements on specific issues will, I believe, ensure that the public is continually informed of and can contribute to the Commission's developing role in river basin management. I have drawn the Commission's attention to the honourable member's question. (Question No. 274) Mr Connolly asked the Minister for Health, upon notice, on 21 March 1985: (1) What arrangements does the Minister's Department make for the production of films and videos for both internal and external use. (2) Is any production carried out within the Minister's Department. (3) How many films/videos were produced for or by the Minister's Department during 1983-84 and what was (a) the title and (b) the cost, of each production. (4) What film/video production equipment is held by the Minister's Department and what is its primary use. (5) How many officers are employed in this area within the Minister's Department and what are their salaries. Mr Blewett —The answer to the honourable member's question is as follows: (1) and (2) My Department normally arranges film or video production through Film Australia or through the Information Co-ordination Branch of the Department of Sport, Recreation and Tourism where there is an advertising component. Minor production only is carried out within my Department. (3) Films/videos produced during 1983-84 were: (a) and (b) Quarantine information (video)-$17 193. Audio Visual Test of Auditory Comprehension (video)-&00 est. (4) The following equipment is held: two new colour video cameras for use within the Department's ADP and Central Training areas were delivered in February 1985; four video recorders, three colour cameras, one editing suite and associated tripods and lighting equipment are held by the National Acoustic Laboratories, Sydney. (5) No staff are specifically employed on film/video production. (Question No. 281) Mr Connolly asked the Minister for Local Government and Administrative Services, upon notice, on 21 March 1985: (1) What arrangements does the Minister's Department make for the production of films and videos for both internal and external use. (2) Is any production carried out within the Minister's Department. (3) How many films/videos were produced for or by the Minister's Department during 1983-84 and what was (a) the title and (b) the cost of each production. (4) What film/video production equipment is held by the Minister's Department and what is its primary use. (5) How many officers are employed in this area within the Minister's Department and what are their salaries. Mr Uren —The answer to the honourable member's question is as follows: (1) The Department of Local Government and Administrative Services produces its own films and videos for both internal and external use and, in so doing, follows Film Australia guidelines. In addition, the Department has occasionally employed Film Australia to produce films, in which case various departmental officers have acted as advisers. The Office of Local Government has provided funds and co-operated with other authorities in the production of films as part of the Local Government Development Program. (2) There exists in the Department a limited capacity for film/video production. (3) Only one film titled RSI-The New Industrial Epidemic was produced by the Department in 1983/84 at a cost of $5,861.20. Six videos were produced by the Department in 1983/84. The titles (a) and cost (b) of these videos are as follows: $ (a) Staff Apartments-Port Moresby (b) 60 (Three videos titled the above were produced at a total cost of $60) Embassy-Dhaka Nil Embassy Site-Riyadh 1,427 Embassy Site-Beijing 1,368 No films or videos were produced externally in 1983/84. (4) The management Division of this Department holds the following film/video production equipment: 1 Hitachi Colour Camera; 1 Rank Arena NGC Video Recorder 3 3/4'' U-matic; 1 Sony Betamovie 1/2'' Beta. The equipment is used for internal training courses. The Overseas Property Office of the Department holds the following film/video equipment: 2 Hitachi Video Cameras; 1 Hitachi portable recorder; 1 National portable recorder; 1 Hitachi video tuner; 1 Sanyo video cassette recorder. Videos are taped by staff when undertaking overseas inspections and used for briefings. Videos for the presentation of overseas site and locality information to the Parliamentary Standing Committee on Public Works are professionally prepared by the private sector. (5) No officers are employed exclusively in film production. Those officers involved in this function incorporate the taks into their range of the duties. A total of approxiamately 15 officers have, to some stage, been concerned with providing advice on or producing films and videos. Pending full development of workload measures, the component of salary costs attributed to film/video production cannot meaningfully be estimated.