Wednesday, 22 May 1985 Mr SPEAKER (Hon. Harry Jenkins) took the chair at 10 a.m., and read prayers. Debate resumed from 17 April, on motion by Mr John Brown: That the Bill be now read a second time. Mr CONNOLLY(Bradfield)(10.01) —The Bounty (Ships) Amendment Bill 1985 proposes to amend the Bounty (Ships) Act 1980 by extending the bounty assistance under the Act to vessels constructed or modified for export from Australia. The Government announced the export proposals on 11 October 1984 after consideration of the report of a task force on the Australian shipbuilding industry which was released in January of that year. The task force was established by the then Minister for Industry and Commerce following representation from the Australian Shipbuilders Association concerning the long term viability of the local shipbuilding industry and its grim forward order situation. The task force made several recommendations aimed at increasing the throughput of Australian shipyards. Concern was also expressed at the substantial increase in the number of yards constructing bountiable vessels since the introduction of the current bounty scheme on 1 July 1980. It was recommended to government that it explore the possibility of prescribing conditions for the registration of shipyards. This Bill proposes to extend the current bounty paid at a rate of 25 per cent of the cost of production to ships for export; to introduce new registration criteria for shipbuilders who wish to claim bounty; and to update administrative arrangements in accordance with recent bounty legislation. In other words, most of the recommendations of the inquiry were accepted by government. I now turn to the question of industrial assistance. The shipbuilding industry has long been a subject of government assistance. Up to the Second World War the industry was protected by tariffs and a bounty was introduced in 1940. However, no claims were made and it was removed during the War in 1943. Assistance by subsidy was introduced in 1947. Under that scheme the cost of construction in Australia was subsidised to equate Australian costs with those in the United Kingdom. The maximum level was set at 25 per cent of the Australian construction cost. Levels of assistance accorded the industry were reviewed by the Tariff Board in 1955, 1959 and 1963 resulting in a number of modifications to the assistance agreement. The maximum subsidy was further increased to 33 1/3 per cent in 1955 and continued at that level through to 1972. The system that was introduced in July 1972 was calculated on the lowest local tender for vessels over 200 tonnes. The subsidy was to be phased from an initial level of 45 per cent to 35 per cent after 1975 and down to 25 per cent after 1980. Restrictions were enforced since the 1940 bounty was levied to protect further the local industry. Next, the Industries Assistance Commission was asked to report on whether any changes were necessary in the assistance accorded the industry in view of the poor order situation and the number of major shipyards which had either closed or threatened to close. The IAC's 1976 report recommended that the previous assistance package be maintained. Following further consideration of the IAC report, the Government announced on 29 November 1979 details of its assistance package for the Australian shipbuilding industry. These arrangements are still current. Essential elements of the new bounty scheme were to operate from 1 July 1980 for vessels over 150 tonnes and fishing vessels exceeding either 150 gross construction tonnes or 21 metres in length. The bounty was to be paid as a percentage of the cost of construction and set at 27.5 per cent, to be phased down to a long term rate of 20 per cent from July 1986. The 20 per cent bounty was to apply for modifications to existing vessels where total modification cost exceeded $400,000. I have outlined the development of Australian government shipbuilding policy over the last 40 years. This period witnessed many changes in the thrust of policy, which was initially aimed at fostering the development of the industry. However, through the late 1970s the aim of policy was significantly redefined. Part of that redefinition was oriented towards phasing down the activity geared towards the construction of large vessels and at the same time fostering the development of an industry now perceived to be closely aligned with defence requirements. During, the 1970s the concept of economic efficiency rather than technical efficiency was introduced and used as an aid to the evolution of industry assistance policies. Up to the mid-1970s the local industry built a wide range of vessels, including bulk carriers, roll-on-roll-off vessels, and ships for international trade. Long-standing industry problems have included a lack of economies of scale, obsolete plant and equipment, low labour productivity and industrial unrest. These were exacerbated by the general economic downturn and the oil crisis of the early 1970s. Large shipbuilding ceased with the closure of the Broken Hill Proprietary Co. Ltd yard at Whyalla, and the industry now consists of mainly small shipyards constructing passenger ferries, fishing boats, off-shore supply vessels, tugs, dredges, barges, and small trading vessels. Members of the industry, unions and task force have expressed concern that the skills in the industry are specialised and that any further contraction in the industry may give rise to a situation in which long term maintenance of the necessary skills is impossible. The availability of experienced high quality design expertise limits the capability of the Australian industry to undertake a major ship design task, and much of the available design capacity is at present engaged in naval work. The depressing forward order position is exacerbated by the apparent large number of firms capable of building the small types of vessels now being constructed in Australia. Since the introduction of the Bounty (Ships) Act 1980, which commenced operation in July 1980, the number of registered shipbuilders constructing bountiable vessels grew from 14 registered yards with 53 bountiable vessels under construction or on firm order in October 1979 to 32 yards with 53 vessels being built or on firm order by October 1983. In the four years between 1980 and 1983, 43 firms not previously registered as builders of bountiable vessels were registered and built bountiable vessels. Of those 43, 20 are currently building vessels. The task force noted that in the IAC report on ships, boats and other vessels not existing 6,000 tonnes gross register the Commission concluded that, given the likely further market for bountiable vessels, there may be too many builders in the industry and that a rationalisation among shipbuilders may be desirable. It is therefore clear that the industry has moved in the opposite direction to that suggested by the IAC and later by the task force, which then believed that the Commission's conclusion was even more relevant today than it was at the time it was made. The task force was of the view that the basic causes of the industry's present difficulties appeared to be low domestic and world demand, too many actual or potential participants in the industry, and the competitive finance packages offered by overseas yards. Consequently, it recommended the extension of the bounty to vessels for export, the introduction of a scrappage allowance for older vessels where a replacement vessel is built domestically, and the introduction of financing arrangements for vessels for the domestic market similar to those existing for vessels sold on the export market. The task force also found that the methods for financing the construction of vessels in Australia were inadequate when compared with the financial facilities offered by overseas yards. Local shipbuilders normally require full payment by the time the vessel is complete. On the other hand, overseas yards offer extended credit at favourable rates of interest, in some cases for domestically owned vessels as well as for export orders. To a large extent the inability of local firms to offer attractive finance packages is the result of the failure of the capital market to meet the requirements of some sections of manufacturing industry. The task force also indicated the very pessimistic projection for local demand for shipbuilding in recommending an extension of the existing bounty to the export market. The current New South Wales Urban Transport Authority ferry replacement program is expected to be completed before the end of 1985; the tug replacement program is virtually completed; off-shore service and small trading vessel areas are suffering excess tonnage; there is generally a high level of over-capacity in world shipping tonnage, and defence shipbuilding demands are irregular and lumpy and would not inject sufficient enduring demand to reverse the current downturn in the industry. The new assistance program has particular relevance in relation to the government's shipbuilding program. It is designed to improve the volume of production through the extension of the bounty to cover vessels built for export and new finance packages. The package includes the removal of the 2 per cent revenue duty from imported goods used in the construction or modification of ships eligible for the bounty. It also covers the establishment of an industry body to monitor progress and outlines a proposed industrial agreement between the industry and the Australian Council of Trade Unions. The major assistance to shipbuilders competing for overseas contracts is the extension to vessels constructed for export of a bounty of 25 per cent of the cost of construction which is currently provided to industry, but the bounty will be paid only to shipbuilders who have a clear and long term commitment to the industry and for the criteria which support that industry. These include that the company be an Australian registered business or organisation, that it have the financial and commercial capacity to build a bountiable vessel and that it employ directly or through sub-contractors an average of 20 people in shipbuilding. The package addresses the problem of Australian builders missing contracts because of their inability to offer competitive finance. The bounty rate is to phase down to 22.5 per cent for vessels commenced between 1 July 1985 and 1 July 1986, phasing to a long term rate of 20 per cent from 1 July 1986. There will be an annual limit on the bounty payable on ships built for export. The limit will be $6m in 1984-85 and $10m in 1985-86. Under the present bounty system, which costs $29m a year, shipbuilders are paid 25 per cent of their construction costs for vessels in the domestic market. Extension of the bounty to cover ships built for foreign markets will enhance local industries' international competitiveness. Revitalisation and long term viability of Australian shipbuilding depends on improved industrial relations. Industrial disputes, including crippling demarcation actions, have long added to construction costs and contributed to an uncompetitive local industry. They have also played a major role in the closure of major shipyards in recent years. This Bill establishes a Shipbuilding Consultative Group consisting of a representative from the unions, industry and government to monitor progress in the industry. The SCG will also be responsible for assisting and assessing the applications for the bounty extension scheme by shipbuilders. The Opposition supports the general thrust of this legislation to rationalise the industry and at the same time to give it wider opportunities by extending the bounty to vessels built for export. The Opposition supports the need for a viable shipbuilding industry in Australia. As the task force has indicated, the level of domestic demand, at least in the short term, is unlikely to be adequate for a viable shipbuilding industry. Export orders should clearly improve the cost efficiency of local shipyards as well as help to overcome the problems of the irregular and unpredictable nature of domestic demand for ships. The peculiarities of Australian geography and economy have focused great importance on the shipping industry from our earliest days as a colony to our present status in international trade. The Australian economy is highly dependent on the world market, both as a buyer and a seller of goods. About 13 per cent of Australian production is sold as exports and a slightly higher proportion of total expenditure goes on imports. As most of the country's foreign trade-over 200 million tonnes of cargo each year-is in fact moved by sea, Australia is dependent on an efficient transport system. The importance therefore of a viable shipbuilding industry becomes increasingly apparent in the present balance of payments situation. The 20 per cent devaluation in the Australian dollar has caused widespread and well-founded concern throughout the Australian community, but the devaluation has also caused major disruptive repercussions on vital imports which have become more expensive, on a consumer price index which will jump significantly, and on calls for discounting of wage indexation which puts increasing strain on the prices and incomes accord. The bounty assistance and consultation will be worthless in the medium to longer term unless the Government gets its macro-economic policies in order. The apparent ongoing devaluation of the Australian dollar provides opportunities for industries such as shipbuilding to both improve their export potential and to improve their competitiveness against imports. However, it must be noted that the costs of imports, which are a major element in the total costs of construction, have also increased. However, unless the Government is prepared to confront the threat of higher inflation from devaluation and wage indexation, this industry and most others will be back again asking for higher bounties and higher tariffs, despite the fact that all industries receiving tariff and bounty assistance are also receiving now an increased devaluation bonus of around 20 per cent which the Government has not taken into account in its policies on bounties or tariff protection. As the task force says in its report, labour on-costs in Australian shipbuilding yards are a significant component of total wage costs-that is, about 30 per cent compared with about 18 per cent in Japan. In Japan at the moment it appears that the spring wage offensive may produce an average wage increase of around 4 per cent for 1985-86. Yet the Hawke Government is now talking about supporting wage increases of possibly as high as 8 to 9 per cent in 1985-86, including at least 4 per cent for the direct and indirect effects of devaluation. This is on top of the significant wage drift evident in the figures on average weekly earnings and the national accounts. Both award and non-award wage increases for 1985-86 will be translated into significantly higher on-costs than in the very countries with which we are trying to compete. Succinctly put, this is economic madness, as is the Government's refusal even to consider deregulation of the labour market. How can anyone justify a policy which forces an industry such as shipbuilding to pay the same rates and conditions as a service industry which is not subject to import competition? The Government's policy gives industries competing against imports and trying to develop exports no real chance, let alone the possibility of being able to prosper. Until the Government comes to terms with the need for labour market deregulation and ends full wage indexation, all measures such as those which have been introduced will be outweighed by fundamental weaknesses in economic strategy. Right now Australia faces a balance of payments crisis. The latest figures are stark evidence of the fact that the Australian economy is not competitive with the rest of the world. Our balance of trade for the 10 months to April 1985 is in deficit to the tune of over $1,422m, compared with the 1983-84 full year surplus of $172m. Imports have increased 29.5 per cent, while exports increased in the 10 months to April 1985 by only 18.6 per cent over the same period of the previous year. In the first 10 months of 1984-85 the invisibles deficit has already reached $7,566m. This indicates a probable full year invisible deficit of around $9 billion. The current account deficit for 1984-85 is likely to approach $11,000m. These trends cannot be allowed to continue unabated. Australia must take steps to rectify this balance of payments crisis. One of the major components of the invisibles equation is transportation, which largely comprises freight, insurance and other costs associated with shipbuilding. In 1983-84 Australia earned $2,273m in this area, but paid out $3,849m. This left us with a transportation deficit of $1,576m. On current trends, in 1984-85 the transportation deficit will be over $2,000m, a slide of 25 per cent in a mere 12 months. This is the annual cost to the nation of having an inadequate merchant fleet. The Opposition supports the proposed Bounty (Ships) Amendment Bill, believing that it will greatly enhance the shipbuilding industry's competitive position. But, as I said earlier, it does little to overcome these underlying problems which are manifestly clear in the situation that is a result of devaluation alone. The cost to the Australian electorate is such that every person-man, woman and child-will be expected to carry a deficit of some $5,000 each this year just to pay back the level of Australia's overseas borrowings, which, in terms of interest alone, have resulted in increased costs of about $1 billion every quarter this year. Among industry leadership there is currently optimism in relation to export potential. We certainly support that. The effects of this Bill will be to focus on additional assistance for the genuine shipbuilder. The new registration criteria will ensure that only genuine shipbuilders are eligible for bounty payments. This will reduce assistance to those firms on the fringe of the shipbuilding industry. Contrary to the intent of the 1980 Bill, the number of registered shipbuilders has increased from 30 in 1980 to the present 80 registered companies. The new guidelines should succeed in rationalisation, although further measures may be required. As stated by the Minister for Sport, Recreation and Tourism (Mr John Brown) in his second reading speech, registration may also be restricted to vessels of up to a specified size and, if appropriate, of a specified hull material. However, the Government must find a set of guidelines which will result in a large majority of the bounty being payable to the specialist shipbuilding industry, not to those on the fringe. This is the only way in which the industry can obtain the reasonable company productivity and continuity of business required to justify the bounty. We welcome the consultations and co-operation with industry and with the unions outlined in the Bill, but in the end it is up to the Government to adjust the guidelines to ensure that bounty flows to the specialist shipbuilding operations best able to compete. This is the crucial need, and the Government would do better to emphasise its determination to ensure that this happens rather than to make largely empty threats on the withdrawal of the export bounty. I shall at the appropriate stage move an amendment to this Bill. Mr ALLAN MORRIS(Newcastle)(10.20) — I was pleased to hear many of the supporting comments from the honourable member for Bradfield (Mr Connolly). I will deal firstly with the positive aspects of that. The fact is that the Government and the Opposition are in agreement on some aspects of the shipbuilding industry, the most important one being that we as a nation have a major need for shipbuilding to continue. As has been pointed out, there has clearly been a decline in shipbuilding over the years. When the current Government came into office in March 1983, we were confronted with a number of industries in severe crisis, of which the shipbuilding industry was one. The model used in the Bounty (Ships) Amendment Bill is similar to that used for the steel industry and the automotive industry. Firstly, it has a positive structure involving some form of regulation of the industry itself; and this bounty Bill incorporates the shipbuilding group. Secondly, it has required a renegotiated industrial relations situation in the steel industry and the automotive industry, and clearly that is long overdue in the shipbuilding industry. Thirdly, it has involved positive assistance for the industry to improve its performance further. The most significant aspect of this Bill is the extension of the shipbuilding bounty to the export market. This is only the second area in which this has happened in Australia's history, the first, of course, being the computer bounty which was introduced last year. The intent of that is to suggest to Australian industry and the Australian community that we must turn back the view of industry that the domestic market is the be all and end all and look at the world as our market, because while we look inwards into the Australian market's potential and capacity it has been obvious for many years that that market will not sustain many of the modern industries that Australia needs. To turn to the export market and to treat it similarly to the domestic market has been long overdue in this industry. Australia has a proud history of shipbuilding. Despite the difficult times experienced in the last 10 to 15 years, we are still amongst the world leaders in the building of smaller to medium ships, particularly tugs, dredges, fishing vessels and ferries. An industry has survived and maintained a skill base under very difficult circumstances. This Bill will allow it and encourage it to expand that base. The problems of the industry were visible long before this Government came to power and certainly long before the principal Act was passed in 1980, but they have been addressed in ways that have smacked of the short term solution and of the cop out. In fact I well remember that the shipbuilding industry in Newcastle in 1976 was in severe crisis. I have taken great interest in recent months in watching observers from the Opposition come to Newcastle, I expect or assume, to examine the corpse of the shipbuilding industry in Newcastle, once one of the proudest in Australia, which they buried in the 1970s. The industry had become uncompetitive, inefficient and undirected, and I suggest that the Opposition can accept responsibility for its current status. In looking at the future of an industry such as shipbuilding, we must look also at two other aspects, one of which is transport. We must consider the gross distortion in the capacity of Australian shipping to carry Australian goods. Taking into account the invisibles deficit on our foreign trade account, it can be seen that the fact that most of our goods are carried by foreign ships is a major contributing factor to the problems facing the industry. The second aspect which we must look at is the ship repair industry, which is the sister industry to shipbuilding. I look forward to the Minister for Industry, Technology and Commerce (Senator Button) bringing forward the finalisation of a ship repair policy that will, in fact, marry the policy to the shipbuilding policy. The two do and must go hand in hand. The unadulterated nonsense which we heard from the previous speaker, the honourable member for Bradfield, regarding the Government's macro-economic policy-he tried to translate the overall Australian deficit into an electorate figure of $5,000 a person and to suggest that the devaluation will somehow make it worse-was an intrusion into an area in which there is a high level of agreement. The Opposition has put forward a sophistic view of economics which is damaging to the industry, the people working in it and the Australian community at large. This general direction of the Opposition of trying to intrude into every positive endeavour and effort a degree of polarisation which is unwarranted does not do it justice. To go much further than the previous speaker did, the devaluation of the dollar provides this industry, firstly, with a major chance to get back into the world market and to be a major force in the small shipbuilding industry of the world. Secondly, it gives Australian shipping and shipping interests a chance to extend their capacity in the transport of Australian goods. We have seen major changes in that area in recent years. The purchase of the bulk ships by Broken Hill Proprietary Co. Ltd represents the first significant shift in Australia's transport capacity in the last five years. The current economic policy of the Government is doing exactly what is needed in Australia. It is getting us back to being competitive. The Government inherited a country which was in severe crisis. Each major industry at which one looks-the steel industry, the automotive industry, and the shipbuilding and ship repair industries-has gone through a period of great trauma. This Bill is the third in a line of reconstruction of industry. It is a major Bill. There is major agreement between industry, unions, government and opposition. It is not the time to be talking about polarisation. It is a time to talk about rebuilding. I commend the Bill in its current form to the House. Mr COBB(Parkes)(10.28) —The Bounty (Ships) Amendment Bill proposes to extend the bounty assistance provided to the shipbuilding industry in Australia to vessels constructed or modified for export from Australia. To date it has been paid only for ships sold in Australia. It is claimed by members on both sides of the House that this extension of the bounty to vessels for export is a more consistent position than we have at present. I am afraid that I have to disagree somewhat. I would have thought that it would have been more consistent to remove the bounty for the domestic market to bring it into line with the export market. Assistance for shipbuilding in Australia has a history spanning several decades. Before World War II assistance was granted by way of tariff. In 1947, this was switched to assistance by way of subsidy. Between 1955 and 1972 there was a 33 1/3 per cent subsidy. In 1972-73, there were changes under the Whitlam Government whereby higher protection was given initially. However, by 1976 there were few orders and yards were closing. Two Industries Assistance Commission reports were brought down. The first recommended continuing the status quo. The second provided the basis for today's assistance. From 1 July 1980, a bounty was paid as a percentage of the construction costs for ships of more than 150 tonnes or a water length of over 21 metres. Initially there was a 27.5 per cent bounty. This was reduced to 25 per cent from 1 July last year. This will be further reduced to 22 1/2 per cent from 1 July this year and reduced to 20 per cent from 1 July 1986. We also have a 20 per cent bounty for modifications over $400,000, and we have some import controls. Australia has under construction less than one per cent of the world's shipping tonnage. If we look at the bountiable vessels built over the last few years, in the year to 31 October 1978 we built 50 ships; in the year to 31 October 1983 we built 53 ships. There was very little change in that time. However, the number of yards operating in 1978 was 16. That has now doubled to 32 yards. It is clear that the bounty is working successfully; in fact, too successfully. The bounty undoubtedly has contributed to an increase in the number of yards building ships. The market has stayed constant at the small number of 50 ships a year, but the number of yards has doubled to build the same number of ships. In 1978, on average we were building three ships per yard. In 1983 we were building on average only 1 1/2 ships per yard. Obviously that is a situation with no viable future. No big ships have been built in Australia since the closure of the Broken Hill Proprietary Co. Ltd yard at Whyalla in 1978. We now build small ships in mainly small yards-for example, passenger ferries, tugs, dredges, fishing boats, off-shore supply vessels, barges and small trading vessels up to 10,000 tonnes. The outlook for the future is not good, either domestically or on the export market. If we look at the domestic market and the construction of tugs we see that tug operators have undertaken a major replacement program in the last few years and few tugs will therefore be required over the next six to seven years. The position with ferries is that most replacement orders have now been filled and demand will be low from now on. There is a very low demand for small cargo vessels and bulk carriers and there are unlikely to be any new orders for off-shore oil rigs. Defence shipbuilding has always been very irregular and provides a very lumpy demand. The export position is really no brighter. Between 1981 and 1984 three Australian yards sold ships. Neumann Equipment sold a dredge to Saudi Arabia, the 'K' Shipyard Co. sold 20 fishing trawlers to Indonesia, and Australian Shipbuilding Industries (W.A.) Pty Ltd sold four fishing trawlers to Saudi Arabia. The world market is extremely depressed. There is very high competition for the few existing overseas markets, especially from countries such as the Netherlands, Taiwan, Japan and South Korea. Competition for imported vessels also is increasing. Generally imports into Australia are prohibited but some are allowed in with the approval of the Minister. For example, between 30 September 1979 and 31 October 1983, 61 vessels, new and second hand, were brought into Australia. That averages about 15 vessels a year. We have a very low economy of scale in this country, with obsolete or outdated plant and equipment compared with overseas yards. We have very low productivity and a high level of industrial unrest. This means that we have a very low comparative advantage against overseas countries. Add to that the world downturn in shipping construction and the oil crisis and there is a low requirement for the building of new ships. The job situation is collapsing, particularly in Australia. If we look at jobs solely or mainly in ship construction, a survey conducted over 90 per cent of shipping industry activity in Australia showed that in the two-year span between 30 October 1983 and 30 June 1985 jobs in Australia collapsed by 76 per cent, from 2,269 jobs down to an estimated 553 at the end of next month. Other factors have led to this unfortunate but inevitable collapse in the number of jobs in the shipping industry in Australia. Overseas yards, apart from their better labour relations, higher productivity and greater throughput, also can offer credit to their clients on more favourable terms. In these tight times credit is really the name of the game. Overseas yards can offer extended credit and more favourable rates of interest. However, Australian shipbuilders have other disadvantages with which to contend. Let us look at costs in terms of a breakdown of materials, labour and overheads. Of the total building costs of a ship in Australia, on average, material costs make up 57 per cent, labour costs 28 per cent-they vary from 13 to 50 per cent-and overheads 15 per cent. Lowering these costs would be one of the best ways to help shipbuilding in Australia. For example, if we look at the local material cost of shipbuilding in Australia we see that almost 90 per cent of our local materials, when priced against overseas materials, are at least 50 per cent dearer. Our labour on-costs exceed 30 per cent of the wage costs, compared with about 18 per cent in Japan. Our overheads are very high because of our low and irregular demand. It is clear that if we want to become competitive and sell ships overseas we will never be able to do so until these costs are lowered so that our shipyards can compete on an equal footing. The only alternative method is to subsidise our yards to the hilt which, by itself, encourages inefficiency and is surely not the way we want to go. I find it particularly hard to stomach extending this bounty at the end of a period of massive devaluation of the Australian dollar. This, in itself, will make Australian-made ships a much more attractive proposition to overseas buyers than they were only a few short months ago. Surely with a 20 to 30 per cent advantage falling into the laps of shipbuilders they do not want a 25 per cent subsidy on top of that. Let us face it. No amount of artificial help from the Government is going to get us export contracts. The world market is too depressed and has substantial surplus capacity, and our competitors are closer to the market than we are and can offer better credit facilities. We should not try to beat that with subsidies from our taxpayers. If we sell our ships at an artificially cheap price simply to get a sale it is simply a case of transferring money from our taxpayers to overseas taxpayers. As I said earlier, we have sold a few ships to Saudi Arabia. I would have thought that the Saudi Arabian taxpayers with their oil wealth would have been the last group we would want to subsidise. The wide range of types and sizes of ships and the spasmodic demand for certain vessel types does not allow the local industry sufficient scope for achieving the levels of specialisation found in overseas yards. The $16m of taxpayers' money that we are about to vote away here today to be spent over the next 18 months is equivalent to a subsidy of $29,000 for each worker in the shipbuilding industry over and above the subsidies it already gets. That is $16m extra of taxpayers' money that has to be collected in one way or another from the profitable sector of our economy. It is $16m worth of jobs destroyed in an efficient area to prop up an inefficient area. It is simply a transfer that must lower the overall standard of living for us all. I guess history will judge that the decline in our shipbuilding industry was largely due to the shocking record of the industrial unrest that it has suffered in recent years. It appears that the union chickens have now come home to roost in that regard. It is such a shame that many many hundreds of workers' jobs have been lost as a result. If we are now to sort our the mess and give the shipbuilding industry a chance the worst thing we can do is grant further assistance. Instead we should address the areas of wage and labour rigidities, the fact that our inflation rate is higher than that in overseas countries and the fact that the world and domestic market situation is in a very tight position. Short of an enormous cost to the economy we are unlikely to have success on world markets and until we do something about lowering material costs and freeing up labour costs and work patterns, the Australian shipbuilding industry is doomed to stagnate at a low level on the domestic market also. In this regard granting further assistance will not treat even the symptoms let alone the causes of the shipbuilding industry's present ills. I know that the present legislation is well-meaning; nevertheless I fear it is ill-judged and will amount to little more than another $16m of taxpayers' money going down the gurgle hole. Mr BALDWIN(Sydney)(10.40) —It is predictable but no less regrettable that the Opposition, in talking about the shipbuilding industry, should seek to make the standard allegations that the problems of the shipbuilding industry can in large measure be sheeted home to industrial relations and excessive labour costs. If the Opposition had bothered to read the report of the task force on the shipbuilding industry, which was a tripartite task force, it would have seen that in fact the problems of the shipbuilding industry cannot be appropriately addressed by focusing on industrial relations issues. I have something of a personal interest in the question of shipbuilding because the Vickers Cockatoo Dockyard, which, according to the table at the conclusion of the task force's report, employed some 720 people in the shipbuilding industry, is in my electorate. It is going to be forced, in effect, to get out of the shipbuilding area, at least for the foreseeable future, and the result of that will be very substantial unemployment. We have already seen the laying off of several hundred people, mainly but not exclusively in the engineering trades. That is obviously a very major human tragedy. By looking at what happened at Cockatoo Dockyard certain general conclusions can be drawn about the state of the shipbuilding industry. The previous speaker, the honourable member for Parkes (Mr Cobb), made some reference to the problems of industrial disputation. Therefore, I would like to look at the extent to which industrial disputation can be regarded as a source of the problems that that shipyard has suffered. Basically the Vickers Cockatoo Dockyard is in the process of completing the supply ship HMAS Success. There have been some major problems with that project. There has been a massive overrun so far as time of completion is concerned and there has also been a massive overrun so far as the cost of the project is concerned. The cost has roughly doubled in real terms by comparison with the initial estimate. I have attended a number of briefings given by the management of that dockyard, I have spoken with representatives of the union and I have familiarised myself to some extent with what the Joint Committee of Public Accounts has been up to in its investigation of that project as part of its broad investigation of defence procurement policies. According to the management and according to the PAC-they are consistent on this point-something like 30 days of the delay of some six years in the initial completion time can be attributed to industrial action. In other words, it is simply not a significant component of the delay problem. Nobody involved, including management, suggests that the major difficulty that that shipyard has faced and the difficulties it has faced with the HMAS Success project can be sheeted home to industrial relations problems. There was some industrial action for a period in relation to the 38-hour week campaign but that was not a major problem. The fact is that the difficulties have stemmed from a number of problems that would inevitably arise in a situation where the yard was doing a one-off order without the benefits that would flow from repeat orders. The difficulties arose from mis-specification of the features of the ship. The Department of Defence, I think, must bear a heavy responsibility for that. The ship was of French design and a production package was supplied by the French designers. It included detailed drawings and other necessary elements to build the ship and there were certain components of the ship that would not be made locally. A very significant problem arose from the paucity of that production package. There were problems of translation of language. A Norwegian firm was contracted to produce a set of paper tapes that would be used to operate some numerically controlled cutting devices that would make the various components of the hull, but it was simply not possible for that firm in the first instance to produce those tapes based on the materials that were supplied by the French designing firm. Problems arose also from an incompatibility between the ultimate Department of Defence specification of the ship and the detailed drawings supplied by the French. All of those sorts of problems were the overwhelming cause of the difficulties. It is fairly obvious that problems of that sort are going to be worse if one is dealing with a one-off order. Initially the intention was to build two such resupply ships. Unfortunately, because of budgetary constraints, it has not proved possible to go down that track. So we are not going to see a repeat order. But there is little doubt that if a second resupply ship had been financed, we would have seen the substantial elimination of the very major problems which have emerged. This just serves to illustrate the fundamental problem which arises when a shipbuilding industry is forced to operate on that basis. I would just like to quote what the task force on shipbuilding had to say about the Defence Department's requirements for shipping and what that means for the shipbuilding industry. The task force on shipbuilding, in paragraph 69 of its report, said: Defence is the most significant Government purchaser of Australian built vessels of the size covered by this report. Defence shipbuilding contracts have tended to be irregular and are dependent for timing on budgetary constraints and the competing priorities of the three branches of the armed services. These factors have led to an irregular lumpy demand which has not aided effective planning and investment within the Australian shipbuilding industry. That epitomises the problems of Vickers Cockatoo Dockyard. This legislation aims to create a framework within which a more viable shipbuilding industry can be developed in the long term by facilitating the development of some sort of export industry. Obviously, if one is successful in doing that to the extent that one's potential market can be enlarged from a purely domestic market to an international market, the problems arising from one-off production are diminished. Hopefully the extension of the bounty to ships built for export will have the beneficial effect of encouraging a more export oriented industry in which economies of scale can be more effectively harnessed. I quote again from the report of the task force on shipbuilding. Paragraph 90 of the report, referring to overheads, states: Respondents to the Department's survey provided insufficient data to enable an examination of the movement in overheads over the period 1979-1983. The important bit is coming up: The most significant factor affecting overheads of the major shipyards since 1980 has been the contraction in demand. Most local builders felt that significant cost savings could be achieved through repeat orders and the marketing of standard vessels. This would enable fixed costs to be amortised over a great number of vessels and may allow savings through bulk ordering of components and materials. Again, that merely underlines the basic point I am making, that what we need to do is to get away from a shipbuilding industry which is oriented solely to the local market and try to construct a more streamlined industry based on a smaller number of manufacturers but with a more substantial export orientation. If that can be achieved, the sort of tragedy that has occurred in Vickers Cockatoo Dockyard, where we have seen the wholesale dismantling of a skilled shipbuilding work force, will be hopefully attenuated. I am not pretending for a minute that this legislation is going to be the complete solution to the industry's problems. There are a number of facets to that. Mr Barry Jones —Or even the final solution. Mr BALDWIN —Or even the final solution. There are a number of elements that are not addressed. Obviously some aspects cannot be addressed. For example, there is a depressed world demand for new ships. The fact that there is an oversupply situation in shipping throughout the world at the moment is a problem that cannot simply be addressed by a piece of legislation of this sort. I also note that the task force on shipbuilding talked about the fact that overseas shipbuilders have been able to offer more attractive financial packages than those which have been able to be offered by Australian shipbuilders who may wish to compete with them. Hopefully we will see a more innovative financial system in the years to come that will offer a partial solution to that problem. Whether the entry of new foreign banks will in practice have that effect remains to be seen. However, one would hope that that would be a consequence. I am sure that those who advocated foreign bank entry would have that sort of thing in mind. I have to conclude my remarks at this point because speakers in this debate are limited to 10 minutes. I certainly support the objective of this legislation. I think the ideologically based opposition to it from Opposition speakers fails to recognise that the real problems of the industry stem from low level production, one-off production, dependency on defence contracts and inability to obtain export orders. These are the real problems of the industry, not the industrial relations difficulties which no doubt have existed to some extent but which, according to all observers, including the management of the firms concerned, certainly do not constitute the major problem that the industry has had to face. Mr TUCKEY(O'Connor)(10.51) —Because of the time constraints, I wish to limit my remarks to Part IV of the Bill and particularly to clauses 13 and 14 which seek to repeal and replace sections 10, 10A, 11 and 12 of the principal Act. Of course, these particular alterations relate to the registering of persons as prescribed shipbuilders and the registration of premises. I am concerned, of course, that this will have a deleterious effect on the shipbuilding industry. I would like to use an example from the port town of Geraldton in my electorate to show how this can happen. The Minister for Sport, Recreation and Tourism (Mr John Brown) in his second reading speech was at pains to point out the following: I mentioned earlier that part of the Government's shipbuilding package is the introduction of registration criteria for the purpose of bounty eligibility. These criteria will ensure that bounty is paid only to those shipbuilders with a clear long term commitment to the industry. That, of course, means that the legislation will confine the industry to full time workshops when in fact substantial employment can be created in one-off operations. Of course, employment will be lost if, as happened in my electorate, a person who proposed to build a tug literally in his own backyard finds that he can no longer attract the bounty. Consequently, he may make a decision not to build a boat at all but to buy one in Singapore or somewhere else. In my electorate, the Geraldton Tug Co., which is a family business of the Newbold and Mildwaters families, recently built a tug worth approximately $1m. This interesting high technology tug, which contains the latest innovations such as rotating propellers, was literally built in the owners' backyard. A decision was taken to build a tug because the owners were able to attract a bounty. Mr Barry Jones —Local design? Mr TUCKEY —It is a local design. The tug was locally manufactured with local employment. It is something which the Minister for Science (Mr Barry Jones) should see one day. The builders have done a wonderful job. The tug does not have a steering wheel but is driven by a joy stick. The bridge of the boat looks like an aircraft control tower. It is an excellent piece of work. The Newbold and Mildwaters families are unique in that they have provided tug services in Geraldton harbour for many years. It is strictly a family business. The Newbolds provide the captain and the seafaring services and the Mildwaters supply the engineer. It was quite interesting to see the families make the decision to build the tug which is in the water and operating very well at present. My concern is that these opportunities and work will be lost as a result of this legislation. I would like to illustrate the difficulties by reading a letter which Mr M. Newbold of the Geraldton Tug Co. received recently. The letter states: Re: Schedule ''T''-Geraldton Dear Sir, Further to our discussions at Geraldton on 17 January, 1985, we request the following changes be made to the methods of working on the tugs in Geraldton. 1. The Tugmasters to be members of the Merchant Services Guild, as employees of the Geraldton Tug Company, not Director/Shareholders as is the case at present. 2. Each tug to have dedicated crews who are designated to act in one capacity only. 3. The manning of the tugs to be- Wootakara is their old tug and Fairfax is the new one- Wootakara Fairfax 1 Master 1 Master 1 Engineer 1 Engineer 2 Deckhands 3 Deckhands 4. An 'Equal Time' leave cycle be implemented-5 weeks on 5 weeks off. 5. Master and Engineer on the 'Fairfax' to be paid category II Tugboat Industry rates of pay. 6. The appropriate Union to supply labour when required. 7. If work required on Company's vessels not normally used for towage, agreement to be reached with Unions beforehand. We confirm that we will be meeting Geraldton Tug Company representatives at 10.30 on 30th January, 1985 at the Seamans' Union boardroom, Terminus Chambers, Packenham Street, Fremantle. Yours faithfully,M. S. BOORMANFor and on behalf of Maritime UnionsC. C. Guild &Institute Members That might seem to be a rather innocent piece of correspondence, but it tells the owners of the Geraldton Tug Co., to get off their tug. It tells them that they will not be able to drive it any more. As owners and drivers with a family tradition, they will not be able to drive their own tug, and that is why I am concerned about what this legislation is leading us to. It will restrict to certain major yards the business of shipbuilding, and in my mind that will mean, unfortunately, telling people that only union members may engage in the industry. It will create a closed shop situation. The meeting to which I referred has taken place. The owners refused to take the instruction and were immediately confronted with strikes. The problem with the strikes is that already ships have stopped coming into the Geraldton port. Although these people have right on their side, the pilots have stopped bringing the boats in. They have a three-year contract for their $1m tug and if they lose that contract they will be in severe financial difficulty. It is now for the Harbour Board in Geraldton to decide whether it sees these people as so disruptive to the operation of the port that it cannot re-employ them. This has all come about because people have been told not to operate their own tugs. The honourable member for Sydney (Mr Baldwin) mentioned something about industrial disputes. That seems to me to be an industrial dispute of the most distasteful kind. We have to look at the situation that exists in Geraldton. Geraldton is also the port for 500 cray fishermen-500 boats. Are they the next on the hit list? Are they shortly to be standing on the beach while members of the Seamen's Union of Australia take their crayfish boats out into hazardous waters and possibly do not bring them back? Is that what we are being promised? It is interesting that this situation has occurred in Geraldton, because another infamous situation of this nature also originated in Geraldton. I will not go into detail, but I mention the famous John O'Connor case of a charge of extortion against a unionist in which the defendant was eventually found innocent, having been committed for trial by a lower court on charges brought by the State Government of Western Australia. That dispute originated in Geraldton also. On both occasions a senior Minister of that Government, the Minister for Police and Emergency Services, was the member for Geraldton. I just wonder where he stands on this new issue. I wonder whether he will tolerate people being told to get off their own boats and not being allowed to use it any more. It is a disgraceful situation. I challenge the local member in Geraldton to see that it does not happen. It is still going on. The people are still concerned; they are still under threat. Will someone who buys a truck to operate as an owner-driver truckie get a letter from the union saying: 'You will not drive you own truck. You are to sit at home and pay someone else to drive it.'? It is un-Australian; it is disgraceful. Unfortunately, this legislation tends to leads us in that direction. It is a recipe for a closed shop and it is most important that the Government consider that point. The Government says that it is making what it sees as a clear long term commitment to the industry. There is no criticism of that. That is a desirable thing to do, but unfortunately things do not always come out as governments intend. I think what will happen in this case is that a large number of owners who have the ability to build a tug or a smaller vessel which still qualifies for a bounty will not be able to do so. Even the tug to which I refer was not built near the water, as required by the new registration criteria. Today we have massive cranes and pieces of equipment to move things along our roads. That requirement just makes it more difficult for people to get into the industry. More importantly, I am sure that employment will be lost through this proposal. This is a classic example of people taking the initiative into their own hands and, with the aid of the Government bounty, building a very capable piece of equipment with excellent technology which works extremely well. They have managed to do it in their back yard, creating employment in their town for local people. Under this new legislation, were they to choose to build another tug in the future they would not be able to do so. I do not think that is wise. It is a fact that vessels of that nature can be built in other parts of the world. A large number of secondhand vessels are available which, if a person chooses to pay the duty, he can import for less than it costs to manufacture one himself. That option is open to many people. I well remember the debates about the very wealthy men getting these bounties to have luxury boats built in Queensland. People wrote to me about it and I replied to them saying: 'I am sure that the purchasers of those boats are not too worried whether the boat is built in Queensland or Singapore. It is not a bounty to them, it is a bounty to the workers who work on the boats and are unable, because of Australia's wages and conditions, to meet competitively the challenge from other shipyards around the world'. That is what we are talking about. I do not think we should remove any opportunity to construct a boat in Australia, whether it is built in what will now be called a registered yard in a closed union shop or whether it is built in someone's back yard. If a person can do the job to the proper standard he should be entitled to do it. I am glad that the Government has allowed me to read into Hansard the letter to the Geraldton Tug Co. I feel that the situation described in that letter is one of the most disgraceful things I have ever come across. If we are going to allow that situation to continue we may as well say that unions are allowed to write to those who own or rent homes and tell them to get out of their homes and rent it to a worker. It is the same thing. A family business is a family business, and the family is entitled to run it. That instruction which is being pursued by the union at this moment is disgraceful and reflects very badly on the local member, Mr Jeff Carr. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(11.01) —I thank the honourable member for Bradfield (Mr Connolly), the honourable member for Newcastle (Mr Allan Morris), the honourable member for Parkes (Mr Cobb), the honourable member for Sydney (Mr Baldwin) and the honourable member for O'Connor (Mr Tuckey) for their contributions to this debate. A number of the issues that have been raised about particular locations and the problems of specific regions connected with shipbuilding have been noted. I will take them up with my colleague Senator Button. We are all conscious of the need to expedite legislation, so I will save any further comments for the Committee stage. Question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. The Bill. Mr CONNOLLY(Bradfield)(11.03) —The Minister for Sport, Recreation and Tourism (Mr John Brown) in his second reading speech on the Bounty (Ships) Amendment Bill stressed that the incentives incorporated in this Bill are to be subject to review. Senator Button, in his speech in another place, said: If the reports from the SCG-the Shipbuilding Consultative Group-indicate that continual progress towards rationalisation is not being achieved, the Government will review the augmented assistance package. Whether the export bounty is paid beyond the 1985-86 financial year will depend on the degree of progress achieved. Subject to the combined industry and union response the Government will consider whether the general bounty assistance should also be reviewed. The Opposition believes that any such package of government assistance to one industry should be closely scrutinised to ensure that funds are being invested to best stimulate industrial growth and international competitiveness. We do not believe that assistance should be open-ended but that it should be subject to regular review and that that review should enable the effectiveness of any assistance program to be evaluated against the Government's own objectives for a particular industry. The shipbuilding industry has been the subject of government assistance over a number or years, as I noted in my speech during the second reading debate. The continuance of assistance that has no limit does not necessarily lead to improved international competitiveness, nor is it necessarily in the interests of the industry as a whole. For these reasons, on behalf of the Opposition I propose to insert a sunset clause providing for the cessation of bounty payment generally on 30 June 1987 and requiring the Government to bring forward further proposals in accordance with the second reading speech. I regard this amendment as being consistent with what has been clearly stated in the Government's second reading speech as the objectives of its policy. I think it would therefore be worth while to incorporate this provision in the Bill so that the sunset clause takes effect on 30 June 1987. I move: Page 8, after clause 7 insert the following new clause: Bounty not payable in respect of construction or modification completed after 30 June 1987 ''7A. Section 6 of the Principal Act is amended by adding at the end the following sub-section: '(6) Bounty is not payable in respect of the construction or modification of a vessel where that construction or modification is completed after 30 June 1987.' ''. Mr McVEIGH(Groom)(11.06) —It is the responsibility of the Government to ensure that the interpretation of its guidelines results in the major proportion of the bounty being payable to the specialist shipbuilding industry through rationalisation. The Government has failed to outline the criteria that will be used to measure rationalisation. Either the Government does not know how it will specifically achieve rationalisation or it has failed to inform the House and industry. Either way, the Minister for Industry, Technology and Commerce (Senator Button) should rectify his blunder immediately. Australian shipbuilders are well placed to contribute a small, but solid, stable industry to our economy. They cannot afford to be the victim of this Government's increasing trend to pay full attention to the glamorous and trendy issues such as tax, welfare and education, while other vital issues are subjected to ad hoc 'she'll be right Jack' policies. It is important that this House notes that none of this bounty assistance would be necessary if the Government were successfully managing the economy. Indeed, if the Government cannot stop vacillating on its macro-economic policies, all the bounty assistance in the world will not help shipbuilders and other exporters. The seemingly unending devaluation of the Australian dollar provides opportunity for industries such as shipbuilding to improve both their export potential and domestic competitiveness. Unfortunately, the Hawke Government has eroded this opportunity by failing to confront the threat of higher inflation caused by devaluation and wage indexation. The result will be a catch-22 situation. Many industries will feel justified in seeking higher bounties and tariffs. This would be unacceptable to the Opposition, given our approach to deregulation and decreasing protection. As the task force said in its report, labour on-costs in Australian shipbuilding are a significant component of total wage costs. They run at about 30 per cent compared with 18 per cent in Japan. While Japan faces an average wage increase of around 4 per cent for 1985-86, the Hawke Government speaks of supporting wage increases of around 8 to 9 per cent in 1985-86-- Mr Barry Jones —Madam Chair, on a point of order: I am reluctant to interrupt the honourable member in full flight but, with respect, I think that this is a disguised second reading debate speech. He has had his opportunity. The CHAIRMAN —Order! I point out to the Minister that we are considering the Bill as a whole in Committee. Mr Barry Jones —He seems to be dealing with matters of policy rather than matters relating to the amendment. The CHAIRMAN —He is not speaking to the amendment but to the Bill, as a whole, because that is how the Committee is considering it. Mr McVEIGH —I repeat: While Japan faces an average wage increase of around 4 per cent for 1985-86, the Hawke Government speaks of supporting wage increases of around 8 per cent in 1985-86 which includes at least 9 per cent for the direct and indirect effects of devaluation. I sincerely hope that the Prime Minister (Mr Hawke), the Treasurer (Mr Keating) and the Minister for Trade (Mr Dawkins) do not lie awake at night agonising over why we have slipped to sixteenth place behind our key trading competitors. The answer lies in the ongoing policy of the Prime Minister to put Australian Labor Party factionalism and union interests above that of the national interest. How can a policy, which forces an industry like shipbuilding to pay the same rates and conditions as a service industry not subject to import competition, be justified by anyone with a grain of economic understanding? If I could make the Treasurer understand this small point, I am sure Australians would gladly forgo the reflected glory of his 'Treasurer of the Year' prize. There will always be problems for exporters in the labour market whilst ever the current rigidities exist. Labour decisions are being made outside the worker-manager relationship by a body which continuously demonstrates how far removed it is from the realities of the work place and the capacity of industry to pay. Far too many small unions, whose interests are very similar to those of larger unions operating in the same industry area, are causing unnecessary disruption to industry. Too often, two men are being used for jobs which require only one man to avoid the eruption of demarcation disputes. Now is the time to disband unions with membership of less than 1,000, which will pave the way for amalgamation. Last week the Treasurer ruled out discounting of wages. The need for discounting has arisen because of the judgment of the international business community on the Australian economy. The judgment has been harsh and with good reason. Exporters have waited for the Government to announce its policy response-that future national wage rises would be discounted for the inflationary impact of the dollar's devaluation. But no, when it came time to crunch the union muscle, the Hawke Government had no stomach for what it had to do and what should be done. The Government has been saying far and wide that Australia's slump in international competitiveness is due to declining commodity prices and our inward-looking manufacturing industry. It would be more accurate to say that the slump can be attributed to the sectional and inward looking nature of the Hawke Government on issues such as flexibility in the wage structure, accountability for unions and tax reform which returns incentive to the private sector. Key requirements in each of the main areas of policy can be easily enough stated. Difficulties arise through the interaction of macro-economic instruments, such as the imbalance between monetary and fiscal policy and the inconsistency between indexation and exchange rate arrangements. Wage restraint via indexation affects the balance between fiscal and monetary policy when it depends on tax cuts unmatched by expenditure restraint. Fiscal and monetary policy have important exchange rate implications which are fundamental to the rise or fall of the export sector, although this Government has made no tangible recognition of that factor. The Hawke Government cannot afford to allow the export sector to continue to bear a disproportionate burden of protection as a result of its failure to seize the opportunity presented by the recent exchange rate movements to reduce protection, despite the fact that effective rates of assistance now dwarf initial levels. The Opposition's concern is simply this: How far do we have to slip behind our trading partners-we are down to sixteenth place now-before the Hawke Government makes a policy response that acknowledges that until public sector spending is cut in real terms, Australia's economic potential will not be realised and perceived inadequacies of industry policy will continue to be treated with band-aids? Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(11.10) — The Government cannot accept the amendment moved by the Opposition. The honourable member for Bradfield (Mr Connolly) argues that the provisions in this Bill are open-ended and insufficiently scrutinised and he proposes a sunset clause. We regard a sunset clause as unnecessary and argue that the Bill already provides for adequate scrutiny. As the honourable member for O'Connor (Mr Tuckey) observed in his speech during the second reading debate, there will be some anomalous cases involving meritorious shipbuilders who may be excluded by the legislation-that is, occasional shipbuilders rather than regular round the year shipbuilders-even when products are of high quality. The whole aim of consolidation was made clear by the Minister for Industry, Technology and Commerce (Senator Button) when it was widely announced in October 1984. It means reduction in numbers, consolidation of effort, and continuity and stability of employment. I remind the honourable member for Groom (Mr McVeigh) that the criteria which have been set out to qualify for registration involve these elements. First, the body concerned must be a registered Australian company, business or organisation. Second, it must demonstrate financial and commercial capacity by way of an independent auditor's report to build a bountiable vessel. Third, it must employ directly or through nominated sub-contractors or have demonstrated clearly that an average of 20 persons will be dedicated to shipbuilding throughout the period of construction for the purpose of building the bountiable vessel. This is to be substantiated by periodic returns. Fourth, it must have an ongoing apprenticeship scheme employing a ratio of at least one apprentice to eight tradesmen directly employed by the shipyard and encourage all sub-contractors to maintain a similar scheme. Fifth, it must own or have access to shipbuilding facilities, including a waterfront site, which are assessed as adequate for building the vessel or vessels for which registration is sought. I freely admit concern that some organisations with existing capacity will be disadvantaged. But the alternative is for the present situation to continue where capacity is dispersed so widely across the continent that none survives, and there has ceased to be a viable industry altogether. The Government would be much more subject to criticism if we let the situation deteriorate and ignored the recommendations made by a very highly qualified group to try rationalising this industry. The decision to extend the bounty to cover export activity must be considered in the context of the discussions the Government held with the industry and with the Australian Council of Trade Unions prior to the announcement of the Government's new assistance package on 11 October 1984. One should remember that section 13, which was referred to by the honourable member for O'Connor, requires that the applicant for registration must have been on 11 October 1984-my birthday as it happens-engaged in the construction then. It is not enough to say: 'I have a great idea. I think I'll set up a new firm tomorrow'. The applicant must have been engaged in construction at that date. It was mentioned in the second reading speech that, as part of the package, the industry and the trade unions-both sides of the table-have agreed to endeavour to achieve industrial agreement over a range of issues. On the basis of this agreement and as an incentive to industry to improve further its competitive position, the Government decided to extend the existing bounty to vessels constructed for export. Progress in the discussions between the industry and the unions on industry rationalisation will be closely monitored by the Shipbuilding Consultative Group. The Group will be required to report to the Minister on a quarterly basis. Both the industry and the unions are well aware that if continual progress towards industry rationalisation and improved industrial relations is not being achieved the Government will review the new assistance package. On the other hand, if progress is achieved the Government may wish to continue the bounty on export activity. As a consequence it is necessary to have flexibility in the package so that the assistance arrangements could be extended, if necessary, by the Government. Adoption of the Opposition's amendment would do two things. Firstly, it would overturn the tripartite agreement and, secondly, it would remove the incentive for the industry to take positive steps to improve its competitive position, which is the central element of the Government's package. Finally, I draw honourable members' attention to the statement also made in the second reading speech where the Government indicated that, subject to the combined industry-union response, it would consider whether the previously existing bounty assistance should also be reviewed. I repeat that, for the reasons which have been indicated, the amendment moved by the Opposition cannot be accepted. Amendment negatived. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(11.18) —by leave-I move: (1) Clause 8, page 9, lines 1 to 13, omit proposed sub-sections 6A (2) and (3), insert the following sub-sections: '' '(2) If the Comptroller-General is of the opinion, in relation to a period referred to in sub-section (1), that the amount (in this sub-section referred to as the ''relevant amount'') available for payment of bounty in respect of the construction or modification of bountiable vessels of the kind referred to in sub-section (1) will be or is insufficient to meet all valid claims for bounty in respect of the vessels, amounts of bounty in respect of the claims shall, subject to the regulations, be approved for payment in such order as is determined by the Comptroller-General in writing and, when the aggregate of the amounts of bounty approved for payment in respect of the vessels equals the relevant amount, no further amounts of bounty are payable in respect of the vessels. '(3) Without limiting the generality of sub-section (2), regulations made for the purposes of that sub-section may make provision for and in relation to- (a) the reservation of amounts available, in relation to a period referred to in sub-section (1), for payment of bounty in respect of the construction or modification of bountiable vessels of the kind referred to in that sub-section; (b) amounts in respect of amounts of bounty so reserved to be approved for payment before any other amounts of bounty are approved for payment; and (c) deeming the construction or modification of vessels that are completed outside such a period to have been completed within such a period.' ''. (2) Clause 11, page 10, line 1, insert ''but subject to sub-section 6A (2),'' after ''claim,''. (3) Clause 11, page 10, line 41, insert ''but subject to sub-section 6A (2),'' after ''apply,''. (4) Clause 15, page 20, lines 32 to 41, omit the clause, insert the following clause: Stock-taking and inspection of production and accounts, &. ''15. Section 14 of the Principal Act is amended- (a) by omitting from paragraph (1) (a) 'yards; or' and substituting 'premises;'; (b) by inserting after paragraph (1) (b) the following word and paragraph: '; or (ba) premises where there are kept any accounts, books, documents or other records relating to the construction or modification (including the cost of construction or modification) of any bountiable vessel,'; (c) by omitting paragraph (1) (e) and substituting the following: '(e) inspect the accounts, books, documents and other records relating to the construction or modification of any bountiable vessel, any may make and retain copies of, or take and retain extracts from, any such accounts, books, documents and other records'; and (d) by omitting from sub-section (2) 'registered yards' and substituting 'registered premises'.''. (5) Clause 21, page 25, line 21, omit ''or''. (6) Clause 21, page 25, at the end of proposed sub-section 20 (2) add the following paragraphs: ''(g) if a determination has been made by virtue of sub-section 6A (2) in respect of the construction or modification of the vessel, either- (i) set aside the determination; or (ii) set aside the determination and make a further determination under that sub-section in respect of the construction or modification of the vessel; or (h) if a determination has not been made under sub-section 6A (2) in respect of the construction or modification of the vessel, make such a determination.'. The amendments to clause 8 of the Bill propose to allow for the payment of bounties on export vessels on a strict 'first come, first served' basis until the funds available in proposed new section 6A are exhausted. In other words, bounty payments will be paid in the order of the receipt of claims until the bounty funds run out. The system proposed in the Bill for the payment of the export bounty does not remove the entitlement to the bounty when funds are exhausted in a period. Under the provisions of the Bill entitlements would be deferred only to the next period in which funds become available. The amendment implements the Government's intention to remove the entitlement to bounty when funds are exhausted. The Government does not intend to provide open-ended assistance for export activity, particularly in view of the current budgetary restraints. It is therefore necessary to amend the Bill to provide for an absolute limit on assistance to the industry in relation to export activity. The proposed limitation on the bounty assistance has been discussed with and accepted by the industry. Because of the introduction in the Bill of the concept of prescribed shipbuilders, the Government considers it necessary that the opportunity be taken here to amend the provisions in the Act relating to the inspection of records and to extend those provisions to records kept at the premises of those shipbuilders. A prescribed shipbuilder is a person who arranges to have a ship constructed or modified on his behalf. The amendments to clause 15 propose to effect this change. Amendments (5) and (6) to clause 21 are consequential upon this action. Mr CONNOLLY(Bradfield)(11.18) —I have only a few very brief remarks to make in relation to the Government's proposed amendments. I was wondering whether the Minister can explain proposed new sub-section 6A (3). Does it mean that the Government could raise an amendment to direct all the bounty funds to one class vessel-for example, to ferries-to the exclusion of other classes of bountiable ships? The Opposition would be grateful if the Minister could let us have some examples as to the impact of this clause, as it would seem that the regulations under this sub-section are subject to parliamentary disallowance. We naturally support the imposition of a regulation which is liable to parliamentary disallowance in this manner. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(11.19) —I think the answer to the question of the honourable member for Bradfield (Mr Connolly) is that only one bounty is payable per application. Because of the provision that payment will be made on a first come first served basis, that is the criterion. Philosophically, one could think of a variety of different ways in which the bounty could be paid. Preference could be given to a particular class of vessels: That would be one way of doing it. Another way would be for amounts to be paid on a regional basis. One could say, 'There are special problems in Queensland and in the West' and we pay the bounty that way. Alternatively, we could say that we will look for-- Mr Duffy —First come, best dressed. Mr BARRY JONES —'First come, best dressed' is in fact the principle we adopted. It is quite arbitrary, but there is a certain rationality in it. Provided that all players in the game are aware of it, no one will be particularly disadvantaged. If we apply that criterion, whoever gets the application in first and fits the broad guidelines will not be disadvantaged by our saying: 'We would have given you the bounty if it had been in a particular category, but we decline to give you the bounty because it is not'. 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. Debate resumed from 15 May, on motion by Mr Duffy: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Millar) —I understand that it is the wish of the House to debate the Broadcasting and Television Amendment Bill 1985 concurrently with the Broadcasting and Television (Consequential Amendments) Bill 1985, the Broadcasting Stations Licence Fees Amendments Bill 1985 and the Television Stations Licence Fees Amendment Bill 1985. Is there any objection? There being no objection, the Chair will allow that course to be followed. Mr MOORE(Ryan)(11.22) —The Opposition supports the introduction of the service-based concept and the amendments to the Broadcasting and Television Act which are proposed under this amending legislation. This introduction of the service-based concept appears to the Opposition to be infinitely sensible and would overcome some of the problems which have been noticed by the licence holders in recent times in connection with this area. Those honourable members who are in the House will be aware that it is the intention of the Minister for Communications (Mr Duffy) to gazette the precise area in which the stations can operate. Within that area the licensees will be able to conduct their business as a whole rather than having to approach the Government again for permission for a translator or other services which might be required. Before I move to the many aspects of the Broadcasting and Television Amendment Bill and cognate Bills which raised some questions in the mind of the Opposition, I draw to the House's attention the Opposition's concern about the haste with which this legislation has been pushed through without adequate time being given for interest groups to pursue this matter. The Opposition feels that a proper course would have been for the legislation to have been introduced in this session and allowed to lie on the table until the Budget session. This is necessarily lengthy legislation and one would have thought that the more sensible approach would have been to have allowed for careful scrutiny by interested parties and the hearing of their views on its implementation and practicality. On the other hand, the Opposition is not unsympathetic to the Government's need to resolve the matter of licences for remote areas and to be able to go ahead immediately with the issuing of these licences when the Act is proclaimed. The Opposition is committed to providing these services to those many Australians in the outback. But we feel that, despite some drafting problems, consideration could have been given to legislation covering the issue of licences for remote areas being given immediate assent rather than having to wait some six months for royal assent to the existing Bill after regulations have been drawn. The Opposition concedes the difficulty in this proposal. However, it feels that it would be outweighed by the advantages of allowing close scrutiny and subsequent meaningful consultation with the interested parties. The Opposition notes that the Department of Communications will be conducting a seminar on the Bill and will be inviting further opportunity for public and industry input. If such is the case, what will be the position if any anomalies are raised and substantiated by persons and organisations? Is the Minister prepared to give to the House an undertaking that these will be remedied? If they cannot be covered by the proposed regulations, will the Bill be amended? The Opposition has been approached by interested persons and organisations who refute that the Government has indeed had adequate input from them and claim that it has failed to live up to its much-vaunted consensus and consultation style of government. The Opposition feels that the Government, in its haste to push through the legislation, is adopting the attitude that many extraneous matters alluded to in the second reading speech of the Minister for Communications (Mr Duffy) can be tidied up in the regulations. This cart before the horse attitude will no doubt create a drafting headache in the months ahead. It seems to be another example of the Government asking the people to trust it. Honourable members are warned that, regardless of how sympathetically these matters are dealt with by the Minister's second reading speech, unless they are expressly defined by the Bill or the proposed regulations they are worthless. The Opposition adopts the view that if, after belated consultation with the public and the industry, the Bill, as opposed to the regulations, requires amendment, the argument against the undue haste of the Government in forcing this legislation through will be seen to be valid. For the Government to argue that to do so would require subsequent amendment to the Bill seems futile, as if it honours the noble words of the Minister on consultation. To further reinforce this argument, the Minister has side-stepped amending this Bill to confirm the standard setting powers of the Tribunal. The Opposition does not wish to argue the merits of this decision or the possible repercussions of the High Court decision. However, it supports our contention that the presentation has been unduly pushed. Some of the anomalies which are concerning the industry and which are of concern to the Opposition are as follows: As to clause 8 of the Bill, proposed new section 6B refers to a program broadcast or transmitted but omits any reference to other matter, including advertising. One might assume from the Bill in its present form that the retransmission of advertisements and other non-program matter by means of telegraph lines is permitted. The Minister should consider amending the Bill by inserting the words 'and other matter' after the word 'program' on each of the three occasions when that word appears in the proposed new section. This addition would be entirely consistent with the principle of the Act. As to clause 10, proposed new sub-section 16 (2) appears to contain a contradiction in that, while it refers to the Tribunal's power to set standards under sub-section 16 (1) (e), it makes mention only of programs. For the purposes of clarity the proposed new sub-section could be amended by adding after the word 'programs' the words 'and advertisements'. As to clause 12, proposed new sub-section 17C (1) requires the Tribunal to hold an inquiry on each occasion that it receives one or more applications for it to exercise any of its substantive powers. No discretionary power has been given to the Tribunal to decide whether or not the application has merit. The Administrative Review Council's recommendation on which this new provision is based is that, once the Tribunal has decided to exercise any of its substantive powers, it must hold an inquiry. In its present form proposed new sub-section 17C (1) gives the initiative to conduct an inquiry to a person lodging a submission. Failure to suitably amend this proposed new sub-section will result in an unending and totally unmanageable series of inquiries, many of which are likely to be on the most frivolous of grounds. As to clause 19, proposed new sub-section 22(2) appears to be unique to Australian legislation. Therefore, there is uncertainty as to the extent of the obligations on the Tribunal to ensure that no party suffers detriment. If the proposed new sub-section is retained in its present form it is predicted that it will give rise to extensive legal argument and ultimate litigation. As to clause 23, it would appear that proposed new section 25AA extends beyond the recommendations of the ARC. In its proposed form the new section would permit the Tribunal to extend its inquiries into the broadcasting practices of a licensee as far back and as far forward in time as it wishes. It is totally unnecessary for the Tribunal to consider program practices engaged upon prior to the last renewal. The broadcasting practices of the licensee prior to that date have been considered by the Tribunal and the licence renewed. There are two reasons why the Tribunal should not be empowered to investigate or comment upon future broadcasting practices. Firstly, the future broadcasting practices of a licensee are likely to be highly confidential and their publication could provide competitors and potential advertising consumers with the information which might be detrimental to the licensee. No protection exists under the Freedom of Information Act to preserve the confidentiality of a licensee's legitimate business secrets if disclosed to the Tribunal. Further, the granting of a power to the Tribunal to comment on future broadcasting practices implies that the Tribunal may be able to influence the future programming policies of the licensee. As to clause 42, there is concern about the granting of almost unlimited powers to the Tribunal in respect of the transfer of a remote licence. Proposed new paragraph 89A (1D) (ca) (vi) confers on the Tribunal a wider power than any other part of the principal Act. It would appear to have the right to make an arbitrary decision as to what matters or circumstances may be relevant to it as grounds for refusal of the transfer. Such sweeping powers should not be granted to the Tribunal. As to clause 65, in his second reading speech the Minister said: The fact that a licensee has not yet provided locally originated programs will not be a ground for censure of the licensee for not providing an adequate and comprehensive service. Proposed new section 99A does not reflect the Minister's intentions. There is concern that the absence of a precise provision may unnecessarily raise people's expectations. Finally, as to clause 92, proposed new section 133A concerns government policy statements. There is no requirement for the Minister to make public a government policy statement or to make that statement available to licensees at the time the policy statement is given to the Tribunal. The policy statement could be delivered to the Tribunal following the last day of a sitting and considerable time could elapse between that date and the next sitting of Parliament when the 15 sitting days referred to in the proposed new section would occur. This proposed new section should be tightened to ensure not only that licensees or their representatives are given access to the policy statement at the time it is made available to the Tribunal but also that the elapsed time between the delivery of the policy statement to the Tribunal and its being laid before each House of the Parliament is not greater than the total of 21 days, including 15 sitting days of either House. In conclusion, this Bill is necessary and contains the most extensive revisions of the Broadcasting and Television Act. The Opposition reiterates that such an important and vital piece of legislation must be concise as to what it purports to do. Succinctly, the Parliament has a duty to get it right the first time. The Opposition has some misgivings that this has been achieved and submits that the proper course would have been to legislate separately for the introduction of remote licences and to introduce the remainder of this Bill this sitting and allow it to lie on the table for further consultation. However, if the Government is committed to pass this Bill as it stands, as it appears to be, reluctantly the Opposition will not oppose it. Mr CHARLES(Isaacs)(11.35) —I support the legislation. I commend the Minister for Communications (Mr Duffy) and the Government for putting so much work into the communications arena. I commend the Government on the communications policy which it has adopted over the last two years and particularly over the last 12 months. This culminated in a ministerial statement by the Minister some time ago. It was that policy statement made in this House that set the right track for the Australian Broadcasting Tribunal which has to take note of government policy in its deliberations in regard to licensing of broadcasters in remote areas. This was, of course, brought about by the decision of the Government to go ahead with the introduction of the satellite broadcasting system. Two satellites will be launched this year-the first in a couple of months' time and the second later this year. The third will possibly be launched next year. The introduction of those satellite services really changes the whole concept of broadcasting of television in particular in Australia. The greatest impact will occur in the outback. It is in that respect that I would like to make a few comments now. The Broadcasting and Television Amendment Bill which is before us provides a clear pointer to the Government's position on communications policy. The policy is for the extension of services to remote regions. It provides for the simplification of licensing provisions to allow for the smooth introduction of new and appropriate technology. It opposes any further concentration of ownership by major city networks and resists what some may have seen as the inevitable impulse to national networking through the facilities of Aussat Pty Ltd which is the Government company that will manage the satellite system. The remote area licensing concept has been developed to meet the real but unique needs of individuals and communities in remote areas who are currently without commercial television services. The remote commercial television services-RCTS-licences will be based on high power signals beamed from the satellite to four regional footprints or zones which make up the Australian land mass and surrounding waters. The objective of the scheme is to encourage a commercial service appropriately geared to the needs and interests of people in these remote zones, to provide local and regional identification and special interest programming and to present programming appropriate to the time zone. In the field of broadcasting services to remote areas, the satellite could have become for us one of the classic cases of technological determinism. After all, here was a piece of technology capable of bathing the nation coast to coast with broadcast signals emanating from one source. This Government and even, on occasions, the Opposition-although I get a little confused from time to time-depending on whom one listens to-have long held the position that the ownership and control of broadcasting facilities should not be allowed to concentrate further and that diversity of ownership and product should be maintained. If we had gone down that track the technology, very conceivably, could have led us to being left with very few broadcasting stations at all. The scheme would have been narrowed down, to, say, three providers, with the largest capable of transmitting right across the country. Regional stations could not have borne for long the competition involved with larger networks actually broadcasting into their service areas. Those networks, with their economies of scales and access to the means of national coverage, would have had the market all sewn up. There are various points to be made in this respect. The proposal which the networks have put continually to the Government-it has been enshrined in various schemes but basically has remained the same-is that they broadcast directly from their major stations in Melbourne or Sydney right across Australia. While this is technically feasible, what it will do-if not in the very short term, in the not too long term-is ensure the complete demise of regional television. I am sure that the honourable member for Maranoa (Mr Ian Cameron) and the honourable member for Bendigo (Mr Brumby) would not agree with that. Regional television could not have borne that competition. It is appropriate to note that the latest schemes which have been put forward by the networks would, I believe, have provided windows to regional stations to provide local programs. In a practical world it would have meant that the regional stations would have needed only a small room with a camera and a couple of staff in order to run their 15-minute news service or whatever at night. In the long term they could have virtually done away with the rest of their staff and facilities. There are many questions to be addressed. Technological change in this area continues to occur. At this stage we look forward to the second grouping of satellites to go up in the 1990s. From my own viewpoint, I think it is appropriate that the Government has spent many hours on this and feels that it is the most appropriate scheme. It is the most appropriate policy to put in place. We are looking at regionally based television for the rural and outback areas. The four footprint scheme, if I can term it that, does have wide backing in the regional areas. Applications have gone before the Tribunal. Some of them are very advanced. Several months ago I spoke to some of the applicants. They are very well advanced in their planning and ideas of what they want to do if they are successful in their applications. I remind the House that the Government has nothing to do with that. It is the Tribunal's decision as to who receives the licence after all the applications are in. The Tribunal must take note of the Government's policy which was put forward by the Minister, I think last year, in this House. The Government, in this Bill, has also provided for service-based licensing arrangements. At present the hardware has to be licensed. For instance, if one puts up a new transmitter to service people in a community who are not being serviced or who are not being serviced properly, one must apply for that transmitter to be licensed separately. Instead of licensing hardware, the Bill provides that service areas will be licensed. One licence is required to service an area and it is the responsibility of the licensee to provide the service in that area. The licensee does not need separate licences to set up separate translators in order to provide the service to individual communities that may exist in small pockets throughout his service area. The idea of service-based licensing arrangements, I think, is a much more rational idea. It will simplify many aspects of the legislation and the practical application in the work place for many licensees. It represents a major change. It has been discussed by members of the Government for quite some time and I am glad to see it before the House at this time. Of course, all of this works together with the satellite. The work of the Australian Broadcasting Tribunal will be facilitated by the passage of these Bills through both Houses. I appreciate that the honourable member for Bendigo will make a few comments in regard to an article published recently in the Bulletin magazine. I will leave that matter for him to address. I just point out that that article was nonsense. It had its facts, shall we say, back to front. It did not really address appropriately the questions before the broadcasting industry. The honourable member for Bendigo will say a bit more about that when he speaks in this House. It has been interesting to see the small struggle that has been going on regarding the concentration of ownership. In fact, even the recent publicity regarding Rupert Murdoch's activities in America raises a lot of questions about future broadcasting in this country. I do not say that in order to flag the Government's viewpoint. Depending on what happens, this could push television broadcasting in all sorts of directions in the future. If Mr Murdoch is able to arrange his companies in such a way as still to have control, in effect that would mean a foreign person-I do not use that term to denigrate Mr Murdoch because I have nothing against him personally-having some control over a broadcasting network in Australia. In the American situation his control raises the possibility of concentration of ownership in regard to television stations and newspapers in the one city. In fact, it raises the question of whether in Australia we should continue to have the same extent of ownership as at present. That matter was raised by the Australian Broadcasting Tribunal in its report last year, where effectively the Tribunal said that we should rip licences off a few people. The Government has not gone down that track. However, the Murdoch position in America raises a lot of questions that obviously governments in the future will need to address. This goes back to the legislation and the fact that regionally based consortiums winning the licences for the remote commercial television service for which this Bill provides will move away from the concentration of ownership that would have been paramount if the major networks had been given the right to direct broadcast. Many people, especially those in the National Party of Australia, would appreciate that, effectively, that would have meant three broadcasters in Australia with blanket broadcasts across the continent. In Western Australia there would have been a two-hour time difference, a problem which has never been addressed by the networks. I do not believe that we will ever see the situation of three people controlling broadcasting in this country. I quite confidently say that is not something I would ever support, and I do not believe I would ever be sitting on this side of the chamber with a government that supported such an idea. It is a principle that the Minister for Defence (Mr Beazley) also would find hard to wear because it goes right back to security considerations in other times. In closing I refer to clause 62 of this rather complex Bill. The clause relates to proposed sub-sections 92V (3) and 92V (4), and the ownership or control of remote licences. It is interesting to note that proposed sub-section 92V (4) states: . . . 'control' includes direct or indirect control and control as a result of, or by means of, trust, agreements, arrangements, understandings and practices, whether or not having legal or equitable force and whether or not based on legal or equitable rights; That appears to me to be a little stronger than the provision in the original Act. I am not suggesting that the Government should do anything about that, and certainly the Government has not done anything in that regard. Because that provision is stronger than the provision in the original Act, if the Government did go down that track and change the original provision, I wonder how Rupert Murdoch would go. I think he would be knocked over in one fell swoop, no matter which way he tried to manoeuvre his companies. As I said before, that is not a personal thing against Rupert Murdoch. I have a long-standing view that, no matter who is involved, the foreign ownership provisions must be maintained rigidly. We just cannot have foreign interests controlling the communications of a country. It is not on; I do not think it is appropriate. The Bill before us has been researched and has been before the Government for consideration for many months. It has been discussed thoroughly. I recommend all the provisions of this legislation, particularly the remote area and the service provisions, to all honourable members. Mr IAN CAMERON(Maranoa)(11.51) —It is certainly my privilege to speak today on the Broadcasting and Television Amendment Bill and cognate Bills. I am the only member of Parliament to speak on this legislation who represents a really remote area. It has been a battle for me this morning even to get to the top of the list of speakers. However, I was determined on behalf of my constituents to put forward some of their views. Mr Duffy —You should have come to see me. Mr IAN CAMERON —I regularly speak with the Minister. I guess the only disappointment I have today is that the House of Representatives debate is not being broadcast. I think it would have been very interesting for those people who live in remote Australia to have been able to listen to the radio broadcast of the debate on these Bills. Unfortunately that was not to be. Under the Bills, a lot of people-roughly 650,000-will receive a radio signal for the first time. It is interesting to note that a lot of remote dwellers do not even receive an adequate radio signal. Of course, the satellite will give them more than one radio signal. There will be an FM and an AM radio signal, which certainly will be a tremendous improvement. The main purpose of the satellite will be to broadcast television to these remote areas. I congratulate previous governments for the fact that we are to launch a satellite in August. I also congratulate the present Minister for Communications (Mr Duffy) for continuing down that track and, I hope, for winning the fight with the Hawke-Packer group in maintaining the regional networks. I remind the Prime Minister (Mr Hawke) that for those of us who live in regional Australia he is not the only member of Parliament. I know he is the Prime Minister and operates out of Melbourne, but I remind him that there are many members of this House who support, operate and work very closely with regional television and radio stations. Those of us who live in scattered areas of Australia like to maintain the regionalism of broadcasting. For someone who represents a big electorate such as Maranoa, which is two or three times the size of Victoria, I am amazed when I travel around to see how regionalised such areas have become. We live in a vast continent. It is interesting to see the controversy that has broken out about the National program on the Australian Broadcasting Corporation. Because of the satellite we will have to become a little more national, if you like, than we were previously. We will have to broaden the umbrella, although I have never believed that we should go the whole hog and broadcast across the nation. I support the Minister's concept of footprints on approximately a State basis. At least we are still able to retain the networks and communications that we have with one another in those areas. Presently western Queensland is getting some telecasts from Sydney. Because of Intelsat and the configurations, we have attempted to make some changes. A number of us have met in Townsville to try to get some change. Presently the western Queensland dish is operating on the Intelsat IV satellite, receiving news and weather from Sydney. I can assure honourable members that people in that region are not very happy about it. I note that it is Government policy to encourage localism in broadcasting to serve the needs of local communities. This matter was mentioned in the Minister's second reading speech. I hope that the Prime Minister and his boys from Sydney are listening to this debate because when the licences are granted I hope that that will be done on a reasonable basis. I put it to the Minister that a lot of stories have been put around that people cannot afford a licence. If the regional networks cannot afford to operate they can take in some capital city networks which are closer to them. If the regional networks in Queensland find that they cannot operate successfully they can include some Brisbane stations in their broadcast format. I wish to concentrate on remote licences, rebroadcast licences and retransmission licenses. These Bills have been introduced because licences are no longer allocated on a structural format, on a radio or television tower. Licences are allocated to cover a particular area. The satellite has forced these changes to take place. This legislation was first introduced in 1942 to cover the radio broadcast format. As changes have taken place we have seen a tremendous increase in broadcast technology. Hopefully, the satellite will be launched in August. We wish it well. Some of the satellites of late have not gone so well but we hope that ours will be launched successfully. Of course one or two others will follow. I congratulate Aussat Pty Ltd for the work that it has been doing in this regard. At this stage I would also like to congratulate the Queensland Government. It is the first group to sign up for a transponder on the Aussat network. It will be spending $1.9m. The Minister for Industry, Small Business and Technology, Mr Mike Ahern, signed a two-year lease only two days ago with Mr Gosewinckel, Chairman of Aussat. Approximately $7m in total will be spent on the network. It will be known as QNET and, of course, it will be a tremendous help for communications in Queensland. Queensland is a very big, settled State. People live from one side of it to the other and from the north to the south. The transponder will be of tremendous help to those living in isolated parts of that State. Trials will take place in October and no doubt they will help tremendously such organisations as the Department of Education, the police, all sorts of primary industries and Public Service bodies. It will help them keep in contact with one another and speed up their communications. That is what the satellite is all about. There has been talk about the cost of the dishes, et cetera. We have switched to the B-MAC system but it is turning out to be much more expensive that we originally thought. It is obviously a better system. The technology is better and we will get a clearer signal but it will be more expensive. I also address my remarks to the honourable member for Isaacs (Mr Charles) and the communications committee. I will put a submission to the Treasurer (Mr Keating) who will probably look at this matter at the tax summit. He is prepared to give $150m to the car companies of this country to keep them in business; I suggest that he knock the sales tax of 20 per cent off the dishes and knock the 33 1/3 per cent sales tax off the translators that are necessary. I do not believe that there is any point in this Government spending $300m to $400m launching a satellite if people cannot receive the signal. Obviously in small communities a group of people-the shire council or whoever-would be able to put up a dish and rebroadcast and the cost would be much less. They could use their existing ordinary commercial television aerials. However, in more isolated areas-there are many isolated homesteads and many isolated Aboriginal communities, stock camps or whatever-where there will be one dish and one signal into one television set, it will be very difficult for these people to afford up to $2,000 to $3,000 to establish a dish. If the Government is not prepared to subsidise the cost it ought at least to be looking at taking off the sales tax on such products. Surely if there were a need for the removal of sales tax it is in this case. There is no business sense in our spending all of this money on a satellite and on all the installations involved and the ground equipment, which will probably cost nearly a billion dollars when all the work is done, if people in the outback-the people who were meant to receive this signal-cannot do so. Aborigines are a group. I am a member of the House of Representatives Standing Committee on Aboriginal Affairs. There are many Aborigines in my electorate and I hope that the Minister will allow them to get involved at the transmission level. We must not fill them with expectations. The National Aboriginal Conference has just put out directions 20 and 24. It gets a bit carried away. Fortunately the Minister will disband the NAC by the end of this month. The NAC, in directions 20 and 24, says that it wants its own television and radio stations. We have to get through to the NAC that with the advent of the satellite it will be able to get a rebroadcast licence and a retransmission licence. It will be able to use the signal coming off the satellite to have an input. The idea of that is to have a window on, and input of, their localism at that level. Perhaps they can get some original Aboriginal content. I cannot see how the Aborigines will ever be able to set up their own television stations. I think that that is a bit beyond the pale, so to speak. Today I spoke to Mr Bill Pollock, the Manager of Telecom Australia. We have a problem with the flying doctor network, the School of the Air and isolated telephonic connections. Presently Telecom is going down the track of digital radio telephones which means that once the system is introduced it will not allow people in isolated homesteads to put in an up-down track on the satellite. Equipment is being developed to enable people to contact the flying doctor and in particular school children who reside in isolated communities to contact the School of the Air. Again, there are many Aboriginal children in isolated communities who are seeking better education. Apparently the previous Minister for Communications, Tony Staley, is heading a communications company which has put out some equipment. This matter is very important because I represent a very isolated part of Australia. People there do have needs. Telecom is going down the track of digital phones. Although it is a vast improvement on no phone at all-people will be able to get off the radio network-I think we have to have another look at the technology involved in giving people on isolated stations the opportunity to use the satellite for education and communication. No doubt the Minister will look at this problem for me. Mr BRUMBY(Bendigo)(12.03) —In general and brief terms the purpose of the Broadcasting and Television Amendment Bill and related Bills is probably four-fold. First, as has been mentioned, they implement a number of recent Government decisions regarding the revision of broadcasting legislation and relate those to services rather than technologies. Importantly, this legislation also provides for the licensing of services to outback areas using the satellites of Aussat Pty Ltd. It also provides other changes to regulations and inquiry procedures of the Australian Broadcasting Tribunal. I would like to concentrate my remarks in the limited time available to me on the remote commercial television services. These Bills create a new category of licences which, of course, will be called remote licences. The licences will enable licensees to provide commercial radio and television services to an estimated 600,000 to 650,000 people who live in outback Australia, and that will be done by means of the Aussat satellite. The satellites are due for launch later this year. The first one will go up in about two months time. In terms of the licence provisions for the remote commercial services, there are a number of differences from the existing licence provisions. I will mention those briefly. Firstly, these licences relate to broadcasting services which will be provided by the use of that satellite and that, of course, is a new situation. Secondly, the public interest criteria which the Australian Broadcasting Tribunal may apply to the granting or renewal of a licence are more widely expressed. In particular, I emphasise that there is no absolute prohibition on the concentration of ownership of those licences, although the Tribunal must consider the need to avoid an undue concentration of ownership and control in the servicing area concerned. That is subject, of course, to the other overriding objective-the fundamental objective-of ensuring that all Australians have access to both commercial radio and commercial television services. I want to concentrate some remarks on that area because, as most honourable members would be aware, on the issue of the remote area television policy and licensing there was an article recently in the Bulletin magazine by a journalist, Mr Stackhouse, in which he pursued with some energy, but in a hardly convincing way, the case for an effective network monopoly of the remote commercial television service. It was an important article and I think it needs to be commented on because from that article one could certainly get the impression that it is only the Sydney and Melbourne television stations which are objecting to the proposed remote commercial television service. I say that because it is not as if the Government has only recently made a decision to proceed with the remote commercial television service. It is not as if the Government suddenly had a rush of blood and decided to implement legislation or Government decisions on that basis. In that sense, one must wonder and one must ask why it is that it seems that only the networks are right, according to Mr Stackhouse, while the Federal Government, the Australian Broadcasting Tribunal, some 35 regional television stations and many State governments seem to be wrong. The fact is that this policy was not a result of a rush of blood. The fact is that this issue is at least four years old. The networks advanced virtually exactly the same arguments before two public inquiries and on both occasions their suggestions were rejected. The effect of the remote commercial television service policy is not to maintain the regional stations' monopoly, as suggested by the Bulletin. Its clear purpose is to provide 650,000 people who live in remote areas of Australia with the same level of television services as those which have already been enjoyed by other country people in Australia for at least the last 20 years. They have all enjoyed an Australian Broadcasting Corporation service and they have all enjoyed a commercial service. This issue is all about ensuring that those other 650,000 people have the right to that same service. It has nothing at all to do, as claimed by Mr Stackhouse, with maintaining a regional station's monopoly. Mr Stackhouse is beating the drum for a last minute alternative scheme. Even though it has been rejected twice, he is suggesting it again at the last minute in his article. It should be clearly understood that the effect of what he is proposing would be to give his employer, as it happens, together with two other networks, effective monopoly control over the distribution of programs by satellite. His article is attempting to play on the sympathy that everyone feels for people in the outback by representing those big networks as benefactors. It has to be clearly understood that the real effect of the proposals advocated by Mr Stackhouse in the Bulletin would be to make remote Australians pay dearly in order to increase further and entrench the networks' control over the broadcasting system. It is simply not true to say that the network proposal involves remote viewers in only marginally more expense than the remote commercial television service. The satellite system was deliberately designed -it is a feature of it-to minimise costs to viewers in the outback. It has been designed to use powerful transponders on the space craft, so producing an average domestic earth station cost of about $2,300, including sales tax and installation. The network proposal-the one advocated in the article by Mr Stackhouse-is to turn the satellite design on to its head. That proposal is about lowering the cost in space, which of course the broadcasters pay, at the expense of costs on the ground, which the viewers pay. The effect would be to produce dishes costing an average of $4,900. That is hardly an insignificant difference. In fact, it is almost twice the cost of the figure of $2,300 which I mentioned before. If we go into further calculations we will see that the total extra costs the networks seem to be trying to pass on to outback viewers is in the order of $80m and could range as high as $277m. That is the effect of the article by Mr Stackhouse. That is the total extra cost that the networks seek to push on to outback viewers. I shall repeat those figures. It is in the order of $79m and could be as high as $277m. That is a significant cost and I am sure that honourable members of the House, such as the honourable member for Maranoa (Mr Ian Cameron), who spoke earlier, and the Minister would not like it to be imposed on residents in northern Queensland. Quite apart from the fact that the proposal advocated seems to be ill-considered-it is certainly a superficial attempt to change the whole satellite system only months before the launch date-the network proposal ignores the central issue, which is how to move to equalisation of services in rural Australia without damaging the existing system and without abandoning our accepted broadcasting policy. In conclusion, I shall make five points about the obvious difficulties with the network proposal. Firstly, the network proposals suggests that the networks and the ABC share a single satellite and direct broadcast four national beams across Australia. It has to be said to begin with that that is technically impossible because each satellite is designed to deliver only three national signals. As a result, the ABC would be pushed into a second satellite and that would mean inevitably that those same outback viewers would have to buy either two satellite dishes or an expensive dish that could be pointed at either of the two satellites. The second difficulty with the national network proposal is that if the ABC were to undo years of planning and transfer to a national beam, it would not be able to honour commitments to State governments to regionalise programs. We have only to recall the outcries when the ABC reduced regional coverage in Queensland or, for instance, some of the complaints that have recently been made about the National. The third difficulty is that the Government, Aussat, the ABC, the Special Broadcasting Service, Telecom Australia and the industry are all committed to a series of decisions taken over a period of years which could now be reversed only at significant cost. If the networks' plan were suddenly substituted, Aussat's financial arrangements would be placed in some jeopardy, the ABC would have to re-plan its distribution system for television and radio services and Telecom would have to cancel ongoing construction of earth stations at hundreds of national transmitting sites. The fourth difficulty is that the network proposal would give those stations, as I have said, some effective monopoly control over the satellite distribution system. I think it has to be clearly understood that the regional stations would become slave stations. The ownership and control provisions of the Broadcasting and Television Act would become virtually redundant. There is no doubt that there would be a major increase in the concentration of media ownership. The fifth difficulty with the network proposal is that the concept of a cheap and affordable dish for domestic use in the outback-that is a crucial element in widespread public acceptance of the satellite system-would simply disappear. There would be no cheap and affordable dish. In short, the network proposal that was vigorously espoused by Mr Stackhouse would seem to be very attractive to the networks but to very few other people. In my view it is not an option for the Government, it is not an option for the public and it is not an option for the 650,000 remote viewers of Australia. I commend the four Bills to the House. Mr LLOYD(Murray)(12.15) —I want to make some comments in relation to the broadcasting and television Bills. Like other speakers, I wish to refer generally to remote area television and radio services, regional television services, networking and new technology, particularly the domestic satellites which are about to be launched. I suppose the first thing I would like to do is commend the Minister for Communications (Mr Duffy) for changing his terminology to the remote commercial television and radio service. At one stage last year the terminology was different. I think this change makes much more sense because we can now clearly differentiate between 'regional' and 'remote'. I want to refer to the Australian Broadcasting Tribunal's satellite program service inquiry which I think really gave a most fundamental consideration of the questions of delivery of programs into the regional and remote areas of Australia and the concentration of programming power and media ownership in the commercial television sector. I believe that what the Tribunal said was contrary to what many people thought it would say. I think many people thought it would say that we already have a concentration in the regional areas and therefore we should allow a further movement of the three networks into those areas. My understanding of what the Tribunal said is that if one is really looking at the question of power in the commercial television sector of Australia, one has to look at the question of programming power-the ability to buy programs, make programs and so on. At this stage there are really only three groups in Australia that have that ability. There is a need for alternative sources of power to be able to compete. If we are talking about choice in commercial television in Australia, we should really be looking at the licensing arrangements for the major metropolitan areas rather than the regional areas of Australia because that, in effect, is where the lack of choice is at present compared with the situation in other countries. The Tribunal talked about going back to square one, which I think would be considered a little too difficult by any government at the present time. The Government and the Minister have talked about equalisation of services. I question what is really meant by equalisation of services and how quickly this process should occur. I know the Minister has indicated that this would take place over a period. But what is seen as important to rural and remote area Australia and what is the position in Australia compared with that in other countries? To repeat what a number of people have said, when one talks to country people about the delivery of communications one is told that the single most important thing to them is a telephone. I will go right through the priorities. Next to that is a telephone that works; the most important thing of all is a telephone that works all the time. A telephone is easily the most important priority because it is the fundamental modern technical means of communication. At present regional Australia basically has one commercial television service and one Australian Broadcasting Corporation television service. I believe that the majority of people in regional Australia have a greater program choice at present than is the case in the regional parts of the United Kingdom and certainly the regional parts of the United States of America outside the limits of metropolitan areas. The position is the opposite if one looks at metropolitan Australia, particularly Sydney and Melbourne, and compares the program choice with that offered in similar sized cities in the United States. There is less choice of program in our major cities than there is in equivalent cities in the United States. I think the answer is quite obvious in terms of the ability of people to look at a range of programs in regional Australia and metropolitan Australia. I represent a regional area and I have looked at the situation in some other countries. There is relatively less choice in metropolitan areas and relatively more choice in regional areas. I think the provision of an ABC and commercial television service in remote areas will be a tremendous achievement for people living in those areas; it will be a tremendous achievement for what has become basically a bipartisan policy. Once this arrangement is established, certainly we can and should look further for greater program choice in regional Australia, metropolitan Australia and remote area Australia. We should look at all three areas. One suggestion that is around at the present time is to allow groups of regional stations to band together. I believe that that is a sensible suggestion because it would provide the opportunity for alternative programming power. It could mean that some sort of fourth power could create and buy programs in this country. One can say that we should accelerate what is happening by using technology as much as possible. But we have to do this in a way that is understandable and acceptable. We also have to take into account the technology that is available. This brings me to the supplementary licence system which I believe is an important step in providing greater program choice for people in regional areas. My only word to the Minister in this respect is that his efforts should be accelerated so that people in regional areas can receive a second program choice as soon as possible. I join with the honourable member for Bendigo (Mr Brumby) and others who talked about the problems that would be experienced in remote areas if one signal came in on a national beam and another signal came in on a zonal beam. I am concerned about the problems that that would create for people in remote areas who are already being subjected to considerable cost in terms of receiving television services. There are also other problems such as time zones. We also have a problem in respect of localism. Even State localism would mean that people in remote areas would receive programs with inputs from Brisbane, Adelaide, Perth or wherever. I believe it is of fundamental importance that people in remote areas should be able to get State localism and, hopefully, more regional localism through the zonal system. Certainly that matter is important and such a system should be adopted as opposed to, if one likes, a national system with all the problems, such as time zones, that it creates. In addition, a national system does not take into account the question of regionalism. At this point I want to make a suggestion to the Minister which I think probably has been made by other speakers in this debate. We have been advised that the ABC will have access to the first satellite and that the remote commercial service will be able to use the third satellite. We will then have a situation in which different satellites will be in slightly different positions. This will create problems in that there will need to be a technical ability for people to switch either to a commercial or to the ABC service. We need to ensure that people in remote areas do not have a problem with respect to the type, size or number of reception dishes that will be needed. Whatever decisions are made at this stage, we will have problems because we are in a transitional period with new technology. The second generation of satellites which will come along will obviously mean that the whole question of programming and networking will be subject to further change. Certainly it is quite possible that eventually there will be some sort of network system right throughout the country. That is something that will have to be addressed when the second generation of satellites are used. There are certainly questions about the viability of some of these remote services. I believe that the regionals have accepted a responsibility to cover and carry as much as possible the losses that will occur. They accept that they now have a responsibility to remote areas as well as regional areas. Although this might be a self-protection situation, this is now being done. There will be problems whatever decision is made on this issue. It is a question of transition as we move into the first generation of satellites and, from there, to the second generation. I would like to say personally, having some interest in this matter, that I give my general support to the direction which the Minister is taking on this very important matter concerning television programs for the regional and remote areas of Australia. Mr DUFFY(Holt-Minister for Communications)(12.25) —in reply-There are a few things that I would like to say before dealing with some of the matters raised by the honourable member for Ryan (Mr Moore), the honourable member for Maranoa (Mr Ian Cameron) and the honourable member for Murray (Mr Lloyd). Firstly, the Broadcasting and Television Amendment Bill is an extremely complex piece of legislation. I express my appreciation to the officers of the Department of Communications for the assistance they have given in the drafting of the legislation. The Office of the Parliamentary Counsel, which under all governments finds itself in the last part of a parliamentary session under enormous pressure, deserves also to be congratulated for the amount of work it has done on this Bill. I also thank on the Government side the honourable member for Isaacs (Mr Charles) and the honourable member for Bendigo (Mr Brumby) for their contributions. The honourable member for Isaacs has always taken a very active interest in this area. The honourable member for Bendigo represents a provincial area in Victoria and his concerns regarding these matters are well known. Before dealing in detail with the matters raised by the honourable members for Ryan, Murray and Maranoa, I indicate that it is interesting and probably all too unusual in this place that we have reached a bipartisan position on this issue. When the remote commercial television service licence scheme was announced in this House last year it was given the support of the then shadow spokesman, the honourable member for Murray. Although some real problems have justifiably been raised by the honourable member for Ryan, and I will deal with them in a moment, if that bipartisan approach which has been continued here today occurred in relation to more issues, the Parliament would operate a lot better and things would be a lot better for Australia as a whole. I thank honourable members for their assistance in that regard. It is necessary to address the specific items raised by the honourable member for Ryan. I think it is reasonable to say that they are matters which have been raised with the honourable member by the industry and they are, of course, known to me because of that. The first item to which he referred was clause 12 of the Bill. The industry organisation has complained that this clause does not give the Australian Broadcasting Tribunal a discretion to dispense with an inquiry-it should be emphasised that we are talking about a public inquiry-when exercising any of its substantive powers. It is claimed that this means that an inquiry must be held whenever a submission is lodged, resulting in an unending and totally unmanageable series of inquiries, many of which are likely to be on frivolous grounds. If that were the position, the matters raised by the industry and put forward today by the honourable member for Ryan would cause considerable concern; but I do not think that the criticisms are justified. I refer honourable members to sub-section 19 (1) of the principal Act, which is not amended by this Bill. That requires inquiry proceedings before the Tribunal to be held in public. Proposed new sub-section 17C (1) in clause 12 provides that the Tribunal must hold an inquiry into the exercise of substantive powers. Proposed new sub-section 17C (5) provides that regulations may prescribe inquiry proceedings in respect of sub-section 17C (1) inquiries. The effect of these provisions is that regulations may provide for circumstances in which the Tribunal may dispense with public hearings in the exercise of its substantive power. It has the power to dispense with them, and that is what we are talking about. We are not trying to further complicate the proceedings but to cut them down. In accordance with Administrative Review Council recommendation 14, which was accepted by the Government, it is proposed that the regulations empower the Tribunal to dispense with public hearings where no matters of substantial controversy or concern are raised by an applicant. I think that will meet the industry's concern. I think the point made by the honourable member for Ryan in relation to clause 19 was that the requirement in section 22 of the principal Act, for the ABT to ensure as far as practicable that no party suffers detriment by being unrepresented at an inquiry, is unique in Australian legislation. The Department of Communications and I have looked at this matter and we have taken the view that the provision is a direct reflection of ARC recommendation 20B. It is not something that was dreamt up by us but is a recommendation of the ARC. The honourable member for Ryan adverted to substantial matters in respect of clause 23 of the Bill. The purpose of that clause is to implement the ARC recommendation in this area and to clarify the Tribunal's existing obligation to investigate thoroughly all matters relevant to an inquiry. The Tribunal's power is to investigate and comment, not to take action, and it must relate, of course, to broadcasting practices. The word 'practice' is defined by the Concise Oxford Dictionary as 'an habitual action or carrying on or a repeated exercise'. Therefore, the Tribunal can inquire only into a course of conduct over an appreciable period and not into specific isolated incidents, and it can consider only matters relevant to an inquiry. The criteria for the renewal of licences are particularised in sections 86 and 86A of the Act. Only if those criteria were breached, either by a specific instance or by a course of conduct, could the Tribunal legally exercise any of its substantive powers. The question of proposed future conduct was also raised by the honourable member for Ryan. Example program acquisition proposals could be relevant to the capacity effectively to provide a licence service. I think the real issue here is that the Tribunal is not in a position in an area inquiry to exercise substantive powers. I take the honourable member's point that further discussions have to be held with the industry. If it is not satisfied in relation to these matters, provided that its lack of satisfaction is reasonable, we will do what we can to meet those problems. The other clause which caused some concern to the honourable member for Ryan was clause 42. In that regard, I think what is described as the wide approach is defensible and should be proceeded with because it also gives a considerable amount of necessary flexibility. There is no evidence of any problems having been experienced with that approach to date. It is proposed to advise the industry that the wide approach is to be adopted because it is more flexible, but, quite clearly, on the basis of the matters raised here today, that provision may have to be looked at in the future as specific problems arise. Clause 65 was another clause referred to by the honourable member for Ryan. The complaint put forward by the industry was that the provision relating to local origination does not reflect the second reading speech. The industry is concerned that the licensee's failure to use local origination could count against the licensee in the ABT's assessment of what is adequate and comprehensive. That complaint did not come only from the television industry; it was also a criticism from the radio industry. I am not convinced about that matter. In fact, my view is totally to the contrary. In my view the Bill does reflect the speech, as permission can be granted only upon application. The Bill does have the effect that the Federation of Australian Commercial Television Stations advocates. The further safety factor is that clause is the requirement for separate proclamation only after detailed provisions and procedures have been determined in respect of each category of licence. This, in my view, ensures clearly that the intention embodied in the second reading speech is picked up before proclamation. The other area related to clause 92 of the Broadcasting and Television Amendment Bill, since concern was expressed about having adequate access to Government policy statements. I will ensure that the industry will be provided with policy statements as a matter of course, and that further procedural requirements to make these statements available will be included in the regulations. I think that meets the point of concern. The honourable member for Maranoa raised the question of telephones and mentioned the satellite. I repeat something I have gone through over and over again. I think that the digital radio concentration system is the best way to go with remote telephones. However, there will be some cases in which the satellite will be used. Those who talk of the cost of the satellite in respect of telephony often do not address the question of the cost of the infrastructure that is necessary on the ground as opposed to what is already up in the satellite. Many submissions have been put forward on this point that the Iterra system would be a better system to be used in remote areas. It is not something with which too many people agree. I should be happy to discuss the matter with the honourable member some time in the future when things here have settled down a little, but at this stage I am not convinced that is the way we should go with remote telephony. In some specific areas such as a mining community, a mining company that wants such a system may be able to afford it, but in view of the expense to the average person in the remote areas represented by some honourable members I do not think that is the answer. The honourable member for Maranoa can continue discussion, as he said, with Telecom on that matter, but Telecom's arguments to me on the issue were overwhelmingly convincing. The honourable member for Murray talked of the Australian Broadcasting Corporation being on the first satellite and he asked who would be on the second satellite. At this stage it is likely that the Western Australian remote licence will be on the second satellite, because it is in a particular position due to the time zone problem and the matters raised by the honourable member for Isaacs. The honourable member for Murray made the significant point that it is necessary to have one dish in order that the ABC and the remote services can be available on the one dish. That will be done because the switching referred to by the honourable member to make that effective will be carried out. That advice has been given by Aussat Pty Ltd recently. The problems raised by the member for Murray are well known on that matter and it will be handled in that way. I want now to move to matters relating to the Government's amendments which have been circulated and which will be moved in the Committee stage. I shall now briefly foreshadow those amendments. The main aspect is the insertion of the date 1 January 1986 as the date for the commencement of the main provisions. It did not satisfy the remote licence applicants that there should not be a fixed date. That was a reasonable point and I thought it should be adopted. Another amendment seeks to include the words 'Corporation or the Service'-that is the ABC and the Special Broadcasting Service, which will be included in the provision to take into account the question of adequate and comprehensive services within a specific area. That relates to the Broadcasting and Television Amendment Bill and most of the other amendments relate to the same matters. In relation to the Broadcasting and Television (Consequential Amendments) Bill, there is again insertion of the date 1 January 1986. The same applies to the Broadcasting Stations Licence Fees Amendment Bill. Those amendments will be moved as soon as we move into the Committee stage. In closing, I thank the honourable members for their contribution to the debate today. Question resolved in the affirmative. Bill read a second time. The Bill. Amendment (by Mr Duffy)-by leave- proposed: (1) Clause 2, page 1, lines 10 and 11, omit 'a day to be fixed by Proclamation', insert '1 January 1986'. (2) Clause 14, page 9, line 26, insert ', having regard to the nature of any broadcasting service provided in that area by the Corporation or the Service and to such other matters as the Tribunal considers relevant' after 'area'. (3) Clause 14, page 9, at the end of the clause add the following sub-clause: '(3) For the purposes of the application, before 1 January 1986, of section 18A of the Principal Act as amended by this Act- (a) references in that section to broadcasting shall be read as including references to television or televising, as the case requires; and (b) references in that section to licensees shall be read as references to the holders of licences within the meaning of Part IIIB of the Principal Act as so amended.'. (4) Clause 96, page 44, lines 17 and 18, omit 'the day fixed by Proclamation for the purposes of sub-section 2 (1)', insert '1 January 1986'. (5) Clause 98, page 48, line 13, omit 'date of commencement of this Act', insert 'commencement date'. (6) After clause 102, page 51, insert the following new clause: Area inquiries '102A. For the purposes of the application of section 18A of the amended Act on or after the commencement date, references in that section to licensees shall be read as including references to the holders of old system licences.'. (7) Page 53, Schedule, omit the item relating to sub-section 99 (3). Mr MOORE(Ryan)(12.41) —The Opposition supports the amendments which seem to be highly appropriate. They meet the requirements of industry whose representatives have spoken to me on the issue. The inclusion of the Australian Broadcasting Corporation and the Special Broadcasting Service is eminently sensible. Amendments agreed to. Bill, as amended, agreed to. Bill reported with amendments; report-by leave-adopted. Bill (on motion by Mr Duffy)-by leave-read a third time. Consideration resumed from 15 May, on motion by Mr Duffy: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. The Bill. Amendment (by Mr Duffy) agreed to: Clause 2, page 1, lines 7 and 9, omit 'a the day fixed by proclamation for the purposes of sub-section 2 (1) of the Broadcasting and Television Amendment Act 1985', insert '1 January 1986'. Bill, as amended, agreed to. Bill reported with an amendment; report-by leave-adopted. Bill (on motion by Mr Duffy)-by leave-read a third time. Consideration resumed from 15 May, on motion by Mr Duffy: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. The Bill. Amendment (by Mr Duffy) agreed to: Clause 2, page 1, lines 9 to 11, omit 'the day fixed by Proclamation for the purposes of sub-section 2 (1) of the Broadcasting and Television Amendment Act 1985', insert '1 January 1986'. Bill, as amended, agreed to. Bill reported with an amendment; report-by leave-adopted. Bill (on motion by Mr Duffy)-by leave-read a third time. Consideration resumed from 15 May, on motion by Mr Duffy: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. The Bill. Amendment (by Mr Duffy) agreed to: Clause 2, page 1, lines 9 to 11, omit 'the day fixed by Proclamation for the purposes of sub-section 2 (1) of the Broadcasting and Television Amendment Act 1985', insert '1 January 1986'. Bill, as amended, agreed to. Bill reported with an amendment; report-by leave-adopted. Bill (on motion by Mr Duffy)-by leave-read a third time. Sitting suspended from 12.48 to 2 p.m. Mr HOWARD —My question is addressed to the Prime Minister. I refer the honourable gentleman to the drift and indecision evident regarding the Government's wages policy. I remind him that three months ago, on 25 February, he told the House that 'the Government is yet to finalise its position' in relation to discounting of potential wage increases from the effects of depreciation. Will the Prime Minister put an end to the drift, indecision and conflicting ministerial statements which have characterised Government comments on this issue since his original and highly equivocal response by stating once and for all the Government's position on the matter? Mr HAWKE —I thank the Deputy Leader of the Opposition for his question. I note in preface that it is more than passing strange that the Opposition in general and the Deputy Leader of the Opposition in particular should be referring to any indecision in regard to wages policy because if we want to look for indecision and total chaos in the area of wages policy we should just look at the Opposition. I make the point generally that it is only within a centralised wage system, which has now been so firmly endorsed unanimously by the members of the Hancock Committee of Review of Australian Industrial Relations Law and Systems, that we have any capacity for an effective wages policy. The prescription of those opposite would be a prescription for unbounded inflation. Having pointed out the hypocrisy of the Opposition, I say simply this: The Treasurer and myself and the Minister for Employment and Industrial Relations have made it clear that the Government will make the decision which is appropriate at the time when it needs to be taken to protect for Australia the undoubted benefit which will accrue to this country from the devaluation which has taken place. It is a repudiation of sensible decision making to come to some position in advance of what you know the position will be. I make it clear that this debate originated when in fact the dollar had gone down to about US62c. It is now back to the order of US70c. It makes sense to say: 'All right, when you come up to the point where you have to make a decision, you will make the decision then as to what is necessary to protect the interests of this country'. That has been the position of the Treasurer, the Minister for Employment and Industrial Relations and myself. The community can be assured that, under the wages policy which has successfully produced for this country a recovery from the economic disaster into which the policies of those opposite plunged it, we will continue to make the decisions which will continue the recovery, continue employment growth, and continue it within containable levels of inflation. Mr SPEAKER —I inform the House that we have present in the gallery this afternoon a delegation from the Bundestag of the Federal Republic of Germany led by Mr Richard Stuecklen, Vice-President of the Bundestag. On behalf of the House, I extend a very warm welcome to the members of the delegation. Honourable members-Hear, hear! Mr SCOTT —My question is addressed to the Minister for Local Government and Administrative Services. Is it a fact that Adelaide is the only State capital city without a recognised Commonwealth Government centre? Can the Minister say what progress has been made by the Government towards developing a Commonwealth centre in Adelaide? Can he assure the House that any proposed development will make a positive contribution to the Adelaide city environment? Mr UREN —Yes, it is a fact that Adelaide is the only capital city that has not a Commonwealth centre. I am pleased to say that the Government has decided to proceed with a new Commonwealth centre in Adelaide at an estimated cost of $38m, which includes $4m for internal fittings. The building will be of environmentally sympathetic architectural design with twin towers. It will be about 27,000 square metres and will house about 1,400 public servants. Tenders will be called on 8 June 1985. Tenders will be assessed between July 1985 and August 1985. The contract will be let in September 1985. The estimated completion date is December 1987. The construction of this building will stimulate the construction industry in Adelaide in South Australia. It will be a co-operative effort between the Australian Government, the State Government and the Adelaide City Council. That is part of our overall pattern of discussion with both State and local government, and I believe that the building will add to the business centre of Adelaide. Mr PEACOCK —I refer the Minister for Social Security to the Government's drift and indecision regarding amendments to the assets test, a test which on the evidence has caused the Government to fall into contempt with Australians. Government members interjecting- Mr PEACOCK —I would not talk about your support today, if I were you! If you want to have a discussion on that, you can, any time you like. Mr SPEAKER —Order! Honourable members on my right will cease interjecting. The Leader of the Opposition will get to his question. Mr PEACOCK —He has fallen even below the value of the dollar. I suggest that those opposite float the Prime Minister. They had better make sure it is not a dirty float, though. Mr Cohen —I thought you didn't believe in polls. Mr PEACOCK —Never make comments on polls; I am talking about support. I ask the Minister: Is it the case that, following the Prime Minister's commitment to amend the assets test, the Minister took the matter to Cabinet on 14 May and, in line with the normal drift and indecision with this Government, the Cabinet was yet again unable to make a decision? When will the Minister be announcing the changes to the test? Mr HOWE —It is interesting that once again the Opposition returns to the assets test. In this case it is talking about urgency in relation to amendment. A lot of the criticism has come from the National Party. It is of some interest to recall that, when the right honourable member for New England, for example, was the Minister for Social Security, the assets test that operated under a coalition government was much more draconian and much tougher in every respect than the means test that currently operates. There was no situation then in which people had open to them the review and appeal procedures that operate at present. The Government has always said that the assets test would need to be carefully monitored, particularly during the implementation stages. It is true that over the last several weeks I have brought to the Government several reports which are the results of the information that has been collected in relation to the implementation phase. The Government has analysed that information. There are some outstanding matters. When we have resolved those outstanding matters, of course, an announcement will be made. Mrs KELLY —My question is addressed to the Minister for Communications. The Minister will be aware of yesterday's decision by the High Court of Australia affecting children's television programs. What consequences will this decision have on the local film and television program industry? Mr DUFFY —I thank the honourable member for Canberra for her question. I understand that yesterday the High Court upheld an appeal by Herald-Sun TV Pty Ltd against the Australian Broadcasting Tribunal's standards for pre-school children's programs and advertising. Essentially this means that the power to require pre-classification of such programs can no longer be supported under the present legislation. This has considerable importance in terms of the Australian Broadcasting Tribunal's administration of standards and accordingly could have a marked effect on local film and television program production in Australia. When I delivered the second reading speech on the Broadcasting and Television Amendment Bill last week, I indicated that it had been the Government's intention to bring forward amendments at this time to clarify and, in fact, affirm the Tribunal's standards. I also said that because of possible effects of such legislation expressed by sections of the broadcasting industry it was decided to exclude the provisions from the Bill at that time to allow further consultation with the industry. However, I made it clear at that time, and I wish to emphasise it today, that the Government's view is that the standards powers must be supported. The Government will move to legislate at the earliest possible time to give effect to the policy that the Australian Broadcasting Tribunal maintain its powers to set and enforce both qualitative and quantitative standards in relation to broadcasting in this area, and that would be in the area of standards and/or conditions. Also at that time I gave notice that because of the Government's commitment to a viable Australian film and television industry, this Government would take all necessary steps to maintain the viability of the industry and, if necessary, would make the legislation effective from the date of the second reading speech; that is, 15 May 1985. Mr SHIPTON —My question is directed to the Minister for Aboriginal Affairs. I refer the Minister to the Government's hopeless drift and indecision over Aboriginal land rights. Will he end the uncertainty which is damaging to all Australians and advise the House what he intends to do about Aboriginal land rights? Will the Government be introducing legislation? Mr HOLDING —I thank the honourable gentleman for his question. The answer is that the Government is seeking the views of Aboriginal people and all the relevant organisations on the question of what ought to go into a land rights package. I remind the honourable gentleman, who talked about drift and indecision, that one of the responsible-I thought it was responsible-bodies that we have approached for its views is Her Majesty's Opposition. Some months ago I gave the honourable gentleman a copy of the preferred model and sought his comments. I offered the resources of the Department of Aboriginal Affairs. What we have is an announced position without any attempt to get an adequate briefing. On half a dozen occasions in the House I have invited the honourable gentleman to tell us what the Opposition's position is on land rights. He has the gall to talk about drift and indecision. This Opposition has had more positions on land rights than a drunken sailor working his way through the Kama Sutra. When the honourable gentleman is able to inform the House whether the Opposition supports the principle of land rights, a principle espoused by a former Liberal government, and is not prepared to pander to some of the worst racist elements in this community, he is entitled to an answer from me. Mr KENT —My question is to the Minister for Housing and Construction. As the Australian Bureau of Statistics has released today final figures on building commencements for Australia for the December 1984 quarter, can the Minister inform the House whether these figures indicate that the target for housing commencements for this year will be met? What are the future prospects? Mr WEST —The targets will be met. Eighteen months ago my predecessor, the then Minister, predicted that there would be 145,000 housing starts this financial year. The latest indicators show that there will be approximately 150,000 starts. Indeed, the final figures for the December quarter to be released today by the Bureau of Statistics indicate that the number of dwelling commencements for the December quarter last year was 39,000. That is the highest quarterly figure since March 1974. I might also say that the figures are particularly strong in the private sector, with private units and townhouses commencements up 44 1/2 per cent in the December quarter on the December quarter of the previous year. Of course, this has had an effect on employment. In the total housing and construction employment area, there has been an increase of 83,000 jobs since August 1983. That means that unemployment in the industry has been reduced from 14 per cent, which was the figure when we took over, to 7.3 per cent currently, which is now less than the national average instead of significantly more than the national average. The second part of the honourable member's question concerned the prospects for the future. I want to look to the two key indicators-approvals by local government authorities and the number of loans by all significant lenders. Both of those indicators show continued stability in the industry, perhaps at a slightly reduced level going into 1985-86. As far as lending is concerned, the picture has been very good because the numbers of loans by all significant lenders has gone up by 15 per cent on the previous year. As far as savings banks are concerned, the number of loans is up 13.7 per cent in the three months to February 1985 over the corresponding period a year earlier. I should say that the picture for the future will depend upon such indicators as the level of interest rates, the level of funding for the States in the area of public housing and the continued availability of finance from the banks. I might say that the level of growth in savings bank deposits, although it has declined somewhat over the last few months, is now back to the long term trend line of the early 1980s. That is not as bad as some people are making out in the banking industry. It does not indicate that serious thought should be given to the deregulation of housing interest rates. Those indicators in regard to the number of loans by all significant lenders and the number of approvals by the local government authorities over the last few months show that we will get 150,000 starts this year, which is in direct contrast to the level two years ago, when we took over, an abysmal 105,000 starts. We are up 50 per cent in two years, on the record of the previous government. Because of what two key indicators show for the last few months, we are looking at stability in the industry over the next 18 months. Mr SINCLAIR —I ask the Minister for Defence a question, and I again refer to the Government's drift and indecision in policy formulation. I ask: Did the Royal Australian Navy's initial request for tender for the Oberon replacement submarine specify that the winning design would preferably be a boat in service or about to go into service with the sponsoring government's Navy in order to ensure low technical and production risks? Has this criterion been met by the German and Swedish preferred tenderers? If not, does this criterion still apply? When was it varied? What are the new criteria? On what date were all tenderers advised of the change? Can the Minister assure the House that the preferred tenderers can guarantee the low technical and production risk for Australian building that were originally specified? Mr BEAZLEY —I will get on to the right honourable gentleman's question, but his wording invites me to comment on drift and indecision and whether this Government has a comparable record to his in the area of drift and indecision in defence matters. In the next 10 minutes or so I shall canvas that subject and then get on to his question. We have before us the example of the drift and indecision of the previous Government in that marvellous process it went through in its decision as to whether it would proceed with an aircraft carrier purchase. That is a memory that will live with us forever. That purchase was on one day and off the next. The previous Government got the Invincible, then handed it back again. It changed the requirement and said: 'Yes, we need a forward power projection capability'. Then it said: 'No, we need an anti-submarine warfare capability. What are we going to do?' This drift and indecision went on for about three years. The matter was not dealt with until we came into office, when we did two things. Firstly, we brought the matter to the conclusion the Opposition in government had arrived at in an intellectual sense but which it did not have the guts to implement or announce publicly. Secondly, because that left an ASW gap, when we came into office we addressed immediately the question that had been drifting and handled indecisively through the present Opposition's unwillingness to come to a decision on what sort of helicopter ought to go on the back of the frigates. So we ended that drift and indecision. Mr Sinclair —You still don't know. Mr BEAZLEY —I know the honourable member does not read much. However, if he had looked every now and then at the newspapers he would have seen our helicopter solution for the frigates. Our decisive activity on the drift and indecision by the Opposition when in government in relation to the helicopter purchase was very thoroughly addressed by us. We then had the right honourable gentleman's drift and indecision on Army training and manoeuvre facilities in the New South Wales area. For a couple of years the right honourable member and his predecessors sat on a series of briefings that bounced to and fro from the Department. Something like five million hectares were under investigation, and bits and pieces of information were leaking out now and then to the disturbance and distress of people in that area. We were obliged to come in and deal decisively with that area of drift and indecision in the previous Government's policies. When it comes to the drift and indecision stakes we come a very poor second to the crew opposite. Next time the right honourable member gets up to ask a serious question he had better work out his preamble somewhat better because his premises will be addressed as well as his general question. The right honourable member accused this Government of drift and indecision. This Government is a Government which when it makes a decision about a weapons purchase makes absolutely certain that what it is getting has the capability it requires. It undertakes a proper investigation of those capabilities, and when it arrives at a conclusion it acts decisively. This Government will do that, in contrast to the actions of the Government of the right honourable member. I now come to the point of the right honourable member's question, most of which I have forgotten. The right honourable member was wondering, as I recollect, whether the criteria set down in the tender process had been met by the selection that was made. I think if he had read through the entirety of the tender requirements he would have seen more than simply the points he raised. He would have found, too, that if a particular requirement for a boat in the water at the point at which a decision was made could not be met there was a minimum requirement for a derivative of proven design. In the areas of derivatives of proven design he would find that certainly the companies we have selected for the tender process met the requirement. As I recollect-I am not absolutely certain of this-the requirement was for a boat in the water by 1986. In fact, only one boat offered to us for consideration conformed with that and that was the Dutch RDM boat. I do not think the Vickers Shipbuilding and Engineering Ltd boat goes into the water until about 1988. The version offered to us, as opposed to that boat, represented a substantial upgrading by several hundred tonnes. So the question as to whether paper boats or real boats were selected is largely a question of degree to the extent to which there is a requirement to go above the tonnage of a boat already in the water. So we did not change the criteria. We based our decisions on the criteria. Where we considered there was an element of technical risk involved as to whether people could achieve what they said they could achieve, a very extensive series of judgments was made and, where relevant, an adjustment was made to the claimed costings that were associated with them. Everything in the decision was conservatively weighted to take that into account. As I said, we are a government that acts both responsibly and decisively in the area of defence policy-making. We are the first government that has operated decisively and clearly in the area of defence policy making since 1975. Mr HOLLIS —Has the attention of the Minister representing the Acting Minister for Foreign Affairs been drawn to Press reports that the Sri Lankan Government is trying to raise money in Australia for its military campaign in the Tamil areas of that country? Can the Minister give the House any information on this matter. Mr LIONEL BOWEN —The position is that the Australian Council for Overseas Aid has recently issued a Press statement drawing attention to the concern expressed about raising funds in Australia for what is called the National Defence Fund of Sri Lanka. I am advised that this matter arose last year when a series of letters, I think dated in August, were issued from the Sri Lankan High Commissioner soliciting contributions for a defence fund. That caused some concern and apparently investigations took place at that time. It was acknowledged that whilst that solicitation was not in breach of the Vienna Convention on Diplomatic Relations it was a practice that should not be encouraged. It was considered that the request went beyond what could be regarded as normal diplomatic custom, convention and practice. Representations were made to the Sri Lankan High Commissioner in, I think, November last year. At that time the High Commissioner indicated that the appeal had concluded. I am now advised, having again been asked about the present position of the Fund, that the High Commissioner has said that whilst no further appeal has been made by him since last year some moneys are still being received into what he calls the trust account of the Fund. We hope that that practice will not be continued. We accept the advice that there has been no further appeal because it is a practice which we do not think should be encouraged. Mr TIM FISCHER —Has the Treasurer taken a decision to exclude petroleum fuel taxation from the White Paper on tax and the tax summit deliberations? If so, has he now rejected his previous statements that every petrol bowser in Australia is simply a branch of the Australian Taxation Office? If not, will he assure the House that petroleum fuel taxation will be reviewed at the summit, including the record 78 per cent of fuel taxation not expended on roads? Mr KEATING —If members of the Opposition want to waste questions with speculation on what is in the White Paper they are perfectly entitled to do so. I would have thought that back bench members should reserve their questions for things which they could apply to Ministers with some reasonable prospect of an answer. Mr PUNCH —My question is to the Minister for Aviation and concerns the second Sydney airport. Specifically, I would like an update on where we are with the second Sydney airport development. Further, will the Minister contrast the present Government's policies with the drift and indecision of the previous Government over the question of the second Sydney airport and specifically the damaging speculation to land values in my electorate and other areas under consideration? What has the Government done in this regard? Mr PETER MORRIS —I thank the honourable member for his question. I think that he has outshone the honourable member for Lowe in this respect. I can tell the honourable member that the program for the selection of the site of the second Sydney airport is, as I have stated before, that the Government is determined to make a decision before the end of the year. On the last occasion when this matter was raised I said that the release of the draft environmental impact statement had been held up because we could not get the volumes printed in time. They are expected to be released in about the middle of June. There will be a 10-week exhibition period, a response period, and then the final statement will be prepared and a recommendation will go to Government. That will be done before the end of the Budget session. I will try to relate to the honourable member, knowing his very deep concern about this issue, the history of the drift and indecision of the conservative governments. I think I would have to go back to about 1968 which would take a considerable time. My recollection is that in 1968 the then Prime Minister, John Gorton, announced that Taren Point would be the ideal site for the second- Mr Dobie —That is not true. Mr PETER MORRIS —I will keep on going; the record can stand corrected. My recollection is that the site was Taren Point and there was a great furore about that. No decision was made until we came to government. We had a shot at selecting the site. In 1975 we left everything as honourable members opposite had left things in 1972. The then Government had everything available to it, including all the sites, and it set out on a new study. It went through a series of discussions and examinations but, again, it was unable to come to a decision until finally, I think it was Minister Fife at the time, went for a stubby airstrip. Nothing really happened in respect of that and that leads on to the situation raised by the honourable member. Sydney has the busiest airport in this nation. For instance, more than two and a half million people per year come through the international terminal. That terminal is inadequate; the conditions there are totally unsatisfactory. The arrival of aircraft is such that there is no way that the existing facilities can adequately handle them. On a Sunday morning, for instance, three aircraft are programmed for arrival in 10 minutes and some six in 60 minutes but, because of delays elsewhere at points of departure, we finish up with an arrangement whereby six aircraft arrive in 45 minutes. There is no way that the existing services there can handle that number of people and that number of aircraft in that time. What we are coping with is the failure of conservative governments to plan investment in the airport properly. They have preferred to go for monuments and white elephants outside Sydney rather than invest in improving that terminal. We have directed the Department of Aviation to prepare urgently a report on ways and means by which we can make better use of the existing space that is available and ways and means by which we can try to alter the arrival of aircraft so that there can be a better spread of the usage of the facilities and also to take up with the Minister responsible for the Australian Customs Service, the Minister for Industry, Technology and Commerce, the means by which we can process people faster through the primary Customs barrier. The luggage handling facilities in the lower section of the terminal are archaic. They are problems that we cannot overcome quickly but we will try to rearrange the facilities in a better way. We will be doing what we can to try to improve that situation. As far as the honourable member for Barton is concerned, we are determined, as I have said, to proceed with the selection of a second site. We are proceeding to make better use of the existing facilities at the existing terminals pending the development of an upgrading program of extensions to the existing operations. Mr PEACOCK —I rise to ask the Treasurer a question in light of frequent references this afternoon to drift and indecision. Will the Treasurer advise which preferred tax option the Government prefers? Is the Government not sure whether it prefers to have a preferred option at all, that is, a deferred, preferred option? Whilst asking this question of the Treasurer, is it a fact that the Foreign Minister's preferred option is to be somewhere else so that he cannot be blamed? Mr KEATING —I realise that old empty head here is buoyed by the results in today's Bulletin. This is a former Minister, who, as Minister for Industrial Relations, let the Australian economy fall to pieces in front of his eyes, who spat out the dummy and resigned when wages blew out, who repaired to his office and for the next two years played darts or draughts, or cards when he was bored with the others, with his staff. He was one of the guilty people who sat and watched the Australian economy slide into its greatest recession since the Great Depression. He was incapable of ever mastering a domestic portfolio; he was incapable of any original thoughts about change in this country and he was totally incapable of dealing with any substantial structural problem, let alone the tax system. The Government has said that it will give this nation tax reform. It has laid down a procedure. I cannot understand the point of the Leader of the Opposition's trying by way of questions to seek from me or from the Prime Minister matters which are before the Cabinet and which will all be revealed in a week or two's time when the White Paper is published. All I say to the Leader of the Opposition, again, is that if he wants to waste his questions, I do not mind replying to him; but I do not think anyone in the business community or the nation at large has any belief that old empty head here could ever deliver anything. He is rivalling Bill Snedden as the greatest empty head ever to lead the Liberal Party of Australia. Mr O'KEEFE —My question is directed to the Minister for Local Government and Administrative Services. It is in respect of the new tax sharing arrangements for local government. Is the Minister aware of a statement issued by the Municipal Association of Victoria claiming that funding for local government has been cut back and that this is likely to result in the loss of up to 500 jobs in Victoria? Will the Minister assure the House that the claims are not correct and that in fact funding for local government is one of the areas where the May economic statement provides for a real increase in general purpose funds? Mr UREN —I thank the honourable member for Burke for his question. I am aware that he has 21 local councils in his electorate. I have read the statement of the Victorian local government association and do not agree with it. I think it has overstated its case. Local government will not get the increase that was projected but it will get a substantial increase. That increase for Victoria is estimated to be $11m or 9 per cent. In other words, there will be an increase from $124m in 1984-85 to $135m next year. Looking at the national scene, I point out that the situation is that local government was paid $486m this year and next year it will receive an estimated $531m-a $45m or 9 per cent increase. If one compares the role of our Government in the first two years with that of the Fraser Government in its last year concerning both tied and untied grants one will find that the funding to local government has increased by over 50 per cent and by 30 June of this year we will be paying $976 in both tied and untied grants. The fact is that local government is not alone in being given a lesser increase than the States in respect of the Commonwealth Budget because the Commonwealth itself is to be cut back. Mr Everingham —Shame! Mr UREN —The honourable member for the Northern Territory interjects. Since the Department of Finance made a submission to the Self National Inquiry into Local Government Finance, which was a little over two months ago, there has been controversy over how much finance local government would receive this year. I have been waiting for the star from the north to ask me a question. I have not received one question on local government in over 2 1/2 months. No matter of public importance has been raised. Given the controversy, one can imagine what we would have done if we were in opposition. We would have torn honourable members opposite to pieces. There has been not one question or matter of public importance on the subject of local government finance. I remind the Opposition also that we inherited a $9.6 billion deficit. In present terms that is over $10 billion. It has cost this Government over $3 billion to service that deficit alone. Therefore, there are difficulties across the board. Our commitment to local government is not one of finance alone. The fact is that this Government has made a broad commitment to local government. It wants to broaden the base of local government because it has faith in the democratic processes in this country. We believe that the form of government which is closest to the people should be a more broadly based government. We have encouraged local government to broaden its base. People have to make decisions about their own lives. Certainly our Government has given local government every encouragement. Mr SPEAKER —I present a special report from the Joint Standing Committee on the Broadcasting of Parliamentary Proceedings relating to the broadcasting of excerpts of proceedings. Mr YOUNG(Port Adelaide-Leader of the House)(2.48) —by leave-I move: That this House authorises the broadcasting and re-broadcasting on Australian radio and television stations of a sound record of excerpts of its proceedings for a trial period from 20 August 1985 until the end of the 1985 Budget period of sittings, subject to the conditions determined for this purpose by the Joint Committee on the Broadcasting of Parliamentary Proceedings. Mr Speaker, I understand that there has been consultation with yourself, the Joint Standing Committee on the Broadcasting of Parliamentary Proceedings, the leaders of the parties, and in the party rooms, and that it has been decided unanimously that the subject of this motion ought to be given a trial. It is a step very much in the right direction and we look forward to the experiment in the Budget session. Mr SINCLAIR(New England-Leader of the National Party of Australia)(2.49) —Mr Speaker, in speaking to this motion, I protest initially. I received the report on this subject only about 10 minutes ago. I have been trying hard to read its recommendations. As there are 13 terms and conditions on which broadcasting is to be conditional, I suggest that the consideration of this motion be deferred for a few minutes to enable me to read those conditions. I seek leave to continue my remarks at a later hour. Leave granted; debate adjourned. Mr WILLIS(Gellibrand-Minister for Employment and Industrial Relations) —Pursuant to section 125 of the Conciliation and Arbitration Act 1904, I present the Arbitration Inspectorate annual report for 1983-84. Motion (by Mr Young) proposed. That the House take note of the paper. Debate (on motion by Mr MacKellar) adjourned. Mr JOHN BROWN(Parramatta-Minister for Sport, Recreation and Tourism) —For the information of honourable members, I present a report from the Working Group on Women in Sport entitled 'Women, Sport and the Media'. The report is tabled in A4 format and limited copies are available from the Bills and Papers Office and the Senate Records Office. Final printed copies of the report are expected to be available in June and will be posted to all honourable members. Mr BARRY JONES(Lalor-Minister for Science) —Pursuant to section 35 of the Student Assistance Act 1973, I present the report on the operation of the Student Assistance Act in 1984. Mr HOLDING(Melbourne Ports-Minister for Aboriginal Affairs) —For the information of honourable members, I present the Edward River Crocodile Farm Pty Ltd annual report for 1983-84. Motion (by Mr Young) proposed. That the House take note of the paper. Debate (on motion by Mr MacKellar) adjourned. Mr HOLDING(Melbourne Ports-Minister for Aboriginal Affairs) —For the information of honourable members, I present a report by the Aboriginal Land Commissioner on the Nicholson River Waanyi-Garawa land claim. Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr MacKellar) adjourned. Mr HOLDING(Melbourne Ports-Minister for Aboriginal Affairs) —Pursuant to section 40 of the Aboriginal Development Commission Act 1980, I present the Aboriginal Development Commission annual report for 1983-84, together with comments made by the National Aboriginal Conference as required by sub-section 40 (6) of the Act. I also present, pursuant to sub-section 34C (6) of the Acts Interpretation Act 1901, letters relating to the delay in tabling the report. Motion (by Mr Young) proposed: That the House take note of the papers. Debate (on motion by Mr Shipton) adjourned. Debate resumed. Mr SINCLAIR(New England-Manager of Opposition Business) —I thank the House for giving me the opportunity to peruse the Committee's guidelines. I think other members would want to peruse some of those 13 guidelines. It is necessary that they realise that it is the audio signal of proceedings transmitted by the House monitoring system that is to be broadcast. I notice that the adjournment debate is specifically referred to in the guideline No. 1. Along with many other members, I hope that the adjournment debate will be broadcast. I think it is a very important part of the proceedings of this place. I note that there is a condition that, should either House agree to the broadcasting of the adjournment debates, authorisation for excerpting should be extended to cover those proceedings. I think it is very desirable that that take place. I hope that the Joint Committee on the Broadcasting of Parliamentary Proceedings might take note of that condition, perhaps consider it prior to the Budget session and make a recommendation to that effect. The other conditions seem to follow the general text of the recommendations of each of the party leaders who have expressed the views of the members of their parties. In that sense I would like to mention that a fortnightly return in respect of the excerpts of proceedings broadcast is to be made available to the Committee by media organisations to give some idea of the broadcast balance between the sides of the House. It is our view that in accepting this guideline obviously there needs to be some balance between both sides of the House and between chambers so that proceedings can be broadcast not just from the House that is being broadcast on that day. With those remarks, and having had some opportunity very briefly to peruse the report, on behalf of the Opposition I support the motion and commend the practice. I trust that it will be dispassionately and effectively used in accordance with the guidelines now laid down. Mr SPEAKER —I am sure the House would allow me to make a brief comment. I wish to refer to only one matter raised by the Leader of the National Party of Australia (Mr Sinclair)-that is, the question of the adjournment debate. The Committee in its deliberations decided that the excerpting would be made from those times of broadcasting of the House that are normally available to air, whether or not the proceedings were on air. I think the Committee was not prepared to excerpt the adjournment debate until the House made the decision to broadcast that debate. We are looking at that matter. I think that this would reflect the view expressed by the Leader of the National Party. It is perhaps something that could be done in the next session. Question resolved in the affirmative. Mr HAWKE(Wills-Prime Minister) —by leave- INTRODUCTION On 17 May 1983 the Government appointed a Royal Commission, conducted by Mr Justice Hope, to undertake a major review of Australia's security and intelligence agencies. Having reported to the Government on the Combe-Ivanov affair in December 1983 and the Sheraton Hotel incident in February 1984, the Royal Commission presented its final reports to the Government in December 1984. I now table certain of those reports in edited form. Motion (by Mr Young)-by leave-agreed to: That this House, in accordance with the provisions of the Parliamentary Papers Act 1908, authorises the publication of the following reports of the Royal Commission on Australia's Security and Intelligence Agencies: General Report Australian Security Intelligence Organisation Office of National Assessments and Joint Intelligence Organisation. Mr HAWKE —Before commenting on the reports, I should like, on behalf of the Government, to express my sincere thanks to Mr Justice Hope for having completed with distinction a very difficult task. His Honour is of course, no stranger to the intelligence and security community having previously inquired into and reported on it in a series of major reports in 1976 and 1977. Those reports led, amongst other things, to the enactment of a new Act governing the Australian Security Intelligence Organisation, a Security Appeals Tribunal, the establishment by legislation of the Office of National Assessments, the public acknowledgement of the Australian Secret Intelligence Service and Defence Signals Directorate, and the creation of a Cabinet committee and supporting committee of departmental secretaries to oversight the activities of the intelligence community. I should also like to thank the New South Wales Government for releasing Mr Justice Hope from his duties as a Judge of Appeal of the Supreme Court of New South Wales. THE REPORTS On 21 December 1984 the Royal Commission presented the Government with a general report, individual reports on the Australian Security Intelligence Organisation-ASIO, the Australian Secret Intelligence Service-ASIS, and the Defence Signals Directorate-DSD, and a combined report on the Office of National Assessments-ONA-and the Joint Intelligence Organisation- JIO. While the nature of the subject matter of these reports rules out, on grounds of national security, publication of some material, the Government has decided to publish as much as is possible of the reports within these constraints. It has taken account of the views about possible publication expressed by His Honour in each of the reports, and has consulted with him further in reaching a decision on publication. As suggested by Mr Justice Hope, the Government is tabling edited versions of the general, ASIO, and ONA-JIO reports. As also recommended by His Honour, the ASIS and DSD reports are not being published, but some general comments about the legality, propriety, effectiveness and efficiency of each are to be found in the published general report and I will have something further to say about each in this statement. I mention also that in accordance with established practice on intelligence and security matters, the Leader of the Opposition (Mr Peacock) has been provided with copies of unexpurgated reports. The Government in this statement responds in broad terms to the principal recommendations raised in the published reports. It has not yet reached a final position on all of the hundreds of recommendations and suggestions made: Many raise complex issues; many are intertwined; many, if adopted, will require the introduction or amendment of legislation. Detailed examination of all of the recommendations has commenced and will continue over future months. MAJOR FINDINGS AND RECOMMENDATIONS Evaluation of the Performance of the Agencies Mr Justice Hope has reiterated his views, formed during his earlier review, that Australia needs intelligence of quality, timeliness and relevance, and for this purpose requires a highly professional system of intelligence and security services (General, 2.43). He has concluded that governments should continue to ensure that the intelligence community is able to fulfil its important role in helping to advise on and protect Australia's national interests (General, 2.44). This Government endorses those views. The inquiry by Mr Justice Hope has been a most comprehensive review of Australia's security and intelligence agencies. It has also examined a number of complaints. It has exposed deficiencies in some agencies. But while noting that there will always be room for improvement, His Honour concludes that the agencies are generally performing effectively and efficiently. He finds that: In ASIO, much work has been done, and is continuing, to restructure and revitalise the Organisation, making it a service more responsive to predetermined policies (General, 2.21). ASIO has been concerned to ensure that its operations and actions are within its charter and has been substantially successful in this (General, 2.5). Its record as to legality and propriety is good (General, 2.6). However, His Honour has pointed to a number of areas, particularly in management and administration, where improvement in performance is necessary. ONA, although a relatively small body, has established its independence and authority by the quality of the work it produces, and is held in high regard (General, 2.34, 2.36). Its national assessments have been of high quality and it also produces valuable reports on matters of current significance (General, 2.36). JIO is a competent and professional agency (ONA/JIO, 4.9). It fulfils an important role in providing the defence organisation and other areas of government with a range of data and assessed intelligence on international, military and defence related developments (ONA/JIO, 2.18). It handles a vast amount of intelligence, and issues assessments and reports, many of which are of a high standard. Its product is well regarded by those who receive it (General, 2.40). ASIS has achieved success over the last decade in organising and reorganising to achieve its goals (General, 2.26). Its effectiveness and efficiency and its contribution to Australia's intelligence will continue to grow as a consequence of the closer relationship with other areas of government which it now has (General, 2.28). The Sheraton Hotel incident was not representative of the quality or professionalism exhibited by ASIS in performing its principal tasks (General, 2.28), and firm and clear steps have been taken to ensure that there will be no repetition of such an incident (General, 2.15). Just to expand on this point, as Mr Justice Hope suggests the Government might, the report on ASIS recommends that ASIS's directive be amended to exclude ASIS from carrying out covert action in the form of either special operations or special political action, and from undertaking training for such action. Special operations can be defined roughly as unorthodox, possibly paramilitary, activity in foreign countries designed to be used in case of war or some other crisis. Special political action is clandestine action against another country designed to further the foreign policy aims of a government, also in time of war or crisis. The development in ASIS of such a covert action capability had been accorded a priority well below that given to the development of ASIS's main intelligence gathering function and had in practice consumed only a very small proportion of the organisation's manpower and resources. Development of this capability as a contingency planning measure had not proceeded very far at the time of the Sheraton incident, and-apart from such training-any action at all of this nature, either special operations or special political action, would have required prior ministerial approval. The report also recommends that the use by ASIS of weapons be terminated and that ASIS's stocks of weapons, including explosives, be disposed of. The Government has accepted and acted upon these recommendations. ASIS will not hold weapons and will not maintain a capability for special operations or special political action. Returning to the evaluation of agencies' performance, Mr Justice Hope finds that DSD is impressive (General, 2.30). Its activities have expanded since 1974, and its skills and technology have thus far substantially kept up with this expansion (General, 2.32). It complies with the obligations which law imposes upon it (General, 2.17). The Government has accepted and welcomes these generally reassuring findings in relation to the agencies. The reports naturally contain recommendations aimed at further improving the performance of the agencies and at ensuring that they continue to act with legality and propriety. Other recommendations are directed to making the agencies more accountable. The Government endorses most of these and is pleased to note the ready support of the agencies for the additional measures I will now outline. General Oversight and Accountability Principal responsibility for oversight and accountability will, naturally, continue to rest with Ministers. The Prime Minister, the Minister for Foreign Affairs, the Minister for Defence, and the Attorney-General, each of whom has direct ministerial responsibility for one or more of the agencies, together with the Special Minister of State and the Minister for Resources and Energy, constitute the Security Committee of Cabinet. The Security Committee was established in recognition that there should be a small number of Ministers collectively tasked with developing policies for, and oversighting the performance of, the security and intelligence community. In the course of the Royal Commission the Committee, deliberately and properly, refrained from taking initiatives which would in any way have cut across His Honour's inquiry or anticipated his findings. Now, with the material contained in comprehensive reports before it and with other matters held in abeyance for the period of the Royal Commission, the Committee confronts a significant and challenging work load. The Government has responded with a number of initiatives. It has instituted a regular program of meetings for the Security Committee which will bring to the security and intelligence community a more rigorous oversight than ever before in this country. The Government believes that the agencies must benefit from having the clear guidance and directions on government policy which will emanate from these regular programmed meetings of the Committee. To ensure that material comes before the Committee in a regular and orderly fashion, a suitably staffed, full time secretariat will be established in my Department. To strengthen its ability to advise the Security Committee on security matters, the Secretaries Committee on Intelligence and Security-SCIS-has been expanded to include the secretaries to the Attorney-General's Department and the Department of the Special Minister of State. The Government has also affirmed the mandate of the SCIS, its individual members, and other relevant agency heads for ensuring that the Committee of Ministers is kept regularly and fully informed of all relevant matters. Mr Justice Hope has made a number of recommendations also aimed at assisting Ministers in the discharge of these functions. I now wish to set out the Government's reaction to these recommendations. As the principal recommendation in the general report, Mr Justice Hope recommends that there be created an Office of Inspector-General of Intelligence and Security which would perform the role of independent watchdog, assisting Ministers in looking after the public interest in the proper functioning of the security and intelligence agencies. The Government accepts the recommendation, believing the proposed Office-covering as it does most of the functions of the Security Commissioner, including in particular the audit function, proposed in the Australian Labor Party submission to Mr Justice Hope-to be a valuable addition to the existing machinery. While the details will need to be finalised in legislation, the Government agrees with the thrust of what is proposed for the Office in the general report (3.19.26) and ASIO report (16.76-102). Basically, the Office will comprise an Inspector-General of appropriate standing, appointed after consultation with the Leader of the Opposition, and a small staff. For administrative purposes, the office will be attached to my portfolio. In relation to ASIO, the Inspector-General will be able to act on his or her own initiative, or at the request of the Attorney-General, or in reponse to a complaint, and will report his or her findings to the Attorney. The Inspector-General's functions and powers will also include: inquiring into and reporting to the Attorney-General on ASIO's compliance with the law and propriety; and, if required by the Attorney-General, on the appropriateness and effectiveness of particular internal procedures; having full access to ASIO's files and other materials and power to require answers to questions; and reviewing ASIO's performance in opening, maintaining and culling files. In respect of the other agencies, the Inspector-General's function will include: checking, as occasion requires, the legality and propriety of the activities of ASIS and DSD investigating and reporting upon matters referred by the Prime Minister and the Minister for Defence in respect of ONA and JIO respectively; and investigating the appropriateness and effectiveness of particular internal procedures of any agency if so required by the relevant Minister. The Inspector-General will produce an annual report which will be made available to the Parliament with such editing only as would be consistent with national security, privacy and other public interest considerations, and in an unexpurgated form to the Leader of the Opposition. Parliamentary Committee Mr Justice Hope has also given consideration to the need for a parliamentary committee and has concluded that it is neither necessary nor appropriate that a special parliamentary committee be established to improve accountability (General, 3.28, ASIO, 17.34). He does, however, emphasise that this is ultimately a matter for Parliament to decide. The Government has given a great deal of consideration to the question. It has weighed His Honour's comments about the adequacy of existing oversight and accountability measures-particularly when supplemented by the new office of Inspector-General. The Government accepts that these measures will be improved by the creation of the Office of Inspector-General. Nevertheless, it believes a further improvement can be obtained by directly involving the Parliament-on both sides and in both Houses-in imposing the discipline of an external scrutiny of the intelligence and security agencies quite independent of the Executive. While the Government has been conscious also of the need to carefully protect intelligence and security information, it believes that appropriate arrangements can be made to ensure that a small but informed parliamentary committee would operate effectively in the public interest. It notes, in this regard, relevant overseas experience of parliamentary scrutiny of intelligence and security agencies. Although the Government will be consulting on the details of the committee's operation, it would propose to establish the committee by amendment to the ASIO Act, to oversight prescribed activities of ASIO relating to domestic security. The committee would not act as a grievance mechanism-that role being given to the proposed Inspector-General-and appropriate safeguards for national security classified material would, of course, have to apply. In relation to ASIO this joint parliamentary committee would supplement, not replace, the arrangements already in place for official briefings on national intelligence and security matters, on a personal and confidential basis, to nominated members of the Opposition, an approach which Mr Justice Hope has endorsed. Impact of Archives Act There is one final matter affecting the general accountability of the security and intelligence agencies which requires comment. In June 1984, this Government brought into operation the Archives Act to govern public access to Commonwealth records. Mr Justice Hope, in his general report, has made recommendations relating to the impact of the Archives Act on the intelligence and security agencies. His Honour has raised a concern that the 30-year time limit which is applied to records under the Archives Act may be insufficient for many intelligence community records because release even after that lapse of time could still reveal sources, modus operandi and other security-sensitive information. His recommendation is that consideration be given to legislative amendments to remove operational records of security and intelligence agencies from the mandatory requirements of handover to Archives and public access after 30 years, leaving discretion with agency heads to hand over records when appropriate. The intelligence community has strongly supported Mr Justice Hope's recommendations and has raised with the Government its concerns about the adequacy of, and feasibility of applying, the safeguards in the Act against compromising the large volume of sensitive documents held, many of which have been provided in confidence by overseas sources. At the same time, the community acknowledges both that its records contain documents of major historical significance, and the Government's commitment to ensuring that these records are preserved and, where possible, made available for public access. The Government takes very seriously its duty to protect the confidentiality of intelligence, its sources and the means by which it is obtained. However, it believes that safeguards in the Archives Act have been appropriately designed and have not been shown to the deficient. The provisions of section 29 of the Archives Act were developed to have the effect of exempting the intelligence agencies from the 'mandatory transfer' provision referred to by His Honour (General); and beyond this, in the event of a request for access, the Act provides a range of exemption provisions and for conclusive ministerial certificates to protect security sensitive information. The Government will ensure, however, that the intelligence community concerns and experiences are specifically addressed in the review of the Archives Act which is scheduled for 1987. ASIO REPORT Turning now to the report on ASIO, I primarily wish to address four main groups of recommendations: Those directed at strengthening ministerial control; those relating to amendment of the ASIO Act to redefine ASIO's jurisdiction; those affecting the role of the Security Appeals Tribunal; and those proposing the gathering-together of a range of protective security measures under the Special Minister of State. Strengthening of Ministerial Control Mr Justice Hope has recommended that the Attorney-General's control over ASIO be significantly expanded and his Department be given a larger role in support of him. He has proposed that the Director-General of Security, in the performance of his functions, be subject to the direction of the Attorney-General, except as to the nature of the advice he should give (ASIO, 16.46). The proposal includes appropriate control mechanisms. The Government endorses his recommendations. His Honour has also recommended that the Attorney-General be given power to issue guidelines relating to a number of areas of ASIO activity. The guidelines will have the status of administrative directions; where appropriate, will be tabled in Parliament; and will be given to the Leader of the Opposition. The areas to be covered will include intelligence collection, targeting, review of file holdings, and the extent of ASIO involvement in investigating activities which might involve the hindering of the Defence Force function (ASIO, 16.52). The Government endorses these recommendations, and has also decided that the Security Committee will approve the guidelines to be issued by the Attorney-General. Amendments to ASIO Act His Honour has recommended significant changes to the definition of 'security' contained in the ASIO Act. The effect of the changes proposed is to allow ASIO's functions and activities to be more carefully defined and limited (ASIO, Chapters 3, 4, 5). The Government accepts the main thrust of these recommendations. I do not intend repeating all of the details-I invite honourable members to give them careful study in the lead up to the future introduction of amendments to the ASIO Act. I will comment that the Government is particularly pleased that the general direction of the changes would: give full recognition to the policy that ASIO should not be concerned with the activities of persons which involve only lawful protest or dissent (ASIO, 4.91 (h)); see the term 'subversion' deleted from the definition of 'security' (ASIO, 5.54 (b)) in favour of a concept of 'politically motivated violence' which covers a much narrower definition of the contentious notion of 'subversion'; make separate provision dealing with activities directed to promoting violence between different communal groups (ASIO, 4.91 (f)); and delete the term 'active measures of foreign intervention' from the definition of 'security' and substitute a more tightly defined definition of 'acts of foreign interference' along the lines suggested by His Honour. Concern has been expressed in some quarters about the ambiguities and potential dangers inherent in the term 'agent of influence'. By changing the emphasis in the concept of 'foreign interference' from activities designed to advance the interests of a foreign country to activities that will have a result detrimental for Australia, this recommendation should allay those concerns. The Government also accepts Mr Justice Hope's recommendation that there should be separate provision dealing with activities directed to obstructing, hindering or interfering with the performance by the Defence Force of its activities (ASIO, 4.91 (d)). The Government proposes to add to this provision as proposed by Mr Justice Hope a further requirement that the acts concerned be not only intended to, but likely to, obstruct, hinder or interfere. I reiterate that these provisions will be subject to the policy on lawful dissent. Another significant amendment of the ASIO Act would result from Mr Justice Hope's proposal that ASIO, under warrant, collect foreign intelligence in Australia-that is, information concerning the capabilities, policies and activities of foreign powers or bodies (ASIO, 6.82, 6.84, 6.87). His Honour concludes, and the Government agrees, that it would be highly advantageous for Australia to provide for the collection of such intelligence (ASIO, 6.80). The Government also agrees that if this is to be done it must be regulated by legislation, as is the case in the United States and Canada and as is being introduced in the United Kingdom, and any such legislation would need to ensure, as His Honour recognises, that no Australian person or corporation would be the target of operations involving such collection (ASIO, 6.84). We will be giving further consideration to the complex issues raised by this recommendation. Security Appeals Tribunal Mr Justice Hope recommends a number of procedural and jurisdictional changes for the Security Appeals Tribunal. These stem from the requirement to report on whether there is adequate provision for effective redress for persons who may be unjustifiably disadvantaged by actions of the agencies. With an exception which I will now address, these recommendations will be the subject of a further submission by the Attorney-General. As already mentioned, the Inspector-General of Intelligence and Security will be empowered, as part of improved redress procedures, to investigate complaints by individuals. Beyond this, Mr Justice Hope has recommended that in any case where a report by ASIO may result in action adverse to the interests of an individual and where the individual does not already have a right to review of that report, the Attorney-General may refer the matter to the Security Appeals Tribunal for advice on the appropriate procedures to be followed by the Government having regard to the interests of the person who is exposed to possible prejudice (ASIO, 17.58). It is suggested that the Tribunal could be asked to consider whether the person should be given notice and an opportunity of testing the ASIO information on which the Government is proposing to act or has taken interim action (ASIO, 17.58). The Government accepts the desirability of being able to draw on independent advice in the circumstances outlined. However, it is concerned that the recommendation may place the SAT, a quasi-judicial body, in the position of giving advice to government on aspects of the handling of a developing security matter. The Government intends, therefore, to incorporate this advisory role in the functions of the proposed Inspector-General of Intelligence and Security. Protective Security Chapters 9 to 12 of the ASIO report deal with protective security matters. Key recommendations set out at chapter 12, paragraphs 77 to 79, are that the Special Minister of State be given responsibility for protective security policy and co-ordination, and that a high level committee be convened by the Department of the Special Minister of State to co-ordinate protective security measures, with representation from ASIO and other agencies with specialist security expertise, and from the major user departments. The Government recognises that under existing arrangements responsibility for protective security policy is vested in a number of departments and agencies. There is, therefore, some attraction to the idea of bringing protective security policy under one department and developing the machinery for co-ordination. Such a rationalisation inevitably carries with it resource and cost implications. Accordingly, the Government is carefully examining whether the benefits of centralisation outweigh these costs. ONA-JIO REPORT ONA After making his favourable findings about ONA, to which I referred earlier and which the Government endorses, Mr Justice Hope went on to suggest that there was scope for ONA more actively to encourage departments to recognise and use its analytical skills and to co-operate with it in its work (ONA/JIO, 3.163). To this end he suggested the establishment of a National Intelligence Committee (Gen., 2.38, ONA/JIO, 3.169-170, 5.47) chaired by ONA and including senior representatives of policy departments and JIO, with representatives of the intelligence collection agencies present as observers. The Government agrees with His Honour and accordingly accepts the recommendations at paragraphs 3. 169 (a) and (b) of the report on ONA and JIO. Appropriate administrative action is being taken to give effect to that decision. Mr Justice Hope suggests four functions for the NIC, involving it in: the development of ONA's work program; monitoring ONA's product; advising ONA on intelligence needs and priorities; and considering all ONA's assessments. The Government agrees with the first three suggested functions for the NIC. Policy departments are already drawn into these things in a variety of ways, but it would be a useful improvement to have them done more formally, and in a multilateral way, in an NIC. The Government does not accept that the NIC should be given the fourth recommended function-that of considering all ONA's assessments. In the Government's view this would result in a most unwieldy system, would greatly reduce ONA's output, would make very difficult the preservation of ONA's independence and could quite easily lead to the introduction of departmental policy preference into ONA's assessments. JIO As with his recommendations on ONA, Mr Justice Hope's main recommendations in respect of JIO are directed towards improving the process of consultation between JIO and its main customers. He also makes suggestions for improving JIO's organisation, manning, training and some aspects of its co-ordination and forward planning. The Minister for Defence (Mr Beazley) will be advising the Government on what action to take in response to the detailed recommendations and suggestions on the JIO. DSD Report As I have said, the DSD report is not being published but it is appropriate at this stage to make some comment about the DSD charter. Following consideration of the reports of the earlier Royal Commission on Australia's Security and Intelligence, the then Prime Minister in 1977 broadly outlined the role and functions of DSD. Mr Justice Hope has now recommended that the Government consider making public the DSD directive, with amendments where necessary for security reasons. This Government has issued DSD with a new directive which differs only slightly, and not in matters of substance, from the previous directive under which DSD operated. We agree with Mr Justice Hope that publication of the directive will allow the Australian public to obtain a clearer appreciation of DSD's role and functions and may allay misconceptions about the organisation. I seek leave to incorporate in Hansard the new DSD directive. Mr SPEAKER —Whilst this document is outside the usual guidelines for incorporation in Hansard, having regard to the nature of the statement, if there is no objection, I will permit its incorporation. Leave granted. The document read as follows- DEFENCE SIGNALS DIRECTORATEDIRECTIVE 1. The Commonwealth Government requires the maintenance of a capability to collect, produce and disseminate foreign signal intelligence and to advise the Government on all matters pertaining to the security of signal communications and related equipments. 2. The capability will be located in: (a) the organisation in the Department of Defence known as the 'Defence Signals Directorate' (DSD); and (b) specialist units of the Defence Force. Functions 3. In respect of signal intelligence, the functions of DSD and the specialist units of the Defence Force referred to in paragraph 2 above shall be: (a) to develop and maintain a capability to provide signal intelligence in support of the Defence Force; and (b) to collect, produce and disseminate foreign signal intelligence to meet the national requirements of the Commonwealth Government. 4. In respect of communications security, the functions of DSD shall be: (a) to provide materials, advice and assistance to Commonwealth Government departments and authorities and the Defence Force on matters relevant to the security of their communications and electronic and related activities; and (b) through the Secretary to the Department of Defence, to keep the Secretaries' Committee on Intelligence and Security generally informed on the state of communications security. Organisational Principles 5. Policy control and managerial oversight over the national intelligence community, external and internal, is exercised by the Security Committee of Cabinet in respect of targets, priorities, activities, organisational requirements, broad allocation of resources, performance and co-ordination and inter-relationships of the various agencies. In the performance of its functions DSD, as a component of the national intelligence community, shall accept the guidance on targets and priorities issued from time to time by the Security Committee of Cabinet. 6. The Australian capability in signal intelligence shall be maintained in DSD and the Defence Force for national purposes generally. DSD shall be the national communications security advisory authority and as such shall maintain the expertise required to carry out those functions detailed in paragraph 4 above. 7. DSD shall be an outrider organisation in the Department of Defence. The Director, DSD shall control DSD and shall be responsible to the Secretary to the Department of Defence. 8. Specialist units of the Defence Force, and Defence Force personnel engaged in signal intelligence and communications security tasks, shall be subject to the command arrangements made by or under the authority of the Chief of the Defence Force. Members of the Defence Force may be loaned or seconded for service with DSD. Operating Guidelines 9. DSD and units of the Defence Force engaged in signal intelligence and communications security functions shall operate in conformity with Australian law. 10. DSD shall maintain direct contact with appropriate Commonwealth Government departments and authorities and the Defence Force as regards signal intelligence and communications security matters. 11. DSD shall be the Australian national authority on signal intelligence and communications security matters. DSD shall conduct liaison on signal intelligence and communications security matters on behalf of the Australian Government as appropriate with counterpart agencies or authorities in other countries and shall maintain overseas technical representation as is necessary. 12. The Director, DSD shall furnish to the Secretary to the Department of Defence and to the Chief of the Defence Force an Annual Report which shall include an account of the performance of DSD in relation to the functions stated in paragraphs 3 and 4 above. Mr HAWKE —I come to my concluding remarks. As I have indicated in this statement, the Government has accepted and welcomed His Honour's findings and, as is quite clear, has accepted most of his principal recommendations. More work remains to be done in responding to his other recommendations and in the area of implementation. The Government will ensure that there is no delay to this work and that its results will be made known as appropriate. When all is finished, I have no doubt that Australia's intelligence and security services will be more efficient and effective than they now are, that they will be run with even greater regard for legality and propriety and that their accountability and oversight will be further strengthened. These will be worthwhile gains to the Australian people, to the Australian government and to the Australian security and intelligence community itself. Mr PEACOCK(Kooyong-Leader of the Opposition) —by leave-Whilst following convention, I would like to thank the Prime Minister (Mr Hawke) for providing me with access to the various volumes, both public and private, of Mr Justice Hope's Royal Commission into Australia's Security and Intelligence Agencies. I will, of course, be commenting on only those aspects of the reports made public. In any healthy democracy, a fine balance has to be struck between the requirements of national security on the one hand and those of personal liberty on the other. Australia has been fortunate to have had Mr Justice Hope preside over the second Royal Commission into Australia's Security and Intelligence Services. He has always brought to his task a perceptive realism about the issues at stake and maintained a standard of excellence in the performance of Royal Commissions. What is unusual is that he brings a continuity to this process of review which is highly beneficial, for Mr Justice Hope was the Royal Commissioner into Australian intelligence and security, established in 1974. On that occasion he investigated the activities of Australia's intelligence agencies in considerable depth. The present Commission, established in May 1983, has enabled him to look into those same security and intelligence agencies and examine progress and developments since his last report. He has also been able to examine the workings of the Office of National Assessments which grew out of his last report. It is regrettable that in Australia the security forces have not received a good Press. Recent events such as the Combe-Ivanov affair, the Sheraton Hotel fiasco, and reports about wire tapping have left the public with an impression which does not do justice to our security organisations. As Mr Justice Hope has pointed out in his report, morale, particularly in the Australian Security Intelligence Organisation and the Australian Secret Intelligence Service, has suffered as a consequence of adverse publicity. The Royal Commissioner has done us a great service in spelling out in clear terms the current strengths and weaknesses of Australia's security organisations. From reading all the reports there is one underlying thread which runs through them, that is, these organisations are dedicated both to preserving Australia's security and to preserving its way of life and fundamental freedoms. Mr Justice Hope's previous Royal Commission was critical of some aspects of the past performance of ASIO and made recommendations seeking to update ASIO's function to help it respond to the realities of the 1970s. The coalition is pleased to note that ASIO has responded well to this challenge. Importantly, the royal commissioner has found that one of the greatest changes was in ASIO's degree of concern for compliance with the requirements of the law and propriety. The royal commissioner points out that this change has come about through increased legislative and government direction. We will be giving close examination to the proposed amendments to the ASIO Act to ensure that the changes to various definitions and the increase in ministerial control do not move us too far in the other direction and hinder the effective operation of ASIO. Mr Justice Hope also made a number of recommendations on the collection and handling of intelligence. These appear generally sensible. It is ironical to now see Mr Justice Hope's statement that ASIO's concern with propriety may have resulted in undue caution. The most contentious aspect is the question of external accountability. The Prime Minister, in his statement today, has confirmed his Party's paranoia over the role of security services in this country and its inability to face the reality of the world we live in-where security services are vital. The coalition's position is clear. We support the Royal Commissioner's recommendations that ASIO lift its public image, and that the ASIO Act be amended to require the ASIO annual report to be drafted in such a way as to allow the Attorney-General to table an edited version in Parliament. The coalition sees some merit in the appointment of an Inspector-General and an Office of Inspector-General to be established by legislation. And it takes on board the royal commissioner's comments that such an office should be empowered to inquire into ASIO's compliance with the law, the propriety of its actions in general terms, and its appropriateness and the effectiveness of its general procedures. Finally, the coalition supports the proposed changes to the Security Appeals Tribunal-but that is where it stops. We categorically reject any notion that there should be a parliamentary committee to scrutinise ASIO's activities. Such an idea is a thoroughly bad one and we oppose it. Like the Royal Commissioner, who spends a considerable amount of time demolishing the idea, we believe it is neither 'necessary' nor 'appropriate'. It is a bad idea because we are now likely to have in any case a full-time Inspector-General. We will continue to have the Security Appeals Tribunal and the Attorney-General's own role. We will most probably continue to have the occasional judicial audit such as the one undertaken by Mr Justice Hope, an audit which incidentally happens to show how unnecessary such a parliamentary committee is. Of course, because of its paranoia, this Government seems determined to supervise ASIO out of operational efficiency. It is also a bad idea because any analogy with Congressional oversight of the intelligence community of the United States is a completely false one. In Australia, Ministers are members of parliament and are still responsible, accountable to Parliament. In the United States the legislature and the Executive are separate. Moreover, Congress does not function at all times on party lines and members are not elected to committees by the party. Again, in the Congress the committees have a good record in protecting classified information. The Congress also maintains effective powers to censor, suspend or expel any member responsible for unorthodox disclosure of confidential information. In Australia, not only are there no real restraints, but also is the record dismal. Indeed, we have a Cabinet Minister who leaked information relating to national security and an Administration where the use of judicious leaks has become a way of governing. The Canadian Parliament, through its Special Committee of the Senate, took a very sensible attitude to the idea of a parliamentary committee overseeing intelligence. It said: Parliamentary committees are notoriously subject to vagaries of time, changes in membership and overwork. There is also the problem of maintaining security of information. This has reference in part to the possibility of partisan motivation in some members, but it also refers to the general question of whether that type of committee can maintain the requisite confidentiality by reason of the nature of its proceedings. Mr Justice Hope also recommends that consideration be given to the allocation to the Special Minister of State of responsibility for protective security policy and co-ordination. Leaving aside the irony of giving the current Special Minister of State (Mr Young) responsibility for security and the prevention of leaks, the coalition approaches this suggestion with an open mind. As a result of Mr Justice Hope's previous submission on security, a number of reforms were implemented. The royal commissioner now proposes on three grounds the transfer of these functions from ASIO to Special Minister of State. Whilst the coalition accepts the soundness of the three reasons propounded by the royal commissioner for this change, it remains to be convinced that the Australian Federal Police and Special Minister of State have the capacity to assume this vital role. Australia does have secrets which the Australian Government is obliged to protect. Left wing paranoia in the Labor Party about security is no justification for any abdication of this responsibility by the Government. The coalition also notes Mr Justice Hope's comments on the collection of foreign intelligence in Australia and his recommendation that certain amendments be made to the Australian Security Intelligence Organisation Act. This would enable ASIO in certain circumstances to conduct intelligence gatherings in Australia relating to the capabilities, intentions or activities of foreign groups of powers. The coalition, while not opposing in principle an extension of ASIO powers in this way, would be deeply concerned if, as a result of changes, there was any diminution of Australia's ability to conduct foreign intelligence gatherings within Australia. The coalition is in general agreement on the Royal Commissioner's remarks on incidental intelligence. In turning to the Australian Secret Intelligence Service, it is, of course, not my intention to comment on the confidential aspect of the Royal Commissioner's report. This limits me drastically in what I can say. I knew the Organisation well. I had the honour-I indicate 'the honour'-to have been the Minister in charge of ASIS for some five years. I am pleased to note Mr Justice Hope's comments that ASIS has been: Organising and reorganising over the last decade to achieve its goals-its success in doing so has not been dramatic but it had been good. It has proved that it is a valuable part of Australia's intelligence service. I also welcome the fact that it has recovered from the difficulties of the Sheraton incident and the firmer steps that have been taken to ensure that no such incident will happen again. Equally, in the operation of the Defence Signals Directorate, I am unable to comment on matters of real substance. Once again, however, I note the Royal Commissioner's remarks that DSD has maintained its impressive performance. Whilst on DSD, I cannot help noting how fitting it is that every now and again the drivel and nonsense perpetrated by the Left in this country are justly destroyed. This happened with the release of the Petrov papers. It has happened again here. In this case, it was a former Labor member for Fraser, Mr Fry, with his assertion that the intelligence community knew that the five Australian journalists 'killed in East Timor were going to be treated as combatants, knew that the Indonesians were about to invade the area where the journalists were, and did not do a damn thing to protect them.' As the Royal Commissioner states, he investigated DSD activities. It had no knowledge of where the journalists were, nor that they were going to be treated as combatants. Moreover, Mr Justice Hope states there was no evidence of improper behaviour on DSD's part. It is these sorts of attacks which do such harm to morale in security organisations, and place pressure on the government principle of neither confirming nor denying matters of security. I welcome the Royal Commissioner's recommendations that the principle-that is, the principle of neither confirming nor denying matters of security-be adhered to. I hope that this Government will not repeat its mistake during the Combe-Ivanov affair and depart again from the principle. Whilst on ASIS and DSD, may I say that I agree with the Royal Commissioner's remarks on the need to strengthen certain aspects of their intelligence gathering operations. I also lend my support to Mr Justice Hope's suggestion that the Inspector-General should be able to, if requested by the Minister for Foreign Affairs in the case of ASIS and the Minister for Defence in the case of DSD, investigate the appropriateness of particular internal procedures. We would not support any proposal to enable the Inspector-General to act on his or her own initiative in this regard. The role of an independent watch-dog assisting the relevant Minister in looking after the public interest may well be a useful addition to the mechanisms for the accountability of our intelligence services. I also see merit in his recommendation concerning the Inspector-General, the Office of National Assessments and the Joint Intelligence Organisation. The Prime Minister, in his statement, rejected Mr Justice Hope's proposal to introduce legislative amendments to remove ASIO's operational records from the requirement to hand records over to the Australian Archives after 30 years and from the application of the 30-year rule in regard to public access. The Government's argument that there are sufficient safeguards in the Archives Act do little to mitigate the concern expressed by Mr Justice Hope. The Government has appeared to put historical and public curiosity ahead of a need to safeguard the large volume of sensitive documents held by ASIO, many of which have been provided in confidence by overseas sources. There is genuine concern in the intelligence community, and supported by the Royal Commissioner, that the 30-year period is too short. The Government should take heed. Finally, I turn to Mr Justice Hope's examination of ONA and JIO. ONA was established by the previous Government largely as a result of His Honour's first Royal Commission on Intelligence and Security. I note Mr Justice Hope's remarks that ONA has been able to establish its independence and authority and has done so by the quality of the work it produces. The difficulties of placing a new intelligence organisation into an already fairly crowded area seem to have been largely overcome. The bureaucratic problem of co-ordination and co-operation pointed to by Mr Justice Hope, while not unexpected, hopefully can be resolved. I conclude by saying that the security forces in this country have been under constant threat from the left wing of the Labor Party and various other lunatic fringes in the community. I would hope that all ordinary Australians and maybe even some of the rat-bags who sit on the other side will take in this statement of Mr Justice Hope's: The product of Australia's intelligence services is a great value to the nation. No doubt there will always be room for improvement and no doubt their need for resources will always have to be measured against the proper claims of other national interests. I am satisfied, however, that Australia's investment in its intelligence services is well justified, and that Governments should continue to ensure that they are able to fulfil the important roles they play in helping to advise and protect Australia's national interest. On behalf of all honourable members on this side of the House, I can fully endorse that paragraph. I reiterate the Opposition's appreciation to Mr Justice Hope and the staff who assisted him. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable Speaker and Members of the House of Representatives in Parliament assembled, the humble petition of citizens of Australia respectfully show: As part of the world wide campaign by women in the final year of the United Nation's Decade for Women for 'Equality, Development and Peace' (1976-1985) and in view of the grave possibility of nuclear catastrophe, the Union of Australian Women calls on the Australian Government to: intensify its efforts for nuclear disarmament. remove U.S. bases from Australian soil. keep the Pacific and Indian Oceans nuclear free. And your petitioners as in duty bound will ever pray. by Mr Baldwin,Mr Gorman,Mr Lee,Ms McHugh,Mr Martin,Mr Snow and Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia 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'. by Mr Beale,Mr N. A. Brown,Mr Holding,Mr Kent,Mr Lamb and Mr Shipton. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully showeth: That the Australian flag symbolises the continuity between Australia's past, its present and its future; That the presence of the Union Jack on the flag represents not a subservience to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression; Nonetheless recognises the rights of Australians should they wish as a people to change the design of their flag. Your petitioners humbly pray that no change be made to the Australian flag except with the consent of the people in a referendum. And your petitioners, as in duty bound, will ever pray. by Mr Cobb. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Humble Petition of the undersigned Citizens of Australia respectfully showeth: 1. That the overwhelming majority of Australians are completely satisfied with the existing Australian National Flag. 2. That we are totally opposed to any change in the Australian National Flag as provided in Section (3) of the Flags Act, unless such proposed change is first voted on by the people of Australia and passed by a majority of voters in a majority of States. And your petitioners as in duty bound will ever pray. by Mr Fife. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully showeth: That the Australian flag symbolises the continuity between Australia's past, its present and the future; That the presence of the Union Jack on the flag represents not a subservience to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression; Nonetheless recognises the rights of Australians should they wish as a people to change the design of their flag. Your petitioners humbly pray that no change be made to the Australian flag except with the consent of the people in a referendum. And your petitioners as in duty bound, will ever pray. by Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives assembled in Parliament. The petition of the undersigned respectfully showeth: Introduction of any additional capital gains taxes, wealth taxes or death 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; 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 Cadman and Mr Fife. The Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The petition of concerned people respectfully showeth their desire to have the wild horses of Queensland and the Northern Territory declared a protected species. Your petitioners therefore humbly pray that your Honourable House set aside a National Park for these horses and ensure that killing of feral animals be undertaken in a humane manner with proper legislation and enforcement. And your petitioners as in duty bound will ever pray. by Mrs Darling and Dr Watson. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia shows that there is a need to end the current discriminatory applications of sales tax on confectionery and the other anomalies existing in sales tax law. Your petitioners therefore humbly pray that this tax should be replaced by a broad-based consumption tax with a uniform ad valorem rate, without any exemptions whatsoever. And your petitioners as in duty bound will ever pray. by Mr Howard and Dr Watson. To the Honourable the Speaker and Members of the House of Representatives in the Parliament Assembled. The petition of concerned people respectfully showeth their desire to have the brumby declared a protected species. Your petitioners therefore humbly pray that your Honourable House follow the example of President Nixon in the U.S.A. by declaring our wild horses protected from industry and discriminate slaughter. And your petitioners as in duty bound will ever pray. by Mr Moore and Mr Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth: That in the light of the Labor Government's failure to act to correct the anomalies in the Assets Test on pensions brought to its notice and due to have effect from the 21 March, 1985 the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners, and calls upon the Australian Democrats to support Senator Messner's bill for the abolition of the Assets Test. Your petitioners most humbly pray that the House of Representatives in Parliament assembled should immediately seek the passage of the Social Security and Repatriation Assets Test Abolition Bill to repeal the Labor Governments iniquitous and unfair Assets Test. And your petitioners as in duty bound will ever pray. by Mr N. A. Brown. To the Honourable the Speaker and Members of the House of Representatives assembled in Parliament. The humble petition of certain citizens of Australia draw the attention of the House- That we should co-operate with America to prevent a nuclear war. That we should have a stronger alliance with America pursuing a common goal of sensible and controlled nuclear arms development. That we should have a referendum to establish the desire of the Australian people to have a more definite and secure commitment in our defence relationship with America. That the referendum should read- That Australia maintain and strengthen its treaties with the United States of America even though that may result in separate and different agreements between the U.S., New Zealand and Australia. Your petitioners therefore request that the above referendum be taken to the Australian people to vote on. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully requests the Government to introduce laws to: (1) Prevent the importation and sale of hard core pornography and grossly obscene publications, (2) Register imported pornographic video tapes for non-commercial use with the Film Censorship Board and require the Censor to more appropriately reflect responsible community attitudes. And your petitioners as in duty bound will ever pray. by Mr Ewen Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of concerned people of Australia respectfully show their desire that your Honourable House (the Government) act to implement more equitable guidelines for payment of independence allowance to enable young Australians who have been employed in the work force to be eligible for Tertiary Education Assistance allowances where that employment has been undertaken while still at school. And your petitioners as in duty bound will ever pray. by Mr Ewen Cameron. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. This humble petition of citizens of Australia respectfully showeth: The richest 2,000 people own as much as the poorest 2 1/4 million. It is a travesty in these circumstances that 2 million people are living in poverty in this country (Bob Hawke 11.7.81 Sydney Morning Herald) The present provision of Social Benefits is absolutely inadequate . . . locking recipients into poverty (including 800,000 children of those on social welfare pensions or benefits. To enable all Australians to share in the wealth of their country we call on the Australian Government in the forthcoming taxation reform to; 1. raise the tax threshold to $10.000 2. double the permissible income ($30 to $60) plus indexation. 3. all pensions and benefits to be raised to 30 per cent of the male average weekly earnings and indexed to C.P.I. 4. full standard pension to be paid on an individual basis to eliminate the discrimination against married couples currently losing $30 per week. Furthermore we strongly oppose the introduction of a broad based indirect tax thereby shifting the tax burden onto those dependent on social welfare and low income earners further increasing their poverty while allowing continuation of high income earners and tax avoiders to pay little or no tax. And your petitioners as in duty bound will ever pray. by Mr Charles. To the Honourable the Speaker and Members of the House of Representatives of Federal Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we the undersigned request Commonwealth and State co-operation and financial commitment to- (a) Providing an infrastructure and making aircraft available for the fighting of bushfires in New South Wales; (b) Further, we request the Commonwealth Government to retain the surplus Grumman Tracker Aircraft (approximately 17) and associated spares, for the purpose of conversion to firefighting aircraft for use on the above project. And your petitioners humbly pray that your Honourable House will respond to our plea. And your petitioners as in duty bound will ever pray. by Mr Cobb. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully shows that: 1. We affirm our belief that, in Jesus Christ, human sexuality is placed in the context of mutual loving relationships and therefore Christians reject any form of pornography which depicts violence against adults and/or children and the economic, physical and spiritual exploitation which is basic to hard-core pornography. 2. We urge the Parliament to prohibit the importation or production of this kind of pornography. 3. We request the Parliament to continue a public enquiry during 1985 to report on the operation of Regulation 4A of the Customs (Prohibited Imports) Regulations and the A.C.T. Classification of Publications Ordinance 1983 in relation to video tapes and video discs which have been refused classification or classified ''X'' by the Film Censorship Board. And your petitioners as in duty bound will ever pray. by Mrs Darling. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of 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 shows that: Whereas space technology involves many of the very highest engineering and scientific disciplines that Australia possesses, which may be applied at an international level to reap significant economic and technological return to the nation, and; Since an appropriate space program for Australia must involve presently unco-ordinated industry, government and research agencies, united together with Federal Government funding; Your petitioners therefore pray that you will support the establishment of an Australian Aerospace Agency to manage aerospace programs under a Federal Budget, promote technology transfer, and market our expertise overseas, while ensuring the continued operation of existing space-related facilities within the nation. by Mr Holding. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia shows: That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the U.S. Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia shows: 1. That the Belconnen Mall is a community asset, financed and operated by the Canberra Commercial Development Authority at a profit to the Government. 2. The operation of the Mall could represent a source of income to an Australian Capital Territorial Government. 3. Sale of the Mall will represent a loss of $200 per head of population to the Australian Capital Territory community. Your petitioners therefore pray that the decision to sell the Belconnen Mall not be proceeded with and the Mall be retained as a community asset. by Mr Langmore. 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. We, the undersigned electors, are deeply concerned at the possibility of an increase in indirect taxation currently being considered by the government. To pose a broadly based consumption tax would mean a proportionately greater burden on low income groups and worsen their already precarious and impoverished position. Women who are supporting mothers, together with their children, are acknowledged as the largest single group forced to exist below the poverty line. As beneficiaries of an already inadequate government pension, their futures would be even more jeopardised if there were to be a change towards increased broadly based consumption taxation. Your petitioners therefore pray that the federal government not adopt the proposed shift towards increased indirect taxation. And your petitioners as in duty bound will ever pray. by Ms Mayer. To the Honourable the Speaker and the Honourable Members of the House of Representatives in the Parliament assembled. The humble petition of the undersigned electors of the Commonwealth of Australia respectfully showeth that: 1. We are completely satisfied with the design of the existing Australian national flag. 2. We are aware it properly reflects the immutable characteristics of Australia, namely: The Union Jack-itself the creation of 3 Christian crosses-represents the nation's historical origin, and the source of its language and law. The Southern Cross on an azure blue background signifying its place in space. The large star depicting the advent of Federation in 1901. 3. We know the flag has been a source of inspiration to generations of Australians in peace and war. 4. We recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. We are certain that any change to the flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will propose and pass a motion that ''the existing Australian national flag remains sacrosanct from change''. And your petitioners as in duty bound will ever pray. by Mr Rocher. To the Honourable the Speaker and Members of the House of Representatives 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 on 30 June, 1985. Your petitioners therefore pray that this Agency be kept operating for the benefit of the many people who avail themselves of its services and who appreciate the convenience of its location. And your petitioners as in duty bound will ever pray. by Mr Rocher. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fairfax 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 Adermann. To the Honourable the Speaker and the Honourable Members of the House of Representatives in the Parliament assembled. The humble petition of the undersigned electors of the Commonwealth of Australia respectfully showeth that: 1. We are completely satisfied with the design of the existing Australian national flag. 2. We are aware it properly reflects the immutable characteristics of Australia, namely: The Union Jack-itself the creation of 3 Christian crosses-represents the nation's historical origin, and the source of its language and law. The Southern Cross on an azure blue background signifying its place in space. The large star depicting the advent of Federation in 1901. 3. We know the flag has been a source of inspiration to generations of Australians in peace and war. 4. We recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. We are certain that any change to the flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will propose and pass a motion that ''existing Australian national flag remains sacrosanct from change''. And your petitioners as in duty bound will ever pray. by Mr Adermann. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of certain electors of the Division of Cowper respectfully showeth: That the introduction of any additional capital gains taxes, wealth taxes or death duties would not be economically beneficial for Australia, as any introduction of such taxes would: First, adversely affect small and medium sized businesses in Australia, destroying incentive and discouraging investment in this important area of the economy; Secondly, disadvantage the Australian economy by stifling employment in particular, which is heavily reliant on growth in small and medium sized businesses; Thirdly, any capital gains that might result when owners of small and medium sized 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; and Finally, the owners of small and medium sized businesses often depend on a capital gain-which are simply deferred salaries-when they eventually sell their business to sustain them in retirement. Your petitioners humbly pray that the House of Representatives oppose any attempt to introduce any additional capital gains taxes, wealth taxes or death duties, which would be to the detriment of the economic well-being of the nation, and repeal any existing capital gains taxes, wealth taxes or death duties, which are to the economic disadvantage of Australia. And your petitioners as in duty bound will ever pray. by Mr Nehl. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of the undersigned residents in South Australia showeth: 1. That we are concerned with the gross lack of good television reception in Pinnaroo and adjacent areas. 2. That at present, the privately owned Television Towers, which range up to 30 metres in height, are not sufficient to achieve a satisfactory Commercial Television picture. 3. That the currently received Commercial Television service is grossly inferior compared to the Metropolitan and near Metropolitan areas. 4. That the most reliable television service is only received from ABC Regional Service based at Loxton which is 110km from the Pinnaroo Township. 5. That the residents of Pinnaroo and the adjoining areas consider that we are disadvantaged as we do not receive a clear Commercial Television Reception. Your Petitioners therefore pray that the Honourable House will ensure that the Department of Communications will upgrade the Commercial Television reception in Pinnaroo and in the adjacent areas. And your petitioners as in duty bound will ever pray. by Mr Porter. Petitions received. Madam DEPUTY SPEAKER(Mrs Child) — Mr Speaker has received a letter from the honourable member for Bruce (Mr Aldred) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The alarming run-down by the Government of the manpower, morale and effectiveness of the Army Reserve. 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 ALDRED(Bruce)(3.50) —The matter of public importance we bring before the House today-the alarming run down by this Government of the manpower, morale and effectiveness of the Army Reserve-is a matter where concern has now gone far beyond the armed forces. For some time now both Regular and Reserve people have been greatly concerned about what this Government has been doing, not only to the Army Reserve but to the defence forces in general. That concern has now gone far beyond the armed forces. The community at large is also concerned about the parlous state in which the Army Reserve has been placed. Before I detail exactly what this Government has done to the Army Reserve over the last couple of years, I would like firstly to contrast it with the performance of the coalition in that regard and, secondly, at the outset lay down exactly what the role of the Army Reserve is. The Army Reserve now has exactly the same role under the total force concept as the Regular Army. That role is defined in the Army Office publication Army in the 1980s: To organise, train, equip and maintain forces for the conduct of timely and sustained combat operations on land. To develop and maintain Reserve forces to supplement or expand the Regular Army. To provide a sound base for expansion. To maintain reserves of equipment and supplies. In view of the appalling record of the Australian Labor Party in relation to the Army Reserve over the last couple of years it is very doubtful whether the Army Reserve could now perform any of those functions laid down in Army in the 1980. The damage done by this Government to the Army Reserve, since the Budget of August 1983 in particular, has been enormous. There could not possibly be a greater contrast than that between the record of the coalition and the record of the incumbent Labor Government on this matter. By contrast, the coalition took the Reserve seriously and in its period in office gave it great support and encouragement. I go back to February 1980, when the importance of the Reserve was recognised by the Fraser Government. In February 1980 Prime Minister Fraser announced an expansion of the Army Reserve numbers from 22,000 to 30,000. That 30,000 was deemed to be the effective strength and the increase was to take place over a period of five years. However, as regional instability worsened during 1980 some changes were made to the original decision. Honourable members might recall that the Afghanistan crisis in particular caused a great deal of concern in this country and in other nations throughout this region. Accordingly, the period for expansion of the Army Reserve was shortened from five years to one year. As a back-up the Fraser Government very sensibly allocated $3.7m for recruiting over the 1980-81 financial year. A further $70m was allocated for new facilities and equipment, again over that 1980-81 financial year, with a capacity to carry over those funds as necessary into the next financial year. Those funds were designated for things such as extra depot facilities, clothing, equipment, boots and so on. By 1980-81, that target had been achieved and the Reserve reached a posted strength of over 33,000. As one always has to allow in the Army Reserve for a factor of about 10 per cent for those coming and going the effective strength in fact was about 30,000. So the target of 30,0000 was achieved quite precisely. Additional Australian Regular Army cadres were allocated to make the expansion process work. Both Reserve officers and ARA cadres worked very hard to make that expansion successful. I think it was an extraordinary achievement on the part of both the Reserves and the Regular Army that the Reserve was expanded by one-third in a year. This was not a one-off success as it has often been claimed by some people, particularly on the Government side, in trying to explain away the rundown in the last couple of years. In fact, that growth was maintained right throughout the 1981-83 period. The Reserves developed a new sense of purpose, stability and continuity. Both senior Regular and Reserve officers came to be very impressed by the higher standards and good morale evident in the Reserve. In fact, had that good support from government continued there is no doubt that the tremendous success story in regard to the work undertaken by the coalition in expanding the Army Reserve would have been continued. I now come to what has happened under this Government. The tremendous record of the coalition in expanding the Reserve so successfully and in sustaining that expansion was undercut in August 1983 by the first Hawke Labor Budget. For the first time in 20 years, Reserve pay was taxed. At the same time, training days were cut from 38.25 to 36 days per man. In terms of practical effect, some units were down to as little as 30 training days a man a year. Advertising funds also were cut. By September 1983 the first effects of these hostile decisions by the Labor Government on the Reserve were apparent. I draw honourable member's attention to a manpower chart of the Third Division of the Army Reserve which shows quite clearly that in September, immediately after the Budget, there was an end to the growth that had taken place under the previous Government. That growth plateaued out and came to an end. In October 1983 advertising ceased completely. We really started to run into trouble in December 1983, when the tax on Reserve pay was actually implemented. That tax initially operated on 100 per cent of the pay. However, the Government having recognised that it had made a mistake, it cut it back to 50 per cent of pay. Once again, the effect can be very clearly seen. It can be seen from the chart that from December 1983 there was a plummeting trend in Reserve strength. Mr Ruddock —Incorporate that chart. Mr ALDRED —I intend to seek leave to incorporate that chart in Hansard later on. The cutback in training days meant that by December 1983 many reservists were parading unpaid. That went on for some time until it became so embarrassing that unpaid training had to be forbidden by the Army. Finally, in March 1983 we got the final nail in the coffin, when manning levels were reduced and a new ceiling was imposed on the Reserve posted strength of 30,000. Again allowing for that 10 per cent factor for those coming and going, the effective strength obviously was significantly below that. That was a real cut in Reserve strength. Again if we look at the graph of the Third Division, we can see that that downward trend accelerated even faster, heading toward the appalling situation we have now. It is a shameful exercise all round. Right throughout the 1984-85 period, as a result of the cumulative effect of all those hostile Government actions on the Reserve, the downward trend accelerated. By the end of April 1985 the posted strength of the Reserve was down to 23,900. I remind honourable members that in August 1983 when the first Hawke Labor Budget was brought down, the strength of of the Army Reserve was 33,523. It is now down to an effective strength of 20,000 compared-- Mr Sinclair —Disgraceful. Mr ALDRED —It is disgraceful. It has an effective strength of 20,000-and that number is falling-compared with an effective strength of 30,000 in August 1983. What has happened under this Government over the past 20 months is that we have lost 10,000 reservists. One-third of the Army Reserve has voted with its feet and left. This Government can take sole responsibility for having destroyed one-third of the Army Reserve. That is an appalling record. In support of what I have just said I seek leave to incorporate a graph in Hansard. Madam DEPUTY SPEAKER(Mrs Child) —I shall have to check with the Speaker to see whether the graph falls within the guidelines. I will let the honourable gentleman know when the Speaker has made a decision on the matter. (For technical reasons, the graph was not incorporated in Hansard) Mr ALDRED —If one looks particularly at the people who hold the Reserve together-the officers and the non-commissioned officers-one again sees an appalling situation. There is now a national shortfall of 1,000 officers. Over the past 12 months the average rate of officers and NCOs leaving the Reserve has doubled. Over the last few years it has normally been in the order of 6 to 8 per cent per annum. Mr Sinclair —That is in addition to the cadet force too. Mr ALDRED —That is perfectly correct. The Government did exactly the same in relation to cadets. Over the last 12 months officers and NCOs have left the Reserve at an average rate of 16 per cent. It is a totally disgraceful situation. One can ask: Why did this happen? The worst interpretation of this is that there was on the part of this Government a deliberate intention, under pressure from the Left Wing, to denigrate our defence capability and run it down. The best interpretation is that it was sheer bumbling ineptitude and a failure to understand the nature and value of the reserves. I observe that having watched this Government over the last two years I am inclined to think that in this case it was sheer stupidity. How did it happen? It happened because this Government removed the tax-free incentive granted to the reserves in 1964 by the Menzies Government. This had an unequal effect on individuals because obviously those who pay tax on their Reserve pay, all pay tax at differing marginal rates. Those who are the hardest hit are the high achievers, the successful industry executives who might be captains or majors, skilled tradesmen who might be sergeants or warrant officers, the ones who are paying the highest marginal tax rates. The high achievers in the community who want to contribute are the ones who have been driven out. Obviously, this tax on Reserve pay could not have worked from the very beginning. As some people are aware, in its place is what is called a Reserve allowance. It was recommended by the Coldham Committee of Reference for Defence Force Pay and has proved to be very ineffective. It is also taxable; so we have the same base problem as we had with the taxing of Reserve pay-it is administratively cumbersome and difficult to apply. It cuts into the defence budget because, obviously, the tax on Reserve pay goes to Consolidated Revenue through the Treasury as does the tax on the Reserve allowance. However, paying the Reserve allowance is an extra charge against the defence budget. So the defence budget loses overall by the institution of this Reserve allowance. What are we going to do about it or, more particularly, what is this Government going to do about it? I suggest that it use its current discussions in relation to the Budget to scrap the tax on Reserve pay without further delay and, of course, as part of that exercise also remove the Reserve allowance. If the Government removes the tax on Reserve pay obviously the Reserve allowance becomes totally unnecessary. I think there is a very good case for increasing the number of training days per man to the level that applied during the days when the coalition was in government. One final factor that this Government could put into effect is that the Minister of the day could finally take some interest in what the Army Reserve is doing; he has certainly taken no interest to date. There are certain things that this Government should not be doing. It should not be using the excuse-it is quite fatuous and stupid-that there has been a rise in the number of ineffectives in the Reserve and the Government has been culling them out. That is absolute rubbish. The number has been 10 per cent for years. For heavens sake, I hope that someone on the other side does not get up here today and claim that it is another measure which is under review by Dibb and the Government cannot make a decision for another year. The Government will get away with that for just so long but it cannot use the excuse of the Dibb review forever for forestalling any decisive action in any area. Also the Government's television advertisements will be coming along in late June-early July and they will be interesting. However, they will certainly not resolve the Government's basic problem. Finally, I refer to a couple of quotes of what one might call the rhetoric side of what this Government has done rather than the reality. In the Australian of 10 May 1985 the Prime Minister is reported as saying: A credible military capability which will hopefully deter and, if necessary defeat, the use of force against Australia remains an indisputable component of national security policy . . . In the alliance context, the Government is committed to developing independent Australian defence capabilities suited to the 1980's and beyond. I think I have shown that we have little of either capability or credibility. This is the final touch. Defence Minister Beazley in the Age of 10 May 1985 is reported as saying: I am concerned that we should be able fairly rapidly to deploy to a battlefield more troops than we are able to deploy now. At present, we can deploy a thousand or so men quite rapidly- that in itself is a disgrace- and then mobilise over months two big divisions. The Minister is a great optimist. As he now knows there is not much left of anything to deploy anywhere. Mr CROSS(Brisbane)(4.05) —We have listened with considerable interest to the speech made by the honourable member for Bruce (Mr Aldred). The matter of public importance which he raised is: The alarming run-down by the Government of the manpower, morale and effectiveness of the Army Reserve. I must say in looking at the material placed before the House by the honourable member that I am looking forward to examining with some care the chart which he has sought to have incorporated in Hansard. He told us a story in which he compared figures in rather a strange way. In 1980, when the Soviet Union invaded Afghanistan, the former Government decided to increase the number in the reserves from 22,000 to 30,000. That was the information given by the honourable member to the House. The number of the reserves went up to 33,500. The target for the reserves over the next five-year period by the present Government is the same 30,000 that applied when the honourable member's Government was in office. His Government allowed the reserves to increase beyond their target. His Government made no provision for any number of people in the reserves beyond the 30,000 and so the quality of training for the reserves under the former coalition Government fell alarmingly. It was the policy of this Government to reduce the number of reserves to its 30,000 target. The honourable member has said that the number of people effectively in the reserves has fallen by 10,000. I would be interested to see the comparisons because the figures show that today the reserves are 5,300 below target. I take it that the honourable member is repudiating the target of his Government which is the 30,000 that remains the target of the present Government. When the present Government came to office it discontinued the advertising for recruitment to the reserves that previously applied. The number of people in the Army Reserve, which at the end of March stood at 24,701, is 5,300 below target. Advertising is being set in train to bring the reserves back up to the Government's target. I noted with interest a reply given by the Minister for Defence (Mr Beazley) to a question asked in the House this afternoon. It is wrong to single out the Army Reserve as being an example of some vast area of malpractice or neglect by the Australian Government of the Australian Defence Force. When one looks at defence and the record of this Government on defence one needs to look at that record as a whole. This Government has devoted a great deal of its time-I include the former Minister for Defence, the Minister for Territories (Mr Scholes) and the present Minister for Defence-to endeavouring to work out priorities and overcome the years of neglect by the previous coalition Government. I take this opportunity to remind honourable members of some of those areas of neglect-areas in which the former Whitlam Government was concerned and had moved but in which very little was done through the Fraser years. When the Whitlam Government was elected in 1972 Australia was coming to the end of its involvement in Vietnam. For a considerable period hardly any equipment had been ordered for the Australian Defence Force and in a very real sense that Defence Force was living on its fat. We were running down our equipment stocks. In fact, many items of equipment, such as tanks, armed personnel carriers and Caribou aircraft, were placed under a lot of pressure in Vietnam and needed either major upgrading or replacement. It was an opportunity for the Whitlam Government to set in train an equipment program for the Australian Defence Force, the like of which had not been seen for many years. I am sure all honourable members who have an interest in defence understand that there is a very long lead time in an equipment program. The equipment that the Australian Defence Force has today in many cases was ordered 20 years ago. The items presently on order for the Australian Defence Force will come on stream at the end of a considerable period-sometimes a decade-and will be around at the turn of the century and beyond. The Whitlam Government ordered the first two FFG frigates to be built in the United States. At that time consideration- Mr MacKellar —We are talking about the Army Reserve. Mr CROSS —Fine. I am trying to paint a broad brush position of the Australian Defence Force. It is important to see the Army Reserve against the background of what has been happening in the Defence Force generally. At that time we had a study on the helicopters for those FFGs. It is only within the last few weeks that the announcement has been made by the Government that orders are being placed to equip the frigate program with the helicopters it has needed since day one. There are now eight frigates in service or in prospect for the Royal Australian Navy. One should also go back a bit in history and say that in the Whitlam Government days we were looking at upgrading the Royal Australian Air Force base at Tindal as a replacement for RAAF Darwin and the principal base for a fighter force in the north of Australia. That decision was under active consideration by the Whitlam Government. Nothing further was done about it in the seven years of the Fraser Government. A decision was recently made. As we all know, the first expenditure on upgrading RAAF Tindal is taking place in the current financial year. It is going to cost over $160m. In addition to facilities of that kind, one has to look at what happened at RAAF Darwin, in particular the disgraceful state of housing for the permanent forces in the Australian Defence Force. It has been disgraceful for many years. At the rate of expenditure by the previous Government, to ensure that every member of the permanent Defence Force had an adequate standard of housing, it would have taken 20 years. Amongst the worst of the accommodation was the accommodation at RAAF Darwin. That accommodation was severely damaged in Cyclone Tracy at the end of 1974. In some cases, very ad hoc repairs were made in the belief that the decision on RAAF Tindal was to be made. At the end of last year, after the decision on upgrading RAAF Tindal had been made, money was provided to upgrade the standard of defence housing at RAAF Darwin. The people who have lived in that very sub-standard accommodation have lived in an absolutely disgraceful situation about which the previous Government had done nothing for a period of seven years. One could go on and on talking about these areas of neglect. Training areas for the Army were under consideration by the Whitlam Government. That is not necessarily a popular political decision but, if we are to have effective defence forces, appropriate and adequate training areas need to be acquired. The Whitlam Government returned to the New South Wales Government some areas of land around Sydney and around Sydney Harbour that were no longer relevant for defence purposes. It was recognised that Holsworthy, which is subject to suburban encroachment, was no longer suitable for some of its then training activities. A procedure was set in train to acquire training areas. The Labor Government has come along seven years down the track and now has to bite the bullet on those important questions of training areas for the Australian Defence Force. Arising out of this debate some people might feel that the Government has done nothing about the Army Reserve. We have heard about the question of the tax on Army Reserve pay and about the recommendations of the Coldham Committee of Reference for Defence Force Pay, which resulted in an allowance for reservists. That decision was made last year and it means that members of the Army Reserve, particularly those conscientious members of the Reserve, have a take home pay equivalent to what it was before. The Defence Force Renumeration Tribunal, under legislation brought in by this Government last year and appointed this year, has a continuing charter to look at the question of Defence Force pay on an annual and continuing basis. It is going to have, as part of its charter, the responsibility of looking at Reserve pay as well. I remind honourable members of the history of pay increases for the Australian Defence Force. When the Labor Government was elected in 1972 it ordered a review of Defence Force pay. That review took place in 1973 and it was paid in that year. In the system that has existed, the discretion about when to review Services pay has been a matter for the Minister for Defence. Under the previous Government a further review was not ordered until 1980. The recommendation came down in 1981. The money was not available to meet those increases in pay in 1981 and the actual increases were paid in 1982. That meant that there was just under nine years between one major review of Defence Force pay and the next major review of Defence Force pay. In that period was the seven years of the coalition Government. A number of decisions of significance to the Army Reserve have been made by the present Government and they have been announced by the Minister for Defence in more recent times. Mr White —Particularly the tax on pay. That was fairly significant. Mr CROSS —I have dealt with that already. It is a pity that the honourable member for McPherson did not show enough interest to be in the House. I will not repeat myself. One of the important Press statements that were made by the Minister was released on 5 May this year. It reads: . . . the Regular and Reserve units of the Army's Field Force are to be more closely integrated. Eleven Regular and Reserve units in Queensland, New South Wales and South Australia will be involved in this latest phase of integration, which will see some reservists being trained and administered within Regular brigades and units. ''This development will continue to improve the readiness and expansion capacity of the Army,'' Mr Beazley said. ''It is a further move towards a Total Force structure for the Army, and reflects the important part that dedicated reservists have in providing for the future defence of Australia. ''Following the recommendations of the Committee of Inquiry into the Citizen Military Forces set up by the Whitlam Government in 1973, some steps have already been taken to combine progressively the Regular and Reserve components into a more effective force. That statement goes on, but I will not repeat what the Minister has already said in this House. I want to make some concluding remarks. The Government agrees that the present level of Army reserves is below target and is taking action to bring that number up to 30,000 in the year immediately ahead. Mr White —Your TV ads? Mr CROSS —I am sorry that the honourable member for McPherson suggested that people dropped out of the Defence Force Reserve because of questions of pay. This nation owes a great debt to the reserves, not only in the Army, but also in the other areas of the Services. Over the years the reserves have had a lot of people who have enlisted to serve their country. Those people have been more concerned with money for training time and the like than they have been for pay. Previous governments have not served them well. There are problems in that area today. There are enormous problems across the board in the Australian Defence Force. This Government is spending more money on defence than its predecessor. In each of the two Labor governments there has been more money provided than the average over the Fraser years-certainly in the two Budgets that immediately preceded the first Labor Government Budget. I am one of those people who would like to see this Government spending more on defence. It is the view of the defence sub-committee of the Joint Committee on Foreign Affairs and Defence in a report last year that we should try to increase the level of defence expenditure by an amount which would be of the order of 4 1/2 per cent in real terms per annum. But we live in fairly difficult days. There are severe economic problems in this country. There are great problems of unemployment and governments have to address all of those considerations and, of course, a lot of humanitarian issues as well. But it is totally untrue for anybody to suggest that the present Australian Government is underrating the Defence Force reserves or the Army Reserve in particular or that it is neglecting them and will do so in the future. Whatever has been said in the debate today, the Budget to be brought down on 20 August will prove that very point. Madam DEPUTY SPEAKER(Mrs Child) —Order! Mr Speaker has advised me that, if it is technically possible and does not delay the production of Hansard, the graph that the honourable member for Bruce (Mr Aldred) seeks to have incorporated in Hansard will be so incorporated. Mr HALVERSON(Casey)(4.21) —I noted with interest the wide-ranging defence overview of the honourable member for Brisbane (Mr Cross). Unfortunately, neither he nor the Minister for Defence (Mr Beazley) appears to have the capacity to examine rationally the composition, structure and manpower requirements of our reserve forces. We are now faced with a situation in which our reserve forces have been allowed to deteriorate to a point where they are exhibiting all the symptoms of terminal insufficiency and neglect. Decisive and radical treatment is required to halt the progress of this debilitating disease. Whether or not this Government cares to take action, or even knows that action must be taken, is a matter of conjecture. It is apparent the Hawke Government regards the security of Australia and Australians as a disposable commodity. This Government has exhibited its lack of concern for the future defence and security of this nation by taking no positive action to rectify the immediate problems facing our reserve forces-lack of sense of purpose, lack of appropriate financial support, lack of adequate training facilities and opportunities, lack of satisfactory recruitment, and lack of morale. In fact, the only thing our defence reserve forces do not lack is the opportunity to pay increased taxes. They are penalised because of their commitment and desire to serve this country. The resignation rate in the Reserve has reached disastrous proportions. In August 1983 the Australia-wide strength of the Reserve totalled in excess of 33,000 members. Today it is only 23,900-10,000 fewer reservists. In reality, the Reserve can field fewer than 20,000 effective personnel. One of the major concerns is the current decline in the number of junior officers in the Reserve. There are insufficient junior officers to replace retiring senior officers. This appalling situation has arisen as a direct result of Government cutbacks in training and support, and the decision to tax 50 per cent of reservists' pay and related allowances. Those most adversely affected by this 'levy on loyalty' include the men and women who are already in the middle income bracket. They have seen their combined civilian and Reserve earnings result in immediate promotion to higher tax brackets. In civilian life, these people are the trade and professional achievers; in the Reserve, as officers and non-commissioned officers, they have the vital combination of skills and leadership potential necessary to maintain the efficiency of existing forces and to provide adequate training for new recruits. A well-trained, properly maintained Reserve Force is an essential factor in Australia's overall defence capability and preparedness. It depends not only on adequate numbers and financial resources, but on retention of staff, so that advanced training for specialist skills and promotion can be provided. A satisfactorily high retention rate will not be achieved unless our reservists are provided with adequate equipment, adequate training and adequate reimbursement for their efforts and sacrifices-both real and potential. Under this Government the rewards are few. The recognition of their vital role is an ever-diminishing dot on the defence horizon. It is rather doubtful whether the promised series of television commercials designed to boost Army Reserve recruiting will have much effect whilst the policy of taxing reservists' pay remains in force. The mind boggles at the possible content of these planned forays into the living rooms of Australia, when two of our lesser-known local military heroes will be promoted to the front lines of the television ratings war. However, after a solid diet of yabbies, with the 1812 Overture as accompanying background dinner music, the public will perhaps have their dormant 'Join the reserves' instincts titillated by the more dramatic exploits and encouragement of Captain Hawkeye and Corporal Kim who have no doubt paid up their Actors Equity dues especially for the occasion. Another area of concern is the integration of the Regular and Reserve units of the Army's Field Force. This is an excellent concept, but it will be successful only if the Reserves enjoy the same access to funds, equipment and training resources and opportunities as the Regular Army. At present this is not the case. A recent issue of Defence Industry states that Major-General Jack Kelly, General Officer Commanding Field Force Command, considers that, should Reserve units be required as back-up for Regular elements in a conflict situation, they would require at least 90 days continuous training-in some instances an even longer period-to bring them up to acceptable standards to enter battle. The same article highlights the fact that current equipment deficiencies preclude the provisions of adequate training opportunities for some Reserve units. For example, there is no sign of tanks being available for units nominated as tank units under the Force Structure Study. As a consequence, their 'training' would be to drive Land Rovers. If, at some time in the future, a Leopard tank were allocated to a Reserve armoured element such as the 1st/15th Royal New South Wales Lancers at Parramatta, it would have to be left parked in the depot. To quote General Kelly: We won't be able to afford to run it around. We'll train them how to actually drive a tank, but they won't be able to run it around. Not straight away, anyhow. It will depend on how the money is. General Kelly said that if operating costs were cut any lower in the Regular Army 'we will start to go backwards'. He continued: To be quite frank, in the Army Reserve we are going backwards now. Notwithstanding the current decline and continuing difficulties facing the Reserve forces, their role in our overall security is still of major importance. The intelligent reform of amending legislative restrictions on call-out of the Reserve for full time service is more critical now than ever before. Under the present provisions, reserves cannot be called out except in situations of war or defence emergency. Serving members of the Reserve believe they should, and would, be called for service if required in circumstances short of war or declared emergency. Their employers also believe the Reserve is a meaningful part of our defence, and they too expect their employees, who are reservists, to be called for when needed. At no cost to the taxpayer, section 50(A) (1) of the Defence Act can simply be amended to provide for the call-out of the Reserve forces, or any part of them, for continuous full time military services in situations other than war or defence emergency. This would put call-out of the Reserve on the same straightforward basis as call-out of the Regular Army Emergency Reserve as specified in section 46 of the Defence Act, with the conditions applying to service in section 46 similarly applying to the reserves. This Government's unsympathetic treatment of the needs and problems facing a vital component of our Defence Force is a continuing and shameful saga of neglect, irresponsibility and inaction. It is perhaps well summed-up as follows by Francis Quales: Our God and soldiers we adore when at the brink of ruin-not before; After deliverance, both alike requited, Our God forgotten, and our soldiers slighted. Mr RONALD EDWARDS(Stirling)(4.30) — The Opposition has chosen today to talk about the rundown in the manpower, morale and effectiveness of the Army Reserve. Historically, the Opposition has always been long on rhetoric with respect to the Army and the whole commitment of defence forces, but it has proved itself to be very deficient in terms of performance. I note that the honourable member for Bennelong (Mr Howard) has now left the chamber. It is no good people such as the honourable member for Casey (Mr Halverson) and the honourable member for Bruce (Mr Aldred) talking in this House about the issue of funding. They have to recognise that when they were in government they were dealing with a Treasurer who had at his feet the same sorts of economic issues we have. One is never really sure where the Opposition stands in debates such as this. For some members of the Opposition it is spend, spend, spend, yet a few of the others who come creeping out from the undergrowth, the economic dries, want us not to spend and to continue not to spend. It would make a lot of sense if members of the Opposition could sort themselves out before they make such speeches. I am sure that the Australian public would be advantaged by that, because of the confusion the Opposition creates. We are never really sure whether we are dealing with members of the National Party, who want to spend a lot more, with some in the Liberal Party who are from time to time concerned about spending and who perhaps misguidedly seek to spend more, or with those in the Liberal Party who seek to reduce spending. We are never really sure which group we are dealing with. We are dealing in this debate with those who want to increase spending. Well, that is all right. That is the group we are identifying today, but let us be sure which group we are dealing with. I think it is important that the Australian community understand that because the other side of spending, of course, is taxation. I could talk further about that but I will not at the moment. Mr Millar —It's where you spend it. Mr RONALD EDWARDS —I recognise the point made by the honourable member for Wide Bay. It is where we spend that is important. We also recognise that effective spending is important. From the way honourable members have spoken so far in this debate, one would almost wonder whether, if they were in government, they would have Reserve units in Afghanistan. That is what they recruited members of the Reserve for, and recruited frantically. One can remember the drums of war being beaten in this country by Prime Minister Fraser and his cohorts, who came down upon us saying: 'We are about to be invaded by the Soviet Union via Afghanistan'. One wonders that the Army Reserve is not committed to Afghanistan because that is the sort of scenario honourable members opposite painted. To head down that track is a very dangerous course for the Opposition because the Australian public was similarly deceived in the 1960s and 1970s about Indo-China and Vietnam. It is unwise for those opposite to practise further deception upon the Australian community because the community does not forget that previous deception. I add that, as part of that deception, people such as those previously in government were prepared to turn their backs upon the Vietnam veterans when they returned here with the memory of unpleasant experiences and with unpleasant war-caused illnesses. The right honourable member for New England (Mr Sinclair) was a prime example of someone who beat the drums of war very loudly but, when it came to the consequences of war, was not prepared to accept that there were Vietnam veterans who may have been impaired by chemically caused problems such as the agent orange situation. Let us be clear in our rhetoric in this place, that we know precisely what we are saying. I am saying to those on the other side who have already spoken that we need to get this structure very clear. There are some central issues to address. I note that the Opposition has said that our Reserve Force is below strength. That has already been dealt with by the honourable member for Brisbane (Mr Cross). We recognise that the Reserve Force is under strength by some 5,300, and we are doing something about increasing that strength. I think it is important to emphasise that we are also talking about appropriate levels of pay. Only scant attention was paid by the Opposition to the Committee of Reference for Defence Force Pay headed by Mr Justice Coldham. It is important to recognise that members of the defence forces must have adequate levels of pay, but I was a little concerned to deduce from comments of members of the Opposition that they were prepared to give those in the Army Reserve very preferential tax treatment. When they were in office, the Department of Defence told them that it would be appropriate to try to equalise taxation arrangements. When honourable members opposite were in office the Department was advocating the path down which we proceeded. We have now brought in a taxation treatment which aims at a degree of equity. One wonders how easy it is to get to an equitable taxation position. It is one of those elusive goals we have, but one has no excuse for working in the other direction. The Government is suggesting that it is important to have appropriate levels of pay, and Mr Justice Coldham has looked at that, but it is also appropriate to have equitable levels of taxation. I do not think I can accept the issue honourable members opposite have raised. I do not think we on this side can accept the proposition that a more equitable taxation system is not something we should aim at. That is something that I believe we should be aiming at all the time. Whilst many people were very concerned at the time about the decision we took on taxation, what we finally arrived at in regard to taxation arrangements for Reserve Force pay-in effect, the imposition of a 30 per cent tax rate-is more sustainable. We are not arguing for an inequitable position. We are not saying that these people should be treated adversely by having very high marginal rates, nor are we saying that they should be removed from the tax system. We are saying: 'Let us look at the average rate of tax they should pay'. I defend that decision, because I think it is a sensible one in the light of the argument that the rest of the community should also be paying equitable rates of tax. I turn to the arrangements for integration, which have been addressed by other members. The question of the integration of the Reserve forces into the Regular forces is very important. The Joint Committee on Foreign Affairs and Defence, an all-party committee of which I was a member at the time, completed a report on the Australian Defence Force structure and capabilities. One of the advantages of that report was that it gave us a fairly rational framework with respect to what we believed were desirable goals for Defence Force structure and capabilities. When we talk about Defence Force needs in this country we must try to deal with a fairly rational picture. I applaud honourable members of the Committee for their contributions to that picture, because I think that is important. I say to Opposition members who have spoken today that they have to be wary of the rhetoric. It is all right suddenly to perceive a defence threat, try to beat it up and seek to match the rhetoric with performance, but what has been done in the meantime in terms of the underlying structure and capabilities may be a grave disservice to the Defence Force. We could go at length into the issues of procurement policy and procurement deficiencies. The Minister for Defence (Mr Beazley) in Question Time today spoke about areas of deficiency. He spoke about the question of the on-again off-again aircraft carrier purchase, or non-purchase. He also spoke about helicopter procurement and about the areas of Army manoeuvring and deployment and decisions that were not taken but rolled over. Obviously, we do not want to get into too negative an environment in this debate, but we have an obligation to look continually at the needs of the defence forces and to have a rational view, recognising that we will always have to deal with rhetorical arguments. That is the nature of the political community by which we are surrounded. Nevertheless, we cannot afford to say: 'Let us distort the structure and capability of our Defence Force to try to meet some short term rhetorical goal we might want to erect'. There have been at least two occasions on which members of the Opposition have done that in government. The Afghanistan exercise was one and the Indo-China exercise was another. We will not go into the merits and demerits of those matters, but if, as a consequence of such a rhetorical exercise, we distort the underlying structure and capabilities of our Defence Force we will have a long term problem. This Government is trying to address some of those problems. It is not easy, because Defence Force matters are always big Budget matters, but in respect of the consultancy work that is currently being done for the Minister for Defence in terms of Defence Force priorities, I am confident that we will emerge with a much more effective Defence Force structure and a much better equipped Defence Force. Clearly, there are some issues we need to address. Many of those have been raised in today's debate. It is not good enough for members of the Opposition to engage in exercises in rhetoric in which they seek to put up a position. It is very important to recognise that we have a long term commitment in terms of the structure and capability of the Defence Force. I believe that what we on this side are doing is satisfactory. Some of us on this side would like to see even further improvement. I believe that those improvements will come, certainly as a result of the work that is being done at present. Clearly, it is possible to defend the Government's record on the Defence Force. We believe that it is satisfactory. Madam DEPUTY SPEAKER —Order! The discussion is concluded. Mr MILLAR(Wide Bay) —On behalf of the Parliamentary Standing Committee on Public Works, I present the fifth report for 1985 of the Committee, relating to the construction of facilities for the Australian frigate project, Williamstown Dockyard, Melbourne, Phase B. Mr Deputy Speaker, if I may briefly add with your indulgence, in the light of the strict time limitation with which the House is faced in the dispatch of its business, I shall not seek leave to speak to the report. Bill presented by Lionel Bowen, and read a first time. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(4.42) —I move: That the Bill be now read a second time. The purpose of the Bill I introduce today is to provide a separate law on cheques. The Government foreshadowed its intention to introduce this legislation when it released a draft Cheques Bill for public comment in February 1984. The law on cheques is presently governed substantially by the Bills of Exchange Act 1909 which also regulates the law relating to other negotiable instruments such as bills of exchange and promissory notes. Essentially, the Bill will revise the provisions of the Bills of Exchange Act applicable to cheques, effectively confining the operation of the Act to bills of exchange other than cheques. The Bill will also clarify the law on cheques in certain areas of existing uncertainty and make a number of substantive changes to that law. However, the new legislation will not alter the fundamental legal character of cheques. In conjunction with the present Bill, I will be introducing a Bill to amend the Bills of Exchange Act making certain changes to the Act that are largely consequential upon the introduction of the Cheques Bill. Background The Bills of Exchange Act is modelled on the United Kingdom Bills of Exchange Act of 1882. The only amendment of the Australian Bills of Exchange Act of any substance-made by the Bills of Exchange Amendment Act 1971-reduced the need for endorsement of order cheques lodged by payees with their banks for collection. Thus, the present law on cheques in Australia effectively dates back over 100 years. Some of the more important changes the Bill will make to the law on cheques are based on recommendations of a committee, chaired by the late Mr Justice Manning of the New South Wales Supreme Court, which reviewed the Bills of Exchange Act. The Manning Committee was appointed by the then Government in 1962, to examine, amongst other things, the provisions of the Act and to recommend any amendments to the Act it considered desirable. The most important recommendation of the Committee, which reported in 1964, was that there should be separate legislation dealing with cheques. This recommendation was based on the following factors: Since the enactment of the Bills of Exchange Act, the use of cheques had increased enormously compared with other bills of exchange; considerable confusion and uncertainty had developed in relation to the law on cheques because that law and the law on other bills had become intertwined under the Bills of Exchange Act, and the law on cheques had assumed great importance to a large number of people, whereas the law relating to other bills of exchange was of significance to comparatively few people. The Bill represents reform of a very technical area of the law. Possibly for this reason, previous governments did not accord its enactment a sufficiently high priority. I think that is understood, Mr Deputy Speaker, because, although the report was completed in 1964, here we are 21 years later with this Bill. It gives me considerable pleasure, therefore, to introduce this Bill today after many years of relative inactivity. Public Consultation Prior to the public exposure of the draft Bill from February to May 1984, discussions on the legislation were held over several years with the Australian Bankers Association, the Australian Merchant Bankers Association, the Commercial Law Association and the Law Council of Australia. In the pre-exposure period, comments were also sought from the States and the Northern Territory, as well as the Australian Association of Permanent Building Societies and the Australian Association of Credit Union Leagues, as well as the relevant trade union organisations. The purpose of calling for comment was to give the public, including the general business community-the people who write and receive most cheques-the opportunity to participate in this important reform of the law. The public exposure period also gave the legal and banking professions, which had already been consulted, the chance to make further comments. A number of other changes have been made to the exposure draft of the Bill in the light of submissions received and I will mention some of the more important changes shortly. Implications of the Bill for the Domestic Payment System It has been suggested at various times in the course of preparation of the Bill that it should perhaps be deferred until there has been a broader consideration of the payment system and its legislative framework. The proponents of this view have, essentially, two concerns. The first concern is that any legislation that deals with an aspect of the payment system, such as the Cheques Bill, should regulate the rights and obligations of users and providers of electronic funds transfer systems. The second concern is that the formulation of the Bill should take account of any Government decision on the access of non-bank financial institutions to the cheque clearing system. Electronic Funds Transfer Systems On 25 June 1984, the Treasurer (Mr Keating) announced the establishment of an inter-departmental working group to consider the consumer protection aspects of the development of electronic funds transfer systems in Australia and to advise whether supervisory arrangements, including legislation, are necessary. The Government considers that it would be premature to make any decision regarding legislation on electronic funds transfer systems until receipt of the working group's recommendations. In any case, even if legislation on electronic funds transfer systems is recommended in the future, it can be expected to be considered separately from the cheques legislation. This Bill is concerned with the cheque as a negotiable instrument, whereas electronic funds transfer systems are, of course, systems for moving money by means of electronics. Two fundamentally different means of achieving a transfer of funds are therefore involved. Access to the Cheque Processing System by Non-Bank Financial Institutions The Treasurer's Press release of 25 June 1984 also advised of the establishment of the Australian Payments System Council. One of the important matters referred by the Treasurer to the Council was the question of access by non-bank financial institutions to the cheque clearing system. The Council, in the course of its deliberations, examined existing commercial arrangements between certain banks and non-bank financial institutions whereby customers of non-bank financial institutions are able to issue cheques drawn on banks with which the non-bank financial institutions have accounts. Several problems were identified with these arrangements in the context of the operation of the present law. I am pleased to be able to tell honourable members that the Bill has been amended in several important respects to meet these problems. I stress that the provisions in the Bill which affect non-bank financial institutions in no way pre-empt any future decision that may be taken by the Government on the question of access by non-bank financial institutions to the cheque clearing system. Future decisions on the access question will be taken by the Government when the consideration of this matter has been finalised. Vesting and Access of Paid Cheques Clause 68 of the Bill makes provision with respect to how paid cheques are to be dealt with. The basic thrust of the clause is that, when a cheque is paid by the drawee bank, the drawee bank has the right to possession of the cheque. This approach basically follows that taken in the Bills of Exchange Act. However, this right that the drawee bank has will not disturb the common law principle that the ownership as distinct from possession in a paid cheque vests in the drawer of the cheque. This common law rule is preserved by virtue of sub-clause 4 (2) of the Bill. It has been proposed that the ownership of paid cheques should vest in the drawee bank. On the other hand, it has also been suggested by interested groups, notably local government associations, that cheques issued by such groups should be exempt from this requirement on the basis that those groups need to have access to their own cheques for audit purposes. The Government has recently considered a submission from the Treasurer on certain recommendations of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union relating, amongst other things, to banking controls, including those relating to the retention of banking records. In response to this, a working group of officials has recently been established from interested departments and agencies under the chairmanship of a Treasury officer to consult, as necessary, with State authorities and the industry and to advise the Treasurer as to what action may be practical and appropriate with respect to those recommendations. The working group can be expected, in the course of its enquiries, to consider the question of the vesting and access of paid cheques. The Government considers, therefore, that it would be premature to deal in the Bill with the question of access to, and vesting of, paid cheques other than by preserving the legal status that paid cheques currently enjoy. Again, I stress that the present provisions in no way pre-empt the Government's future consideration of this issue. Changes Resulting from Exposure of Draft Bill A number of changes have been made to the draft Bill following its exposure for public comment in February last year. Some of the more important of these changes are summarised as follows: The insertion of sub-clause 6 (2), which ensures that certain rights and obligations under the Bill cannot be altered by agreement; the deletion of certain provisions contained in the exposure draft of the Bill requiring a notice of dishonour to a drawer or indorser of a cheque before the drawer or indorser could be regarded as being liable on the cheque; and a general revision of the provisions in the Bill dealing with material alterations. These and other amendments to the Bill reflect the Government's willingness to seek and, where appropriate, to accept suggestions for changes from interested bodies in the course of the finalisation of the Bill. A comprehensive list of these changes is contained in an attachment to the explanatory memorandum on the Bill. The Banker-Customer Relationship The Bill does not deal in detail with the relationship between banker and customer. Although the release of the exposure draft of the Bill prompted some calls for comprehensive coverage of this subject in the Bill, it has been decided that codification of the common law is not at this point justified in this area. The Bill does, however, deal with the banker-customer relationship in certain limited respects. For example, the Bill imposes a duty on banks to present cheques promptly and to pay or dishonour cheques promptly. Banks will be liable to the holders of cheques for breach of this duty. Content of Bill Some of the more important features of the Bill which I will now outline represent significant advances in the law on cheques. Definition of 'Bank' The Bill departs from the approach of the Bills of Exchange Act in its definition of 'bank' in sub-clause 3 (1). In the Act the defined term is 'banker' and it includes any incorporated or unincorporated body which carries on the business of banking. Because the term 'business of banking' is undefined, there is, in the Australian context, some uncertainty surrounding the proper interpretation of the word 'banker'. This led to the possibility, recognised by some writers, that various corporations authorised under the Banking Act 1959 to carry on the business of banking would not be bankers for the purposes of the Bills of Exchange Act. Conversely, a person could be a banker for the purposes of that Act while carrying on business in contravention of the Banking Act. The Bill seeks to overcome this problem by defining the term 'bank' and limiting it to the Reserve Bank of Australia, banks within the meaning of the Banking Act, State banks and persons who carry on the business of banking outside Australia. Alteration of Rights, Duties and Liabilities of Persons in Relation to Cheques One of the most important provisions of the Bill is clause 6, which provides that, subject to certain specified exceptions, nothing in the Bill will prevent two or more persons from altering by agreement their rights, duties and liabilities in relation to one another under the Bill. An agreement between two parties cannot, of course, affect the rights, duties and liabilities of a third party. But there are important exceptions to this general principle. The provisions of the Bill that may not be altered by agreement will ensure, in particular, that the crucial legal features of the concept of a cheque may not be altered. Transferabilty of Cheques One of the underlying philosophies of the Bill, which is reflected in clause 39, is that every cheque should be capable of being transferred by negotiation until it is discharged. This provision will have effect notwithstanding: Firstly, any agreement between the parties to the cheque; secondly, anything on the face of the cheque-for example, words indicating an intention that the cheque not be transferred, such as 'pay X only'; and, thirdly, the crossing of the cheque. Clause 39 changes the existing law in this area as section 13 of the Bills of Exchange Act makes it clear that a bill of exchange, which includes a cheque, may be made non-transferable. The inclusion of this clause is considered desirable for the following reasons: The holder of a cheque has always had the right to negotiate or transfer his cheque instead of paying it to the credit of his own account; crossed cheques are the medium used for making many types of payment; and some people without such accounts find it convenient to cash cheques-for example, with shopkeepers or people who provide similar services. The provision also gives effect to a recommendation of the Manning Committee. Crossing of Cheques The crossing of cheques will be simplified and standardised by clauses 53 to 57 of the Bill. Nothing on the face of a cheque will be effective as a crossing except two parallel transverse lines or two parallel transverse lines with words 'not negotiable' placed either completely or substantially between the lines. Although crossings other than those just referred to will not be effective as crossings, this does not mean that a bank will be able to disregard totally a non-permissable crossing if the words of the crossing, either alone or in conjunction with other circumstances known to the bank, are sufficient to put the bank on inquiry. For example, the words 'Account Payee Only' will not make a cheque non-transferable but a court might well hold that a drawee bank was negligent in not considering the implications of those words in paying a cheque to someone other than the original payee. Truncation of Cheques Probably the most significant feature of the Bill is the presentment provisions which will enable the 'truncation' of cheques. Under sub-clause 62 (2), a bank will be able to present a cheque for payment by physically presenting the cheque or by employing any other means to effect presentment. There is no restriction on the 'other means' that may be used for presentment. Thus, the demand could be made, for example, by exhibition of a facsimile copy of the cheque, transmission of a copy of the cheque or transmission of particulars of the cheque by electronic means. It is clearly desirable for the means that may be used to effect presentment to be left completely open in view of the advances in banking practice in recent times. Although the collecting bank will be able to choose any means to effect presentment of a cheque, the means chosen by the bank will be one of a number of factors to be taken into account in determining whether it has fulfilled its duty under clause 66 to present the cheque 'as soon as is reasonably practicable'. Sub-clause 62 (3) of the Bill provides that where the cheque is not delivered to the drawee bank the demand for payment of the cheque will have to identify the cheque with reasonable certainty and be in a form that is intelligible to, or readily decipherable by, the drawee bank. It will also be possible for a bank to designate, by notice published in the Commonwealth of Australia Gazette, a place for the purpose of presenting cheques or for the giving or receiving of further particulars to facilitate the payment of cheques. The changes in the area of presentment of cheques have been made specifically to take account of developments in technology by enabling cheques to be presented for payment by transmission of particulars without physical movement of the cheque itself. This method of 'presentment by particulars' will speed up transactions and enable the faster clearance of cheques. Needless to say, this will provide benefits not only to banks but also to the general cheque-issuing public. Dishonour of Cheques The most significant aspect of the provisions in the Bill dealing with dishonour is that the drawee bank must pay or dishonour a cheque promptly. Sub-clause 67 (1) of the Bill imposes a duty on the drawee bank either to pay or to dishonour a cheque presented to it 'as soon as is reasonably practicable'. If it fails to do so, the bank may not dishonour the cheque and is liable to pay the amount of the cheque to the holder. It has been decided not to impose an arbitrary standard time limit for the payment or dishonour of cheques, firstly, because such a limit may not always be appropriate in the future given technological developments in communication and, secondly, because arbitrary time limits could be too onerous in certain cases. Material Alterations The provisions in the Bill relating to the material alteration of cheques represent an important change of approach from the corresponding provisions of the Bills of Exchange Act. Section 69 of the Act provides, among other things, that where a bill of exchange is materially altered without the assent of all parties liable on the bill, the bill is 'avoided'. The section also specifies the instance where alterations will be regarded as 'material'. The problem with enumerating the circumstances in which an alteration of a cheque is to be regarded as material is that it is virtually impossible to provide an exhaustive list of these circumstances. Any such enumeration could, therefore, result in anomalies as it may be that in a particular case an alteration such as that to the date of a cheque should not be regarded as material. Basically, an alteration will be material, under sub-clause 3 (8) of the Bill, if it has the effect of altering the rights, duties or liabilities of the drawer, indorse or drawee bank in respect of the cheque. This test is well supported by authority and it is considered that a general guiding principle in determining material alterations is preferable to the enumeration of a miscellany of separate instances. The new test should also overcome difficulties that the present law produces and that have been evidenced by recent judicial decisions. Standard of Care for Application of Protective Provisions to Paying Bank At present the Bills of Exchange Act, with one exception, requires a paying bank to act in 'good faith and in the ordinary course of business' if it is to have benefit of the protective provisions contained in the Act. The exception is section 86, which requires a bank to act in 'good faith and without negligence' in the payment of crossed cheques. The letter standard has been adopted in all the protective provisions contained in the Bill that apply to paying banks because the existing law has the effect that a drawee bank may act negligently so long as it is in the ordinary course of business to do so. It is clearly in accordance with the modern concept of 'duty of care' that banks be required to act without negligence in all cases. Other Significant Features of the Bill There are several other features of the Bill which deserve brief mention: Sub-clause 3 (5) of the Bill will extend by three months the period during which a cheque operates as a valid mandate to the drawee bank. A cheque will now not become stale until fifteen months after the date upon which it is drawn; where a cheque inconsistently describes the sum ordered to be paid because the words and figures used express different amounts the cheque will be deemed to be an order to pay the smaller of the two sums mentioned. This is provided in clause 15. Previously, where the two differed, effect was given to the words expressing the sum to be paid and the figures were ignored; clause 16 of the Bill will clarify the status of post-dated cheques to ensure their validity as cheques where they meet all other necessary criteria. Under the Bills of Exchange Act it was unclear whether a post-dated cheque was in fact a valid cheque under clause 17 of the Bill, it will not be possible for the drawer to limit his liability on a cheque. In this respect, the Bill equates the drawer of a cheque with the acceptor of a bill of exchange and ensures the drawer's primary liability on the cheque; clause 5 will provide that, with certain specified exceptions, the provisions of the Bill apply to 'bank cheques' and 'bank drafts'; clause 98 will give legal effect to the established practice of affixing a signature on a cheque by stamp or by mechanical means; and clause 91 of the Bill will provide that where a cheque is fraudulently altered so as to increase the amount of the cheque, the alteration is the only material alteration made fraudulently and the drawee bank pays the cheque in good faith and without negligence, the bank will be able to debit the drawer's account for the original amount of the cheque. Financial Impact Statement The Cheques Bill is concerned with the law relating to cheques. It will not provide for any additional powers and controls to be vested in any public official. The Bill will, therefore, have no impact on Government revenues. It is proposed that the Bill be only introduced at this stage and not proceed to finality, but it is hoped that the matter can be speedily completed in the Budget session. I commend the Bill to the House. Debate (on motion by Mr Blunt) adjourned. Bill presented by Mr Lionel Bowen, and read a first time. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(5.03) —I move: That the Bill be now read a second time. The purpose of the Bill I introduce today, in conjunction with the Cheques Bill 1985, is to amend the Bills of Exchange Act 1909. The Bills of Exchange Act substantially governs the law in Australia relating to bills of exchange, including cheques and promissory notes. Upon enactment of the Cheques Bill, the law relating to cheques will be governed by that Bill. The Cheques Bill and the Bill to amend the Act will have the combined effect of confining the application of the Act to bills of exchange other than cheques. This Bill to amend the Bills of Exchange Act will also revise certain provisions of the Act to either mirror similar provisions in the Cheques Bill or give effect to recommendations of the 1964 Manning Committee report on the Act. Content of Bill The more significant provisions of the Bill are as follows: Act not to apply to cheques The Bill will insert a provision into the Act to provide, in effect, that the Bills of Exchange Act will not apply to cheques drawn on or after the date of commencement of the Cheques Bill. However, the Bill will also provide that cheques drawn before that date will continue to be governed by the Act. Clarification of certain expressions in section 14 of the Act To be a valid bill of exchange, a bill must, among other things, be expressed to be payable for a sum certain in money. The provisions of the Bills of Exchange Act which relate to what constitutes a 'sum payable' and a 'sum certain' by a bill of exchange will be expanded and clarified to accord with current commercial practice and to bring the provisions into line with the Cheques Bill. Thus, a bill of exchange will be valid even though it is expressed to be payable for an amount plus bank charges. The possibility of an injustice being caused under the present provisions of the Act to a drawer of a bill of exchange who makes an error when writing in the sum payable will be removed by the insertion of a new provision which provides that, where more than one sum is expressed to be payable in a bill, the lesser or least of the amounts so specified will be taken to be the operative amount. This provision will mirror a provision in the Cheques Bill and give effect to a recommendation of the Manning Committee. Extension of time in relation to noting of bills In the case of certain bills of exchange, evidence may be required to indicate that notice of dishonour has been given in relation to the bill. This evidence is provided by noting or protesting the bill. As the noting or protesting of a bill involves compliance with certain formalities and there are, as the Manning Committee noted, occasions when considerable technical difficulties have been experienced in complying with the relevant requirements, the time allowed for noting a bill will be extended from 24 to 48 hours after its dishonour. Moreover, a bill which has been returned by post dishonoured will be able to be protested not later than the next business day after the day of its return. These changes will introduce more flexibility in the noting and protesting of bills of exchange and, again, will give effect to a recommendation of the Manning Committee. Expansion of provisions dealing with replacement of lost or destroyed bills The provisions in the Bills of Exchange Act dealing with the replacement of lost or destroyed bills will be revised to bring them into line with the provisions in the Cheques Bill dealing with the replacement of lost or destroyed cheques. These changes will also give effect to a recommendation of the Manning Committee. The current provisions in the Act authorise the person who was the holder of a bill which has been lost or destroyed before it is overdue to apply to the drawer to give him another bill of the same tenor. The holder may be required to give security to the drawer as an indemnity in case a lost bill is found. This provision was criticised by the Manning Committee on the basis that it did not give equivalent rights against the acceptor or any indorser of the bill. This defect has been rectified by a new provision to be inserted into the Act by the present Bill. The new section will make detailed provision with respect to the method by which a request for a replacement bill may be made. Under the new provision, the request must: (i) be in the form of a notice in writing; (ii) be served either personally or by post on the drawer; (iii) clearly identify the original bill; and (iv) contain sufficient information to enable the drawer to draw a new bill. The new provision will also specify certain time limits within which a drawer will be required to provide a replacement bill. Similar time limits will apply to an acceptor or an indorser of a bill in relation to the acceptance or indorsement of the replacement bill. Financial Impact Statement The Bill will not provide for any additional powers and controls to be vested in any public official and will, therefore, have no impact on Government revenues. I commend the Bill to the House. Debate (on motion by Mr Blunt) adjourned. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(5.07) —by leave-I move: (1) That the resolution of the House of 21 May 1985, concerning the delegation from the Commonwealth Parliament to the Australian Constitutional Convention, be amended, as follows: (a) paragraph (1) (a)-omit '4 shall be members of the Senate and 8', substitute '5 shall be members of the Senate and 7'; (b) paragraph (1) (b)-omit '8 Members of the House of Representatives comprise 4 members of the Australian Labor Party, 3', substitute '7 Members of the House of Representatives comprise 4 members of the Australian Labor Party, 2', and (c) paragraph (2) (b)-omit '2 other Members', substitute 'another Member'. (2) That a message be sent to the Senate acquainting it of this resolution agreed to by the House of Representatives. This is a formal matter. Yesterday we approved delegations representative of both the Government and the Opposition from this House and from the Senate. The Opposition has given me advice, which I understand has been approved by its parties, that it wishes to alter the numerical representation by reducing the number from this House and increasing the number from the Senate. It makes no difference to the total number. What I have moved is somewhat of a mathematical mystery, but it works out in fact. Mr SINCLAIR(New England-Leader of the National Party of Australia)(5.08) —I understand that there have been some discussions about this amendment. The only comment I would make is that I notice that, in the debate yesterday on the original motion, views were expressed about the value or otherwise of the Constitutional Convention. I confess to being one of those cynics who regard the Convention as not having contributed a great deal towards changing the substances of concern to most members in this place. While I do not go along with the Attorney-General (Mr Lionel Bowen) in his suggestion of a people's convention, I think there is reason for the Convention system to continue. I am a little concerned about the reduction in membership as far as my Party is concerned because I see that either I or somebody from my Party may attend, but not both. As the Deputy Prime Minister would realise, there are sometimes problems in making sure that we are in two places at one time! I am rather disappointed that two members of my Party will not be able to be present so that I can be absent if I need to be. However, that aside, I accept the changes and, rather obviously, the Opposition does not oppose this motion. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(5.09) —in reply-I thank the right honourable member for New England (Mr Sinclair) for his co-operation. Of course, the representation was determined by the Executive, not by the Government. What the right honourable member says about previous Conventions not being successful encourages the Executive to think that they would be more successful if fewer people were there. Mr Sinclair —If you and I were there alone, we might get something done. Mr LIONEL BOWEN —I am glad the right honourable member agrees that something can be done. I am a little disappointed that he does not agree with my proposal. It has been suggested that I will have everybody in Australia at the Convention. I referred to 'a wider representative gathering of the people'. I think that the number could be limited to, say, 100. I am sure that we could have people from all shades of political thought who might be able to agree on a new document for Australia. I hope that it comes about. Question resolved in the affirmative. Mr YOUNG(Port Adelaide-Leader of the House)(5.10) —I move: That this House authorises- (1) the Speaker to make arrangements for the preliminary proceedings relating to the introduction of the Appropriation Bill (No. 1) 1985-86, all or part of the second reading speech of the Treasurer, and all or part of the reply to that speech by the Leader of the Opposition to be filmed by the Australian Broadcasting Corporation; (2) the direct, live, telecast of all or part of that film and the accompanying sound of the proceedings by any television station provided that a station telecasts both speeches live and gives approximately equal time to both speeches, and (3) the use by any television station of any part of the filmed proceedings and accompanying sound in subsequent news, current affairs and documentary programs. The motion permits the arrangement for the televising of the Budget Speech by the Treasurer (Mr Keating) and the reply by the Leader of the Opposition (Mr Peacock) when the House meets in August. I think this was done for the first time last year. Not only were people able to hear on the news what was contained in the Budget, but also they were able to watch the presentation of it. They appreciated the fact that the Parliament had been opened up even to that limited extent. The Australian Broadcasting Corporation does the filming and makes the film available to other stations so that they may use it. As long as the television stations use the film on the basis of equality between the parties-that is, between the Treasurer and the Leader of the Opposition-we give approval. My personal view is that we could look to extending this into some other debates, if greater interest were shown by the television stations, so that people could see more workings of the Parliament. We have taken a minor step today by doing something with the broadcasting of the proceedings as an experiment in the Budget session. I am pretty sure that it will not be long before we look to experimenting with the televising of at least the major debates of the Parliament so that people throughout Australia can witness those also. For some time Question Time in the South Australian Parliament has been televised. Therefore, the South Australian people have been able to watch excerpts from Question Time every night. I am not too sure of the guidelines which apply. I do not think that the stations have to be too strict in terms of the way in which they portray the parties. Usually in a news service or a current affairs program the television stations are anxious to see that governments and oppositions are given equal time. Perhaps this will lead to a further discussion of those matters, but at the moment we are merely setting in train the procedures which applied in 1984, which I think everybody would agree, were very successful. Mr SINCLAIR(New England-Leader of the National Party of Australia)(5.13) —The Opposition accepts and agrees with the motion. There are a couple of aspects of it that concern me a little. Firstly, there is a closed circuit television service operating in this chamber at present and there are cameras around the chamber and they are able to function quite efficiently with the level of lighting that is now available in the chamber. One of my concerns on other occasions when the proceedings in this place have been televised is that arc lights are brought in which make it most unpleasant if one is sitting under them for a protracted period. I do believe that there are modern television cameras now which are adequate- Dr Klugman —It will wilt Hodgman's flower. Mr SINCLAIR —If we had to look at the honourable member for Prospect, I could understand our not wanting the bright lights. Considering the shirt that he is wearing, one can understand the reason. At the same time, there is a necessity for us to try to get cameras that can record accurately the proceedings of this place without a level of lighting intensity that is quite unpleasant to sit under. It is that which has concerned me in respect of other chambers that I have seen televised. I know that in the House of Commons- Mr Humphreys —What about the Whips? They have to watch the screens all the time. Mr SINCLAIR —I am not worried about the Whips. The Whips look after the rest of us. The honourable member for Griffith probably will be filmed by the television camera when he is running around. For the rest of us there is a problem. One finds that quite often in other chambers the lights seem to be set fairly low and they impede on the vision of speakers. The lighting can be quite unpleasant. I hope that the lighting for whatever cameras are used in the chamber will be kept to a minimum so that it will not become too unpleasant for us all to sit under it. Once that is achieved I think it will be easier for us to achieve more uniform acceptance of the televising of other proceedings. Secondly-again, there is no specific mention of this in the motion-I think there is an advantage if not only the speakers but also others in the chamber are shown on television. I refer to the sartorial splendour of the Australian Labor Party Whip, the honourable member for Griffith (Mr Humphreys), who, I am sure, would benefit considerably if his electors could see the manner in which he is attired. Others in this place may not find that the same benefits ensue. For those of us who are rather concerned that the dress standards in this place have slipped, I think it would be a good idea if a roving camera could pick out some members who come into the chamber in a form of a dress that I frankly do not believe is appropriate to the Parliament. It might be of advantage for their constituents to view the degree of recognition which they give to the chamber. For that reason, I hope there will be an occasional roving camera that might even pick up, for example, the Minister for Arts, Heritage and Environment (Mr Cohen) and show him in all his glory. I do think it is necessary that not just the speakers in their respective places are shown but also other honourable members in the chamber. Last year's experiment seemed to me to work quite well. Those of us who were present at the Joint Sitting in 1974 found that the level of lighting was fairly intense. I think honourable members will remember that it was necessary for honourable members and honourable senators to speak alongside the Speaker's chair in order that the proceedings could be televised. If there is to be an extension of the televising of parliamentary proceedings, I believe back benchers and others in the chamber need to be able to rise in their places rather than our adopting a procedure which requires everybody to come down to a rostrum. This place is principally a debating forum. I think that it should continue in that role. I do not think that we are here simply to increase our television image and to appear as performers. That does not accommodate the purpose for which we are seated where we are in the chamber at the moment. When we consider extending the televising of proceedings, we need to have in mind that the cameras should be placed to enable them to record the proceedings and the lighting intensity should be such as not to inconvenience honourable members when they are in their normal places in this House. Having said those words, the Opposition agrees with the motion moved by the Leader of the House (Mr Young). Question resolved in the affirmative. Mr WEST(Cunningham-Minister for Housing and Construction)(5.18) —I move: That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Refurbishment of Commonwealth Centre and associated major fitout works, Melbourne. Melbourne Commonwealth Centre, at the corner of Spring and La Trobe Streets, is on the north-eastern fringe of the central business district. Built in two stages in 1958 and 1966, it consists of two blocks and an adjoining link with basement, lower ground, ground and 11 upper floors. The external appearance of the building and its internal finishes and services were appropriate to the time of construction, but have since deteriorated and are now below current acceptable community standards. In addition, there is a significant amount of sprayed asbestos fire protection material in the building which must be removed for safety reasons. The Government plans to refurbish the building and its services to bring it to a standard generally equivalent to that of commercial office buildings in Melbourne. It is expected that the work will extend the useful life of the centre by some 20 years. The building will need to be vacated to allow the work to proceed and a number of fitout works in leased premises are consequently required to accommodate displaced staff. The proposed work in the Commonwealth Centre comprises air-conditioning of Block 1; replacement of Block 1 lifts; installation of automatic fire sprinklers and improved lighting throughout; upgrading of services; removal of asbestos base fire protection material and revised internal layouts to suit occupancy changes. The proposal had originally been planned to be referred to the Parliamentary Standing Committee on Public Works over the summer recess at a limit of cost estimate of $16.4m, but this was not possible due to the dissolution of the House last October. The current limit of cost estimate is $18.4m at February 1985 prices, the increase being due solely to movements in costs in the building industry as measured by my Department's building price index. The associated major fitout work at 399 Lonsdale Street is a further $2m. I present plans of the proposed work and commend the motion to the House. Mr SINCLAIR —I am not worried about the Whips. The Whips look after the rest of us. The honourable member for Griffith probably will be filmed by the television camera when he is running around. For the rest of us there is a problem. One finds that quite often in other chambers the lights seem to be set fairly low and they impede on the vision of speakers. The lighting can be quite unpleasant. I hope that the lighting for whatever cameras are used in the chamber will be kept to a minimum so that it will not become too unpleasant for us all to sit under it. Once that is achieved I think it will be easier for us to achieve more uniform acceptance of the televising of other proceedings. Secondly-again, there is no specific mention of this in the motion-I think there is an advantage if not only the speakers but also others in the chamber are shown on the television. I refer to the sartorial splendor of the Australian Labor Party Whip, the honourable member for Griffith (Mr Humphreys), who I am sure, would benefit considerably if his electors could see the manner in which he is attired. Others in this place may not find that the same benefits ensue. For those of us who are rather concerned that the dress standards in this place have slipped, I think it would be a good idea if a roving camera could pick out some members who come into the chamber in a form of a dress that I frankly do not believe is appropriate to the Parliament. It might be of advantage for their constituents to view the degree of recognition which they give to the chamber. For that reason, I hope there will be an occasional roving camera that might even pick up, for example, the Minister for Arts, Heritage and Environment (Mr Cohen) and show him in all his glory. I do think it is necessary that not just the speakers in their respective places are shown but also other honourable members in the chamber. Last year's experiment seemed to me to work quite well. Those of us who were present at the Joint Sitting in 1974 found that the level of lighting was fairly intense. I think honourable members will remember that it was necessary for honourable members and honourable senators to speak alongside the Speaker's chair in order that the proceedings could be televised. If there is to be an extension of the televising of parliamentary proceedings, I believe back benchers and others in the chamber need to be able to rise in their places rather than our adopting a procedure which requires everybody to come down to a rostrum. This place is principally a debating forum. I think that it should continue in that role. I do not think that we are here simply to increase our television image and to appear as performers. That does not accommodate the purpose for which we are seated where we are in the chamber at the moment. When we consider extending the televising of proceedings, we need to have in mind that the cameras should be placed to enable them to record the proceedings and the lighting intensity should be such as not to inconvenience honourable members when they are in their normal places in this House. Having said those words, the Opposition agrees with the motion moved by the Leader of the House (Mr Young). Question resolved in the affirmative. Mr HODGMAN(Denison)(5.20) —As shadow Minister for Housing and Construction, on behalf of the Opposition I indicate that we support the motion referring this matter of the Melbourne Commonwealth Centre to the Joint Committee on Public Works. However, there are two comments I want to make in relation to the proposed works. Many who attended the Commonwealth Heads of Government Meeting would be aware of this building and its general location. I agree with the statement of the Minister for Housing and Construction (Mr West) about the appearance of the building. However, what staggers me is that for an expenditure in total of $20.4m the useful life of the Commonwealth Centre will be extended only, in the Minister's own words, 'by some 20 years'. I would like the Public Works Committee in its deliberations to look at the mathematics of that because, on the face of it the Commonwealth is incurring on behalf of the taxpayers of Australia an expense of $20.4m, which will extend the useful life of a building by some 20 years-in other words, $1m a year. To a layman at least, that figure is rather staggering. I ask that when the Committee looks at the matter there be some cost-benefit analysis of the project. In addition, the Committee might well take evidence from the business community in Melbourne as to the availability of more economical and more suitable accommodation than the accommodation that will be provided by the refurbishing of this building. Mr Porter —You can rent a lot of space for $1m a year. Mr HODGMAN —My word, that is quite correct. It seems absolutely staggering that the Hawke socialist Government is going to slug the taxpayers of Australia $20.4m to extend the use of a building by some 20 years. Mr Deputy Speaker, with your prior experience in this field, I think you will agree that the comment I make is a legitimate one. I think a cost-benefit analysis should be carried out and the alternative of renting accommodation from the private enterprise sector should at least be looked at. With those comments, we support the motion. Question resolved in the affirmative. Mr WEST(Cunningham-Minister for Housing and Construction)(5.23) —I move: That in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the Committee has duly reported to Parliament: Construction of new Commonwealth Offices, Sydney (Kingsford-Smith) Airport. The Joint Committee on Public Works has now reported that there is a need for a new building at Kingsford-Smith Airport, Sydney, to accommodate on-airport Commonwealth functions associated with the operation of the international terminal building and cargo complexes. The proposed multilevel complex will house the Australian Customs Service, Australian Federal Police, and the departments of Foreign Affairs, Immigration and Ethnic Affairs, Defence, and Local Government and Administrative Services. The proposal is intended to overcome present unsatisfactory aspects of operations and provide appropriate facilities to meet needs to the year 2000. In recommending construction of the work, the Committee suggested that toilets for the disabled should be provided on each floor and that proposed cafeteria, amenities and recreation areas should be made contiguous. I am advised that the building was planned in accordance with the relevant Australian standard for access by the disabled, with toilets on two levels only. However, the additional cost of facilities on each floor for the disabled is marginal, and I can advise the House that changes will be made to include the additional facilities within the overall estimated project budget. Regarding the cafeteria, amenities and recreation areas, the Committee was advised at the public hearing last year that these will be brought together during the normal refinement of design which follows the PWC consideration phase. The estimated cost of the proposed work is $7.6m at February 1985 prices. Subject to the approval of the House, it will take some eight months for the project to be advanced to the point of readiness for calling tenders. Construction is of course subject to further approvals in the Budget context. I would like to thank the Committee for its prompt consideration of this proposal. Its report is the first tabled by the new Committee. If the House agrees to support this motion, planning can proceed in accordance with the recommendations of the Committee. I commend the motion to the House. Mr HODGMAN(Denison)(5.25) —The Opposition supports the expediency motion just moved by the Minister for Housing and Construction (Mr West). We also congratulate the Joint Committee on Public Works for the speed with which it reported back to the Parliament. This matter was before the House comparatively recently. The mathematics in regard to this project are a lot better than they were for the previous project. For an expenditure of $7.6m in this case there will be usage of the building, with its combined facilities, to the year 2000-that is, another 15 years. I must say, Mr Deputy Speaker, that the year 2000 is approaching very quickly. The Opposition agrees that it is appropriate to have the relevant functions to which the Minister referred accommodated in the one complex. In respect of the recommendation of the Committee that the provision of toilets, including toilets for the disabled, be in excess of the Australian standard, I can assume only, without having the opportunity of studying the reports and the evidence before the Committee, that there were good and valid reasons for this recommendation. For example, one could well imagine that if a person was disabled and was being subjected to a body search by the Australian Customs Service or was in the custody of the Australian Federal Police, there may be good reasons, from the security point of view, to have that person remain on the same floor rather than have to move to another floor area for the purpose of attending a toilet for the disabled. I say that on the face of it, the Opposition takes the view that the Australian standard should not be exceeded unless there is evidence, and strong evidence, to justify the additional expenditure. In this case the Minister has indicated that the additional cost is minimal. I do not take the matter any further. I say on behalf of those people who have the opportunity to travel internationally-I certainly do not have that opportunity on many occasions-that these facilities will be at least a step towards bringing Sydney (Kingsford-Smith) Airport into the twentieth century. Even representing a constituency as far away as Tasmania, I still get the occasional letters of outrage from international travellers who have returned to Kingsford-Smith Airport and who have been detained for various purposes relating to Customs or even, in one case, a Federal Police investigation. The facilities currently available are far below the standard suitable for an international airport and for facilities which are located in what is described as Australia's number one airport. Having said that, I hope the Government will now put its money where its mouth is. Expediency motions normally carry with them an implication that the Government will proceed to provide the funding. I am sure that the Minister has moved this expediency motion before we rise for the winter recess so that he will be able to persuade the Expenditure Review Committee and, indeed, the Cabinet to make an appropriation of funds for the 1985-86 Commonwealth Budget. I hope the Minister does not suffer the acute embarrassment that occurred particularly during the Whitlam years, when expediency motions were passed in relation to very important projects for which funds were not then made available. That can be very embarrassing. I am sure the Minister will have no problem at all in anticipating the response of the Opposition if such an eventuality occurs. Mr Braithwaite —Are they broke again? Mr HODGMAN —It looks as though we are heading for bankruptcy. Hopefully this Minister will be in a position to make an appropriate announcement on 20 August next that the funds have been made available. Question resolved in the affirmative. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(5.30) —I move: Customs Tariff Proposals No. 5 (1985) and Excise Tariff Proposals No. 3 (1985). Excise Tariff Proposals No. 3 (1985) which I have just tabled places before Parliament alterations to the Excise Tariff Act 1921. The proposals abolish the duty on wine produced with added sugar and set out revised definitions and restructured tariff items dealing with brandy, whisky, rum and liquers. Customs Tariff Proposals No. 5 (1985) which I have also just tabled contains a complementary change to the Customs Tariff Act 1982 in respect of rum. The changes contained in both Tariff Proposals operate on and from 23 May 1985. The Government has previously announced that amendment to excise and associated legislation dealing with wines and spirits was to be undertaken to reflect, as appropriate, the revised standards for wines and spirits adopted by the National Health and Medical Research Council. The alterations contained in these tariff proposals are part of those measures. Excise tariff item 16 presently imposes a duty of 49c per litre on wine produced with added sugar. The item was introduced in the 1930s for the purpose of inhibiting the manufacture of wine made by adding sugar before fermentation. All States have since prohibited the practice of adding sugar thus rendering this item redundant. While the amendments to the excise tariff items dealing with brandy, whisky, rum and liquers and the Customs tariff item for rum change the specification of those products, they do not alter any duty rates prescribed in the relevant provisions. In addition, these Tariff Proposals follow complementary changes to the Spirits Act and the Distillation Act which have already been enacted by the Statute Law (Miscellaneous Provisions) Act (No. 1) 1984. I commend the Proposals to the House. Debate (on motion by Mr Connolly) adjourned. Bill returned from the Senate with amendments. Ordered that the amendments be taken into consideration in Committee of the Whole House at a later hour this day. Motion (by Mr Cohen) agreed to: That in accordance with the provisions of section 11 of the Australian National University Act 1946, this House elects Mr P. M. Ruddock and Dr R. E. Klugman to be members of the Council of the Australian National University for a period of three years from 18 August 1985. Debate resumed from 15 may, on motion by Dr Blewett: That the Bill be now read a second time. Dr BLEWETT(Bonython-Minister for Health) —Mr Deputy Speaker, I seek leave to make a brief statement about an amendment that the Government will be moving at the Committee stage, to facilitate debate on the Health Legislation Amendment Bill. Leave granted. Dr BLEWETT —Clause 9 of the Bill provides for annual reviews of fees on which Medicare benefits are based. The purpose of this clause was to accommodate recommendation No. 6 of the Penington Committee of Inquiry into the Rights of Private Practice in Public Hospitals. While both the Government and the Australian Medical Association believe that annual reviews of these fees are highly desirable, the AMA has raised a number of further points for negotiation concerning the nature of the review mechanism to be adopted. The Government has therefore decided to give further consideration to the views of the AMA. The Government does not, however, wish such consideration to delay consideration of the remainder of the Bill which gives effect to the major elements of the New South Wales doctors' dispute settlement package. It has, therefore, been decided to withdraw clause 9 at this stage, pending further discussions with the medical profession. Mr PORTER(Barker)(5.35) —This Government's single greatest achievement in its health policy is that it has managed to break more promises in less time than any government before it. It promised to make health care more accessible to all Australians; yet the Medicare queues for public hospital beds are still growing. We have just received information that 24,772 people are waiting for beds in Victoria alone. Compare that with the statement of the Minister for Health (Dr Blewett) seven months ago that under the previous Government there were waiting lists in Victoria of between 8,000 and 11,000. So the queues in Victoria alone have more than doubled since the introduction of Medicare. Medicare has caused an Australia-wide increase in the number of those on waiting lists. The Government promised to make private insurance more affordable; yet the Government has made private insurance more expensive, in direct contradiction to the promise of the Prime Minister (Mr Hawke). The cost of private health insurance is set to increase by at least $52 per annum as a direct result of this Government's action. That will cause a further swing away from the private sector and increase the burden on the public hospital system which already is unable to cope with the demand generated by Medicare. The Government promised to put an end to constant changes in the health insurance policy yet here we are today, with Medicare only 15 months old, debating changes to the health insurance policy. The Government promised to save money in the area of health, yet it has totally failed to contain costs. The cost of Medicare is going through the roof. The additional costs over the original estimates have increased by $430m, that is 24 per cent in just 14 months. The Government promised to end medifraud. In November 1983 the Minister for Health reported to us in glowing terms how his Department was upgrading the fraud and overservicing detection system to increase its operational efficiency. In fact he doubled its budget from $4m to $8m and doubled its staffing. Then 16 months later he dismantled the system, calling it 'overly bureaucratic and inefficient'. The Government promised to help the chronically ill with prescription charges and to provide free pharmaceuticals for the unemployed. The Government has done neither. The Government promised to maintain the highest standards of health care in this country. The standard of care in public hospitals has deteriorated dramatically. The Minister promised that Medicare is about the less well off in society, yet they are now the ones who are on the end of long queues for hospital beds. The fact is that Medicare is failing on every front. The Government has engaged in open warfare with the medical profession. Last year the Minister caused the first doctors' strike in Australia's history. There has been a Medicare induced mass exodus of nurses from the overburdened public hospital system. In the last six months 10 per cent of nurses have resigned. Mr Cobb —Disgraceful. Mr PORTER —It is disgraceful. We were promised Medicare; we have got medichaos. For over a year doctors and health professionals across Australia have been calling for fundamental changes to Medicare. Contrary to the Minister's claims that the doctors were interested only in money they have consistently addressed the problems of the erosion of the private health system and the decline in the standard of care in the public sector. The Opposition has consistently called for fundamental changes to Medicare in order to restore the balance between the public and private sectors' involvement in the delivery of health care in this country. The doctors and other health professionals who have been pressing the Government for changes have been expressing similar concerns. Given the extent to which the thrust of the doctors' case was consistent with the Opposition's policy, we supported their arguments, and continue to do so. We do not in any way retreat from our position; nor in fact does the AMA. It also seeks further changes to Medicare. The Minister and the Government stand alone. The Minister's overt contempt for the medical profession so jaundiced his judgment that he set out like a man possessed to discredit the doctors. He insulted them and he endeavoured to obstruct the conduct of their private practice. He has single-handedly turned the relationship between the Government and the profession into open hostility. In his arrogance he has assumed that he can plan for the nation's health without consulting the major health providers. In November 1984 the Prime Minister, in his policy speech, said of his Government's health policy: Medicare has put an end to the constant changes in health insurance policy that have marked the past decade. Medicare had been in place a whole 10 months when he said that. Now, some six months later, we are considering Medicare mark 2. This Bill not only changes the health insurance policy but also repeals the draconian section 17 provisions which last year caused the first doctors' strike in Australia and which have caused continuous disruption and confrontation in the health system since their introduction. We all know the history of this Bill. It represents the Government's attempt to implement the so-called seven-point peace plan in the New South Wales doctors' dispute. However, in reality it is no more than a crude political quick-fix which will not fix anything because it does not address the fundamental issues which are at the heart of the declining health system in this country. The Bill does several things. First of all it repeals the provisions of section 17 inserted by Health Legislation Amendment Act of 1983. These coercive provisions were a blatant attempt by the Minister to control the private practice rights of doctors in public hospitals. The legislation was based on information which was wildly inaccurate but which, because of the Minister's ideological blind spot and his contempt for the medical profession, he believed without question. Mr Cohen —Bullshit. Mr PORTER —That is an interesting interjection and is about the standard I would expect from the Minister. I remind the Minister in particular how wrong the information of the Minister for Health was in justifying his action to control doctors' incomes. He cited the rapid rise in the incidence and cost of pathology and radiology services in public hospitals. He claimed that pathology services had risen by 105 per cent over seven years. In fact, they had risen by 39.7 per cent over nine years. He claimed that radiology services had risen by 55 per cent over seven years. In fact, they fell by 14 per cent. The Minister was proven wrong on every count by the report of the Penington Committee of Inquiry into Rights of Private Practice in Public Hospitals. The Minister believes he is infallible. He said: . . . we cannot and will not be deterred from the principle of section 17. After months and months of confrontation and disruption generated by this Government, after causing massive hardship and inconvenience to the people of Australia and after making constant and totally unjustified attacks on the medical profession, the Minister has belatedly agreed to repeal his obnoxious section 17 legislation, pretending that he can now reverse his position because in his petty minded way he believes that the medical profession has behaved itself, and not lived up to the outrageous claims that he made earlier. Mr Braithwaite —That is pathetic! Mr PORTER —It is indeed pathetic. The Minister stated in March of last year: It would not be in the interests of any Government, especially a Labor Government, to introduce guidelines that prompted an exodus of specialists from the public hospital system. We are dependent on these people for the excellence of care that is currently provided in our public hospitals. That was in March of last year. A more important issue, I put to the Minister, is that it was not in the interests of the people of Australia to introduce legislation which prompted an exodus of specialists from the public hospital system. We can only be thankful that at long last the Minister has discovered that it was not in the Labor Government's interests either. The balance of the Bill changes the Government's health insurance policy to implement the insurance package proposed in the settlement of the New South Wales doctors' dispute. The amendments do not go far enough to make private insurance more attractive. Contrary to the Prime Minister's pledge to make private insurance more affordable, this package, in addition to the further reduction in the reinsurance subsidy which was part of the mini-Budget, will increase private health insurance premiums by up to $1.15 per week, hardly making private health insurance more affordable. Expansion of the basic cover to include hospital gap insurance, prostheses and surgical implants means that the private health funds will now be faced with much larger payouts, and the Government has provided no relief to the funds when the big payouts come. With the further reduction in the reinsurance fund under the mini-Budget, the only alternative for health funds is to raise premiums. The increased costs of private insurance will now prove to be prohibitive for many. Now, only those who are able to afford the higher premiums-in addition, of course, to the still compulsory one per cent Medicare levy-will be able to insure privately. In addition, the health funds will now be forced to process numerous $4 and $5 claims for gap insurance, but they are not permitted to process Medicare claims. Their administrative costs will increase, thus forcing up premiums even further. Meanwhile, consumers have the inconvenience and inefficiency of the dual administration of one claim. So much for the simplicity and efficiency of Medicare! I understand that the health funds have offered to handle Medicare claims for the Government at the same cost as the Government is now paying to its own public servants. In other words, the private insurers have offered one stop shopping at no extra cost to the Government. The Opposition has consistently maintained that health insurers ought to be allowed to handle Medicare claims. The proposal of the private insurers would extend Medicare agencies to the bush, it would provide one stop shopping and it would save the dual administration of claims. As the funds have offered to handle the claims for the same amount as it is currently costing the Government, there is no reason why the health funds should not be allowed to handle the claims. The Government stands condemned for its failure to accept readily the health insurers' offer. I turn now to the extensions to the basic table. Gap insurance is only to be allowed for treatment within a hospital. This means increased incentives for consumers and doctors inappropriately to utilise hospital facilities. People will now opt for procedures to be done in hospital because insurance will pay, whereas some procedures could be performed out of hospital. This will increase health costs and pressure on hospitals. By limiting gap insurance to treatment within a hospital, doctors such as general practitioners who carry out a small proportion of their work within a hospital are disadvantaged compared with specialists who perform most of their work within hospitals. In his second reading speech the Minister made some very peculiar and puzzling statements regarding gap insurance. He seems to suggest that gap insurance for medical services outside a hospital would induce doctors to charge above the schedule fee, while gap insurance for treatment in hospital would somehow not have that effect. This artificial distinction between the way doctors charge in or out of hospital begs the question anyway, because the gap insurance is limited to covering the difference between the Medicare benefit and the schedule fee. The Opposition is committed to allowing gap insurance for both medical and hospital treatment. Permitting health funds to offer front-end deductible tables is hardly likely to result in a stampede to the private sector. Those who are likely to be attracted to that option will be the young and the healthy who were previously covered by the commercial insurers at lower rates, and others who are already insured, but who cannot afford to take the risk of the first dollars payout. The poor, the elderly, and the chronically ill, who are most likely to experience frequent illness, simply cannot afford such insurance. Clause 13 of the Bill would permit payment of benefits for single day treatment in a private hospital or a 'day hospital facility'. The definition of a day hospital facility is not clearly spelt out in the Bill, but leaves the regulation to the States, or in the absence of State regulation, regulations will be prescribed. I call the Minister's attention to the language in clause 13 which seeks to add paragraph (db) to section 4 of the National Health Act. Proposed paragraph (db) states: In respect of a day on which a person occupies a bed in hospital, for a period that does not include part of an overnight stay-- Use of the phrase 'occupies a bed' would appear to limit private hospitals wishing to establish day surgery units to do so only within the number of their currently approved hospital beds. Section 24 (5) (a) of the Health Insurance Act states that the number of beds at the hospital will not at any time exceed such number as is determined by the Minister to be the number of approved beds in relation to the hospital. Private hospitals, therefore, will be able to establish such a day surgery unit only if they are prepared to reduce in-patient beds, or by establishing a separate premise registered under State law or as prescribed. This limitation on the development of day hospital facilities could be corrected by changing the language to read 'in respect of a day on which a person received treatment'. I urge the Minister to re-consider the implications of the present wording which could unduly stifle the development of single day beds. This matter was only recently drawn to my attention. The fact that the legislation is faulty is a matter of concern to the Opposition. I ask the Minister to clarify the matter when he is winding up the debate. If he does not give the appropriate undertakings as to the operation of the section we will have to review our position in the Senate. I am informed that the Australian Democrats share our concern about this section. I therefore repeat my request to the Minister to clarify his intention in that regard. The basic table is expanded to include the provision of prostheses and surgical implants. These are presently provided by the Government. Yet, under this legislation the cost will be borne by private health insurers. The list of items to be covered under this provision has not yet been drawn up, but will be decided by the Minister. Until it is decided what items are included, it is not possible to know what savings the Government can expect, nor how much additional cost will now be borne by the private funds. Clause 15 of the Bill requires all health insurers to comply with the requirements of the National Health Act because, according to the Minister, the price of community rating has been 'steadily eroded by cheaper ''risk-rated'' insurance being offered to good risks by insurers not registered under the National Health Act'. This is a typical example of the ham-fisted approach this Government has to health insurance. The Opposition certainly accepts that all insurers, including general insurers, ought to be obliged to abide by the same rules, that is, they should operate under the same Acts of parliament. However, we would approach this matter differently. Whilst requiring insurers to abide by the same rules, we would at the same time move to limit government regulation under the Health Act to the minimum necessary to ensure fair competition and community rating. Instead of increasing regulation, the Opposition will be seeking ways in which to free up the rules and regulations restricting health funds to encourage insurers to extend their range of tables and include optional packages that could inhibit the unnecessary use of services and reduce administrative costs, while at the same time reducing insurance premiums. I wish to refer to the variation in waiting periods. A number of changes are made to the waiting period for basic table benefits for new fund members. A few former Medibank Private members who are on long waiting lists-especially for prostheses-may return to Medibank Private for private insurance, but this move is unlikely to have major impact on queues. Many parts of the settlement package require action by the New South Wales Government. In the past, despite undertakings, that State Government has failed to meet its commitments. We shall have to wait and see whether on this occasion it will in fact implement the package or whether it will continue on its destructive course of removing the private hospital sector from New South Wales. For over a year, health professionals around Australia have signalled that fundamental changes to Medicare are necessary. Similarly, the Opposition has consistently called for such changes to Medicare. But the Government has steadfastly refused voluntarily to review Medicare, despite the fact that the situation for most Australians has become decidedly worse under Medicare. Doctors in New South Wales have had to drag the Government screaming to the negotiating table to get these changes introduced. Any Minister worth his salt would have realised that Medicare is not working and that changes were required-but not this Minister. The Government is obviously more concerned about ensuring the conversion of health care to nationalised medicine than providing the means whereby those seeking quality medical treatment get it without undue delay. The Minister for Health has said that 'this scheme is about the less well off in our society', but the less well off in society-those who are most dependent upon the system-are the very people who are hardest hit by the failure of Medicare and they are no better off as a result of these changes. If they could not afford private insurance before, they certainly will not be able to afford it now. We would, of course, make private insurance more affordable because we are committed to allowing people to opt out of paying the levy if they take sufficient private cover. In this way we would restore choice and stop people from having to pay twice. The Prime Minister promised to make private health insurance more affordable. Instead, he has made it more expensive. The fact is that only those who are able to afford the higher premiums, in addition to the still-compulsory one per cent levy, will be able to insure privately. With private insurance becoming more expensive, even more people will leave the funds, the reliance on Medicare will grow and the erosion of the private sector will continue. The public hospitals already are unable to cope with the demands of Medicare, and as the queues continue to grow, the poor, the elderly and the disadvantaged will go on bearing the brunt of this Government's health policy. So much for the Government's promises. Finally, I note that the Government has, at the last minute, withdrawn clause 9 of the Bill which sought to establish a Medicare schedule fees tribunal to provide for automatic annual review of fees in the Medicare schedule. This is yet another example of the hopeless administration of the portfolio by this Minister. Not only had he failed to consult with the AMA on this proposal but also he relied on a recommendation of the Penington report which this Bill, by seeking to remove section 18, makes irrelevant. The Minister has yet again been forced to back down. Medicare is not working and these changes do not go far enough. Therefore I move the following amendment to the second reading motion: That all words after ''That'' be omitted with a view to substituting the following words: ''whilst not declining to give the Bill a second reading, the House notes that- (a) the long and unnecessary delay by the Government in implementing the changes to Medicare embodied in the Bill has caused intolerable pain and suffering, and (b) the amendments fall short of the urgent and fundamental changes required to Medicare to restore a high standard balanced private and public health delivery system''. Mr DEPUTY SPEAKER(Mr Andrew) —Is the amendment seconded? Mr Carlton —I second the amendment. Dr CHARLESWORTH(Perth)(6.01) — Once again we have heard the Opposition bleating concerns about the poor, the elderly and the less well off. It seems that not long ago those people had very little access to private health insurance and, except for the very wealthy, this Government provides a much cheaper possibility. Honourable members opposite, even within their election policy, are committed to a universal scheme, which is the basic premise of the Medicare legislation and something which under their administration was not available to the people of this country. Opposition members talk about cost increases. One finds it very difficult to understand how they can do so when one remembers that the cost of pharmaceuticals increased by 167 per cent in the years of the Fraser Government. Perhaps the greatest myth that Opposition members talk about is gap insurance and the wonderful possibilities that that makes available for the people of this country. The report of the Jamison Commission of Inquiry into the Efficiency and Administration of Hospitals, and the Australian Medical Association concurred on this point, and suggested that gap insurance was merely an inducement for doctors to overcharge. It is impossible to make a rational and cogent case for the implementation of gap insurance. It is interesting to look at the statistics. In the first year of Medicare the average Australian paid $16.15 out of his pocket for extras. Of that, $11.76 represented gaps and the other $4.39 represented the excess over the scheduled fee when doctors chose to charge an excess. It is estimated that the introduction of gap insurance would cost the average family insurer $3.00 a week, or $150 a year. Some 84 per cent of the population paid $20 or less in gap insurance last year and 42 per cent paid nothing. The only place where people are likely to be hurt through not having gap insurance is where a considerable number of procedures may be performed in a hospital over a short period. This legislation provides for the implementation of gap insurance within the private insurance sector and covers that possibility. Gap insurance is really an unnecessary and added burden and a costly waste of money for the vast majority of families. Indeed, the premiums very often amount to much more than the benefits. The amendments proposed within this package of legislation, which goes to the solution of the doctors dispute in New South Wales, are something that the Government has worked upon over a period. It was always indicated, and it was always our belief, that the implementation of Medicare would have an impact and that it would be necessary for us to respond accordingly. Unfortunately, a small minority of surgeons in New South Wales-procedural specialists-chose to take a very vitriolic approach, and their action has caused a great deal of suffering and pain to people in New South Wales. The Government resolved to negotiate and consult with the medical profession and I am sure that, but for the hysterical and impractical actions of those people, this dispute would have been resolved long ago. Fortunately, the AMA, the representative body of the doctors in this country, a group which represents over 30,000 practitioners and certainly is not the ideological bed partner of the Australian Labor Party, understood the right of the Government to implement the mandate it received at two elections. We saw a very vitriolic set of circumstances come about within the profession. It ranged to the point of personal abuse of the President of the AMA, Dr Thompson. The position of the profession on this issue, which was supposed to be one of great principle, certainly deteriorated in many ways. The President, Dr Thompson, was quoted in last Sunday's Sun-Herald as stating: My profession is supposed to be a highly educated one. And this dispute was not supposed to be a personal matter, but rather involving concerns of great principle. Unfortunately, this dispute deteriorated to the degree where this was not the case. Where did members of the Opposition stand in all this? They are the people who defended the militant and recalcitrant action of the Queensland Government with regard to the power workers who struck in Queensland. They are the people who said that essential services need to be protected. Yet in relation to this dispute, true to form, they did a complete turnaround and supported a wealthy group which participated in a strike that was really not a strike because the doctors were still able to accrue benefits, through Medicare, for their private practice. The Opposition acted in folly in supporting the militant doctors. Whom did it support? Dr Thompson said last Wednesday: I am speaking for 30,000 doctors. My opponents, (the surgeons' leaders) are speaking for a few hundred. But they have grabbed the headlines by being sensational, making wild allegations and saying unsubstantiated things. Unfortunately, it's good media stuff and so they've hogged the limelight. But the public are now seeing them for what they are. The procedural specialists over a period have alienated themselves from the public. The Government and the AMA have been able to negotiate a settlement. Indeed, a national plebiscite in the AMA showed that 75 per cent or more of doctors belonging to that organisation favoured a return to normal services. This legislation incorporates many of the recommendations of the Penington Committee of Inquiry into Rights of Private Practice in Public Hospitals. There were messages in that report for both sides of this Parliament. The legislative package contains a number of elements and, unfortunately, I may not be able to cover them all in the time available. Perhaps the principal revenue consideration is the provision over three years of $150m to the public hospitals in this country. If that was the intention of the procedural specialists when they embarked on this dispute, I would applaud them. Certainly, that is something this Government had always looked at doing. During the time of the Fraser Government there was a significant capital and equipment rundown, and the cupboard was bare when we came to office. It has always been our intention that the public hospital sector should be supported in this way. It is worth while noting that the staff of the teaching hospitals worked tirelessly to keep the system working during this dispute. I think this element of the package is very worth while and will certainly benefit the public of this country. Perhaps the most symbolic element of the dispute concerned section 17 of the principal Act. This has become a very much misinterpreted symbol and a weapon of the militant doctors, who used it on occasions to whip up hysteria. It required that approved agreements should exist for private practice within public hospitals. Indeed, this did not represent a problem in the vast majority of States. In my home State of Western Australia such agreements were already in place, but there were particular difficulties in New South Wales. The provision of this aspect of section 17 led to the schedule fee compliance for pathology and radiological services. It has been shown over the time of the Medicare legislation to have been largely complied with. As such, the Government is satisfied with the situation and is pleased to be able to revoke that section. I suppose that the remuneration aspect is at the heart of this dispute, and I think there was a legitimate concern as to the position with regard to remuneration. Within the package we are now providing for fee-for-service for public patients in all but teaching hospitals, and indeed, modified scales according to the staffing levels in those hospitals will be available in the metropolitan and country areas. Of course, it was always thought to be necessary that, with the change in the private to public mix, sessional fees and the numbers of sessions available for practice in public hospitals would have to change. It was always intended, and again in Western Australia negotiations were underway with regard to this. What has happened is that we have seen the funding base for visiting medical officers in New South Wales brought on to a par with that which exists in other States. Therefore, this legislation puts right the difficulties that existed in that regard. There are other aspects of the legislation which improve the attractiveness and flexibility of private health insurance, and in many ways this will have an effect on and go to the concerns which have been expressed during this dispute. The growth in commercial funds was threatening the community rating principle to which we are committed. Indeed, the legislation will make changes in that respect, which will make the commercial funds risk-rated under the same conditions as the registered funds. The hand-over of regulatory control over private hospitals is another element of this package which is under consideration. Indeed, the principles and guidelines of that categorisation are being negotiated. This dispute would still be continuing if the confrontationist approach of the procedural specialists had been allowed to continue. It was resolved by negotiation. I commend the Minister for Health for his work and I commend this Bill to the House. I hope that we will be able to focus our attention in the health area on other areas that are deserving of concern, rather than this one which seems to have consumed our time over so long a period. Mr CARLTON(Mackellar)(6.12) —There are two small points on insurance on which I would like the Minister for Health (Dr Blewett) to respond in his reply. First, it is not clear what will happen with ancillary benefits. The Department of Health has not taken a very close interest in ancillary benefits, such as for chiropractic or dental treatment, because they have not formed part of the community rating system. I would like to know, in respect of the transfer of business from the commercial insurers under the Act, how the ancillary benefits will be dealt with. My second query relates to companies which are currently insuring for their employees with commercial insurers and which may not wish to continue those arrangements under the new regulated system. Presumably, they would be able to cover their employees' health costs as an accepted cost without coming under the Act, and would be able to opt out in that sense by carrying the insurance themselves. I assume that that would not be prevented under the terms of this legislation, but I would welcome clarification of that point. Mostly tonight I want to say something about this Health Legislation Amendment Bill in broad prospective. In September 1983 the Minister brought down unworkable, unfair legislation. He made a major political and administrative mistake. Instead of admitting it, he has, with the assistance of the New South Wales Government, tried to bully his way through and to tough it out. This legislation today represents the admission of error, but it comes 20 months after the initial misguided act-20 months of anguish for patients, 20 months of damage to the medical profession, and 20 months of decline in our once excellent health system; a decline that will take years to reverse. If this legislation is necessary, then it was necessary from the beginning. The fact of this legislation proves that the Minister and the Government unnecessarily and wantonly threw our health system into dangerous turmoil for no good reason. We told them at the time, but they would not listen. They proceeded to make the people suffer. The Minister began by trying to avoid the clear lessons of history, quite apart from the requirements of fairness, common sense and sound administrative practice. At the beginning he appeared deliberately to mislead the medical profession as to his intentions, thereby activating its instinct for survival. As Dr Sidney Sax points out in his recent book A Strife of Interest: . . . during his campaign in connection with the unsuccessful 1944 referendum on federal powers, Chifley stated that a full-time salaried medical service would be established. Ever since-no matter what has been said to the contrary-any Labor policy for the expansion of government activity in health care services has been criticised and described as the 'thin end of the wedge' which would lead to a socialist system of medical care. Thus, Sax described the views of the doctors. The present Minister for Health explained Labor's now more sophisticated Fabian approach of gradualism in a speech when he was still shadow Minister in 1982. I quote: The Party has put aside any primary emphasis on salaried or capitation systems in pragmatic recognition of the prevailing culture and attitudes in this society and in its efforts to secure widespread community support for its programme. Private fee-for-service medicine is deeply entrenched in Australian society, strongly defended by the medical profession, and favourably evaluated by the population at large. This is a fact of life and whatever changes may be desirable in that system will have to take place gradually and incrementally. Those were the words of the honourable member Bonython (Dr Blewett) when he was shadow Minister for Health. When in September 1983 the Minister armed himself with Federal powers over doctors' contracts in public hospitals under the now notorious section 17 of the Health Insurance Act, which, incidentally, this Bill now removes, visiting medical officers, led by the procedural specialists, saw his action as a first step towards fully-salaried medical practice in the public hospitals, replacing the fee-for-service system then applying to privately insured patients in these hospitals. The Minister claimed that his intention was merely to curb the excessive increases in diagnostic costs, such as pathology and radiology. However, the legislation covered all services and, to the Minister's discomfiture, it was subsequently found that he had already signalled his intention of extending the controls. In a speech to the Doctors Reform Society in August 1983 he said: It was agreed at the July Health Ministers' Conference that attention to these problems should be initially directed to the area of diagnostic services, with the intention to move more broadly in due course. Thus, the Minister's claim to be concerned only about diagnostic services was quite misleading and, taken with his 1982 remarks, removed any basis of trust that might have been built up between the Government and the medical profession. The Minister's standing was further eroded by the publication of the Penington report in September 1984. Professor David Penington led a Committee of Inquiry into Rights of Private Practice in Public Hospitals, set up by the Federal Government following the doctors strike early in 1984. Penington found that, contrary to the Minister's claims at the time of the section 17 debate, diagnostic services in public hospitals had not grown at an alarming rate. Embarrassingly, Penington proved that figures submitted by the Department of Health in support of the Minister's case were false. The Department had claimed increases of 105 per cent in pathology and 55 per cent in radiology over a seven-year period. Penington found that pathology utilisation had risen by only 40 per cent over nine years, and that radiology had actually declined by 14 per cent over the same period. Further, because of improved technology, pathology costs had increased by only 13 per cent in nine years. So it was not 105 per cent and 55 per cent increase respectively; it was actually an increase of 13 per cent on pathology and a decline of 14 per cent in radiology over an even longer period. The dimensions of this scandal were hidden from the general public by tabling the report with a mass of other material on the last parliamentary sitting day before the last election, and allowing only 15 minutes for debate. However, the medical profession read the report in detail and was outraged. It also found it difficult to understand why, given this and other findings, refuting the Minister's case, Penington recommended the retention of section 17 of the Act. I am pleased that the Minister has now rejected that recom- mendation. In New South Wales, because of its historically greater proportion of private medical practice within the public hospital system, and also because of the doctor-baiting inclinations of former State Health Minister, Mr Laurie Brereton, matters came to a head more rapidly than in other States. The likely end result of the Federal Minister's salami tactics, cutting up private practice slice by slice, could be glimpsed from a perspective much closer to the blade and, appropriately, those closest to the cutting edge were the surgeons. Fortuitously they were led by two men of courage and determination, Dr Bruce Shepherd and Dr Michael Aroney. At the public hospital work face, surgeons found that the proportion of their patients paying fees via insurance declined substantially following the introduction of Medicare. They happily treated 30 per cent of patients either free or for nominal sessional fees, relying for their income on the remaining 70 per cent of insured patients to pay the fee for the individual services rendered. Under Medicare the Minister promised free public hospital treatment to everyone, regardless of his or her means, but he had overlooked the question of who was to provide the treatment and on what basis. Eventually it became clear that the doctors were to be forced to provide their services on the same basis as they did to pensioners. Thus, as more and more people dropped private health cover to take up the Minister's generous offer, the number of non-paying patients on the surgeons' lists increased. Action by the New South Wales Labor Government further expanded the lists of non-payers. Brereton's admissions clerks were instructed to carry out a form of body snatching. Unless insured patients specifically requested the services of a particular doctor-that is difficult if one is admitted, for example, unconscious-they were to be admitted as hospital, not private, patients and were thereby added to the free list. This astonishing provocation by Brereton's machine came on top of draconian State legislation prohibiting doctors from even discussing insurance matters with their patients. Almost overnight procedural specialists found that fewer than half their patients paid fees and their incomes dropped by 30 to 40 per cent. More importantly for their future and for the quality of medicine in the public hospitals, they could see the gradual extension of this process to the point where, instead of acting as independent professional entrepreneurs serving individual patients, they would be fully employed by the Government within an hierarchical structure. Professional and financial incentives would be diminished and the frustrations so clearly evident in the British National Health Service would push our excellent public hospital system towards mediocrity. Given the Minister's professed commitment to gradualism, his and Brereton's thuggery in New South Wales was a major tactical blunder. Comments by the Prime Minister (Mr Hawke) comparing the New South Wales specialists with the Builders Labourers Federation of Australia none of whose members, to my knowledge, has been forced to take a 40 per cent pay cut to provide free housing for anyone-served merely to reinforce the doctors' opposition to the two governments. Mr Wran's subsequent attempts at bullying, the seven-year exclusion of doctors who resigned and the attempted recruitment of overseas doctors further cemented resistance. The doctors' case, advanced by the exposure of the facts about what had been done to them by this Minister and this Government, was strengthened by their decision to resign rather than go on strike. As this Bill has been brought in 20 months too late, what is the balance sheet? The balance sheet is this: The Medicare scheme is still unworkable. Free hospital care will not work. It will starve the system of essential private funds. Bulk billing for non-welfare patients cannot be sustained without corrupting both patients and the profession. These amendments do some necessary but not sufficient things. They have been extracted under duress from two bullying, incompetent governments by the actions of Dr Shepherd and Dr Aroney. Without the determination and courage of these much maligned people and their colleagues there would have been no 75 per cent vote from the profession urging the specialists to resume their public hospital work. The limitations of umbrella bodies such as the Australian Medical Association have been demonstrated once again. It is a pity that acrimony developed between the Federal President of the AMA, Dr Lindsay Thompson, and the procedural specialists. Dr Thompson is a fine, decent and intelligent man who has been given an almost impossible job. I applaud his work. I am very unhappy that it ended in acrimony between him and the procedural specialists. I acknowledge the extent of his work and his sincere determination to try to prevent the profession from being dragged down into the gutter with this Government. However, because of the diverse constituency of the AMA it cannot prevent outrageous things being done to selected, targeted segments of the profession. It took the steel of Shepherd and Aroney to force this Government to this partial admission of its outrageous behaviour. Let us hope that the professionals in the system-doctors, nurses and others-will fight grimly to maintain standards, despite the system, until a coalition government can come in and clean up the mess. Mr SNOW(Eden-Monaro)(6.25) —Once again we have heard from the honourable member for Mackellar (Mr Carlton) in his role as an apologist for people earning hundreds of thousands of dollars a year. As we listen to the Opposition members we hear words such as 'arrogance', 'believes he is infallible' and 'outrageous claims' when they are talking about the Minister for Health (Dr Blewett). These ring strange to me as one who has known the Minister for six years. I think better words to use are 'attentive', 'considerate yet firm', 'careful and factual in his claims'. and 'one who is always prepared to talk and negotiate with the industries with which he deals'. I believe that the Opposition is continuing in its role as an opposition with its attempt to use personal abuse where logical argument fails. This is not Medicare mark 2. It is Medicare full stop. As with any new system, the basics can be amended by a government which, unlike the Fraser Government, is not afraid to admit the need for improvements. The Opposition wants Medicare mark 2. It wants a return to the outrageous systems of the Fraser years, to the various proposals born in panic and too expensive for ordinary people. Its opponents fail to mention that millions of Australians would have no health cover at all without Medicare. Honourable members opposite should talk to breadwinners on below average and average incomes and they will see who made the major political and administrative mistakes. It was the Fraser Government. I do not propose to deal with the various amendments which have been mentioned, as they have been outlined fully by the Minister and the honourable member for Perth (Dr Charlesworth), who spoke previously. I put it to the House that the changes put forward in this legislation are all sensible and rational changes to health insurance policy. 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. However, the Medicare arrangements with the States will result in extra spending of about $16m a year in New South Wales for increased remuneration to visiting medical officers and $150m, which is to be spent over three years, for upgrading the facilities and equipment in Australian teaching hospitals. With funding for capital works limited in a tight economy, the Hawke Labor Government is still committed unshakably to upgrading our public hospitals. The Government is moving amendments to assist in resolving a dispute which has become stalemated at great and often tragic human costs to patients in New South Wales. In line with the recommendations of the Penington Committee of Inquiry into the Rights of Private Practice in Public Hospitals, negotiations are being conducted with the States to amend the Medicare agreements so that privately insured patients are automatically classified as private patients unless they specifically opt to be Medicare patients. This will reduce administrative problems in hospitals. One of the difficulties in dealing with the doctors has been that the Australian Medical Association has been hampered in negotiations by the existence of an elite group of procedural specialists who have the political aim of destroying Medicare and the economic aim of holding on to their high income, their macadamia nut plantations and their aeroplanes. For example, acceptance of the demands presented to the Commonwealth Government would have completely changed the way Medicare functions and would have destroyed Medicare. This Government was elected at two elections on its promise of a universal health scheme-Medicare. I believe that we have to stick to that principle: The people expect us to stick to that principle. The medical practitioners reacted not only to the proposals of this Government but also to a proposal of a conference of Health Ministers in 1983 which provided that Medicare benefits would be payable for services to private patients in public hospitals only if certain conditions were met. How did some medical practitioners react to this agreement of State and Federal Ministers? Some, but not all, reacted through the strike weapon. People wanting treatment came up against obstruction, vague directions and refusal of treatment on some occasions. They found their allies in the anti-strike coalition parties in this Parliament-the people who have supported these few recalcitrant procedural specialists. In contrast, this Government pursued the policy of consultation and consensus with the medical profession, just as it did with the trade unions in Queensland. It is evident that the Queensland Government has failed in its negotiations with the unions by not pursuing that policy of consensus. Sitting suspended from 6.30 to 8 p.m. Mr HODGES(Petrie)(8.00) —During yesterday's debate on the National Health Amendment Bill 1985 the honourable member for Barker (Mr Porter), the shadow Minister for Health, and the honourable member for Moreton (Mr Donald Cameron) called into question the credibility of the Minister for Health (Dr Blewett) on a number of counts, and did so very well. I want to take up tonight a few points that also concern the Minister's statements both since he has been Minister for Health and when he was shadow Minister for Health over the past several years, because his words came back to haunt him in yesterday's debate, and they have come back to haunt him in tonight's debate. It is a case of the Government having broken promises, promises and indeed more promises. If we look at the record of the Government, particularly over the past few months since its re-election on 1 December, we find that it is a government riddled with factionalism, a government that lacks direction and cohesiveness and a government that has broken promises on numerous occasions. Indeed, one could say that it is a government akin to a rudderless ship. The Minister has stated on previous occasions-indeed, he so stated in a speech on 6 September 1983-that Medicare is very similar to Medibank, which was introduced by his colleagues during the term of the Whitlam Government between 1972 and 1975 when the honourable member for Oxley (Mr Hayden) was Minister for Social Security. I want to quote one or two passages from the Minister's speech on 6 September when he introduced the Medicare legislation. I think his second reading speech lasted about one hour. I will quote what he said about Medicare: Medicare will be substantially self-funding through the one per cent levy and a re-arrangement of existing health insurance subsidies, whereas Medibank placed a considerable strain on Consolidated Revenue. The honourable member for Barker pointed out to the House earlier, very effectively I believe, that the estimates made by the Minister, and no doubt prepared by his Department, have proved to be very wrong and that we have seen a massive increase in the cost of Medicare. This side of the House, the Opposition Liberal and National parties, warned when in opposition, when again in government between 1975 and 1983 and in opposition again now that any basically free service will be abused and the costs will go through the roof. That is exactly what has happened. We advocate in our policy that there be an option for people to be part of a government scheme or to have the freedom to opt out of that into private insurance. I hope that eventually we will see people looking after themselves instead of being looked after wholly by government. The predictions of the Opposition parties have come true: The costs of Medicare have burgeoned. I ask the Minister whether he will give the House and the nation some explanation as to why the costs have burgeoned to the extent they have. Apart from in that speech of 6 September which I just quoted, the Minister maintained in his second reading speech last week the position that Medicare would be substantially funded by the one per cent levy. I quote from that speech of last week: The additional cost of the Medicare program remains substantially funded through the fair, income-related levy. As far as I am concerned, that statement and his statement of 6 September 1983 are misleading. That is not the situation at all. If one looks at the 1984-85 Budget Papers one will see that the levy is expected to raise $1.191m or 58 per cent of the estimated $2,050m expenditure on Medicare this financial year. Mr White —How much will it be next year? Mr HODGES —The honourable member for McPherson, who represents the Gold Coast area, asks how much it will cost next year. I think the Minister ought to address that question during his summing up of the debate in a few moments because it is a serious situation when the Minister in his second reading speech when introducing the original legislation can make the blunt statement, which he repeated in similar terms in his second reading speech last week when bringing these amendments before the Parliament, that the levy will substantially fund Medicare. It is not substantially funding the expenditure in Medicare. There is a massive shortfall of $859m or 42 per cent of the estimate. This is unacceptable. This is not in keeping with the Minister's statements or, to put it bluntly, this is a broken promise. This is a deception of the Australian people. This is a scheme which is and will remain a financial millstone around the neck of the Hawke Labor Government. If the levy is to substantially self-fund Medicare it ought to be increased to somewhere around 1 1/2 per cent. Now hundreds of millions of dollars are being taken out of Consolidated Revenue to fund Medicare to make up that shortfall as a result of the one per cent levy being inadequate. The Government's estimates were grossly in error. The one per cent levy did not cover the cost of Medicare initially, it is not covering it now and it certainly will not cover it in future. I repeat: I hope that the Minister will answer that question because I think the public of this nation deserve to know why he has not kept that promise and that figure is so deficient as to cause a shortfall of $859m or 42 per cent of the estimates in this financial year. I have a time constraint on me tonight, but I want to make one or two other points relative to this scheme. I will not go into a lot of the detail that the honourable member for Barker so adequately handled, but I ask the Minister to explain why he has broken a further promise relative to gap insurance. He was quite adamant on 6 September 1983 when he talked about the Jamison Commission of Inquiry into the Efficiency and Administration of Hospitals. Earlier in this debate the honourable member for Perth (Dr Charlesworth) also mentioned the Jamison report and the report of the Penington Committee of Inquiry into Rights of Private Practice in Public Hospitals, as did the Minister in his second reading speech last week. Firstly, let me see what he said on 6 September 1983. He talked about gap insurance not being of any real benefit to the public. He said: This would be in addition to the insurance premium for the gap cover, so overall most people are financially better off without gap insurance. It is only doctors who would be financially better off if gap insurance were permitted. For all of these reasons the Government will not allow gap insurance to be offered. In this way doctors will be encouraged to limit their charge to a level around the schedule fee and this will be important in containing Australia's overall health bill. That was quite a positive and definite statement by the Minister that there would be no gap insurance. Yet we find that gap insurance is being introduced at least in part. I ask the Minister: Why would he want to stop there? If it is not good enough to have it in general, why have it in part? In his speech last week on 15 May he said: 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 Minister had the gall to go on to say: 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. I ask the Minister: On what basis would he make the assumption that the authors of those reports would adopt a different attitude? I refer to his impertinence, because that is what it is, in making that sort of assumption. On what grounds would he make that statement? A little later he went on to say: For these reasons this legislation only permits 'gap' insurance for medical services provided in hospitals, and the Government would strongly oppose its further extension to cover all medical services. I ask: Why? Why not have the extension of gap insurance to cover all the differences between the amount of the Commonwealth benefit, and the fee which the doctors charge? It is a pretty fair question. The Minister has seen fit in one instance to allow it, and then he has the impertinence to make the statement that the authors of these reports would have had a different attitude. I do not know on what basis he makes that assumption. I have run out of time. I made an agreement with the Deputy Government Whip to speak for only 10 minutes. I repeat that there are questions which I believe the Minister ought to answer. Obviously the Government has had a change of heart in some respects. Its attempts to defeat the doctors in New South Wales, I think, have failed. The honourable member for Mackellar (Mr Carlton), as a former Health Minister, has handled that subject very fully. I ask the Minister to give consideration to the introduction of gap insurance across the board. I sincerely hope that he will give people more freedom of choice. I commend him on his move in the community rating area to ensure that the ordinary insurance schemes which cover the well Australians-they are usually young Australians-are required to be registered under private health insurance organisations. I also congratulate the Minister on his move in the area of front end deductibles. Dr BLEWETT(Bonython-Minister for Health)(8.14) —Before the suspension of the sitting for dinner and in the last few minutes we have had a debate which has been characterised by a series of what can only be described as rather mindless demagogic comments with very little reference to the specific Bill at all. I call much of this demagogy mindless because it simply reveals that the Opposition has learnt nothing from its period in government. Firstly, it has not understood the type of system it is having to deal with-I will give some instances of that in a moment-and, secondly, it is simply ideologically blinkered, partly, I think, by its commitment to those vested interests in the health field who do well out of it but also because it has a set of preconceived notions that it is not prepared to apply to the present situation. I take the case of what can only be described as one of the most contemptible industrial disputes that has ever disfigured this country-that is, the activity of the militant surgeons in New South Wales. The proposals that are embodied in the Health Legislation Amendment Bill have been on the table for months and have been rejected by the intransigent leadership of that group. They have never agreed to the package that was offered. Indeed, what finally happened was that there was a resolution between, on the one side, the Australian Medical Association and the Government against this minority group backed by the Opposition. One of the most hypocritical things that I have ever had to listen to in this Parliament occurred in the speech by the honourable member for Mackellar (Mr Carlton) where he applauded the Federal President of the AMA, Dr Lindsay Thompson. Yet the honourable member for Mackellar did everything within his power to disrupt and undermine the compromise that had been made and backed by the great bulk of the medical profession to settle the dispute in New South Wales. He aligned himself then, as he aligned himself tonight, with the likes of Dr Shepherd and Dr Aroney. Let me say that I think the distinction between the Government and the AMA on one side and the militant surgeons and the Opposition on the other is that we were prepared to search for a real compromise on this issue because we did not take the position occupied and explicitly stated by Dr Shepherd that he was willing to see people die in order that he could win his war against the Government. That is on the record. Of course, one great benefit has come out of the debate tonight and that will be invaluable when we next go to the people. This Opposition is prepared to align itself with the likes of Dr Aroney and Dr Shepherd against not only the Government but also the AMA and the bulk of the medical profession. I make one further point: In early July we will be publishing the annual earnings of the medical profession from Medicare by category and by State. We will see how false is the allegation which was made again tonight that somehow surgeons in New South Wales have lost between 30 and 40 per cent of their income as a result of Medicare. The figures and the statistics will be there for the people to make the judgment. The second issue illustrates what I describe as the kind of mindlessness of the Opposition, although in this case it is more illogical. The honourable member for Barker (Mr Porter) said that I, the Minister, was proven wrong on every count by the Penington Committee of Inquiry into the Rights of Private Practice in Public Hospitals in relation to section 17 of the Health Insurance Act. He did not bother to go on to explain to the public why practically all of the major proposals by the Government were either accepted by Penington as desirable or proposed, in a somewhat modified form, to the medical profession. I believe there is a need for the Opposition to come to grips with the problem of accountability in the public hospital system. In an effort to solve the dispute we have taken the action of removing section 17. The reasons for that are partly that on increasing evidence which we have had from the hospital system about the charging practice of doctors, we are more confident that that legislation is not required. Secondly, the medical profession itself has indicated a willingness in the public hospital system to observe, as far as possible, the schedule fee arrangement. There is a lot of evidence from the information we are now getting that that has been observed in the hospital system. But again, let me say, even after the section 17 imbroglio, that I think there will be a long term gain to health in this country. I believe that because of this debate, the quality of the Penington report and the attitude of most State governments to that report, many of those recommendations which are not implemented in this measure will be implemented over time by responsible State governments concerned with effective accountability of their hospital systems. Let me come to the question of waiting lists which is no doubt the latest tactic to be used by the Opposition in this matter. Mr Porter —Only since Medicare came in. Dr BLEWETT —Only since Medicare came in. If the honourable member for Barker had done his homework he would have realised that in the public hospital system for over 10 years there has been a mounting problem with waiting lists, exacerbated above all by the reduction of funds by the previous Government. That major reduction in 1981 contributed to an escalation of these waiting list problems. I am glad that at last the Victorian Government has been prepared to put on the table actual waiting list figures which are not, as the honourable member assumes, comparable with the figures for two years ago. If he bothered to look at them he would see that those figures have been constituted in a completely different and much more thorough way. He would begin to understand the real reasons for the waiting lists and begin to address and cope with the problem. Mr Porter —Are you suggesting that there has not been a rapid increase? Dr BLEWETT —As the Minister in Victoria pointed out, the waiting list problem in Victoria and the increases that have occurred over the last 12 months are due primarily to two factors. One is industrial disputes in Victoria, unrelated to Medicare. There has been no industrial dispute relating to Medicare in that hospital system. The second factor is the shortage of nurses. Having got the figures and examined them, the Victorian Government was able to make an assessment of the real reason. Again, the South Australian Government recently has done what I regard as the best analysis of patient waiting lists in public hospitals yet produced in this country. I will provide a copy for the honourable member for Barker because, again, it will help to educate him to the real problem. I will give the conclusion from that study in South Australia. There is no direct evidence to support the contention that Medicare, by adding greatly to the in-patient load, has contributed to the situation of lengthening waiting lists. I believe it is worth while that these detailed waiting lists should be put on the table and examined so that we can find the real reasons for them and begin to address the particular problems. It will not be helped by the simple, demagogic claptrap that it is all a Medicare problem. I refer to some of the more specific problems raised by honourable members, and firstly to the issue of 'attractive and affordable'. We have tried to present a much more attractive private package by providing a coverage for prostheses, and for full gap cover for medicals bills for private patients in both the private and public hospital systems. We have also made provisions for day surgery. Those were efforts to make the package more attractive. Of course, in some ways providing that more attractive package will mean some increase in the contribution rates. I point out that when we look at the individuals concerned, the overall cost to the patient may well be less than is the present situation because, for instance, medical services in hospitals will attract benefits representing 100 per cent of the schedule fee, whereas currently patients must meet the cost of all gaps. In the case of complex surgery involving diagnostic services, the cost can be substantial. As the honourable member for Perth (Dr Charlesworth) pointed out earlier, that is why the Government has agreed to the gap proposals in relation to the hospital situation because one is likely for a single operation to have a series of procedures and a multiple collection of gaps. Secondly, private patients with basic insurance at present are required to meet the full cost of prostheses involving hundreds of dollars or maintain additional health insurance. These will now be covered in the basic package. We believe that the same day hospital benefit should assist in reducing the cost of health insurance. I notice that the one word of praise from anywhere on the Opposition benches was from the honourable member for Petrie (Mr Hodges) and concerned the enforcement of the community rating principle for the whole of the health insurance arrangements which will ensure an adequate pool of good risks in the system and should result again in lower contribution rates than would otherwise be the case. So, there are a number of pressures designed to reduce the contribution rate. Even though there is some expectation that the rates will go up, on the other hand there are those greater benefits emerging to the patient. In addition, there will also be the choice of a front-end deductible scheme whereby if a contributor is willing to accept a certain proportion of the overall bill he or she will be able to get much lower contribution rates. The honourable member for Barker raised the particular issue of his concern over the phrase 'occupies a bed' as somehow stifling the development of day care. Again, if he looks at the facts he will see that that is a most unlikely occurrence. If a private hospital wants to admit day care patients-it has that choice-it has three options open to it. It can admit day care patients up to the limit of its existing approved bed capacity. Currently, most private hospitals are operating at occupancy levels of around 65 per cent, which are very little changed from pre-Medicare levels. There is therefore plenty of space and bed capacity and the new day care benefit will encourage people to make use of that bed capacity. Secondly, the hospital can build a separate free-standing day care facility and seek state government approval for it as is already the practice, I understand, in one private hospital in South Australia. That seems to have worked well over the Medicare year. Thirdly, the hospital can apply to the appropriate authorities for an increase in its existing bed capacity. With those options open to the hospital it is difficult to see how the development of day care will be stifled. A further point is that it is necessary to have some safeguards at this stage in the development of day care surgery, which is a new development. It is important at this stage that day care benefits are paid only in legitimate cases. We do not want people walking in and out of hospitals without receiving a service or procedure and being able to claim benefits. We believe that the term 'occupies a bed' provides that safeguard. The honourable member for Mackellar raised two specific questions. One related to employers providing their own insurance for their workers. The legislation will not affect or disturb employer self-financing or self-insuring health benefits for employees. I give the honourable member that assurance. His other question asked to what extent ancillary benefits for commercial insurers will come under the National Health Act. They will come under the Health Act. They will be able to offer tables covering ancillary benefits, as defined in section 15 of the Bill, on the same terms as existing registered insurers. Quite clearly, I will be dealing with the costs of Medicare in the Budget session so I will not deal with that now at any length. I must point out that as much nonsense is talked on this issue as on most of the other issues that have been raised tonight. If the honourable member for Petrie read my 3 September speech fully and most of the statements I have constantly made, he would see that they have indicated that there are three sources of funding of Medicare. One is the levy itself. The second is the very substantial saving to revenue by the ending of the tax rebate. I must say that every Opposition member is only too willing to attack the Government for doing that but never willing to admit that that is a major part of funding of the Medicare program. Thirdly there is the cut in the reinsurance pool. It is estimated at the moment that the net cost of Medicare is some $220m above what would have been the cost of the continuing and unsatisfactory Liberal scheme. In conclusion I make one other point clear. One of the main aims of the Bill is to ensure the maintenance of community rating for health insurance. The Bill requires that if commercial insurers wish to continue in health insurance they will need to register under the National Health Act. Thus they will be required to comply with all provisions of the Act, including participation in the reinsurance arrangements, which is an essential feature of community rating. Question put: That the words proposed to be omitted (Mr Porter's) amendment stand part of the question. The House divided. (Madam Deputy Speaker- Mrs J. Child) Ayes . . . . . . . . . . . 69 Noes . . . . . . . . . . . 56 —— Majority . . . . . . . . . 13 —— Baldwin, P. J. Jakobsen, C. A.Beazley, K. C. Kelly, R. J.Beddall, D. P. Kent, L.Bilney, G. N. Keogh, L. J.Blanchard, C. A. Kerin, J. C.Blewett, N. Klugman, R. E.Bowen, Lionel Lamb, A. H.Brown, Robert Langmore, J. V.Brumby, J. M. Lee, M.Charles, D. E. McHugh, J.Charlesworth, R. I. McLeay, LeoChynoweth, R. L. Maher, M. J.Cleeland, P. R. Martin, S. P.Cross, M. D. Mayer, H.Cunningham, B. T. (Teller) Mildren, J. B.Darling, E. E. Milton, P.Dubois, S. G. Morris, AllanDuffy, M. J. Morris, PeterDuncan, P. O'Keefe, N. P.Edwards, 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. Staples, P. R.Griffiths, A. G. Theophanous, A. C.Hand, G. L. Tickner, R. E.Holding, A. C. Uren, T.Hollis, C. West, S. J.Howe, B. L. Willis, R.Humphreys, B. C. (Teller) Wright, K. W.Hurford, C. J. Young, M. J.Jacobi, R. Adermann, A. E. Hodges, J. C.Aldred, K. J. Hodgman, W. M.Andrew, J. N. Hunt, R. J. D.Beale, J. Jull, D. F.Blunt, C. W. Katter, R. C.Braithwaite, R. A. Lloyd, B.Brown, N. A. McArthur, F. S.Burr, M. A. McGauran, P. J.Cadman, A. G. MacKellar, M. J. R.Cameron, Donald Macphee, I. M.Cameron, Ewen (Teller) Miles, C. G.Carlton, J. J. Millar, P. C.Cobb, M. R. Moore, J. C.Coleman, W. P. Nehl, G. B.Conquest, B. J. Porter, J. R.Cowan, D. B. Reith, P. K.Downer, A. J. G. Robinson, IanDrummond, P. H. Rocher, A. C.Edwards, Harry Ruddock, P. M.Everingham, P. A. E. Sharp, J.Fife, W. C. Shipton, R. F.Fischer, Tim Smith, W.Fisher, Peter Spender, J. M.Goodluck, B. J. Sullivan, K. J.Hall, Steele Watson, DavidHalverson, R. G. Webster, A. P.Hawker, D. P. M. White, P. N. D.Hicks, N. J. (Teller) Wilson, I. B. C. Hayden, W. G. Dobie, J. C. M.Dawkins, J. S. Howard, J. W.Lindsay, E. J. Sinclair, I. McC Question so resolved in the affirmative. Amendment regatived. Original question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. The Bill. Motion (by Dr Blewett) proposed: That clause 9 be omitted. Mr PORTER(Barker)(8.41) —The Minister for Health (Dr Blewett) explained earlier in the day why he is seeking the Committee's support in amending the Health Legislation Amendment Bill by removing clause 9. Clause 9 is a provision which sets up a tribunal to review schedule fees. The matter was not previously discussed by the Government with the Australian Medical Association and when the AMA received information that this matter was in the legislation it expressed concern to the Minister about the detail of that proposal. The Opposition also has expressed some concern about clause 9. Therefore, we are not opposed to the amendment which deletes this clause from the Bill. Dr BLEWETT(Bonython-Minister for Health)(8.42) —I just point out that the issue was discussed with the Australian Medical Association. If the honourable member for Barker (Mr Porter) looks again at the Bill he will see that clause 9 occupies some two pages of the Bill. There is a lot of detail there and some of those details have concerned the AMA. We admit to that. In an effort to get a satisfactory solution, the Government is prepared to have further negotiations on that detail with the AMA. We do not wish to delay the passage of the whole Bill and therefore I am moving for the omission of clause 9. Amendment agreed to. Bill, as amended, agreed to. Bill reported with an amendment; report-by leave-adopted. Bill (on motion by Dr Blewett)-by leave-read a third time. Debate resumed from 8 May, on motion by Mr Kerin: That the Bill be now read a second time. Madam DEPUTY SPEAKER(Mrs Child) — I understand that it is the wish of the House to debate the Wool Industry Amendment Bill 1985 concurrently with the Wool Tax (Nos 1 to 5) Amendment Bills 1985. There being no objection, the Chair will allow that course to be followed. Mr HUNT(Gwydir)(8.45) —The Opposition will assure the passage of the Wool Industry Amendment Bill 1985 and the Wool Tax (Nos 1 to 5) Amendment Bills which propose amendments to the Wool Industry Act 1972 and Wool Tax Acts (Nos 1 to 5) 1964. These pieces of legislation are very important and they affect a very important Australian industry. The purpose of the Bills is to allow greater flexibility in the apportionment of wool tax receipts and to provide for the apportionment of wool tax receipts amongst wool market support, wool research and the general purposes of the Australian Wool Corporation, namely, wool promotion and market administration, as part of the Wool Industry Act 1972. They provide for the apportionment to wool market support to be varied between a maximum of 5 per cent and a minimum of 4 per cent of the gross value of wool sales. The Bills allow the balance of the wool tax receipts to be apportioned between the Corporation's general purposes and wool research at a total rate of up to 4 per cent of the gross value of the sales of wool. Finally, they remove from the Wool Tax Acts (Nos 1 to 5) 1964 the provision for apportionment of wool tax receipts among wool market support, wool research and the general purposes of the Corporation. The Opposition supports the aims of the provisions in the Wool Industry Amendment Bill 1985 and the Wool Tax (Nos 1 to 5) Amendment Bills 1985. The Opposition also supports the provision for the actual figure within this range to be determined by the recommendation to the Minister for Primary Industry (Mr Kerin) of the Wool Council of Australia. At present the Wool Tax Acts provide for a levy on wool growers of 8 per cent of the gross sale value of wool. In 1984-85 the tax is expected to yield $171m. Receipts from the wool tax are apportioned under the Wool Tax Acts. Five per cent is allocated by the Wool Tax Acts for market support. The support fund finances any losses from the operation of the floor price scheme. The remaining 3 per cent is allocated under regulations, with 2.5 per cent going to wool promotion and market administration expenses and 0.5 per cent going to research. Under the existing legislation, the 3 per cent levy is a maximum rate. It is not a fixed rate. The rate is determined by the Minister with the concurrence of the Australian Wool Corporation. The new arrangements will not alter the total levy on wool growers-that point needs to be stressed-which will remain at 8 per cent of the value of wool sales. They will change the apportionment of 8 per cent. The levy for market support will be able to be varied between 4 per cent and 5 per cent. The actual percentage will be set by the Minister. The levy for promotion, administration and research will be variable up to a maximum of 4 per cent, corresponding to variations in the levy for market support. Wool industry research, which is a very important program, is funded by a 0.5 per cent levy on the gross value of wool sales and is matched by a Federal Government contribution on a dollar for dollar basis. This has been so for some time. This year the total amount for wool research will be around $20m. Promotion and market administration expenditures are funded by a 2.5 per cent levy on the value of wool shorn and a Federal Government contribution on a $2 industry to $1 Government basis. The levies are set as part of the current five-year plan for the wool industry. In 1984-85 the Commonwealth's share of the $102.4m for research, promotion and other expenditures will be around $38.3m. That amount includes $26m for wool promotion in 1984-85. The wool industry is a very big Australian industry. Wool exports are expected to earn $2.5 billion this financial year. They represent a sizable proportion of Australia's export earnings. In fact, around 10 per cent of Australia's export earnings will come from wool. There are very few industries in Australia which are more important to the well-being of Australia's standard of living than the Australian wool industry. I must declare a pecuniary interest in this because I happen to be a wool grower. I am proud to be a wool grower. Mr Kerin —You have very woolly ideas. Mr HUNT —The Minister said that I am very woolly around the ears. I am proud to be woolly around the ears. Mr Leo McLeay —You are woolly between the ears. Mr HUNT —The honourable member, who represents a metropolitan electorate, is very woolly-especially on the showboat. These figures demonstrate the tremendous importance of the wool industry in the overall export earnings of this country. The wool industry is based largely upon the magnificent merino sheep. The Australian merino is undoubtedly the best wool producer in the world. My family has been involved in wool production for four generations. As a wool grower, I have every reason to be proud of the enormous contribution that the industry has made to the standards of living of all Australians and the development of this nation since earliest settlement. So wool growers and their families can take a bow. I hope that they are all listening to this debate tonight, wherever they might be. I pay a tribute to those great parent stud masters who have done so much to maintain the standard of the merino animal. The merino is one of the wonder animals of the world. It is a proud animal-even prouder than the most proud Minister sitting in this Parliament, and I notice that the Minister for Aboriginal Affairs (Mr Holding) is about to leave the chamber. Merino wool is still playing a very important part in the overall stability of the economy at the present time through its important export earnings. This would not have been the case today without the Fraser Government's drought assistance schemes. Breeders of merino sheep were preparing to let their flocks face the drought unaided because of their inability to maintain the expenditures necessary to feed them through the extended drought. The fact that they did not have to let their stock become victims of drought ensured the continuation of the wool industry's vitally large export earnings and the industry's contribution to rural recovery. There are few industries in Australia that are less assisted or protected. It is interesting to note that 95 per cent to 97 per cent of the industry's product is sold on the world market. Eighty per cent of Australia's clip is exported as greasy wool and 15 per cent is processed to varying degrees locally and then exported. The outstanding export performance of the wool industry has been due in large part to its aggressive market promotion and research and the comparatively high productivity gains in the industry. I have just been asked by way of a little note from the Minister for Aboriginal Affairs whether I want a job as a stud master. I wonder what he has in mind. Mr DEPUTY SPEAKER(Mr Keogh) —The Minister has indicated to me that the honourable member should not elaborate on that question any further. Mr HUNT —Mr Deputy Speaker, thank you very much for your help. I do not know what we would do without you, sir. One of the most outstanding contributions made to this industry has been the aggressive market promotion and research and the comparatively high productivity gains in the industry. Wool's research and promotion effort is a model for other industries. Export earnings have continued to rise during a period of falling resource prices generally and on markets characterised by fast-changing consumer demands. The Australian Wool Council and the Australian Wool Corporation must be given full credit for the excellent export performance of the wool industry. Some of us in this House will remember the financial crisis that faced the Australian wool growers in the late 1960s when the so-called free auction system failed the growers and failed the nation because of certain activities of vested interest groups. Some of us can recall the great debate within the wool industry leadership-between the factions seeking a single selling authority and other mechanisms to ensure a fair return for the fleece and others who clung ideologically to the so-called free auction system. In 1970 I became very much involved in this controversial issue because it was my firm belief that the so-called free auction market was being manipulated by certain vested interest groups to bear the resource market in their favour. On Saturday, 21 March 1970 I helped organise a wool growers meeting in Moree. The meeting, which was attended by over 3,000 growers, was one of the biggest gatherings of its kind ever held in this nation. Speakers at that meeting, which I chaired, included people such as Sir William Gunn, to whom I pay a great personal tribute, Mr Bryce Killen, Mr Ronald Hunter, OBE, and Mr Claude Renshaw, OBE. Mr Hunter moved the main motion at that great meeting in the following terms: That a single marketing authority be established with the necessary powers to administer the efficient marketing and distribution of the entire wool clip. That is where and how the Australian Wool Corporation began. The Corporation was born at that meeting at Taylor Oval in Moree, New South Wales. That meeting was followed by other such meetings throughout Australia. The rank and file wool growers had become impatient with the warring factions at the leadership of the industry organisations. They had become tired of government inaction, although government was also awaiting an agreed policy position from the industry. From the Moree meeting a wave of support for a new authority grew and ultimately the wool leaders read the signs clearly. The Liberal-Country Party Government of the day set up a peak council of the Australian Wool Industry Conference. The Government acted. The then Minister for Primary Industry, Doug Anthony, who can claim great credit for the part that he played in this process, introduced the first Bill to establish the Australian Wool Commission headed by Sir William Vines. That body is now known as the Australian Wool Corporation and is headed by its excellent Chairman, Mr David Asimus. The Corporation is one of the greatest success stories in Australian agricultural and pastoral history. However, events have moved on. I might add that I believe Mr David Asimus, the Chairman of the Australian Wool Corporation and the International Wool Secretariat, is probably the most outstanding man in the field. I do not think anybody has done more for the Australian wool industry than he has. David Asimus has said: A major effort now centres on the creation and promotion of new products to expand wool demand, and marketing projects which will fully exploit the international presence of IWS to identify growth markets, improve the share of IWS sponsor countries' wool in the total demand for wool and move new products faster into consumption. The Australian Wool Council two or three years ago foresaw the possibility of future problems in meeting commitments to the International Wool Secretariat. The Council saw the need for flexibility in the apportionment amongst the end users of receipts from the wool tax levy. The Wool Council of Australia fully supports the introduction of some flexibility in the allocation of the wool tax proceeds and the Council will, of course, recommend the actual allocations. As a result of the depreciation of the Australian dollar, the Corporation would be looking at a deficit of around $20m in its commitments to the IWS in 1985-86. It is important that the flexibility provision of the Bills be in place before the 1985-86 selling season. The Opposition congratulates the Government in responding to the requests of the Wool Council of Australia. The Opposition parties offer a speedy passage to this very important legislation which I am sure will be of great value to one of the most important industries, if not the most important industry, in Australia. Mr ANDREW(Wakefield)(9.00) —The honourable member for Gwydir (Mr Hunt) has expressed his justifiable pride as a wool grower and as a participant in the Australian wool industry. It is a pride which all Australian wool growers and every other Australian ought to echo. The Australian wool industry has an extraordinary history. Within ten years of colonisation the first of the merino sheep of Spanish origin had been brought into this nation, and from 1860 to 1930 the export component of what was a new industry grew from 27 kilotonnes to 425 kilotonnes of wool. The industry had etched itself indelibly into Australia's history. The history of wool growing in Australia is the history of farmers jealously guarding their independence and their right to be profitable and productive as Australian men on the land. These Bills are another step in entrenching the capacity of this industry to develop its own character, to be a little more flexible, and to open up and pioneer its own new markets. The Wool Industry Amendment Bill and the Wool Tax Amendment Bills reflect the fact that 8 per cent of growers' gross product is contributed by growers through the wool tax to the wool industry. That is no mean undertaking for individual Australians to commit themselves to. These Bills have bipartisan support, but it is widely enough recognised in our community just how independent the wool growers have been prepared to be. The urbanised legislators opposite have failed to appreciate that the urban image of the Australian wool grower is not the Australian wool grower at all. The Australian wool grower personified by a popular cigarette advertisement, which has him astride a well-groomed horse, wearing his R. M. Williams, with a wide-brimmed hat and smoking that popular brand cigarette is far removed from the reality of growing wool in Australia. So is that image of a wide verandahed house set in spacious grounds with idyllic surroundings. In reality, the wool grower of Australia today is a man who is struggling in the face of the chill wind of economic competition. Furthermore, if honourable members will pardon the pun, were it not for the fact that he is dealing with the wool industry, he would be frozen in that chill wind. In fact, this wool grower faces the gale of competition from alternative products but has continued nonetheless to further develop a unique and natural product. After two hundred years we have a wool industry that is not only innovative and productive but whose production is reflected in the statistical fact that, whilst this nation has only 14 per cent of the world's sheep, it produces 27 per cent of the world's wool. From the years 1900 to 1970 our flock grew to a maximum of 180 million sheep. That represented a threefold increase in flock numbers but a fourfold increase in the amount of wool produced. Those figures illustrate just how innovative and productive Australia's wool farmers have been. The purpose of the Bills before the House tonight is to allow the 8 per cent contributed to the wool industry by Australia's wool growers to be broken up a little more flexibly. As the honourable member for Gwydir has said, the previous allocation of funds for wool promotion and marketing, which was previously 3 per cent, will now be up to 4 per cent and the market support levy will be variable up to 5 per cent. This greater flexibility will allow Australia's wool industry to be a more effective marketer overseas. This proud and unique industry which, as the honourable member for Gwydir has said, has survived in Australia with less protection than any other industry, and whose product is unique and unrivalled as a garment fibre, is now able to market more effectively because these Bills are before the House and more funds will be made available to it for the purpose of wool promotion and marketing research. I am very conscious of the time limits that are placed upon us tonight by the Labor Government, which is not prepared to have this issue debated as it deserves. Because time is short, I need to trim-perhaps I should say shear-my remarks in order not to go unduly over time. I close by referring, as did the honourable member for Gwydir, to the Chairman of the Australian Wool Corporation, Mr David Asimus, who is currently Chairman of the International Wool Secretariat. He said that one of the greatest areas for expansion in the wool market and for wool exports currently exists in the Chinese market. All of the innovation and productivity that has been characteristic of Australian wool growers will be needed if we are to move effectively into that market. The Bills before the House will mean that greater resources can be directed towards market expansion. I commend the Bills to the House. Mr HAWKER(Wannon)(9.06) —In speaking on the Wool Industry Amendment Bill and the Wool Tax (Nos 1 to 5) Amendment Bills, I, like the Deputy Leader of the National Party of Australia, the honourable member for Gwydir (Mr Hunt), have to declare a pecuniary interest. I can also match him and say that I am a fourth generation member of a wool growing family. In supporting these Bills I endorse all that has been said by the honourable member for Gwydir and the honourable member for Wakefield (Mr Andrew). One of the reasons this industry is so great is that it has worked in harmony with so many people who have supported it. I mention in particular the shearers and the wool classers, because it is only through the combined efforts of the growers, the shearers and the classers that this industry has become such a great industry. The amendments to the Acts which the Bills deal with mainly revolve around giving the industry the opportunity of taking up to one per cent of the wool tax-that is tax on the gross proceeds of all wool growers-away from the reserve price scheme and to use it for promotion. As has already been mentioned, at present 2 1/2 per cent of the 8 per cent levy on the gross proceeds of all wool is used for promotion in the industry. Research receives 0.5 per cent. At present the remaining 5 per cent is being used to support the reserve price scheme. Under the changed arrangements it will be possible for the industry, with the Minister's consent, to use an extra one per cent of the wool tax in promotion. The important thing for members of this House and for all people to realise is that this industry has shown a great deal of initiative. It has shown how an industry can support itself and pull itself out of a crisis with self-help. The industry is to be commended. Many other industries in Australia could take a long hard look at the wool industry because it certainly has been a great success. I emphasise to honourable members present in the House tonight that this industry is supporting itself. I also bring up the question of Government support for promotion. At present the Government provides 1.2 per cent of the gross value of wool proceeds for promotion. This works out at something like $26m a year. Some people might ask: 'Why should the Government be providing some support?'. There is plenty of justification for that support. I will quote from a submission made to the Government in December 1983 by the President of the National Farmers Federation, Mr Ian McLachlan. He spelt out very clearly the justification for the industry receiving some support from the Government. I believe that this money is well spent by the Government. I am sure it reaps it back for the nation many times over in export earnings and, probably for the Government itself, in additional taxes. Why should the Government support wool promotion funding? Honourable members will find the answer in the letter written by Mr McLachlan. He said: The Government has committed $248 million in 1983/84 to support exports of Australian manufacturing and service industries compared to $20m for the wool industry. The export dependency of the manufacturing sector according to the IAC Annual Report for 1982/83 is 11.8% making 135,600 export dependent employees and is equivalent to the estimated number of employees dependent in the sheep industry. The support per export dependent employee in the manufacturing sector is $1,840 compared to the export support for the wool industry of $165 per employee. The support for the manufacturing sector is equivalent to about 4.2 per cent of the total export earnings as measured in 1982-83. That 4.2 per cent compares with a figure of 1.2 per cent of export earnings for the wool industry. On any basis of equity the support that the Government at present puts into wool promotion is very small indeed, and certainly it is only a relatively small amount compared with support for exports in the secondary industries and service industries. Why does the industry need these additional funds? If one looks at the International Wool Secretariat, which is where most of our promotion funds are spent, one finds that the problem facing the Secretariat at present is that we have made a commitment to maintain funds in real terms at the 1982-83 level. But with the fall in the value of the Australian dollar, Australia is finding it more difficult to meet those commitments without this change in legislation. I would add, for the benefit of Government members, that the International Wool Secretariat is, again, a self-help organisation. It has three founding members-they are the wool-growing countries-namely Australia, New Zealand and, would you believe it, South Africa. Two have since been added. Nevertheless the IWS is a great success story. As the Chairman of the Australian Wool Corporation, Mr Asimus, said to the Wool Council annual conference in May of this year, the cost of the fall in the Australian dollar has caused our commitment to promotion to reach a deficit of about 50 per cent, which could be as much as $25m. That is due solely to the devaluation of the Australian dollar. When one considers that in 1984-85 the 2.5 per cent levy on wool growers' proceeds will raise $54m, one realises that a further one per cent taken from the reserve price scheme will give only $22m, so it is more than timely. I remind the House that wool is one of the great export industries of this country, earning $2.5 billion in the coming year, making it roughly equal to the wheat industry and second only to the coal industry. The wool industry has a very low level of protection, and its success is due very much to its self-help in getting out and promoting its product. I have great pleasure in supporting the Bill. Mr SHARP(Gilmore)(9.08) —I support the Wool Industry Amendment Bill, which has already been eloquently supported by the honourable member for Gwydir (Mr Hunt), the honourable member for Wakefield (Mr Andrew) and the honourable member for Wannon (Mr Hawker). The National Party of Australia and our Liberal coalition partners are prepared to support this Bill tonight on the basis that existing wool taxes are not increased. This condition is important because government taxes and charges and costs of production are already helping to deny the wool industry and indeed agricultural industries throughout Australia the opportunity to develop fully the potential of profit and the potential for a viable and enduring future in our economy. In recent years farmers' terms of trade have slowly been eroded. Costs of production have increased at a far greater rate than the consumer price index. Indeed, the costs associated with farming have risen by a far greater amount than any of the prices received by farmers for their products. The farming organisations throughout Australia, spearheaded by the National Farmers Federation, attempted to draw to the Government's attention at the so-called farm costs summit held recently here in Canberra the fact that costs are increasing at a rapid rate. Not only did the Minister for Primary Industry (Mr Kerin) not listen but the Government did not listen to the needs and demands of the farming community of Australia. The farm costs summit proved to be a sham. It proved to be the political ploy that members of the coalition parties suggested it would be during the recent election campaign. The Federal Government is slowly losing credibility in the farming community. It is important for any Government to maintain credibility if it is to stay in office. If the Government wishes to regain some of the credibility that it has lost in recent months it must try to give to the farming sectors of Australia the importance that they so richly deserve. The Australian wool industry laid the foundation-stone of our economy. It used to be popular to say that Australia rode on the sheep's back. Although it perhaps rides on the sheep's back to a lesser degree now, that is still the case to a great extent. The wool industry produces $2.5m, or some 10 per cent, of Australia's export income. In fact, 95 to 97 per cent of all wool produced in Australia is sold overseas. The responsibility for marketing and promoting wool and for managing our wool industry rests broadly on the shoulders of the Australian Wool Corporation. Of course the National Party and its coalition partner, the Liberal Party, can take a great deal of the credit for the Australian Wool Corporation because without us and, as mentioned by the Deputy Leader of the National Party, without the assistance of the former Leader of the National Party, Mr Doug Anthony, the Australian Wool Corporation would not exist as it does today. Certainly it would not be able to provide the more than adequate support that it now gives to the industry. It would be inexcusable of me to talk about the wool industry without mentioning the electorate of Gilmore, which I have the honour of representing in this Federal Parliament. Within the boundaries of the electorate of Gilmore we find some of the best wool growing areas in Australia. I mention, for instance, the areas around the city of Goulburn and towns such as Crookwell, Boorowa and Gunning, all of which are renowned fine wool growing areas. They are not just renowned for producing fine wool; they are also renowned for producing some of the best breeding stock in Australia. When I think of some of the more notable wool growers and breeders in the electorate of Gilmore my mind immediately goes to the Picker family at Bigga, who until recently held the world record price for a bale of wool. I also think of the famous Merriman family from Boorowa who own and operate the Merriville stud. The Merriville stud was established by Sir Walter Merriman and is now owned and operated by Mr Bruce Merriman and his family. Mr Hunt —Hear, hear! Great family. Mr SHARP —Certainly a great family. Goulburn is the centre of the Gilmore electorate and we find there one of the largest wool handling centres in Australia. The wool industry provides a great deal of employment, not only to shearers and others connected with the shearing industry, but also to all those people in Goulburn who work within the wool handling industry. It was a great honour for me this afternoon to be host in Parliament House to the former long-serving Mayor of Goulburn, Mr Ernie McDermott, and the former State member for Goulburn, Mr Ron Brewer. Mr McGauran —Two gentlemen. Mr SHARP —They are both great gentlemen. Both recognise the importance of the wool industry to the city of Goulburn. They have done all they can to ensure that it is a strong and viable industry for Goulburn and have thus helped to give that city a much needed impetus for development. My hope that Bills of this nature will continue to be introduced by this Government is unparallelled, but the legislation which this Government has introduced into this Parliament over recent months does not give me great confidence. The fact that fuel prices have increased dramatically, by nearly 11c a litre in the first six months of 1985 with further increases to be introduced during the rest of this year, gives me no great hope for the future of Australia's agricultural industries. However, it gives me a great deal of pleasure to support this Bill. Mr KERIN(Werriwa-Minister for Primary Industry)(9.20) —in reply-I thank honourable members for their comments during this debate on what is basically a series of machinery measures which will give the wool industry more freedom in the use of its funds. The comments made by the honourable member for Gwydir (Mr Hunt) and by most of the other honourable members opposite are shared by the Government. We all well know how important this industry is to Australia. Wool is about the only commodity for which we are a price-maker on world markets. That is why it is so important for the public to back this industry with respect to wool promotion funds. I first came into this Parliament after a stint in the Bureau of Agricultural Economics. I was in the wool marketing section and was engaged in the Australian objective measurement project, which enabled me to visit sheep properties throughout Queensland, New South Wales, Victoria and South Australia and to get a very good hands-on feeling for this great industry. When I entered the Parliament I represented the electorate of Macarthur, which was named after John Macarthur. I made the comment that the electorate of Macarthur was named after one of the greatest rogues in Australian history and had always been represented by rogues-Jeff Bate, John Kerin and Michael Baume. I think I will leave out the present honourable member for Macarthur (Mr Martin). Maybe that description is not too apt now, in later years, for Colin Hollis and the present honourable member. Recently a book has been brought out on the Macarthurs, about the Saxon strain of sheep and all the rest of it. I think we owe a greater debt to Elizabeth than we do to John. But that is a matter for the historians to argue. The Australian Wool Corporation has been a success in terms of selling, its market support measures, and the way it handles research. The Government will still put pressure on the Wool Corporation in various ways, and in discussion, to continue to be a market innovator, to continue to research the effectiveness of its wool promotion and also to go through constantly the exercise of looking at the way it should set the minimum reserve price. Quite frankly, with floating exchange rates and the way world commodity markets are, in recent periods there have been times when South Africa and New Zealand have really had a bit of a feed at our expense. At other times we have had a feed at their expense. But there is a need to go through this exercise constantly. I think the honourable member for Gilmore (Mr Sharp) talked a lot of nonsense. The wool industry has always been very much a bipartisan sort of issue in terms of what governments from both sides of the House have done. A lot of effort certainly went into the industry through the late 1960s and into the 1970s when Mr Anthony negotiated and argued with this industry against a lot of opposition. He told it that it should get itself into better shape. The actions of Sir William Gunn at Hamilton have gone down in the annals of agricultural politics in this country as a bit of folklore. It was extremely hard to get this very conservative industry to face up to the necessity to change. Eventually it did change and that is why we have what we have today. Before the Labor Government came into office in 1972 the previous Government had had a deficiency payments scheme. There was a great slump in the wool industry in the late 1960s and early 1970s. It was a very tragic time. To go through the dates, 1964 was the first time the wool tax was introduced. There was a 3 per cent tax in 1964 for promotion research. In 1970 the Australian Wool Board initiated the flexible reserve price system. During 1971 the former coalition Government introduced the fixed floor price at December 1970 levels, as I recall. It was not a formal procedure. It was limited to a single season. In 1972 the Wool Industry Act established the Australian Wool Corporation. The legal mechanisms were put in place when the Labor Government came into power. In 1974, under the Labor Government, with Ken Wriedt as Minister, the Wool Tax Acts were amended. The tax was increased to 8 per cent, and 5 per cent of that went into the market support fund. To finance it, there was a government loan of $150m to kick off the whole system of a minimum reserve price, which has since been repaid and the industry has kept on, basically, on its own funds ever since. Ken Wriedt set up the corporation structure as it is now. It is the structure which I would like to give to the Wheat Board, but of course the Wheatgrowers Federation and the wheat growers are still far too conservative to accept what I think would be very much in their own interests. When I say that the honourable member for Gilmore has talked a lot of nonsense, I am not trying to make a partisan point; it is to point out that the ongoing way that both the Liberal Government and the Labor Government have handled the wool industry has been a credit to all of us and has involved quite a lot of discussion. I have already touched on the question of promotion-what the Prime Minister (Mr Hawke) said at Deniliquin when he announced that the Government was going to move to a more predictable and equitable way of financing wool promotion than allowing the fiscal fiends to come into the matter at every Budget time. As the growers contribute on the basis of percentage of proceeds, we thought that the Government should also contribute on that basis. Instead of freezing this, as Mr Fraser did, at $20m, we moved to the 1.2 per cent formula. Honourable members may not be aware of it, but I have just received the clip forecast. On the latest figures the sheep flock is tipped to reach a 150.6m-that is going up by some 12 per cent-and we will get a clip estimated at about 785 kilotonnes. We can look at all sorts of predictions for price. We cannot determine exactly how much the wool promotion figure will be, but calculations can be made of anything up to $33m this year. I think that the figure will be about $30m; but it is certainly a great improvement on the $20m that went into wool promotion but was then frozen. I think that this Government has again shown that it can act in the real interests of the wool industry in a very constructive sense. As I said earlier, wool promotion and the funding by the public through the Government is the best demonstration possible of the public's faith in this great industry, because we still depend so much upon it. Other comments were made about the farm costs conference. I do not suppose that I should go through that, but it has been a very useful exercise for the National Farmers Federation to get some understanding of the complexities of the budgetary problem that the Government faces-in respect of wage fixation, secondary industry tariffs and protection, and how we should be handling that by way of industry packages rather than engaging in the sterile debate about free trade and protection. Even though the Press, in my view, has very much misreported the first farm costs conference, shall we call it, I think that a lot of constructive good came out of that. Even today, one of the matters that came out of it was that we have set up a working party with respect to the fisheries industry. Quite frankly, at the first meeting, when we found that the estimates of the load per farmer were so divergent, from $6,000 to $19,000, it was very sensible to put that matter into the hands of officials to see whether we could get agreement. Now we have narrowed that agreement down to something between $6,000 and $9,000. Mr Hawker —Which is your figure? Mr KERIN —It does not really matter what the figure comes out at. We know that the theory is right and that the order is something between $6,000 and $9,000. That is certainly not of the order of $6,000 to $19,000. So we have agreement on that. In terms of the budgetary considerations, specific requests by the National Farmers Federation will be taken into account in the budgetary discussions. I have to go into a Cabinet meeting in a moment to discuss some items relating to these matters. I do not really want to carry through this idea that the farm costs meeting was somehow a bad exercise. I think it was a very good exercise in getting the NFF to understand the complexities of the budgetary decisions that we have before us, the need to preserve the trilogy, the need to bear down on costs, and the need to take macroeconomic decisions in the interests of the rural sector as a whole, because getting the economy right, getting inflation down and keeping interest rates down are by far the most important things that any government can do for the rural sector as a whole. I thank honourable members opposite for their comments on this most important legislation. Question resolved in the affirmative. Bill read a second time. Message from Governor-General recommending appropriation announced. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Kerin) read a third time. Consideration resumed from 8 May, on motion by Mr Kerin: That the Bills be now read a second time. Question resolved in the affirmative. Bills read a second time. Leave granted for third readings to moved forthwith. Bills (on motion by Mr Kerin) read a third time. Debate resumed from 15 May, on motion by Mr Howe: That the Bill be now read a second time. Mr BRAITHWAITE(Dawson)(9.32) — While the Social Security and Repatriation Legislation Amendment Bill 1985 is an all-inclusive Bill covering 19 separate Acts, it does not provide much problem for the Opposition, except inasmuch as we have given notification that we will be opposing certain aspects of it in Committee. It has been described as an ordinary machinery Bill, but in some respects the full information that would properly reflect the nature of the changes has not been included in the outline, in the explanatory memorandum or in the second reading speech of the Minister for Social Security (Mr Howe). I will deal with those as we come to them. The Bill in fact covers three ministerial areas-Social Security, Community Services and Veterans' Affairs. I would like to dwell on some aspects of the amendments to the Social Security Act before I deal with the assets test and the amendments to the Compensation (Commonwealth Government Employees) Act. In respect of not only the Social Security Act but also other Acts, the Bill provides for the payment of reduced pensions and allowances under the new enterprise incentive scheme, but we find a difficulty here in that it has been impossible to date to find out details of that scheme. I understand that legislation is not required by the Department in this regard, but the only assurance I as shadow Minister have been able to receive is that payments under this scheme will be provided by way of income support, whereas at one time it was suggested that there might be capitalisation of funds and they would be payable in a lump sum. Based on the fact that they will be paid as income support, the Opposition sees no problem with the amendments suggested to both the Social Security Act and some of the other Acts. I say to the Minister for Health (Dr Blewett), who is at the table, that I do not believe it is good enough to bring legislation into this House when a program relating to that legislation has not been properly put to the Parliament, which I believe to be the case. Whilst some States have agreements with the Commonwealth in connection with this program, they have not yet been signed; and other States have yet to agree. I believe it is almost a contempt of the Parliament not to have that scheme available for scrutiny by all members of the Parliament before this Bill becomes an Act. The Bill also clarifies, in a context which will not be misleading or from which a mistake will not be made, matters pertaining to the custody of children. Apparently in many cases it is very difficult under the Family Law Act actually to determine custody, and the Bill goes some way to clearing that up. There is also a four-year rule which provides that the benefit, pension or allowance can be payable to a parent for a dependent child is overseas provided that that child is likely to return to Australia within a certain period. That is an adjustment of something that was not clear in the past. There is also a 10-year rule under which it is necessary for a person to prove 10 years of residency in Australia, preferably at the one time. However, providing a person has been in Australia for five years on a continuous basis and for another broken period of five years, he will now be eligible to the various entitlements. The social security amendments also pick up aspects of the Redlich report in relation to summary hearings. This is expected to improve the basis on which charges can be laid for overpayment or fraud and enable the matters to be dealt with more quickly. Of course, this highlights the difficulties not only in the social security legislation but also with many other Acts of the amount of reported and unreported fraud under the various programs. I have heard estimates of as much as $300m per year being taken from the Commonwealth, from taxpayers, by fraudulent applications and payment of benefits and allowances. Perhaps this will be a means by which quicker action can be taken to recover such overpayments. As I have said, while the amendments deal with a new enterprise incentive scheme, I believe there is some need, particularly with unemployment benefits, for legislation to clarify the situation of a self-employed person who is able to work outside at certain times of the year but, because the Act at present deems such people to be underemployed and not unemployed, they do not receive the benefit. Under the new scheme, those people will not be eligible for the benefit because they are established. These people are mainly in the rural industries. I have seen cases in which commissioners on a tribunal dealing with unemployment benefit for farmers have indicated that the legislation is a bit fuzzy and needs clarification. This is an area which should be looked at. One of the 19 Acts amended by this legislation is the Social Security and Repatriation (Budget Measures and Assets Test) Act of 1984. The amendments just clarify the situation of payments before and after the starting date. However, I believe that many pensioners who have been affected by the assets test expected that when the first available opportunity to amend the legislation arose the opportunity would have been taken to include in the legislation the changes that have been mooted, and recognised by both the Minister for Social Security and the Prime Minister (Mr Hawke), to correct the anomalies and the difficulties faced by elderly people on farms in rural areas. This would have been an opportunity for the Minister to bring forward such amendments. We understand that these matters have been taken to Cabinet. I am not sure how much they were pressed in Cabinet. We have not seen a statement made in this House and we certainly have not seen any amendments to this measure. As I have said, this would have been a wonderful opportunity for the Government to incorporate those changes acknowledged as necessary by pensioners, elderly people, rural industries, the National Farmers Federation, the Queensland Country Women's Association and of course the Opposition. The Opposition has been pointing out from the time the assets test was suggested that there would be hardship and anomalies. Yet nothing has been done. Either the Government is deaf and does not hear these complaints about the anomalies or it is pigheaded about them. It is time that those changes were made to relieve the distress and discomfort of many of those elderly people who are suffering as a result of the assets test. I will not say that it is widespread but the number of applications being made at the moment under the hardship provisions-from 2,000 to 3,000 people-indicates that a minority is being affected and that relief is required. The quicker this relief is provided the better because, if it requires legislative change, it cannot be done until August. This will put many people in a continually disadvantaged situation. They will have no idea of what the changes should be or could be and, worse still, whether they will be applied retrospectively to the date of the commencement of the Act. The Opposition believes that a wonderful opportunity was missed by the Government in this regard. I now deal with the third and most important area. The Government seeks to amend the provisions of the Compensation (Commonwealth Government Employees) Act 1977. The Opposition has read of the discontent within the private and public sectors about the escalating cost of workers compensation. Any employer would realise that the effects of these compensation payments are being felt in workers compensation premiums right around Australia. Any change to the Act at this stage which would make it more generous is not something that the Australian people would tolerate. I draw the attention of honourable members to some statistics in this regard. A report in the National Times dated 6 to 12 July 1984 stated: Compensation claims paid by private insurers mushroomed from $261m in 1977 to $647m in 1982-a rise of 148 per cent. Over the same period, the CPI rose by only 57 per cent. I have taken some figures from the annual reports of the Commissioner for Employees Compensation. The figures cited are from Table 1. According to the National Times, compensation claims paid by private insurers mushroomed. The Commonwealth's payments in 1977 amounted to $25m, but in 1982 the figure for that area of Commonwealth responsibility had risen to $75m, or a rise of 200 per cent. If the National Times was complaining about the 148 per cent rise in the private sector, I wonder what it would have done if it had realised that there had been a 300 per cent increase within the public sector under the Commonwealth's own scheme. Those figures were for the years between 1977 and 1982. It is interesting that from 1982 to 1984 the figure increased from $75m to $121m. That is an increase of about 60 per cent. Certainly the consumer price index has not increased by that extent. Let me give the House the basic comparative figures for the last 10 years. In 1974-75 there were 35,000 claims costing $15m. In 1983-84 there were 54,776 claims costing $121m, or eight times the amount 10 years before. I believe the Opposition has a legitimate concern. The National Times and the Press of Australia also have a legitimate concern, as do the employers who have to contribute to private insurance schemes. To recapitulate, I quote from the Australian Financial Review of 9 January 1985. Under the heading 'Serious deficiencies in compo office' it states: Serious weaknesses in the operational of the Federal Employees Compensation Office are being reviewed by a team of consultants and officers from the Public Service Board and Department of Social Security. Government sources expect the review, which has been running for some months, to go to the Minister for Social Security, Mr Howe, next month. This has led to soaring administrative costs as well as overloading of an antiquated administrative structure for processing claims. The final paragraph states: The 1982-83 annual report shows a 33 per cent increase in expenditure on compensation claims from $75,610,000 in 1981-82 to $100,665,000 in 1982-83. As I have said, this reached $125m in 1983-84. The Opposition has looked at these changes. Very little mention was made in the second reading speech of the major changes to which the Parliament should be addressing itself. There are three changes. We have given indications that we will be amending clause 34 and opposing clauses 35, 36 and 37. I believe it would be of interest to the Parliament to understand what the situation is. Clause 34 gives, for the first time in compensation history-I have checked three of the States in this regard-a privileged position to a trade union official. Mr Slipper —Shameful! Mr BRAITHWAITE —It is not only shameful, but also typical of the manner in which this Government has gone down the trade union and the Australian Council of Trade Unions line. It has not had the gumption or the guts to say in this House: 'This is what we are doing'. I understand this is a break with tradition in that the Government has not only introduced the definition of trade union into the Act, but it is also prepared to give an employee of the Commonwealth, who is also an official of the trade union, cover for work done after hours where it is said that he is employing himself in the interests of the members of his union. If a trade union meeting is held after hours, travel to and from home is now covered. What is the position of such an employee who pickets against his employer? Is that activity covered or not? I have checked with three of the States to confirm that this legislation is breaking fresh ground. None of the States have separate compensation requirements for their employees; they are covered as part of a private insurance scheme. In view of the figures I have mentioned, the Commonwealth has obviously provided a very generous scheme. It appears to be so generous that the trade union movement wants to move in. At the moment, if a trade union wants to take cover on a voluntary basis, it is allowed to do so. The Government, in a most secretive way, has included its compensation provisions in amongst a lot of amendments to other Bills. It has not made known what it is doing. We will be seeking an alteration to clause 34. While the legislation does not define an ordinary recess-I understand this has been established legally as meaning a lunch hour break-a lunch hour break, apart from certain exceptions, will be covered. So an employee who goes about his business in his hour off to have dinner outside, have a run around or whatever will be covered. The legislation in the States does not cover this point specifically because there have been enough legal precedents to determine that a person who is engaging in this type of activity, with the knowledge of the employer, is covered in the event of an accident. Not covered in the legislation as an exception is a person who wilfully and deliberately engages in high risk activity. Would someone injured in a football match during the lunch hour be covered, even though it is not a requirement of the employer that he play sport during the lunch hour? Again, I think this is putting a person into a privileged position. This does not already exist, for the right purpose, in the State Acts. In this legislation we do not find the exemption we feel is necessary to exempt those activities undertaken by a person who wilfully goes looking for trouble during a lunch break. That is my second point. My third point relates to tables which I have cleared with the Minister for incorporation in Hansard. The tables are taken from the Department of Social Security annual report for 1983-84 and make a comparison between benefits available from unemployment and sickness benefits and those available under the Commonwealth employees scheme. I seek leave to have the tables incorporated in Hansard. Leave granted. The tables read as follows- RATES OF UNEMPLOYMENT AND SICKNESS BENEFITS AT 30 JUNE 1984 Maximum weekly rate at 30 Benefit June 1984 $ Single person Aged 16 or 17 45.00 Aged 18 or over without dependants Unemployment beneficiary 78.60 Sickness beneficiary 89.40 Aged 18 or over with dependants 89.40 Married person with dependent spouse 149.10 Other payments Additional benefit for each child 12.00 Supplementary allowance (sickness beneficiaries generally after six weeks) 10.00 Mother's/guardian's allowance 8.00 Remote area allowance Single person 7.00 Married rate (couple) 12.00 Addition per child 3.50 RATES OF BENEFIT-COMMONWEALTH GOVERNMENT EMPLOYEES ACT 1971 From 1.5.83 From 1.11.83 From 1.5.84 $ $ $ Weekly incapacity payments Employee 134.85 141.30 149.00 Dependent spouse 35.30 37.00 39.00 Each dependent child 16.80 17.60 18.60 Attendant's allowance 23.55 24.70 26.00 Maximum payment-partial incapacity 134.85 141.30 149.00 Payment on death of employee Lump sum to dependants (maximum) 42,000.00 44,010.00 46,400.00 Weekly payment each dependent child 16.80 17.60 18.60 Minimum total payment each child 1,680.00 1,760.00 1,860.00 Funeral expenses 1,090.00 1,140.00 1,200.00 Mr BRAITHWAITE —I thank the House. As I said, those facts and figures have been taken directly from the report. The last aspect about which the Opposition complains is that which allows a person who is partially incapacitated but available for work and who cannot find work and who has undertaken certain schemes to try to rehabilitate himself, to be treated as a fully incapacitated person and to continue to be compensated as such. That is a unique situation applying only to a Commonwealth employee. The two tables I have just incorporated indicate that a single person paid compensation on this basis will have had available to him $149 a week as at 30 June 1984. However, somebody who is in exactly the same situation who has had to leave employment, who receives compensation, who undertakes rehabilitation courses and who is available for work but is unable to find work, would necessarily, if he were 85 per cent incapacitated, have to go on an invalid pension. Obviously that person would not be 85 per cent incapacitated because he could still work. I understand that such a person normally would fall within the unemployment benefits provision. Such a person in the private sector who is 18 years old and without dependants would be entitled to $78.60 a week compared with the other benefit of $149 a week. No wonder the people of Australia not only complain about the growth of the private sector compensation, but also must be concerned about the figure that we were talking about earlier-the tremendous eight-fold increase over the last 10 years in payments by the Commonwealth. People must wonder why these payments have taken place. At the moment this Government is deliberately going out of its way to cut expenditure yet it has introduced a Bill, practically within the week, that will increase, certainly not curb, the rate of expenditure. I believe it is hypocritical of the Government to say one thing and next week make favoured allowances to the trade union movement and its own employees. Mr Rocher —When has this Government ever worried about hypocrisy? Mr BRAITHWAITE —The Government probably has never worried about hypocrisy, but it should know the meaning of the word by now. This is not the only example of such hypocrisy; there have been thousands over the years. We have the situation of the Government cutting costs in one week in connection with local government and in a lot of other areas that we have a concern with and yet treating its own employees to conditions of privilege. I return to the Bill. The amendments to the Act have been introduced without the Government addressing itself to a review of the whole service, which obviously was to come out earlier this year. The Minister for Social Security has not addressed himself to the administrative changes required in this regard. I believe the Opposition would agree with the other amendments because basically they dovetail more closely with arrangements but also because they accept the principles available within other workers' compensation Acts within the States. We will go into Committee on these matters at a later time. I know that it is all very well for an Opposition to be critical in here, but people will want to know our position in this regard. Having examined both the private and public sectors and bearing in mind the fact that there must be a review, I believe that it would be part of our policy to review the existing Commonwealth employees compensation scheme with a view to contracting it out to the insurance market in order to reduce the high administrative cost currently incurred by the scheme. If we are contracting out, we would possibly contract with one of the State instrumentalities where the benefits would be greater and the cost would be cheaper. It is time for a proper review of this Act. I wish the matter would come before the Parliament for a full debate so that the Opposition could expound its views in this regard. Mr Deputy Speaker, I move: That all words after 'That' be omitted with a view to substituting the following words: 'whilst reiterating the Opposition's intention to abolish the ''assets test'', the Government be rebuked for not providing within the Bill, the amendments required to remove the anomalies and hardships provided within the present test so as to effect the review of the assets test as promised by both the Minister and the Prime Minister'. Mr DEPUTY SPEAKER(Mr Drummond) —Is the amendment seconded? Mr Everingham —I second the amendment. Ms McHUGH(Phillip)(9.57) —The Social Security and Repatriation Legislation Amendment Bill contains a number of amendments which simply update and simplify the legislation dealing with the Government's responsibilities to those who receive welfare and repatriation benefits. This is an area of high priority for a Labor government. Our first priority is to those who need government help and that leads me to talk tonight about the issue of poverty in this lucky country in 1985, and particularly the issue of women in poverty. The Opposition claims of hypocrisy astound me when we begin to talk of benefits for those in need. Some of their claims that pensioners and beneficiaries are worse off under the Australian Labor Government are just not true. Senator Messner has made some of these claims and in so doing has used figures that are deliberately slanted. Instead of making a proper comparison of the last full quarter under the Liberal Government, December 1982, with the December 1984 quarter, he took figures from May 1983, just after Labor had granted its first social security rise, and March 1985, just before the latest rise under Labor. The real figures of course show that the position of people receiving social security has improved by up to 19.5 per cent relative to the poverty line. That is still not enough, but at least our Government has its priorities right. It is committed to providing income support first to those who need it, unlike honourable members opposite whose priorities commit them to providing income support to those who have their own wealth to support themselves whether the Government can afford them that benefit or not. Honourable members on this side have a genuine concern for the real poor in Australia. The Opposition has no understanding of poverty. For the last three weeks we have listened to Opposition members talking about the poverty of farmers who have assets and about their need for Government help. How many times have members of the Opposition talked about the poverty of those who have nothing at all, except the support that government gives them? Do they give any thought to the fact that 800,000 children in Australia are dependent on people who are receiving pensions or benefits and most of whom are women? Labor's first two Budgets meant a 40 per cent increase in additional payments for children of people on social security. This year some 420,000 families are receiving additional payments for children at a cost of $420m. Another $50m is being provided for children in low wage families through the family income supplement. But there is still a great deal to be done. Since the Henderson Commission of Inquiry into Poverty almost nothing has been done to implement the recommendations coming out of that Inquiry. Ten years after the completion of the Poverty Inquiry's main report the problem of persistent poverty in Australia apparently remains as intractable as ever. This is recognised by the Minister for Social Security (Mr Howe) and our Government. Dr Bettina Cass, in her recent paper 'The Changing Face of Poverty in Australia' pointed out that the face of poverty in Australia is female. The majority of people who run the risk of being poor in Australia are women, especially women living alone or unmarried mothers. The Institute of Family Studies showed that from 1978 to 1982 the number of sole parents in poverty-93 per cent of those parents were women-grew by more than 38 per cent. One in four income units in Australia is headed by a woman but women comprise one-half of all income units in poverty. A single parent with three children and receiving $165.65 a week is 20 per cent below the poverty line. One of the most moving experiences for me since I became a member of parliament was meeting a delegation of women from the Council for the Single Mother and Her Child. They told members of the Caucus welfare committee about the terrible plight of single parents and their children. In 1972 the allowable income for a single parent was $20 per week, plus $6 for each child. In 1985 the allowable income for a single parent is $30 per week and still only $6 per child. In 1972 the consumer price index figure for the September quarter was 40.2; in September 1984 that figure had increased to 134. Twenty dollars in 1972 would be worth $67 in 1984 dollars. Similarly, $6 in 1972 would be worth $20 in 1984 dollars. So just to restore the allowable income to the value it had in 1972 it would be necessary to increase the means test free area to $67, plus $20 for each child. As it stands now, a single parent with one child loses 50c in every dollar earned over the sum of $36 per week. This represents an effective marginal tax rate of 50 per cent. So on that meagre income these women enter that very high marginal tax rate area. Since the supporting parent's benefit and widow's pension for a single parent with one child is only $115.90 a week this effective marginal tax rate comes into operation when the family's total income is only $151.90 per week. In addition, there is also a means test on the supplementary rent allowance for which the allowable income is only $6 a week. The combined effect of such severe means tests is to lock single parents out of the work force or place intolerable economic pressure on them not to report their earnings. The income tests and the taxation system operating together lock single parents, who are already on low incomes, into a poverty trap. The more they struggle to climb out of the trap by their own labours, the more they slip back into poverty. In other words, as a result of the combined effect of the income tests, taxation, costs of child care, transport and other costs incurred in participating in the work force, a person may be worse off by working. The single parent is caught between fear and poverty. Often he or she has nowhere to turn but to the unscrupulous employers in the underground labour market. Some of these employers actually seek out single parents as potential employees and encourage them to work without reporting their earnings. One of the women from the Council for the Single Mother and Her Child told the committee that she was preparing to hand over her child to the State because she could not cope any longer on supporting mother's benefits. The cost to the State of supporting her child in the care of foster parents would be $350 a week, twice the amount of the supporting parent's benefit. Single parents who have the double task of rearing children and earning money in order to survive should not be penalised in this way and we in the Government must find a way to redress this highly regressive situation, particularly as it relates to women. Dr Bettina Cass stated: The explanation of women's over-representation among the poor must be sought in women's discontinuous employment history-their relatively low pay when in work and the periods which married women and mothers spend at home providing services which give little financial reward. Measurements of women's poverty do not end, however, with the identification of poverty in women-headed income units. In aged couples and large, married couple families, in families with unemployed, sick and incapacitated male breadwinners there are also many poor women, very often taking up the burden of managing and stretching the family's inadequate resources. Dr Cass points out how many women fall into this terrible trap of poverty. The unequal distribution of wealth in Australia places too heavy a burden on too many women. Our Government will work, through the social security legislation and through taxation reform, to relieve that burden. Mr WILSON(Sturt)(10.06) —I rise to take part in the debate on the Social Security and Repatriation Legislation Amendment Bill, which covers a whole range of social security and related issues. I must say that I was very interested in what the previous speaker, the honourable member for Phillip (Ms McHugh), had to say. In her speech she expressed concern about the poverty that is experienced by many people in Australia, particularly women. I think she is right. In percentage terms, women suffer a greater degree of poverty than perhaps do men. Nevertheless, there is still an all too large group of men who suffer from poverty also. In her speech she focused on the problem of the incomes of people in poverty. I bring to the attention of the House that it is not merely income deficiency which causes poverty. Sometimes poverty for an individual is a reflection of that individual's lack of economic independence. A woman, or indeed a man, can be living within a household that, viewed as a household, is affluent. Yet that individual can experience some, if not all, of the attributes of poverty, one of which is a lack of personal economic independence. I have been concerned over the years about how members of the Government and the Australian Labor Party have failed to understand, when they look at the tax system and the effects and implications of the spouse rebate in the tax system, one of the features of the benefits conferred on families through the spouse rebate. It is true that the spouse rebate is a benefit to the taxpayer of the household, who is mostly a man, but who increasingly in many households is a woman. The benefit is provided by recognising the reduced taxable capacity of the taxpayer because the taxpayer is supporting not only himself or herself but also other members of a household-in the case of a spouse rebate, a husband or wife. Some could argue-I support the view-that there are strong reasons why consideration should be given to cashing out the spouse rebate and paying it as a cash benefit to the person who would otherwise be the dependent member of the household, be it a woman or a man. Our social attitudes have changed over the years. This Parliament needs to recognise that that change has occurred. As a result of our social behaviour, all of us, for many years of our lives, live in households and in many economies where we contribute to and draw on the income of that household. Notwithstanding that fact we have come through a family household life experience in which we have been taught to be independent and we want personal economic independence. It is interesting that when men and women reach the age of retirement we do not ask them whether they live in a single income household and, if they do, pay the pension only to the nominal bread winner of that household. When they reach the age of retirement and, through age, become eligible for the age pension, we pay them each an age pension and give to each some degree of economic independence. I think that is an issue that needs to be addressed and understood more fully than it is. I also recognise that what the previous speaker had to say about the level of benefits is an important matter that needs to be considered. Ms McHugh —To single parents. Mr WILSON —And the position of the single parent is an important one. I was fascinated to hear the previous speaker talk about the marginal effective tax rate and the implications of putting a means test, whether it is an income test, assets test or both, on top of a tax test. I think we need to look at it in a wholistic way and we should not try to delude the Australian people by making them believe that pensioners are well off because they have withdrawal rates through the means test on incomes of 50c in the dollar, when in fact large numbers of them have withdrawal rates higher then those of the highest taxpayers in the land. When we put on top of the incomes test the tax liability of so many pensioners, the withdrawal rate, in some cases of two parent households, can be in excess of 80c in the dollar; for others as high as 65c in the dollar. If we are concerned about helping people in greatest need, we need to ask ourselves what is the effect on social behaviour of imposing upon pensioners or prospective pensioners a tax effective withdrawal rate at the highest marginal tax rates in the land. I am glad that members of the Labor Party are beginning to look at the combined effect of income tests which they so readily support with the liability that is imposed by another test on income through the Income Tax Assessment Act. I believe that we need to integrate our social security and tax systems and reduce the effective marginal tax rates imposed upon low income individuals and low income households in a way that does enable them to lift themselves off the poverty line. It is true that the system does provide poverty traps that prevent people getting out of poverty. It is not only the tax effect of the combined implications of the income test and income tax that does it; it is also the effect of providing to children of social security beneficiaries income entitlements or child benefits-not because they have children but because they are unemployed or because they are supporting parents. If they become employed or if they cease to be supporting parents, they lose the child benefits. This creates yet another poverty trap. The previous speaker drew attention to the fact that a child in public child welfare care might cost governments hundreds of dollars per week. If the social security tax system is to acknowledge the cost of dependent children and if we are to prevent those costs occurring, we need to recognise the cost that all families-be they those of supporting parents, two-parent families, low income, middle income or high income families-incur in supporting other individuals who, if they were not supported, by private sector social security, would become a burden on the State. So we need to address that question too as we approach the issue of tax reform. I have been greatly concerned that as this taxation debate has proceeded there has been little comment from members of the Government as to the reform that might be needed within the income tax system itself. The debate has focused upon the possible switch of the mix between direct income taxes and indirect, sales and other similar taxes. Little attention appears to have been given by the Government to the need to reform the income tax system. This Parliament and Government must ask whether income taxes should be imposed on the basis of capacity to pay, and, if so, what are the factors that will be brought into account in determining capacity to pay. Is it merely a function of the income of the individual or are the individual circumstances to be looked at in terms of the income or lack of income of the household of which that taxpaying individual is a member? Is it also to take account of or to ignore the extent to which the taxpaying individual is supporting children and a dependent spouse or are they going to be regarded by the Labor Government as mere indulgences and luxuries that the person who marries and supports a totally dependent spouse must pay for 100c in the dollar, the same being true of their choice to have children? I happen to believe that we need a tax system in the personal income tax area that is far more sensitive and which recognises more fully the role discharged by people in the private sector in supporting individuals who, if they were not supported by individual taxpayers, would fall back and have to be supported by the taxpayer in general through the social security system. The more people we can encourage to support themselves and reward for their efforts in trying to support themselves, their spouses and their children, the more there will be available to direct to those who are in real and genuine need. But the tax and social security systems we have today destroy all those incentives and in so many areas of their operation encourage family breakdown, encourage people to dissipate their assets and encourage current day spending rather than providing for future possible needs. I hope that some members of the Labor Party will take up what the previous speaker said and be concerned about those who are genuinely poor. But in expressing that concern I hope they recognise that the people who are genuinely poor can be more greatly assisted if others are encouraged and rewarded for providing for themselves. The fact that they provide for themselves and others should be recognised through the tax and social security systems. This can be done only by reducing and in some cases by abolishing income tests which have the effect of increasing the effective marginal tax rate about which the previous speaker spoke and expressed her concern. There are two elements of the Bill unrelated to social security that I want to bring to the attention of the House and about which I express my concern. I am deeply worried about the extension of the compensation legislation that will confer rights upon Commonwealth employees who, if they are members of unions and go to a meeting in what they claim to be the course of their union responsibilities, can still be regarded as being on duty in the Public Service. The Bill does not spell out the limits for those sorts of meetings. Will it enable union officials who, out of their own interest join the Labor Party, for example, and attend Labor Party branch meetings and who, upon returning home after such meetings, are involved in an accident, then to be entitled to workers compensation when other members attending that meeting are not so benefited? The second area with respect to which I want to express concern is the circumstances in which invalidity pensions are to continue to be available. Increasing proportions of our population are employed by the public sector, a trend which I think needs to be reversed. Even if it were reversed, there would still be a substantial number of public sector employees. This legislation seeks to give an entitlement to an employee who is partially incapacitated. I assume that that means that the employee is not 85 per cent incapacitated, which is the test that the average Australian invalid pensioner has to satisfy before being entitled to a social security pension. A partially incapacitated employee who cannot find work is entitled to continue to receive a full pension. I believe that the test that should be applied to eligibility for such a benefit is the test that would be applied to the whole community. I do not believe that public servants administering the Social Security Department should be in the position of saying to the average Australian citizen who, as a result of accident, applies for an invalid pension: 'You are not incapacitated to the extent of 85 per cent. Therefore, go out and find a job.' So many people in that position cannot find jobs in today's employment market. They cannot go back to the Department of Social Security and say: 'I know I am not 85 per cent incapacitated for work. I have tried to get a job but every employer I have approached knows that I have an injury and no one will employ me. Please give me an invalid pension.' Unless the Government is prepared to look at that position and say that those people should be entitled to a full invalid pension, I do not believe that Commonwealth employees should be entitled to greater concessions in terms of invalid compensation pensions. I think those people, like every other Australian, should fall back on the generalised social security safety net and get the benefits that are available in that area. I think it is unfair that the taxpayer should be required to pay additional benefits to Commonwealth employees when presumably the Government does not think the nation can afford to make such benefits available to everyone. I conclude my remarks by referring to means tests in general, and I wish to make some points of principle. Means tests, in my view, are counter-productive. They rarely, if ever, provide greater help to those in need than would be available under a universal pension scheme. Because means tests destroy incentive and penalise those who strive for self-reliance, more and more become victims of what are, in effect, the wealth tax imposed by the assets test, or the supertax on income imposed by the income test, and the poverty traps inherent in all means-tested pensions. Means tests distort individual choice and actions in ways far more significant than many will concede. They affect people's patterns of expenditure and saving. They distort rational economic behaviour. There is no doubt that means and assets tests cause people to reduce their savings effort; to dissipate assets and the present and future income potential of such assets, to purchase housing or fast-depreciating consumer goods; and to use up their savings or potential savings on consumption expenditure at levels they would not incur if there was a reward for deferring expenditure, perhaps for use in their old age. It is clear that people adjust their affairs to their best advantage. The expectation of or entitlement to a non-contributory universal age pension would, in my view, eliminate the disincentive to save caused by the operation of means tests on income and assets. Choice and individual responsibility go together. They are intrinsic to the philosophy of a truly democratic society. When an individual is free to choose the directions he wishes to follow in his future life, most recognise that with this freedom goes the desire and responsiblity to strive for self-reliance. These ideals of choice and individual responsibility must be tempered by compassion. Compassion properly dictates that society must accept responsibility for ensuring that no Australian falls below the basic minimum standard of living. It is, however, important that society's compassion be expressed in ways which maximise rather than minimise the freedom of choice and the capacity of individuals to achieve self-reliance. Mr DEPUTY SPEAKER(Mr Andrew) —Order! The honourable member's time has expired. Mr GEAR(Canning)(10.26) —I was very interested in some of the views put by the honourable member for Sturt (Mr Wilson), particularly in relation to income tax. He expressed some personal views, which I think should be canvassed more widely. Certainly, he would have that opportunity if only his Party leader would accept the invitation extended to him to come to the tax summit and put the Liberal Party's views on taxation. It is a pity, in my view, that the Liberal Party will not take up that offer. If it really wanted to make a constructive contribution to the tax debate it would have the opportunity. I agree with the honourable member for Sturt that there is a need for an overhaul of the social security and taxation systems. The Government is addressing directly the taxation system with the tax summit in July. We have to deal with social security in a piecemeal fashion, mainly because we cannot rely on bipartisan support from the Opposition to look at the provisions in the Social Security Act in any rational manner. We have seen in the past that Opposition members are nothing more than political opportunists who will try to scare anybody if it will get a vote for them. The honourable member for Sturt also said that means tests and assets tests destroy incentive. He is right. Any pension scheme with an assets test or a means test does. The system that we have now destroys incentive. There is absolutely no incentive for anybody to make provision for his retirement if it excludes him from the pension paid to everybody else. We have had that system since 1951. Prior to that we had the embryo of a national superannuation scheme to which the honourable member for Sturt alluded but that changed in 1951 when the present pension system was introduced. It was a safety net for those people who did not have the capacity to make provision for their retirement. We have not changed that system. The assets test was a feature of the system in 1951. In fact, it was in force from 1908 until 1976. It was an easy political decision to abolish the assets test in 1976. To bring some integrity back into the pension system it has to have an assets test; otherwise we have the spectre of which the Minister for Social Security (Mr Howe) told us with millionaires receiving the pension. They get money at the expense of people who are living on nothing more than the pension, who have no assets and are forced into the private rental market with nothing more than their pensions. There is something obscene about that. The honourable member talked about a national superannuation scheme. I agree with him that there is nothing more urgent in providing for our future retirement schemes than a national superannuation scheme. Only one government in recent times has looked at that matter and it was not a Liberal government. The Social Security and Repatriation Legislation Amendment Bill before us tonight makes a few significant advances in the field of social security. I will touch on some of them. The new enterprise incentive scheme is designed to encourage and assist unemployed people in creating and developing business initiatives which will generate permanent employment. It is an excellent employment creation initiative by this Government which aims to provide incentive and support for unemployed people who have the capacity and drive to organise themselves into a small business. It is an employment creation scheme based on the principle of promoting and encouraging self-sufficiency. It is a rational and efficient use of public money. The scheme was endorsed in principle by the report of the Kirby Committee of Inquiry into Labour Market Programs, which recognised the need for income support to be provided during the establishment of self-generating business projects. A constituent of mine has sought alternative solutions to the problem of unemployment. I know that this scheme will be of assistance to her. As a graduate from a tertiary institution she was unable to find work. She was not satisfied with simply receiving the unemployment benefit fortnightly and began to consider ways in which she could productively use her time and generate an income for herself. Since then she has set up a small store selling clothes and craft goods which she designs and makes herself. The capital and ongoing costs of running the business are a drain on her limited savings. Because it takes time to attract customers there is a delay between setting up and making an adequate profit. For the first couple of months she ran at a loss. The catch-22 situation comes in because she is not now unemployed. Because she has started a business she is considered to be employed, although she is not earning an income. As I said before, in setting up the business she is running at a loss. However, she is considered to be employed and is not entitled to the unemployment benefit. Because she needs an income, she faces the prospect of having to close the business in order to requalify for the unemployment benefit. It would be a great pity if this initiative and potentially successful enterprise were strangled. This Bill will allow an income supplement to be paid to people like my constituent who, having been receiving the unemployment benefit, are now establishing a small business concern for themselves. I am sure that many other people in Australia will be assisted by that measure. Many people in receipt of the unemployment benefit at the moment can show the initiative to start small businesses, whether they are cottage industries or any other initiative that they might like to turn their talents to, and make themselves self-sufficient. Certainly, I welcome that part of the legislation before us tonight. Another aspect of the legislation complements some of the legislation we brought in last year. It refers to the payment of Commonwealth nursing home benefits during periods when patients are temporarily absent from nursing homes. I know from experience that elderly people in my electorate who are confined to nursing homes like to get away from the nursing home for holidays with their families. Until last year, if they left the nursing home the Commonwealth benefit that was paid to them was stopped, and therefore they had to pay for the shortfall in Commonwealth benefit as well as for the additional benefit to the nursing home. They faced the cost of going out of the nursing home and also the cost of the Commonwealth supplement. We have now overcome that difficulty to the extent that those people can get away from the nursing home and have a holiday with their families. Mr Ronald Edwards —A sensible amendment. Mr GEAR —It is a sensible amendment, as the honourable member for Stirling said. It is complementary to the amendment we made last year for the respite care bed subsidy, which was introduced at that time to encourage the provision of respite care in approved hostels. That was an initiative to help those who care at home for elderly family members and who at times need a break. Those people can now have their relatives looked after in a nursing home and at the same time people who reside in nursing homes permanently can spend some time with their families. So this aspect of the legislation is very complementary to the legislation we brought in last year. I now wish to touch on something which I believe we will need to address with much urgency. I refer to the projected costs of social security in the future. I have with me some figures that were given to me by the Parliamentary Library Research Service based on a projection of the population in the year 2001 and the costs therein of providing the services which are currently provided under the Social Security Act. A couple of assumptions are made in these figures. The first assumption is that the percentage of the aged in the population will remain constant. We know that that is wrong because the number of aged in our community is increasing. On that criterion these figures are quite conservative. The second assumption is that the percentage of unemployed, which is currently about 8 per cent, will remain constant. We hope that that does not happen but, for the sake of the argument, we will assume that the amount expended on the unemployment benefit in 2001 is the same as it is now. The total estimated expenditure this year for the age, invalid, family allowance, widows', supporting parents' and unemployment benefits is $13,687m. If we project that forward in current value to the year 2001 we see that $17,140m will be needed. That is an increase of about 25 per cent on what we are currently spending. The total number of people of pensionable age is currently 1,380,000; in 2001 it will climb to 1,840,000. The total number of social security beneficiaries this year is 2,614,000 and my projected figure for the year 2001 is 3,325,000. The cost of providing social security services will escalate quite rapidly, and it is for this reason that in the last Parliament the Government introduced an assets test to limit the amount of payments going out. There is also the question of social equity which I touched on before. We think it is obscene that millionaires should be receiving pensions and competing for scarce resources with pensioners who have nothing but the pension cheque to provide for their day-to-day living. There is only one alternative if the Leader of the Opposition (Mr Peacock) is dinkum about repealing the assets test. It should be remembered that in the current financial year we will save about $105m. We do not know what the figure will be in three years time, but it will be significantly more. If that assets test is scrapped, one of two things will happen; taxes will have to go up to provide the pension for those millionaires who do not need it, or the pension will have to go down for people who are living on nothing more than the pension and do need it. That is the choice which will confront the Opposition. I would be interested to hear any answer it might put up at any time as to which of those two choices it will present to the people when next we go to the polls. Certainly the Opposition has gained some political mileage out of the matter, but it has not based its argument on any sort of social equity or economics. It is purely political expediency that has forced the Opposition to adopt the tactics it has, and the fact that it still adopts those tactics does it no credit. I conclude by saying that the Labor Government has, since its re-election in December 1984, attached a great deal of significance to reforming the social security system. I am a little disappointed that we cannot do it in a comprehensive way, but that would need the support of both sides of this House. I do not think we will get it; therefore the system will have to be changed by the piecemeal provisions that we are bringing in. I hope that the Opposition, when it does get a new leader, gets a leader who has the guts actually to recognise the problems and to recognise a bit of economic reality and who will say to the Government: 'Let's sit down and talk about the serious problems that are confronting our nation'. Mr ROCHER(Curtin)(10.38) —The Social Security and Repatriation Legislation Amendment Bill contains a provision, amongst others, which will ensure that veterans who had the right of appeal to specified bodies under the original legislation will now have rights of appeal to corresponding bodies under the Repatriation Legislation Amendment Act 1984. It will also allow the Repatriation Commission to delegate powers, similar to those granted to the Department of Veterans' Affairs, to the Public Service to act as its agent. These provisions in themselves are welcome. However, in the context of a package affecting veterans entitlements, we can see an entirely different picture. Although the Prime Minister (Mr Hawke) and the Minister for Veterans' Affairs (Senator Gietzelt) gave what were thought by ex-service organisations to be gilt edged guarantees to consult fully, those organisations were destined to be disappointed once again. The promised talks never took place and yet another solemn undertaking went by the board. Never mind the Minister's repeated assurances, never mind the Prime Minister's confirmation. Yet again his word and the collective word of the Government have been broken by the introduction of this Bill and other Bills this week. No one should have been surprised that yet another promise was broken, but many lived in the hope that even this Prime Minister would not break his promise of full consultation before the benefits of those who have served their nation were materially changed. When we think of the length to which the Government goes to consult with the Australian Council of Trade Unions and the captains of industry on matters which they are not elected to speak about on behalf of the wider community, we begin to learn something of the Government's priorities. Its great deception lies not only in its failure to consult as promised but also in the separation of the provisions of this Bill from the as yet unseen Veterans' Entitlements Bill. Ex-service organisations had every reason to expect that the entitlements Bill would include, but not necessarily be limited to, the measures in the Bill before the House tonight. That was the reasonable expectation of and the promise given to the elected representatives of Australian ex-service men and women. What did they get instead for their trust in what they mistakenly thought was the solemn word of the Prime Minister and his Minister? They were double-crossed. It is as simple as that. Honourable men and women who served their country in times of armed conflict have been double-crossed by a government that once pretended to govern for all Australians, and all for what? It has happened for want of a chance to consult and, if warranted, present a case. Australians could be forgiven for thinking that the unilateral disarmers in the mad Left of the Australian Labor Party have not just been successful in going a great part of the way towards destroying our contemporary defence capabilities; they want to make it retrospective. They want ex-service men and women who have already served Australia to be deprived of a say even in the recognition this Government gives to their sacrifices and to the sacrifices made by their families. Mr Braithwaite —They are specialists in retrospectivity. Mr ROCHER —They are specialists in retrospectivity, but they have sunk to new depths in this case. The ex-service men and women of Australia do not demand to be put in the privileged position of the ACTU, although they deserve to be treated much better. They cannot go on strike and would not do so if they could. That is probably why they will not be given the privileged treatment the trade unions enjoy under this socialist Government. The reward for moderate and reasoned behaviour is the double-cross. On top of that, what must surely be the final and ultimate insult to our ex-service personnel. It is that this bill is to be part of the Government's so-called cost cutting mini-Budget. According to the rationale offered by the Government, the Bill is not before us because it is right or equitable or, primarily, because the existing legislation is over- generous. What then is the catalyst for the Bill? It is part of a cost cutting program. Most decent Australians would think that if extravagant government spending is to be cut many billions of dollars could be cut before touching ex-service and war widows' pensions. If there is more to the Government's reasons than cost cutting, why does it not consult? After all, the Government has made much of its consultation with the unions on the prices and incomes accord. It has made a big deal out of its consultation with the union and corporate gentry at the National Economic Summit Conference. It has made a feast out of its consultation with the ACTU on the 1983 and 1984 Budgets. No doubt, this will happen in respect of the 1985 Budget. The Government has made a virtue out of consultation with the Aboriginal people on the issue of land rights. It has made a feast out of relationships with Uncle Tom Cobbleigh and all on all sorts of less worthy causes. Under this mob we can forget consultation, promised or not, with ex-service organisations on matters integral to the very reason for the existence of those representative organisations. One can be forgiven for wondering about the priorities of this Government. It seems that with this Bill, with Medicare and with means and assets testing of pensioners, those who served their country well are being singled out for more than a fair share of attention. It is not that the Government is wrong on every score, because it is not. The concentration-the volume if you like-of benefit cuts culminates in a transfer of wealth not from the rich but from the elderly, the retirees and those on fixed incomes to others who are not, in many cases, worse off. To go even further, as the Government does in this Bill, without the promised consultation is to give further emphasis to the uncertain and unclear intentions of this Government. Given the repeated-albeit at election time-utterances by this increasingly pathetic Prime Minister, one would have thought the assault on the elderly would have finished with the means test on the pensions of those aged 70 and over. After all, the Prime Minister's promise was not to take money out of pensioners' cheques. But it did not stop there. Next came Medicare, and then the assets test. Now, we witness the attack on the benefits of ex-servicemen and ex-servicewomen. That attack has been spread over four or five separate Bills brought into this Parliament in the last couple of days, as distinct from one Bill in the promised form of the Veterans' Entitlements Bill-a Bill which we have not even sighted. It is true that the provisions in the Bill that is now before us are mild and unobjectionable in themselves, but we must look beyond that if we are better to understand the duplicity of the Government in its deliberate avoidance of consultation with ex-service organisations. This is but one separate Bill of four or five, each of which in total or in part makes inroads into the long-accepted standards of assistance which successive Commonwealth governments have given to those ex-servicemen and ex-servicewomen who have proudly and honourably served Australia. In the past few days we have seen an omnibus Bill, the Statute Law (Miscellaneous Provisions) Bill, amending repatriation law and veterans' entitlements; the Repatriation Legislation Amendment Bill; and the Defence Re-establishment Amendment Bill. However, we have not even seen the Veterans' Entitlements Bill which, it was promised, would be available over the winter break to permit study and consultation with ex-service representatives. Mr Braithwaite —Did that happen? Mr ROCHER —No, of course it did not. However, we still have less that 24 hours and something might come in at the last minute. The Government will certainly stifle debate on that Bill and stifle any preconsideration of it in this Parliament, as it has done with a number of measures. There are about 50 reports outstanding that will not be debated this session-and those reports are for the year ending 1983-84. Honourable members will not even get to talk about those reports until the Budget session some time after August, if we get to debate them at all. We have not seen the Bill to which I have referred because most of those provisions have been hived off. They have been hived off and salted away in a multiplicity of Bills, in a deliberate attempt to divert attention from the Prime Minister's 'solemn' undertaking to consult representatives of our ex-service men and women. The Opposition does not necessarily complain at the provisions of this Bill as they affect veterans. Our complaint is that the Government has failed to consult, despite repeated promises by the Minister for Veterans' Affairs (Senator Gietzelt) who is very conveniently flipping away somewhere overseas and having a marvellous time. The Government has failed, despite the Prime Minister's undertaking, to give that consultation the attention that it deserves. We might agree with all or most of the provisions in each of those Bills affecting veterans which have come before this Parliament, or will do so. But we will never agree to a broken undertaking given to ex-servicemen and ex-servicewomen or representatives to consult. We will never agree with that sort of behaviour, although we are used to it following the 100 or more broken promises of the Prime Minister since the 1983 election. He has already built up a formidable tally of broken promises since the last election but we will never agree to cop the Government taking that sort of attitude towards the representatives of the people who have served this country proudly. For those reasons I support the amendment. I only wish that I had the opportunity to debate the other measures-particularly the Repatriation Legislation Amendment Bill-that last night were guillotined through the House so crudely and without due regard to the wishes of this Parliament. Question put: That the words proposed to be omitted (Mr Braithwaite's amendment) stand part of the question. The House divided. (Mr Deputy Speaker-Mr J. N. Andrew) Ayes . . . . . . . . . . . 74 Noes . . . . . . . . . . . 59 —— Majority . . . . . . . . . 15 —— Baldwin, P. J. Jacobi, R.Beazley, 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. McHugh, J.Child, J. McLeay, LeoChynoweth, R. L. Maher, M. J.Cleeland, P. R. Martin, S.P.Cross, M. D. Mayer, H.Cunningham, B. T. (Teller) Mildren, J. B.Darling, E. E. Milton, P.Dubois, S. G. Morris, AllanDuffy, M. J. Morris, PeterDuncan, P. O'Keefe, N. P.Edwards, 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. Tickner, R. E.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. Hodgman, W. M.Aldred, K. J. Hunt, R. J. D.Beale, J. Jull, D. F.Blunt, C. W. Lloyd, B.Braithwaite, R. A. McArthur, F. S.Brown, N. A. McGauran, P. J.Burr, M. A. MacKellar, M. J. R.Cadman, A. G. Macphee, I. M.Cameron, Donald Miles, C. G.Cameron, Ewen (Teller) Millar, P. C.Cameron, Ian Moore, J. C.Carlton, J. J. Nehl, G. B.Cobb, M. R. Porter, J. R.Coleman, W. P. Reith, P. K.Connolly, D. M. Robinson, IanConquest, B. J. Rocher, A. C.Cowan, D. B. Ruddock, P. M.Downer, A. J. G. Shack, P. D.Drummond, P. H. Sharp, J.Edwards, Harry Shipton, R. F.Everingham, P. A. E. Sinclair, I. McC.Fife, W. C. Slipper, P. N.Fischer, Tim Smith, W.Fisher, Peter Spender, J. M.Goodluck, B. J. Sullivan, K. J.Hall, Steele Watson, DavidHalverson, R. G. Webster, A. P.Hawker, D. P. M. White, P. N. D.Hicks, N. J. (Teller) Wilson, I. B. C.Hodges, J. C. Question so resolved in the affirmative. Original question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. Clauses 1 to 33-by leave-taken together, and agreed to. Clause 34 (Interpretation). Mr BRAITHWAITE(Dawson)(11.01) — The Opposition has circulated its amendment to clause 34. We seek to omit paragraph (c), which defines a trade union. This is the first time in any compensation legislation in Australia that a trade union has been so favoured. Few members of the Government would realise what has been done in this legislation by the Minister of the day. The Australian Council of Trade Unions has prevailed once again on the Government to give it a privileged position in this legislation. I mentioned in the speech I made on the second reading why we take this view. This provides an opportunity for those members of the Government who were not aware that this provision was being placed in the legislation to demonstrate to Australia who rules this Government-the ACTU or the Ministers and the Prime Minister of the day. It is a testing time for them. Accordingly I move: Clause 34, page 13, lines 30-37, omit paragraph (c). Amendment negatived. Clause agreed to. Clauses 35 to 37-by leave-taken together. Mr BRAITHWAITE(Dawson)(11.03) —In my earlier speech I referred to the fact that for several reasons we find these three clauses objectionable. One is, again, that they seek to give a privileged position to Commonwealth employees over the course of an ordinary recess. There are enough legal precedents in the States and the Commonwealth to indicate what is an ordinary recess, and to indicate that, where the master-servant relationship exists, accidents within that ordinary recess have been covered, as far as cases heard and decisions given are concerned. Whilst there is no definition of 'ordinary recess', there is a series of exemptions, but those exemptions do not cover problems that we find within the amendment. For instance, anybody on an ordinary recess without his master's approval at this moment could take an unacceptable risk, or even an extreme risk, or could even wilfully expose himself to danger during that recess, and no matter what that risk was, he would be covered because there is no particular exemption in the legislation. As to clause 35, we go further. the reason we object to the definition of trade union is that, again, trade union members are given a position of privilege under this clause. An employee of the Commonwealth who is also a union official can go about the work of the trade union, attend a meeting of the Australian Labor Party, or even perhaps, where it is in the course of his duties relating to the representation of the interests of one or more of the employees, actually take part in a picket line out of hours, and any damage or accident that occurred would be covered under the legislation. As far as I am concerned, trade unions should be responsible for their own compensation by way of what is available to them under normal circumstances in the private sector and should not have to rely on these provisions. One must ask: Now that trade unions are in it, who else will infiltrate this grand and generous scheme, expenditure on which has gone up eight times in the last 10 years? So, we object to that aspect. Clause 36 causes no great problem because, if the clause is taken out of the amending Bill, we will revert to the principal Act and, as far as we are concerned, the principal Act can stand on its own two feet. If we treat partially incapacitated persons who cannot readily find work as totally incapacitated we will be allowing them, because they are in Commonwealth employment, to claim compensation which is basically twice the amount available by way of invalid pensions or unemployment benefits to people in similar situations outside that employment. We believe again that there is no case for putting further privileges in the way of the Public Service and that the compensation available to such employees should be related to what is available in the public sector. For those reasons, we will oppose clauses 35, 36 and 37. Question put: That the clauses be agreed. The Committee divided. (The Deputy Chairman-Mr L. J. Keogh) Ayes . . . . . . . . . . . 73 Noes . . . . . . . . . . . 60 —— Majority . . . . . . . . . 13 —— Baldwin, P. J. Jacobi, R.Beazley, 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 Kerin, J. C.Brown, John Klugman, R. E.Brown, Robert Lamb, A. H.Brumby, J. M. Langmore, J. V.Campbell, G. Lee, M.Charles, D. E. McHugh, J.Charlesworth, R. I. McLeay, LeoChild, J. Maher, M. J.Chynoweth, R. L. Martin, S. P.Cleeland, P. R. Mayer, H.Cross, M. D. Mildren, J. B.Cunningham, B. T. (Teller) Milton, P.Darling, E. E. Morris, AllanDubois, S. G. Morris, PeterDuffy, M. J. O'Keefe, N. P.Duncan, P. O'Neil, L. R. T.Edwards, Ronald Price, L. R. S.Fatin, W. F. Punch, G. F.Fitzgibbon, E. J. Saunderson, J.Free, R. V. Scholes, G. G. D.Gayler, J. Scott, J. L.Gear, G. Simmons, D. W.Gorman, R. N. J. Snow, J. H.Grace, E. L. Staples, P. R.Griffiths, A. G. Theophanous, A. C.Hand, G. L. Tickner, R. E.Holding, A. C. West, S. J.Hollis, C. Willis, R.Howe, B. L. Wright, K. W.Humphreys, B. C. (Teller) Young, M. J.Hurford, C. J. Adermann, A. E. Hodges, J. C.Aldred, K. J. Hodgman, W. M.Andrew, J. N. Howard, J. W.Beale, J. Jull, D. F.Blunt, C. W. Lloyd, B.Braithwaite, R. A. McArthur, F. S.Brown, N. A. McGauran, P. J.Burr, M. A. MacKellar, M. J. R.Cadman, A. G. Macphee, I. M.Cameron, Donald Miles, C. G.Cameron, Ewen (Teller) Millar, P. C.Cameron, Ian Moore, J. C.Carlton, J. J. Nehl, G. B.Cobb, M. R. Porter, J. R.Coleman, W. P. Reith, P. K.Connolly, D. M. Robinson, IanConquest, B. J. Rocher, A. C.Cowan, D. B. Ruddock, P. M.Downer, A. J. G. Shack, P. D.Drummond, P. H. Sharp, J.Edwards, Harry Shipton, R. F.Everingham, P. A. E. Sinclair, I. McC.Fife, W. C. Slipper, P. N.Fischer, Tim Smith, W.Fisher, Peter Spender, J. M.Goodluck, B. J. Sullivan, K. J.Hall, Steele Watson, DavidHalverson, R. G. Webster, A. P.Hawker, D. P. M. White, P. N. D.Hicks, N. J. (Teller) Wilson, I. B. C. Question so resolved in the affirmative. Clauses agreed to. Remainder of Bill-by leave-taken as a whole. Mr HODGMAN(Denison)(11.13) —Just briefly, as the hour is late, I want to speak on clause 81 of the Bill and my comments will go right through to clause 98. These, effectively, are the amendments to the Repatriation Act. Last night in this House I made the point in the debate on the Repatriation Legislation Amendment Bill that this Government had broken a firm and solemn commitment to consult with the Returned Services League and the Australian Veterans and Defence Services Council on any substantive amendments involving entitlements. I now find that-- Mr Punch —I take a point of order, Mr Deputy Speaker. Unless I am mistaken the honourable member is not talking to the present Bill and I ask that his attention be drawn to that fact. The DEPUTY CHAIRMAN(Mr Keogh) —There is no point of order. The honourable member for Denison is speaking collectively to the clauses that he has mentioned. Mr HODGMAN —I am speaking to clauses 81 through to 98. If the honourable member for Barton would like me to read the headnotes I will do so. The first states: PART XIII-AMENDMENTS OF THE REPATRIATION ACT 1973 That relates to clauses 81, 82 and 83. The next headnote states: PART XIV- AMENDMENT OF THE REPATRIATION (FAR EAST STRATEGIC RESERVE) ACT 1956 That relates to clauses 84 and 85. The next headnote states: PART XV-AMENDMENTS OF THE REPATRIATION LEGISLATION AMENDMENT ACT 1984 That relates to clauses 86 to 96. Last but not least, the next headnote states: PART XVI-AMENDMENT OF THE REPATRIATION (SPECIAL OVERSEAS SERVICE) ACT 1962 That relates to clauses 97 and 98. If I am not speaking to those clauses, I am not here. The honourable member for Barton ought at least to look at the Bill before he takes points of order which have no substance at all. The point I make is that today I found out to my horror that in addition to this Government breaching a solid commitment to consult with the RSL and the Australian Veterans and Defence Services Council in relation to the Repatriation Legislation Amendment Bill, which was rushed through this chamber at midnight last night, with barely 45 minutes in which to debate the welfare of 650,000 Australian veterans, there has been no consultation in relation to these clauses. What do we find when we look at these clauses? There is some magic stuff in them. I give honourable members an example. In some cases the clause will backdate provisions to 1973. I made an inquiry a few moments ago as to how many members of this chamber were members in 1973. Mr Deputy Speaker, you will be interested to know that the number is fewer than 30. As I have said, clauses are going through which are backdating provisions to 1973. Mr Deputy Chairman, you were a member of his chamber in 1973, but there are quite a few who were not. I wonder whether this Government has completely taken leave of its senses. The plain fact is that, for the second time in less than 24 hours, the Government has betrayed 650,000 Australian ex-servicemen and ex-servicewomen. For the second time in 24 hours it has broken a solemn commitment given by the Prime Minister (Mr Hawke) to consult with the RSL and the Australian Veterans and Defence Services Council on substantive amendments affecting their entitlements. Over the winter recess every member of every RSL club in Australia will come to know that this was the Government which, in 24 hours, broke a tradition of 65 years. The Government has betrayed the men and women and their dependants of $1.4m in all. Government members-Ha, ha! Mr HODGMAN —Honourable members opposite think it is funny. I can say that their days are numbered. The Government is already being called the Nescafe Government-43 beans in every cup. Forty-three per cent is about its proper rating, but the rating will drop much lower. Shame on the Government for the fact that for the second time in 24 hours it has betrayed 650,000 Australian ex-servicemen and ex-servicewomen. Last but not least, I remind members of the Government that last night the Government destroyed section 47 of the Repatriation Act which was the famous Evatt amendment-a 30-year campaign by Dr H. V. Evatt which in turn honoured commitments by true Labor Prime Ministers, the late John Curtin and the late Ben Chifley. I think the people in the community will realise that the Government is quite hypocritical in relation to repatriation matters. It will betray again and again until it is thrown out of office, and that will be at the next election. Remainder of Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Mr John Brown)-by leave-read a third time. Consideration resumed. Senate's amendments- No. 1-Page 8, clause 16, proposed new sub-section 234AB (1), lines 9 to 19, leave out the sub-section, insert the following new sub-sections: ''(1) An officer may direct a person, including a passenger disembarking from, or embarking on, a ship or aircraft- (a) not to operate a camera, or use an appliance to record or transmit sound, at a place in relation to which a sign is displayed under sub-section 234AA (2); or (b) not to operate a camera, or use an appliance to record or transmit sound, at a place (being a place that is part of a ship, of an aircraft or of a wharf) at a time when the personal baggage of passengers disembarking from, or embarking on, a ship or aircraft, is being examined, for the purposes of this Act, at or in the vicinity of that place. '(1A) Where an officer gives to a person a direction under sub-section (1), the officer shall inform that person that failure to comply with that direction is an offence under this Act. '(1B) A person shall not, without reasonable excuse, fail to comply with a direction given to that person by an officer in accordance with sub-section (1). Penalty: $1,000.''. No. 2-Page 8, clause 16, proposed new sub-section 234AB (2), line 21, leave out ''sub-section (1)'', insert ''sub-section (1B)''. No. 3-Page 11, paragraph 23 (a), after proposed new sub-section 269P (2B), insert the following new sub-section: '' '(2C) A revocation under sub-section (2B) of a concession order comes into effect on the date specified in the order of revocation, not being a date earlier than the date of the making of the order.''. Mr BARRY JONES(Lalor-Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(11.22) —I move: That the amendments be agreed to. The amendments reflect amendments that were proposed by the Opposition in the Senate and agreed to by the Government. The first amendment to clause 16, which is about the unauthorised use of cameras and sound recorders, was debated in the Senate on 16 May and accepted by the Government on 21 May following criticism in the sixth report of the Senate Standing Committee for the Scrutiny of Bills. The original clause provided substantial penalties for operating cameras or sound recorders in areas where passengers were disembarking. However, this could catch innocent people who were not aware of signs prohibiting such use. The amendment provides for a penalty where any person fails to comply with a lawful direction from an officer not to operate a camera or use an appliance following a warning. Amendment No. 2 is merely a minor drafting change consequential upon amendment No. 1 and amendment No. 3 concerns the revocation of concessional orders and is, as Senator Chaney remarked, a belt and braces amendment to remove any possibility of ambiguity about retrospective operation. Mr CONNOLLY(Bradfield)(11.23) —The Opposition is, naturally, delighted that the Government has seen fit to accept the amendments which were moved initially in this House resulting from the sixth report of the Senate Standing Committee for the Scrutiny of Bills. I think it clearly emphasises the tremendous advantages the Parliament gains from the activities of that Committee. It does give both the Government and the Opposition the opportunity to receive, in a somewhat non-partisan environment, changes which are necessary to legislation of this type. The Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce (Mr Barry Jones) will recall that the other night I did draw the attention of the House to both of these issues. It seems an extraordinary thing that a person could, in fact, be infringing the regulations under this legislation if he was taking photographs of his relatives coming down the gangplank from a ship if, by bad luck, that photograph depicted Customs officers who may or may not have been appearing to be carrying out their duties of inspecting the baggage or the persons leaving that ship. Naturally this clause needed to be significantly changed to make that more viable. The second most important element is the one I raised with the Minister, namely, the retrospectivity clause. He gave me confirmation then that the Government would make the necessary changes. On behalf of the Opposition, I am delighted that the Government has chosen to do that. Question resolved in the affirmative. Resolution reported; report adopted. The following Bills were returned from the Senate without amendment or requests: Excise Tariff Amendment Bill 1985 Customs Tariff Amendment Bill 1985 Sales Tax Amendment Bill (No. 5) 1985 Sales Tax Bill (No. 10A) 1985 Sales Tax Bill (No. 10B) 1985 Sales Tax Bill (No. 10C) 1985 Madam DEPUTY SPEAKER(Mrs Child) — Mr Speaker has received the following message from the Senate acquainting the House of a resolution concerning the Commonwealth Parliament's continuing participation in the Australian Constitutional Convention. That the Senate, recognizing the desirability of a thorough review of the Australian Constitution in the light of experience since its establishment and of modern day requirements, agrees that the Commonwealth Parliament continue its participation in the Australian Constitutional Convention established to review the Commonwealth of Australia Constitution and accordingly resolves: (1) That, for the purposes of the Convention- (a) a Delegation from the Commonwealth Parliament take part in the deliberations of the Convention, and comprise 12 members of the Parliament of whom 5 shall be members of the Senate and 7 shall be members of the House of Representatives; (b) the 5 members of the Senate comprise 2 members of the Australian Labor Party, 2 members of the Opposition and one member of the Australian Democrats. (2) That- (a) 2 Senators being members of the Australian Labor Party, nominated by the Leader of the Government in the Senate; (b) 2 Senators being members of the Opposition, nominated by the Leader of the Opposition in the Senate; and (c) one Senator being a member of the Australian Democrats, nominated by the Leader of that Party in the Senate, be members of the Delegation. (3) That the Prime Minister or his nominee be the Leader of the Delegation, and the Leader of the Opposition or his nominee be the Deputy Leader. (4) That a member of the Delegation cease to be such a member if- (a) he ceases to be a member of the Commonwealth Parliament; (b) the House of Parliament of which he is a member terminates his appointment; or (c) he resigns as a member of the Delegation by writing addressed to the President of the Senate or the Speaker of the House of Representatives, as the case requires. (5) That where, because of illness or any other cause, a member of the Delegation is not available to attend a meeting, or part of a meeting, of the Convention, the Leader or senior available member of that member's Party may nominate an alternative member and the member so nominated shall be a member of the Delegation for that meeting, or that part of that meeting. (6) That, in the event of a member of the Delegation ceasing to be such a member, the Leader of that member's Party in the House from which that member was drawn may nominate another member (being a member of the House of which the first-mentioned member is or was a member) to replace the first-mentioned member. (7) That the Leader of the Delegation from time to time make a report for presentation to each house of the Parliament on matters arising out of the Convention, and that the Deputy Leader of the Delegation may make an accompanying report. The Senate requests that the House of Representatives reconsider the Resolution transmitted to the Senate by Message No. 111. Bill returned from the Senate with amendment. Ordered that the amendment be taken into consideration in Committee of the Whole of the House at the next sitting. Bill returned from the Senate with amendment. Ordered that the amendment be taken into consideration in Committee of the Whole of the House at the next sitting. Mr LEO McLEAY(Grayndler) —On behalf of the Parliamentary Standing Committee on Expenditure, I present the report of the Committee entitled 'The Inquiry into the Aboriginal Development Commission: Final Report'. The report incorporates a dissenting report. I also present a copy of the minutes of the proceedings. Ordered that the report be printed. Motion (by Mr Young)-by leave-proposed: That the House take note of the paper. Mr LEO McLEAY(Grayndler)(11.29) —The report presented by the Standing Committee on Expenditure is a final report of the inquiry which the Committee undertook into the Aboriginal Development Commission. I guess in compiling this report the Committee had to consider a number of matters which one could say go to the heart of the role and function of parliamentary committees. I suppose that if one looks at those things in abbreviation one could say that committees can either set out to scapegoat or to cause reform. I would come heavily down on the side of committees setting out to cause reform. In the Committee's first report-our interim report-we made 35 recommendations for changes in the activities of the Aboriginal Development Commission. I understand that the Government will accept those recommendations. I believe that the Committee, in making those recommendations and the Department, the Commission and the Government in their responses have shown that parliamentary committees can do a lot to cause reform of both bureaucracy and the bureaucratic system. During the course of the inquiry a number of rather wild allegations were made on a number of matters by various people. A number of witnesses pointed out to the Committee that in the area of Aboriginal affairs backbiting seems to be as endemic as it is in political parties. Indeed, I guess that there might even be more backbiting, calumny and detraction in Aboriginal affairs than there is in political parties. The Committee then had to decide how to weigh the evidence that was before it. We had come to some fairly broad conclusions on the administrative changes that should be made in the Commission but we had to look at the allegations that were made against individuals. To assist the Committee in doing that we sought the advice of a Queen's Counsel, Mr John Coombs. Mr Slipper —Why wouldn't you follow his advice? Why did you ignore the QC? Madam DEPUTY SPEAKER —Order! The honourable member for Fisher will cease interjecting. That is the second time I have had to speak to him. Mr LEO McLEAY —Members of the Opposition seem interested in what Mr Coombs had to say. Of course, the honourable member for Fisher was a member of the Committee and he is well aware of what Mr Coombs said. Mr Coombs made a number of recommendations to the Committee and in considering his advice-what the Committee sought from Mr Coombs was advice; not direction, not a solution, but advice on how some matters should be handled-the Committee had to decide whether it would give people against whom allegations were made the chance to rebut those allegations. Many honourable members opposite may think that one should not bother to give people against whom an accusation is made the chance to rebut the allegations. Most of the members of the Committee were not of that view. Honourable members need to be aware that some of the allegations were rather flamboyant and the Committee decided that the best way to approach those allegations was to hear them in camera. As members who have served on parliamentary committees will know, we then came across difficulties with the Standing Orders of the House in that if a committee hears an allegation against a person in camera, the committee and the members of that committee, both severally and individually, are unable to communicate to the accused person what the accusations are that are made against him. So the Committee decided that there had to be a mechanism to ask the people about whom allegations were made whether they had in fact done what they were accused of doing. I think that is what any fair-minded person would want; in fact, it seems to be at the root of law in Australia. It also seems to be what a lot of people have said things about. For the benefit of the House I would like to quote from a book called Parliament and the Bureaucracy which is edited by J. R. Nethercote. In that book the honourable member for Wentworth (Mr Coleman) had this to say about parliamentary committees: I find myself in agreement with those who have long expressed concern about parliamentary committees with powers of an inquisitorial brand over citizens. What the New South Wales Bar Council said ten years ago remains correct today and recent debates on the inquiry by the Senate Committee on Finance and Government Operations into the Asia Dairy Corporation have reminded us of it. The honourable member then went on to say: The Bar Council said: It is the view of the Bar Council that this type of investigation is not a proper activity of a parliamentary committee. Investigation of public scandals, the collapse of large financial enterprises, the procedures and organisation of occupational, political or social groups should be placed in the hands of persons with adequate training in the exercise of the judicial function. In such investigations, persons whose future credit is endangered should be given the rights of an accused person under the law. Those rights, in the view of the Council, should be given by Statute and should not be dependent upon the goodwill of any investigating body. If, however, Parliamentary Committees are, in the future, to perform tasks such as those given to the Senate Select Committee on Securities and Exchange, the Bar Council is strongly of the opinion that adequate safeguards for persons called before such committees should be ensured by Statute. That is what the honourable member for Wentworth had to say about giving natural justice to those who are accused before parliamentary committees. However, it is interesting to see that some of his colleagues on the Committee were not of that persuasion. One could go further and see what the Leader of the Opposition (Mr Peacock) had to say about giving a person who is accused the chance of natural justice. The Leader of the Opposition, the honourable member for Kooyong, in a debate in this House on 28 February 1984 in relation to the Cross Special Commission of Inquiry into Certain Allegations by the Rt. Hon. Ian McCahon Sinclair and the allegations made against the then Deputy Leader of the National Party, said: . . . where a person exercises the kind of duties that His Honour was exercising and who proposes to criticise or to make adverse findings of a substantial nature against a person in the position of Deputy Leader of the National Party, he is bound by the rules of natural justice to put the substance of what he proposes to say to the person who will be affected and get that person's answer. If it is good enough for that rule to apply to the Leader of the National Party of Australia (Mr Sinclair)-I believe most emphatically that it should-it is most certainly good enough for it to apply to any and every person who is accused of anything before a parliamentary committee. It is unfortunate that some of the members of the Committee did not believe that that basic element of justice should prevail. I mentioned the Leader of the National Party. It is interesting to have his view on this matter, I say again that I support the contention of the Leader of the National Party. In an essay in the same book Parliament and the Bureaucracy, the right honourable member for New England stated: Certainly in considering parliamentary privilege the making of unsubstantiated allegations in parliament and the treatment of witnesses without the traditional procedures adopted by courts of law designed to guard against unfairness to a witness are matters of concern. It was a matter of great concern to the members of the Committee that the people against whom these allegations were made should have had the right of rebuttal. There was opposition on the Committee to that. I am pleased to say that the people who believed that natural justice should prevail were successful. The Committee heard evidence from the people who were accused. The overwhelming consensus of the Committee to that evidence was that any fair-minded person would accept the word of the people who gave evidence and the Committee came to that view. Some members of the Opposition raised the question of who was responsible. Should we look to see who is responsible in these matters? We should remember that some members of the Committee in a dissenting report called for a judicial inquiry into the whole area of Aboriginal affairs. The honourable member for Fisher was very keen that this should be done. The honourable member for Fisher, as a new member of this House, might not have a great understanding of the system in this House. This Parliament runs on the Westminster system. Last week members of the Opposition accused the Minister for Aboriginal Affairs (Mr Holding) of being responsible and having to take responsibility for what happened at the National Aboriginal Conference. The Minister stood up in this Parliament and said that he did take responsibility. I put it to honourable members that the close relationship the NAC has with the Minister in regard to his responsibilities is far less of a close relationship than the Minister for Aboriginal Affairs has with the Aboriginal Development Commission. The dissenting report was signed by a number of members of the Opposition, including the honourable member for Sturt (Mr Wilson). Surely, in calling for a judicial inquiry, the honourable member for Sturt is not seriously asking this House to inquire into the activities of the portfolio while he was the Minister? That is the fact. The allegations that were placed before this Committee in relation to the Aboriginal Development Commission all relate to events which occurred prior to this Government coming to office. The previous Minister, who was responsible under the Westminster system for the administration of the Aboriginal Affairs portfolio, is the present Deputy Chairman of the Committee who called for a judicial inquiry. Under the Opposition's proposal, he would be the chief witness. It is rather stupid for us even to consider the trashy suggestion that there should be a judicial inquiry. The Committee has heard and weighed the evidence. The Committee has attempted to give people natural justice. We have tried to adopt what the Leader of the Opposition, the honourable member for Kooyong, suggested should be the rule that applied to the Leader of the National Party. We have adopted the rule that the honourable member for Wentworth suggested should have applied during the Asia Dairy inquiry. At least during that inquiry, honourable members will recall, when allegations were being made against a Minister the Senate Standing Committee on Finance and Government Operations invited the Minister to give evidence. The Minister declined, but at least the Committee invited him to give evidence. In the present circumstances some members of the Committee were not the least bit interested even in allowing the people who were accused to know what had been said against them. If we had allowed that situation to continue we would have found that tonight after midnight, this House would have adopted this report and neither of the people against whom the accusations were made would have had a clue what the report was about or what the allegations against them were. If the Committee had not sought the opinions and evidence of the people against whom the accusations were made, tomorrow morning they probably would have woken up to television cameras and a reporter asking: 'Have you heard what a parliamentary committee said about you?' If that is the sort of justice that the dissenters to this report want to give, it is not the sort of justice I want to have any part of. The final word on this matter should go to the gentleman who gave the Committee its advice, Mr John Coombs, QC. Mr Cobb —What is this? This is a disgrace. Mr LEO McLEAY —The Opposition seems very keen to see that the Committee should concur with what Mr Coombs said. Unfortunately, the Opposition will not like what Mr Coombs said. As it was my right to do under the Standing Orders, I circulated to Mr Coombs, who was a consultant to the Committee, a copy of the draft report. Mr Coombs has responded to me today in these terms: Dear Mr McLeay,-- Opposition members interjecting- Mr LEO McLEAY —Honourable members opposite should listen to me. This will take the wind out of their sails. I continue: At your request I have read, in confidence, the draft of the report of the House of Representatives Standing Committee on Expenditure in respect of its inquiry into the Aboriginal Development Commission, bearing the date May 1985. Having regard to the further investigations conducted by the Committee and to the convincing explanations and denials given by Mr Perkins and Mr O'Brien, I see no reason to disagree with the Committee's decision not to pursue the various allegations further beyond the current investigations by appropriate authorities in respect of the allegations against Mr O'Brien. With kind regards, J. COOMBS, QC That, most assuredly, should be the final word on this matter. Madam DEPUTY SPEAKER(Mrs Child) —Order! I recognise that emotions are running fairly high on this issue and that tempers are getting a bit frayed. It is also getting late. I request that honourable members restrain themselves and listen to the honourable member for O'Connor. Mr TUCKEY(O'Connor)(11.45) —This report on the Aboriginal Development Commission by the House of Representatives Standing Committee on Expenditure has come about because of a recommendation 1.10 of the previous interim report of the inquiry into this matter in which the Committee said: A number of other matters brought to the attention of the Committee have involved serious allegations of mal-administration which in some instances may lead to criminal prosecution. That matter was not resolved before the election and the Committee, once reconstituted, started to meet on this matter. I think that the Chairman of the Committee, the honourable member for Grayndler (Mr Leo McLeay) protests too much. He seems particularly concerned with defending the position of his side of politics. All the final decisions of this Committee were taken by a vote. The Opposition members constantly opposed the proposals of the draft report and of course we were voted down on each occasion. The first words in clause 1 of the dissenting final report state: Those of us making this dissenting report recommend that there should be a comprehensive judicial inquiry into the Aboriginal Development Commission. Mr Robert Brown —Madam Deputy Speaker- Mr TUCKEY —That is exactly what the honourable member for Grayndler took half of his time to talk about. Madam DEPUTY SPEAKER —Will the honourable gentleman resume his seat please. The honourable member for Charlton has a point of order. Mr Robert Brown —I seek your advice, Madam Deputy Speaker. Mr TUCKEY —Sit down, Bob. Your are a disgrace. You are as bad as Ros Kelly. Sit down. Mr Holding —You are going to bash women, are you? Mr TUCKEY —Shut up. You will do first, you stupid man. Madam DEPUTY SPEAKER —Order! I warn the honourable member for O'Connor. If he does not heed the Chair, he is going to be in trouble. Mr Sinclair —That is not a point of order. Madam DEPUTY SPEAKER —I do not need the advice of the Leader of the National Party. The honourable member for Charlton will resume his seat. He cannot seek my advice. He must raise a point of order. The House will now be quiet. If it becomes as disorderly as it has been, I am going to suspend the sitting. Mrs Kelly —Madam Deputy Speaker, I ask the honourable member to withdraw his comments with reference to me. Mr TUCKEY —I do not recollect making any statement about the honourable member, but so that we can get the matter straight, during the inquiry and in this report-- Madam DEPUTY SPEAKER —Order! The honourable member will withdraw. Mr TUCKEY —I will withdraw so that I can continue. During this inquiry a change of evidence was brought before the Committee. The honourable member for Canberra (Mrs Kelly) chose to introduce to the Committee remarks which were not recorded in the letter and which in fact were aimed directly at denigrating a witness who is further denigrated in the report. That is what I was talking about. She knows it. It was a disgraceful act against a person of her sex and it was deliberate. I have read the recommendation of this Committee and pointed out that we sought justice for everybody. The Expenditure Committee has a responsibility to protect public revenue. It had a responsibility in inquiring into the Aboriginal Development Commission to protect the rights of Aboriginal people. The Commonwealth spends $400m annually on Aborigines, of which $60m is spent by the Aboriginal Development Commission. If that Committee has not ensured that that money was used for the benefit of the Aboriginal people, it has abrogated its responsibilities. There was substantial evidence, as was admitted in the first inquiry, that called on the Committee to consider these problems. Opposition members on the Committee were prevented from considering them. This happened on occasion after occasion before the engagement of a very expensive Queen's Counsel, who could only read the written evidence. As this report points out, there were grave deficiencies in the means by which evidence was gathered. Therefore, a proper inquiry is required. That is what the Opposition members on the Committee set out to achieve. They were blocked continuously and constantly by the Government members of the Committee. In fact, motions calling for a judicial inquiry were refused by the Chairman. They were not even to be debated. The Chairman refused to accept them and, in so doing, of course they could not even have the privilege-- Mr Leo McLeay —That is a lie. Mrs Kelly —You have lied through this whole speech. Mr TUCKEY —I put the motions and it is not a lie. The fact is that the Committee tried as much as it could to block any further action. Mrs Kelly —Why? Mr TUCKEY —I can tell the honourable member why. Madam DEPUTY SPEAKER —Order! The honourable member for Deakin need not hurry back to his seat. He is still not going to interject. Mr TUCKEY —I sent a telex to the Minister for Aboriginal Affairs (Mr Holding) saying that I wished to state-- Mr Beale —Well, Madam Deputy Speaker-- Madam DEPUTY SPEAKER —Order! The honourable member for Deakin will not interject. Mr TUCKEY —I ask the honourable member to give me a break. Mr Beale —I am not interjecting; I am responding to your invitation. Madam DEPUTY SPEAKER —You are interrupting the speaker, who has the call from the Chair. Mr TUCKEY —On 16 March 1984, as this inquiry commenced, I sent this telex to the Minister: I wish to state that I consider this appointment is inappropriate at this time- I am talking about the rumoured appointment of one Charles Perkins- in the light of the pending inquiry by that Committee into the Aboriginal Development Commission. As Chairman of this Commission it is imperative that Mr Perkins represent the ADC in that role during the inquiry so that the inquiry is not thwarted by insufficient information and advice which Mr Perkins must provide and for which he must resume responsibility. I am already in receipt of some information which if not an isolated case will raise considerable concern. Of course that information has been part of the Committee evidence but has now been ignored. It related to the misappropriation by an Aboriginal Commissioner of possibly some $60,000. Mr Perkins told us there was nothing wrong with that. Both he and his Director put out a Press release on it. That Press release is well known to the Chairman of the Committee. It had to be withdrawn. Of course the eventual Auditor-General's report put forward to the Committee showed that all those things that had been suggested in the correspondence had occurred. But that, too, has been whitewashed by this Committee. The Expenditure Committee has been put into a position where it has abrogated its duties. Its first duty was to protect people, as the Chairman has said, who had allegations made against them. The fact is that this report now carries their names because at all stages the Committee rejected the moves of Opposition members on that Committee for a judicial inquiry. That is what we wanted-a judicial inquiry-because that was the only way we could get to the bottom of the serious maladministration which the Committee admitted to itself in its first report, signed by all the members. The problem is that the Minister has a problem in all of this. The situation is this: Mr John Coombs has been quoted. Is it not interesting that suddenly he finds all the conditions? By the way, Mr Coombs was the only Queen's Counsel whom the Committee was allowed to appoint. Although a large list was provided, there was only one we were able to have. That was another case of where caucusing occurred in a committee which is supposed to be bipartisan. Mr John Coombs, QC said in his report that Perkins was generally an evasive and unhelpful witness from whom the Committee's attempts to seek answers were probably a waste of time. Yet we find in this report, as honourable members will see, that his word is chosen over that of another witness who, to my mind, gave excellent evidence. The fact that the Committee chose to change that evidence in no way affected the substantive situation. As I said, it is surprising that that witness, the core witness, the one whom Mr Coombs said was most to be believed and whose evidence should be put to the Australian Federal Police, was the same witness whom the honourable member for Canberra deliberately tried to discredit by saying that she had reported to her that all her actions were only because they were vindictive. Mrs Kelly —That is a lie. Mr TUCKEY —The honourable member should look across there when she says that is a lie. Madam DEPUTY SPEAKER —Order! The honourable member for Canberra will resume her seat. The honourable member for O'Connor must not cast aspersions on other members of the House. I would also appreciate it if the honourable member for O'Connor would not suddenly start roaring. Mr TUCKEY —Thank you, Madam Deputy Speaker. It is interesting to note that when this report was first brought to the Parliament I made similar statements regarding the credibility of Mr Perkins. I was reported as saying that on 6 October in the Sydney Morning Herald. The evidence that the Committee received was a continuous list of maladministration and matters of great concern. They can be resolved only if a proper judicial inquiry is held. The report of the dissenting members is quite clear. For instance, although the QC and the Committee failed to raise the matter of pecuniary interests, we did so. Considerable evidence was given of certain members acting in breach of the pecuniary interests provisions of the Aboriginal Development Commission Act. This is in the report. However, that matter was never even touched upon. But all these matters were not for us to decide. Our job was to decide whether there was a problem and, if so, to put it in the proper hands. The Minister may remember that this is not the first time since this Parliament has reconvened that I have drawn his responsibilities to his attention. There are pages of Press reporting on these matters. We have seen headlines such as 'Loans questions raised' and 'Aboriginal funds misappropriated'. These are headlines in the Canberra Times. Why did the Minister have to wait until tonight to take some action? The smoke has been pouring out of the chimney for long enough for him to find the fire. The situation is that the dissenting members have requested a judicial inquiry. We have asked for a judicial inquiry so that we can protect those persons who have been accused and so that we can see that witnesses are properly cross-examined. That is what has been rejected. Having had advice from a QC who said that certain matters should be referred to the Federal Police, the Committee conducted a form of kangaroo court and decided to vote them innocent. The vote was 7 to 8. Of course, that is no way for a committee that had-and I repeat 'had'-the reputation of the Expenditure Committee to act. Committees of this kind are supposed to protect the public money; they are supposed to protect all the people concerned. In this case, the people concerned are the Aboriginal people. We wish to protect the Aboriginal people from the avaricious few. Plenty of evidence was given to the inquiry that it has cost a large amount of money to get the avaricious few out on the ground to help Aboriginal people. This whitewash is to protect the Minister and the Government. It is not the appropriate way in which we should be going about our affairs. A suggestion was made that some previous Ministers might be discredited. No ex-Minister on this side of the House is concerned about that. The concern seems to be for the Minister for Aboriginal Affairs. The ex-Minister referred to is not frightened of the position. The amount of time available to us has been limited. I wanted to go right through the report and identify all the problems. All the allegations listed in the report simply need to be read. Those allegations are serious. What is more, as we say in the report, we had no opportunity whatsoever to inquire properly into these allegations. The decision to be taken in this Parliament tonight is whether we walk away from those allegations or have them properly investigated. If they are not properly investigated, the Parliament will never know whether the $400m that it provides for Aboriginal people-and I repeat 'provides for Aboriginal people'-is being provided to them. It is an absolute whitewash. Let me spell out the position again. The Committee has been forced to vote on party lines on every occasion it has met on this matter- Mr Leo McLeay —Two divisions; there were only two divisions. Mr TUCKEY —How many more does the honourable member need? The point is that Opposition members of the Committee opposed the appointment of a QC. We saw it as a waste of money. We proposed then that there be a judicial inquiry. We were defeated on party lines, although all the evidence said that was where we should go. The Minister started to have a judicial inquiry under Mr Coombs. Of course, that was strangled because of a lack of cash. Eventually, this became an inquiry into the National Aboriginal Conference. I have a newspaper article which suggests very strongly that in fact when the Minister got the report from Mr Coombs, he asked Mr Coombs to go away and rewrite it. I can give the Minister that article. That is where the inquiry stopped. We have asked many questions about this matter. As I have read to the House, Mr Perkins is a very bad witness. The QC said it; I have said it.In fact, we could not believe a word he said. In his final evidence to the Committee, he lost his memory as soon as the going got tough. That was what he did every time. The situation is that unless the Parliament accepts the recommendation in the dissenting report and Australia has a proper inquiry into Aboriginal affairs, the Minister will have on his head the public backlash which will result from the waste reported at State and Federal level. It will stop any good that we can do for Aboriginal people. Madam DEPUTY SPEAKER(Mrs Child) —Order! The honourable member's time has expired. Debate interrupted. Thursday, 23 May 1985 Mr SINCLAIR(New England-Leader of the National Party of Australia) —Madam Deputy Speaker, I wish to speak on a matter of parliamentary privilege. Madam DEPUTY SPEAKER(Mrs Child) —The right honourable member may proceed. Mr SINCLAIR —The honourable member for Grayndler (Mr Leo McLeay) disclosed in the course of his remarks that a final draft of the report of the Standing Committee on Expenditure which is under consideration by this House was submitted to a counsel who apparently had been briefed at an earlier stage by the Committee. Under the laws of our privilege any paper that is to be presented to the Parliament must be presented to the Parliament first. If it is submitted without the approval of the Committee to any outside person it is a breach of the privilege of this place. I suggest to you, Madam Deputy Speaker, that that report, being submitted to an outside counsel should now be considered by you as a matter of parliamentary privilege and referred to the Privileges Committee, wherein it can be examined and considered as a matter which is not in accordance with the practice of this place and a proper censure registered on the person concerned. Mr Leo McLeay —Madam Deputy Speaker-- Madam DEPUTY SPEAKER —There is no cause for the honourable member to speak. I will answer the right honourable gentleman. In accordance with the practice in these matters, I will give consideration to the issues raised by the right honourable member and advise the House of my decision in due course. Debate resumed. Mr HOLDING(Melbourne Ports-Minister for Aboriginal Affairs)(12.02 a.m.) —Madam Deputy Speaker-- Mr Slipper —I take a point of order, Madam Deputy Speaker. I wish to speak to the dissenting report. Madam DEPUTY SPEAKER —The Minister for Aboriginal Affairs has the call. Mr HOLDING —I desire, as someone who has always been committed to the principles of the Westminster system, to-- Opposition members-Ha, ha! Mr HOLDING —Honourable members opposite can laugh if they want to. I desire to draw the attention of the House, first of all, to the very serious recommendations that were made by the Standing Committee on Expenditure in terms of the procedures and practices which the Committee found it had to deal with. These raise very serious and pertinent points to be considered by the Parliament in terms of the reforms that seem to me to be necessary in order to protect both public servants and people appearing before committees and to see that parliamentary committees adhere to the basic principles of natural justice which are endemic to our judicial system. The Parliament, under the Westminster system, is regarded as the highest court in the land. I believe that when a committee is acting in a judicial capacity it has a duty, as far as possible, to see that the procedures of natural justice are followed. I ask honourable members to deal with this issue quite separately from the evidentiary aspects because it is a matter of important principle. The process that has occurred, I believe, is a matter of concern to all honourable members. Public servants were told to appear before the Committee after evidence had been given in camera. The Committee felt that it was appropriate to hear certain evidence in camera. Those public servants were not provided with any transcript of the evidence. They were given a simple summary of the allegation against them. They were not given the evidence upon which they could reply. They had to appear before the Committee. Mr Beale —They did not have to appear; they chose to appear. Mr HOLDING —If the honourable member for Deakin knew anything about the Standing Orders he would know that there is a requirement on public servants to appear before this Committee if they are requested to do so. I suggest that he should not make interjections which display his ignorance. It is all very well for honourable members opposite to interject. When Mr Kerry Packer identified himself as Goanna he said that he had been denied the principles of natural justice, and I personally believe that he had been. But when it occurs in this House, when honourable members opposite can actually make a decision about whether natural justice has been applied, there seems to be a marked reluctance to face up to the issues. I do not care which committee is involved; I do not believe as a matter of principle that any citizen or any public servant ought to be required to appear before a parliamentary committee when, basically, from the moment he appears, he is there to prove his innocence. It is an extraordinary procedure. Someone can appear before a committee and make an allegation which has no substance in fact-it may be scuttlebutt; it may be defamatory; it may be entirely false-and the only process that is available is a process whereby the accused person is not given a copy of the transcript of the evidence given before the committee when the allegation was made and the person who makes the allegation is not subject to any kind of cross-examination at all. The accused public servant has to appear before the committee on the basis of his receiving a simple notice saying: 'It is suggested that you are potentially guilty of a criminal offence; we want to hear your explanation'. That process would not live for two minutes within any of our courts and it should not live for two minutes within the processes of this Parliament. Mr Tuckey —Give us the judicial inquiry. Mr HOLDING —No. I commend the majority of members of the Committee who have drawn the attention of the Parliament to that serious inadequacy in our processes which can place any citizen in that position. That is the first and most important aspect of this matter that I want to address. Secondly, I want to deal with some of the allegations made by the honourable member for O'Connor (Mr Tuckey). The implication of his remarks was that I as Minister was somehow involved in these administrative processes. I point out that all of the material that came before me in terms of the report related to an offence that took place prior to my being Minister. Dr Watson —They are cover-ups. Mr HOLDING —The honourable member can use those sorts of terms if he wants to. Let me just say this, and it is also related to the principle of natural justice: The Ministers who were responsible at the relevant time for the period covered by the examination of the Committee were Senator Chaney, Senator Peter Baume and the honourable member for Sturt (Mr Wilson). They, of course, were aware of the terms of the legislation. If they were concerned about the administration of the Aboriginal Development Commission, why was no action taken by any of them in respect of any of these matters at that time? Mr Tuckey —They may not have known it. Mr HOLDING —They may not have known. The point is that a Minister cannot be heard to say that he does not know what occurs within his own portfolio. They may not have known. That might be the truth. I want to deal with one other matter because I believe that it is a very serious matter. During the period of the administration of the honourable member for Sturt, who preceded me as Minister for Aboriginal Affairs, it was well known in the Department that he had great difficulty in reconciling his attitudes with those of the Chairman of the ADC. On no fewer than five occasions the honourable gentleman sought advice as to how he could sack Mr Perkins. There was an occasion when he even went to the then Prime Minister with Mr Perkins to call for Mr Perkins's resignation. Mr Tuckey —Why do you think he did that? Mr HOLDING —I am pointing out to the honourable member that the then Minister was so dissatisfied with the Chairman of the ADC that he sought his dismissal. Mr Beale —The report says it all. Mr HOLDING —I do not mind if honourable gentlemen opposite, by their interjections, show that they have no interest in the principles of natural justice, but what an extraordinary situation we have when the honourable member for Sturt sits on a committee which is examining areas, we are told, of misfeasance and negligence within his own former portfolio, which seeks to indict- Mr Sinclair —Madam Deputy Speaker, I raise a point of order. I do not want to interrupt the honourable gentleman but I believe there is a Standing Order that requires any criticism of a member of this place to be made in the form of a substantive motion. I suggest that the honourable gentleman's remarks are going very close to falling in that area. I would suggest that the remarks should be terminated. Madam DEPUTY SPEAKER(Mrs Child) —Yes. The Leader of the National Party will resume his seat. I call the Minister for Aboriginal Affairs. Mr HOLDING —All of a sudden there is a concern when the facts come out, and the facts are these: What an extraordinary process we have when a Minister sits on a committee and does not disclose to that committee-- Mr Ruddock —A former Minister. Mr HOLDING —He is a former Minister. That is where he began and that is where he will end up, but it is the principle that is important. Here is a former Minister whose administration and his relationship with one of the principal witnesses is under scrutiny. In that situation, did he say to the Committee: 'Look, you are dealing with facts and evidence which relate to my competence as a Minister in the supervision of my portfolio, but, more importantly, I want to disclose to you that I have a relationship bordering on personal malevolence with one of the witnesses and, therefore, I seek to discharge myself from the Committee'? Not a bit of it. If ever there was a cowardly act which I believe belittled this Parliament, it was the situation where the honourable member-- Mr Sinclair —I raise a point of order. Mr HOLDING —You can dish it out, but you cannot take it. Madam DEPUTY SPEAKER —Order! The Minister will resume his seat. I call the Leader of the National Party on a point of order. Mr Sinclair —I raise a point of order in relation to that remark. I ask that it be withdrawn and suggest that the remarks are now quite outside our Standing Orders. Madam DEPUTY SPEAKER —The Minister might like to withdraw the word 'cowardly'. Mr HOLDING —I will withdraw the word 'cowardly'. I say that it is an extraordinary abuse of the due process when a Minister sits as judge on his own administration and does not disclose to the Committee that he had been in a situation where one of the principal people-- Mr Sinclair —Madam Deputy Speaker, this is still outside the Standing Orders. I draw your attention to the continued abuse of Standing Orders. Mr HOLDING —Abuse, rubbish! You cannot take the facts; that is your problem. Madam DEPUTY SPEAKER —Order! The Minister will sit down. I point out to the Minister that he is almost going beyond what can be considered as falling within the Standing Orders. He will get back to the point he was making before. He will leave the former Minister out of it. Mr HOLDING —I believe this is an extraordinary process and one which should not have taken place within this Parliament. I want to deal with some of the allegations that have been made by the honourable member for O'Connor, who threw around figures like $500m-- Mr Tuckey —I did not. Mr HOLDING —You did. Mr Tuckey —$400m. Mr HOLDING —Well, $400m; I stand corrected. Of course that has been the subject of a report and in respect of that report actions have already been taken by the ADC and me to deal with that. The particular allegation which the honourable gentleman opposite wants to have an inquiry into relates to the use of an airline ticket from Canberra to Sydney prior to the formation of the ADC. That is the monumental issue about which we must have a royal commission. Let me conclude on this note: It pains me to say it, but I am bound to say that from the outset, from the time Mr Perkins was appointed, he was subject to attacks by the honourable member for O'Connor. I believe that any objective analysis of what has occurred here will show that the honourable member for O'Connor and the honourable member for Sturt, a former Minister who had his own motives, set out on a deliberate course to find evidence upon which they could indict a senior public servant-- Madam DEPUTY SPEAKER(Mrs Child) —Order! The Minister must not cast aspersions upon other members of the House. Mr HOLDING —It is not an aspersion. I am saying that a conclusion is open to honourable members and I invite them to draw it. It is beyond argument that from the time that Mr Perkins was appointed the honourable member for O'Connor attacked him openly and publicly. The honourable member for Sturt had a relationship with the Corporation which could only be described as difficult and complex. I will not use any more astringent term than that. I believe that both these men set out to seek facts that would enable them to destroy the most senior Aboriginal public servant in Australia. Madam DEPUTY SPEAKER —Order! The Minister must not cast aspersions upon the honourable members. Mr Sinclair —I take a point of order, Madam Deputy Speaker. I ask that the Minister withdraw those allegations. Mr HOLDING —I meant what I said. I will not withdraw them. Mr Sinclair —Madam Deputy Speaker, I ask that the Minister withdraw those allegations. They are contrary to our Standing Orders. Mr HOLDING —They are not contrary to the Standing Orders. Madam DEPUTY SPEAKER —Order! The Minister must not cast aspersions upon honourable members of the House. He may detail what he thinks they have done. He may not impugn their motives. Mr Tuckey —Madam Deputy Speaker, I take a point of order. The Minister has not withdrawn. Mr Sinclair —I require him to withdraw those remarks, Madam Deputy Speaker. Madam DEPUTY SPEAKER —The Minister will withdraw the words. Mr HOLDING —I say that the evidence is there, and I ask honourable members to draw their own conclusions. Mr Tuckey —You have not withdrawn yet. Mr N. A. Brown —He has. Madam DEPUTY SPEAKER —I think he did withdraw. I find it very interesting that the Leader of the National Party of Australia keeps getting up to tell me about the Standing Orders. I suggest to him that he also abide by the Standing Orders. I have had reason to speak to him about this when I have been in the chair during Question Time. If he is so interested in the Standing Orders, he too must abide by them. Mr Sinclair —Madam Deputy Speaker, I seek your advice as to the circumstances in which I have not risen in accordance with the Standing Orders. Madam DEPUTY SPEAKER —I base it on the number of times that the right honourable member has been asked to stop interjecting during Question Time. Mr Sinclair —Madam Deputy Speaker, I take a point of order. I have just raised within the Standing Orders of this place a series of points of order relating to offensive remarks by a Minister. You asked him to withdraw those remarks, presumably because those remarks are in accordance with my observations and you did so, in accordance with Standing Orders. I ask on what basis you have just made an aspersion against me. Madam DEPUTY SPEAKER —I made the aspersion on the basis that during Question Time the right honourable member has repeatedly gone against the Standing Orders of this House, but he likes to stand up to invoke them when it suits him. Mr Ian Robinson —You are a disgrace to the Chair. Mr Robert Brown —Madam Deputy Speaker, I take a point of order. Ian Robinson called you a disgrace to the Chair. Mr Slipper —Madam Deputy Speaker, I take a point of order. The honourable member for Charlton should use the name of an honourable member's electorate. Madam DEPUTY SPEAKER —Order! The honourable member for Fisher and the honourable member for Charlton will resume their seats. The Chair did not hear what the honourable member for Page said. Mr WILSON(Sturt)(12.19 a.m.) —Tonight we are debating a report of the Standing Committee on Expenditure, to which was attached a dissenting report. The Expenditure Committee inquiry into the affairs of the Aboriginal Development Commission was set up in the previous Parliament. The first interim report issued by the Committee indicated that there were certain serious matters that the Committee would further investigate. Following the elections, when the Committee was re-established, it set about inquiring into those matters. I am reminded that during the life of the Committee in the Thirty-third Parliament, when some of these very serious matters were raised, members of the then Committee expressed their serious concern as to whether it was the role of a parliamentary committee, once given notice of matters of a serious nature, to investigate them further. Although the suggestion was put to members on the Committee that it might be a matter for a royal commission or judicial inquiry, they rejected that view. The Committee in its report said that it would further investigate the matter. When the Expenditure Committee was re-established, further evidence was taken. The new Committee on the taking of that evidence had on it a number of members who continued to express their concern about serious matters of maladministration and some matters that pointed to the commission of possible criminal offences. Mr Holding —You were not concerned when you were a Minister. You had a responsibility and did not discharge it. Mr WILSON —Let me deal with the interjection. The Aboriginal Development Commission is a unique statutory corporation. Under the legislation its commissioners are given some of the broadest powers provided by any statute establishing a statutory corporation. The ministerial rights of control and direction are most severely limited. Mr Holding —Look at section 17 and section 11 of the Act. You could sack the Chairman if you wanted to and you could issue a direction if you wanted to. You did not want to know. Mr WILSON —In what the Minister said earlier this evening he indicated not only that I did not want to know, but that I knew and that, because of my deep and serious concern about the broad questions of the administration of the Aboriginal Development Commission, I was exploring ways and means of remedying the defective administrative arrangements that then existed. Mr Holding —Did you seek advice to sack Charlie Perkins? Mr WILSON —This Parliament established an Expenditure Committee. That Committee, on which the Government has a majority of members, determined that it wanted to examine the affairs of the Aboriginal Development Commission. It embarked on that inquiry believing that, like other inquiries on which it had embarked, it would examine the programs and the effectiveness and efficiency of the body concerned. Then, when this serious evidence came before the Committee, despite numerous occasions on which suggestions were put to the Committee that it was not its function to conduct criminal investigations, ultimately the time came when the Committee rejected the idea of a judicial inquiry at that stage, but decided to refer the in camera evidence it had received to Queen's Counsel for advice as to what should be done. I draw honourable members' attention to some of the comments contained in the dissent report. We said: In examining the efficiency and effectiveness of the ADC the Committee became aware of the possible commission of criminal offences, the occurrence of serious administrative malpractice and gross mismanagement. There were numerous occasions on which the evidence presented to the Committee indicated widespread management inefficiency and ineffective procedures. In fact, the Committee in its interim report had found just that. When the matter was referred to the Committee, our recommendation in the dissent report that such a judicial inquiry be established was based, first, on the Committee's examination of the evidence it collected, but that view was reinforced by the views expressed by Mr John Coombs, QC, who was appointed to assist the Committee in evaluating the evidence. The Committee believed that it was a parliamentary committee and not a criminal investigation body, not a body with the necessary expertise to weigh that sort of evidence. We who presented the minority report agreed with the view expressed by Mr Coombs that in the light of the Committee's limited powers, its lack of criminal investigatory controls, there were many questions which those with such powers and experience would have wished to ask, but those questions were not asked by the Committee. Those of us who presented the minority report said: We do not believe that the Committee should have placed itself in the role of a criminal investigator, prosecutor or tribunal. It is not trained or equipped in any of these roles. Once any allegation of a criminal kind is made and supported by evidence which had to be taken seriously, the Committee in our view should in accordance with its procedures take steps to refer the evidence to an appropriate investigatory authority whether it as a Committee accepted the evidence or not. That recommendation was made to this House on the basis of advice from Queen's Counsel. It was not our view, although we adopted it. The Queen's Counsel said that parliamentary committees are not criminal investigators, prosecutors or tribunals. He made it quite clear that in his general view committees do not have the appropriate powers to protect witnesses, to protect those who make allegations or to protect those against whom allegations are made. We on this side of the House who were members of the Committee were deeply concerned to ensure that those who made allegations and those against whom allegations were made were fairly treated. It was our view that this whole matter should have gone to a judicial inquiry. It was not necessary to name names but the majority of the Committee chose to name them in its report. We made it quite clear that we were deeply concerned at that fact. It is not for a parliamentary committee to conduct criminal inquiries. To the extent that the Minister for Aboriginal Affairs (Mr Holding) expressed his concern that the role of parliamentary committees, I personally and my colleagues on the Committee share that concern. We believe that when matters of a serious and possibly criminal nature come before a parliamentary committee, the committee should not attempt to evaluate the evidence. Much was made earlier in the debate tonight about whether, following the Queen's Counsel's opinion, witnesses should have been called back or invited back to the Committee to give evidence or explanation. Firstly, I emphasise the fact that they were not called back. They were invited to attend the Committee and it was made quite clear in the letter signed by the Chairman of the Committee that it was up to them to determine whether or not they came before the Committee to comment upon the matters that were contained in the Chairman's letter. It was stated that they could do so if they wished, and they chose to do so. We did not believe that it was correct that they be invited or brought before the Committee again because it was not for the Committee then to further examine or cross-examine them. It is interesting to note that the Queen's Counsel made it quite clear in his advice that, even if further evidence was taken, the Committee was not competent in assessing questions of criminal law to make an assessment as to the weight to be attached to the evidence of those who were making allegations and those against whom those allegations were made. Our minority report makes no judgment on those questions. What we say is that those matters in which possible criminal offences were committed are matters for an appropriate judicial inquiry to examine and assess and make recommendations to the Government as to whether the matters should be handed to the law enforcement authorities. It is noteworthy that the Queen's Counsel, on receiving and examining the in camera evidence, recommended that three matters be referred to the police. Queen's Counsel's advice was sought-at not inconsiderable expense-because the Committee did not believe that it was its role to make such a decision. Interestingly enough it was Government members of the Committee who wanted to obtain a Queen's Counsel's advice. When they received that advice and the Queen's Counsel had recommended that certain matters be referred to the law enforcing authorities they chose to weigh further evidence in circumstances where the Queen's Counsel had in his opinion to the Committee made it quite clear that the Committee did not have the competence, the experience or the expertise to make that judgment. Those of us who have submitted the dissenting report believe that it is necessary for the Expenditure Committee to discharge its reponsibility to this Parliament appropriately. In view of the circumstances placed before the Committee, in our considered opinion there is only one course of action that will adequately protect the position of witnesses who have given the Committee evidence of allegations and the position of witnesses who have given us evidence in answer to those allegations. The only way to determine that matter adequately, fairly and in accordance with what would be described as natural justice is for it to be considered by a proper judicial inquiry where witnesses of both kinds can be adequately represented and where cross-examination can take place under the more appropriate judicial conditions that would apply in a judicial inquiry. Furthermore, the nature of the Committee's inquiry was such that it indicated that there were serious elements of mismanagement and maladministration by the Commission, an independent statutory authority. There was widespread evidence of that. The Committee believed that it was not the responsibility of the Committee to investigate every such allegation but that the matters were so serious they should be more fully examined by a committee with a wider charter and a more appropriate set of rules under which it could fully ascertain the extent to which such maladministration as was identified by the Expenditure Committee resulted in inappropriate expenditure of the taxpayers' funds. We believe that the only course which can appropriately be taken in all the circumstances is for such a judicial inquiry to be established. We believe that it should be. Only in this way will the functions and actions of this very independent statutory authority be able to be adequately examined. Motion (by Mr John Brown) put: That the debate be now adjourned. The House divided. (Madam Deputy Speaker-Mrs J. Child) Ayes . . . . . . . . . . . 73 Noes . . . . . . . . . . . 61 —— Majority . . . . . . . . . 12 —— Baldwin, P. J. Jakobsen, C. A.Beazley, K. C. Jones, BarryBeddall, D. P. Keating, P. J.Bilney, G. N. Kelly R. J.Blanchard, C. A. Kent, L.Blewett, N. Keogh, L. J.Bowen, Lionel Kerin, J. C.Brown, John Klugman, R. E.Brown, Robert Lamb, A. H.Brumby, J. M. Langmore, J. V.Campbell, G. Lee, M.Charles, D. E. McHugh, J.Charlesworth, R. I. McLeay, LeoChynoweth, R. L. Maher, M. J.Cleeland, P. R. Martin, S. P.Cross, M. D. Mayer, H.Cunningham, B. T. (Teller) Mildren, J. B.Darling, E. E. Milton, P.Dubois, S. G. Morris, AllanDuffy, M. J. Morris, PeterDuncan, P. O'Keefe, N. P.Edwards, 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. Tickner, R. E.Hollis, C. West, S. J.Howe, B. L. Willis, R.Humphreys, B. C. (Teller) Wright, K. W.Hurford, C. J. Young, M. J.Jacobi, R. Adermann, A. E. Hodgman, W. M.Aldred, K. J. Howard, J. W.Andrew, J. N. Hunt, R. J. D.Beale, J. Jull, D. F.Blunt, C. W Lloyd, B.Braithwaite, R. A. McArthur, F. S.Brown, N. A. McGauran, P. J.Burr, M. A. MacKellar, M. J. R.Cadman, A. G. Macphee, I. M.Cameron, Donald Miles, C. G.Cameron, Ewen (Teller) Millar, P. C.Cameron, Ian Moore, J. C.Carlton, J. J. Nehl, G. B.Cobb, M. R. Porter J. R.Coleman, W. P. Reith, P. K.Connolly, D. M. Robinson, IanConquest, B. J. Rocher, A. C.Cowan, D. B. Ruddock, P. M.Downer, A. J. G. Shack, P. D.Drummond, P. H. Sharp, J.Edwards, Harry Shipton, R. F.Everingham, P. A. E. Sinclair, I. McC.Fife, W. C. Slipper, P. N.Fischer, Tim Smith, W.Fischer, Peter Sullivan, K. J.Goodluck, B. J. Tuckey, C. W.Hall, Steele Watson, DavidHalverson, R. G. Webster, A. P.Hawker, D. P. M. White, P. N. D.Hicks, N. J. (Teller) Wilson, I. B. C.Hodges, J. C. Question so resolved in the affirmative. The following notices were given: Mr Rocher to present a Bill for an Act to amend the Conciliation and Arbitration Act 1904 so as to implement the principles of freedom of association, and for related purposes. Mr Everingham to present a Bill for an Act to amend section 112 of the Customs Act 1901, Part III of the Atomic Energy Act 1953 and regulation 4 of the Northern Territory (Self-Government) Regulations, and for related purposes. Dr Blewett to move- That government business shall take precedence over general business for this sitting. The following paper was deemed to have been presented on 22 May 1985: Lands Acquisition Act-Statement of lands acquired by agreement authorised under sub-section 7 (1).