Friday, 11 October 1985 Mr SPEAKER (Hon. Harry Jenkins) took the chair at 10 a.m., and read prayers. Bill returned from the Senate without amendment. Consideration resumed from 8 October. Schedule 2. Department of the Treasury Proposed expenditure, $588,503,000. Department of Finance Proposed expenditure, $72,276,000. Advance to the Minister for Finance Proposed expenditure, $160,000,000. Mr BEDDALL(Rankin)(10.03) —In debating the estimates for the Department of the Treasury and the Department of Finance I wish to focus particularly on the economic growth rates which these departments oversee. The growth rates for Australia since this Government came to office have been real and sustained. In 1984-85 economic growth rates were forecast and were on target at 5 per cent for non-farm growth and 4.6 per cent for total gross domestic product. Economic growth is forecast to continue at 5 per cent this financial year. This will enable the job seekers in Australia to widen their employment prospects. This performance contrasts markedly with the Appropriation Bills brought down by the previous Government. When we came to office the Australian economy was ravaged. Negative growth rates were recorded for the first time in 30 years. Unemployment had risen by a quarter of a million in the previous year. We were left with a deficit of $9.6 billion which, if left untended, would have been absolutely ruinous for every man and woman in Australia. Initially our growth rates impacted greatest in the public sector. This was the essential place to kick-start the economy. As the growth rates have continued, our reliance on the public sector has been wound back. The Department of the Treasury forecasts that this year the public sector will contribute less than a sixth of overall growth compared with more than a third last year. This will reduce the deficit further and will substantially reduce the public sector borrowing. The discipline the Commonwealth has imposed upon itself also has important ramifications for external accounts directly and indirectly. Directly, public sector borrowings abroad are being moderated. Indirectly, reduced public borrowings will have some counterpart in reduced lending to Australia by the rest of the world. The outcome for taxes, outlays and the deficit fully meets our trilogy of fiscal commitments and our commitment to reduce the deficit in money terms. This is the first time it has been met in 17 years. There has been much misleading talk recently of the Government amassing a huge debt overseas. A well-known businessman, Mr John Leard, placed advertisements in the Australian asserting that as much as $70 billion was being borrowed overseas. In reality, there is no net Commonwealth overseas debt. The Commonwealth overseas debt is equal to the Commonwealth's holdings of gold and foreign currency. Something like $13 billion of State government and State guaranteed debt is owed externally. The rest of the $52 billion is privately owned debt. Some supposed finance experts have been running around, particularly on the Darling Downs, alleging that the country is in trouble because of the debt. No wonder business in my State is in such a mess if that is the quality of advice given. I note that the appropriations deal with the Australian Taxation Office. As a result of initiatives undertaken by this Government, taxation officers will have the privilege of administering a fairer taxation system. The recently announced tax changes give genuine relief to the honest, law abiding taxpayer. I am also pleased that whilst giving incentive to those who earn large incomes, the new system also recognises those in need of assistance. In debating the Treasury appropriation, I am pleased to be able to refer to the previous head of Treasury. Unlike the present Department heads, the immediate past head has taken a quantum intellectual leap backwards. Indeed his cerebral decay is so advanced that he actually agrees with the Premier of Queensland on, of all things, a flat rate of tax. To date, however, unlike the Queensland Premier, I do not think Mr Stone believes that cars run on water. It is interesting to speculate why Mr Stone never seriously advanced a flat rate of tax when he was in a position to do something about it. In discussing Treasury appropriations, it is interesting to speculate why a flat rate of tax was not put forward by the Treasury. Perhaps the main reason is that a 25 per cent flat rate of tax would make every taxpayer in Australia earning less than $23,000 a year worse off. That would be about 85 per cent of all Australian taxpayers. A taxpayer with a $13,000 income would be $22 a week worse off. A taxpayer on $17,000 a year would pay $18 a week extra tax under a flat rate system and someone on $20,000 a year would pay $13.30 a week extra taxation. The flat rax rate would result in a tax increase of about $2,000 for a farmer on average levels of farm income. That is what Mr Stone, the Queensland National Party and the Federal National Party hope will be the new wave of taxation measures. I challenge the Queensland Premier to tell the voters in Redlands why he would tax them an extra $18 a week. The former Treasury head said that the 25 per cent flat tax rate could be reduced to 20 per cent with government restraint. Assuming that the deficit would be the same size, a 20 per cent flat tax rate applied now would require a cut in government outlays of the order of $12 billion to $13 billion. The Queensland Premier and the Federal National Party have not cared to comment on exactly how they would like to cut back this amount of money. The Queensland Premier went off squealing after the Premiers Conference, yet he advocates a system that would bring about enormous reduction in State revenues. The Queensland Government has never been able to reduce government spending by anything near the amount of money it would need to finance a flat rate of tax. Indeed, Queensland has the highest per capita deficit in Australia. I suggest that the Treasurer (Mr Keating) should lend his Treasury officials to Queensland as an act of mercy on the long-suffering Queensland population. As I look at the Organisation for Economic Co-operation and Development survey with its glowing predictions for Australia, I wonder why my State of Queensland is performing so disastrously. Queensland has the highest rate of unemployment of any State. It has the largest number of working days lost per 1,000 employees through industrial disputes and, in that respect, has almost doubled the national average number of working days lost. It had the smallest growth in new dwelling commencements for the 12 months ended March 1985. That represents an improvement in Queensland of only one half of one per cent. In the rest of Australia the average was 14 per cent. Queensland has the second lowest rate of inflation decline. In the March quarter of 1985, fixed private capital investment in Queensland declined by 3.4 per cent while in the rest of Australia it increased by 11.1 per cent. Most importantly, there was a 24 per cent increase in the number of bankruptcies in Queensland when the number of bankruptcies in Australia, on average, fell by almost 5 per cent. Unfortunately, Queensland is the sick State of the nation. It has not shared the prosperity which has been brought to this country. The great difference between the appropriations in this Parliament and the ones in the Queensland Parliament is performance. As the Treasurer has said, this is a can do government. It has set out to get the fundamentals of the economy right. (Quorum formed) Obviously members of the National Party of Australia do not like to know the truth about Queensland, that is it is run by an aging megalomaniac. They are very susceptible to criticism. In Queensland the National Party is motivated by hype rather than any realistic assessment of the true position of the economy. Like a reversion to the ancient tradition of the cargo cult, the National Party announces multi-million dollar projects that never eventuate. One such project is the rolling steel mill to be built in Carole Park in my electorate. This has been promised for many years and nothing has happened. In the early 1980s Brisbane Mini Steel Mills Pty Ltd discussed a steel mill proposal. The CHAIRMAN —Order! The honourable member's time has expired. Dr HARRY EDWARDS(Berowra)(10.13) —The speech of the honourable member for Rankin (Mr Beddall) was not a very profound defence of the Government's policies relating to this country's external problems and the difficulties associated with our massive external debt. There is a dominant factor in the present economic scene, a crucial point which should not be out of our minds for a moment, although the Government hardly ever mentions it directly in all its rhetoric about Australia having 5 per cent growth and an increase in the number of jobs that the Government, to use its quaint phrase, has created. It is precisely the fact that this country is living beyond its means. It has been now for two to three years, and it is a situation that as for an individual, cannot go on indefinitely. The most visible and culpable manifestation of this is the Hawke Government's succession of massive Budget deficits-$8 billion in 1983-84, $6.7 billion in 1984-85, and with an effective deficit of near $6 billion this year. Although there has been economic recovery and growth, as the Government constantly reminds us and which is gratifying, we would expect that by now a responsible government would have reached the stage where it could live more within its means. However, the problem of the nation living beyond its means goes further and wider than just the Government; it raises the whole question of the nation's standard of living generally; of the appropriateness and sustainability of that standard of living. In fact, the situation has rightly been described as one of fundamental national economic disequilibrium. This national `living beyond our means' shows up in the balance of international payments. The deficit there in 1984-85-the excess on what we had to pay for imports and in interest on that massive external debt, over what we earned from exports-was at an all time high of $10.2 billion in that year. Well, we meet that by borrowing in one form or another, but because of the increasing size of that external deficit the judgment of the international community has been visited upon us in the form of the depreciation of the Australian dollar of the order of 20 per cent. It is worth noting the impact that depreciation has on our external debt. With borrowing last year of the order of $10 billion, and the depreciation of 20 per cent applied to the whole external debt-in effect adding $10 billion-the debt increased by over $20 billion to a gross total of nearly $70 billion, requiring in the order of 33 per cent of our export income to service it. Mr Webster —It is still rising. Dr HARRY EDWARDS —My colleague says that it is still rising. Indeed in 1985-86 we are on the way to another $10.7 billion deficit in the balance of payments. That is likely to be exacerbated by energy and other commodity price weaknesses that have been reported lately. On the positive side, the devaluation of the Australian dollar is, or should be, the beginning of the readjustment process. Given a chance to work, it will have the effect of reducing imports and increasing exports, thus moving the adverse balance of payments situation in the right direction, and also it encourages economic activity in Australia. Indeed, the basic economic strategy of the Budget that we are discussing is precisely a devaluation-led dash for further economic growth. The important point is the qualification I mentioned-that it should be given the chance to work. In the Budget Speech, the Treasurer recognised what is required. He said: In the face of a slowing world economy we must increase our share of markets to pay our way as a nation. This means we must stay competitive and if we are to do that, we cannot afford to allow our production costs to rise above those of our competitors. If the initial and full price effects of the depreciation were to be transmitted to wages via indexation decisions, our cost increases would noticeably exceed those of our major competitors for years to come. Mr Cadman —And then they do a deal with the unions. Dr HARRY EDWARDS —I was coming to that. My colleague anticipates me. The Treasurer continued: Our competitive edge would be lost. . . We would be throwing away any prospect of sustaining the growth rates required to get unemployment down. That is why, temporarily, we must modify our normal support for full wage indexation. He continued: In the next two wage indexation cases the Government will argue before the full bench of the Conciliation and Arbitration Commission that the price effects of the depreciation be taken into account. That is what the Treasurer said in his Budget Speech. What happened then? Quite simply, as my colleague said, the Australian Council of Trade Unions, the Government's master in this as in tax matters, said no. The prices and incomes accord, that much vaunted instrument of policy that seems to have received such a build-up in recent days, makes no provision for taking the price effects of devaluation into account. Still, it could be bent, and it was bent, and a deal was done. Mr Cadman —It could mean a 12 per cent increase in wages this year. Dr HARRY EDWARDS —It could, but it starts off with a full 3.8 per cent indexation request in the September case and puts off until next April a discounting of 2 per cent. By then, these price effects will be well in excess of such a discounting of the adjustment of wages to prices. This 3.8 per cent increase in wages and other related on-costs, fuelled by the rapid expansion of credit, will feed into price levels in 1986 and put this country on a course of costs and prices rising well above those of our competitors. I have no hesitation in stating that a 2 per cent discount next April is both inadequate and too long delayed-indeed, fatally delayed. The result will be that the effect of the depreciation in correcting the massive balance of payments deficit will be largely inoperative, so the borrowing will continue, the nation's overseas debt will continue to grow, and our national credit status will fall even further. Over recent weeks we have seen a concerted attempt to paint the prices and incomes accord as entirely beneficent-indeed, indispensable-to the conduct of overall economic policy. I can understand what the Treasurer is attempting to do in principle, namely, to restrain wages directly through the accord, in order to pursue more expansionary fiscal and monetary policies and thus achieve a higher level of economic activity and employment, with less inflation than otherwise would be possible. Yet, I submit that over the whole period of the Government's term of office the level of award wages-from the initial 4 per cent increase in the September 1983 case through to this present accord Mark II deal with the ACTU to which I have just referred-has been at least as high as, if not higher than, would have been the case under a different system. Increases outside the award system, which the unions are supposed to eschew in return for full indexation, have also been significant. While there has been significant economic growth, the Hawke Government's excessively expansionary fiscal and monetary policy has resulted only in a massive balance of payments deficit; the weak Australian dollar; record high interest rates; very likely double digit inflation next year; and unemployment, albeit down on the latest figures by a fraction of a decimal point or two, pretty sticky and at a level higher than that which prevailed throughout six of the seven years of the Fraser Government. I conclude by saying that the world's best Treasurer had better batten down for some pretty heavy weather ahead. Mr RONALD EDWARDS(Stirling)(10.22) —This is an interesting time in the national economic debate because the Opposition is trying to cobble together a philosophy and an approach to economics at the same time as the Government has put together an economic performance which is beginning to show results. It is interesting to compare the performance in terms of statistics with what we are getting from the Opposition. While the honourable member for Berowra (Dr Harry Edwards) has some distinction in the area of economics, I hope that he does not fall into the current Opposition strategy of appearing to yap yap away on economic matters. The honourable member for Berowra has made a contribution to the economic debate in this country, but I hope that he will not fall into the position of stringing together this sort of rhetoric and appearing to yap around in terms of economic performance. The substantial economic picture is that the Australian economy is performing very well. I am mindful of what the honourable member for Berowra said about the external debt and I propose to debate that in just a moment. If we talk to people in the Australian community, they are mindful of the fact that jobs are available, the economy is performing, price increases have been reduced, housing in particular is now on a substantial upturn, and the economy, compared with that of three years ago, is markedly improved. Those opposite cannot get away from that. They have to recognise that in the context of debates of this kind, if they come in here and cast around a few figures they run the risk of appearing to be like small dogs yapping at the heels of the Australian community. That will not work because the community will not accept it. It is more realistic and down to earth in its understanding of the way things work. The community can cut through the nonsense that sometimes is debated in this place. I think it is important and instructive for all of us on both sides of the chamber-I say this in good faith to the honourable member for Berowra-to remember that the Australian community is not about to be conned by any government or by any opposition. The Opposition is under considerable pressure at the moment, because the Australian community is waiting for it to come up with a wages policy. There is not one, and that is well known. Let us think for the moment of the proposition of the Leader of the Opposition (Mr Howard) which concerns deregulation. The Leader of the Opposition has said: `Let us deregulate wages, let us have free bargaining'. Can honourable members really imagine a 17-year-old who has been unemployed for six months going to a senior manager of a metals company or a building company and saying: `I am here to bargain about my wages, to strike a contract with you'? That is not a realistic proposition. Nor is it realistic-I think this is a substantial point-for the Opposition to talk about deregulating wages. I ask honourable members to imagine a circumstance in which wages were freed up completely, as the Leader of the Opposition proposes. What would an employer do? Would he keep on a man who had a wife and three children, a house and a mortgage and so on on a salary of $300 a week or would he put on an 18-year-old on $200 a week? I put that proposition to the Opposition. Quite logically, the employer would put on the person who cost less. What is the implication of that? Is the Opposition really saying that it favours a situation in which mature-aged Australians, be they men or women, with families will be pushed out of the work force? That is the substance, the outcome, of what the Opposition is saying. If we enter into a free bargaining situation the lowest bidder will always win. The Leader of the Opposition himself admitted in a radio program on Perth radio 6PR that a $100 a week wage differential was a real possibility. He then resorted to saying: `Well, employers are more benevolent than that. They really would not take advantage of that situation'. I suggest that employers are sensible economic people. They would take advantage of that situation and they would employ the person on the lower wage. What would we see? We would see considerable disturbance for ordinary Australian people, and the ordinary Australian people who are listening to this debate would understand that very clearly. On that first count, the Opposition's current performance on wages, is very shaky indeed. Fortunately, some others in the Opposition have said: `No, we will stay with centralised wage fixation because it makes sense'. I know that the honourable member for Goldstein (Mr Macphee) in particular is one who supports that proposition. It is a substantial one and I think we have to recognise that. The Opposition has not yet delivered on wages. It has not yet delivered on taxes, either. We still have before us the extraordinary flat tax, flat earth proposition of some on the other side, and some other notions are being introduced about using section 26AAA of the Income Tax Assessment Act for a capital gains tax, and so on. There really is considerable confusion. The community recognises that confusion, too. It recognises that the Opposition has not worked it through. Let us contrast that with the statistics. A headline in this morning's Australian Financial Review says: `Jobless rate down to lowest in three years'. That is not a rhetorical invention; it is a reality. We have a substantial reduction in unemployment. In the last year of the previous Government some 250,000 jobs were lost. We have seen a substantial turnaround. Since March 1983 we have created 487,000 new jobs, and that is related to the increasing work force participation. Not only are people more confident about the economy and coming back into the work force, but they are coming back at an increasing rate. At the same time, with the support of the private sector, we are creating jobs at a rate fast enough to absorb them and so reduce net unemployment. That is a substantial achievement, and people in the community know that. Despite all the comments and all the rhetoric that go on in here, the community understands very clearly that the job situation is improving. The statistics support that proposition, but so do the community's own perceptions, every day. Also, we have substantial economic growth. In the years of the Liberal governments we saw an average economic growth of 2.1 per cent. We are looking at an average economic growth under the two Hawke Governments of some 5 per cent-and that is substantial. We have a non-farm gross domestic product of 4.5 per cent to 5 per cent. It is not good enough for the Opposition to say that we are in a state of crisis. We are not; the economy is growing. I wish to devote just a moment to the question of external debt. The Opposition is not saying to the Australian community, as it ought to be-it is attempting to mislead the community-that a substantial part of the growth in external debt has been in private sector borrowings. People are currently very much aware of enormous activity on Australian stock exchanges. That activity, in part, is being funded by external borrowings. In fact, growth in the external private sector debt has been far greater than growth in the public sector external debt. We on this side of the chamber are mindful of the difficulties created by increasing external debt, but the reality is that a substantial amount of that growth is occurring in the private sector. That is not to say that we should wash our hands of it and say that it is not the responsibility of the Government, but we have to recognise that, if there is borrowing, it is borrowing for a purpose. The purpose in this instance is to try to get money into the Australian economy to participate in economic growth. As the Treasurer (Mr Keating) said in his Budget statement, we are about getting this economy back to work; this economy is back in business. Australia is back in business, and people understand that very well. Whilst our external debt position is not altogether satisfactory, we have to recognise that a substantial amount of that debt lies in the private sector. I wish also to devote a moment to the question of interest rates. The Opposition is making much of interest rates at the moment. We also have some members of the Opposition saying: `Let us deregulate housing interest rates'. That is a very sinister proposition, because the deregulation of housing interest rates would mean that the current housing interest rates would go up by some 2 per cent. Is the Opposition really saying that it wants ordinary Australians to pay an extra 2 per cent on their housing interest rates? We on this side are very clear on this matter. We would not wear that. We believe that housing is an important part of the economy. We also believe that people deserve to get into housing, unlike the Opposition which, when it was in government, began to put about the proposition that people would have to learn to live without housing. In conclusion, I believe that the position is clear. The Opposition is putting around a bit of rhetoric about its position. It is not clear, and the community knows it. The Government's position has become very clear. The number of jobs has grown, the economy is growing substantially, inflation is being reduced and Australia is back in business. The community understands that, and so does the Government. Mr COWAN(Lyne)(10.32) —The honourable member for Stirling (Mr Ronald Edwards) certainly sounded convincing in his comments concerning the economy. What he said was basically the same as the proposition which the Treasurer (Mr Keating) has brought before the Parliament. I do not want to speak at length on this matter, but I do not see the result of this in the electorate, and that is the important thing. I do not find the confidence which the Government feels is held about the economy. Many of the business houses throughout Australia today, and many people generally, are very concerned. Mr John Leard was spoken about here today. He took the trouble to advertise his personal thoughts throughout Australia and the response to that was tremendous. I received a lot of mail from people who asked: `What are you doing as our Federal member? Do you agree with the sentiments of Mr Leard?' I am sure that the views put by the honourable member for Stirling are not shared across the broad spectrum of the Australian people. I want to stress that point. I know what the Treasurer says about the gross domestic product, a lower inflation rate and all the other issues. That all sounds good, but in reality I cannot see this. I do not want to be a pessimist. I think we have to be optimists at all times. We have to go around our electorates pumping up the thoughts, the endeavours and the motivation of people to do well and expand. I do not blame only the Government for the situation but I wonder whether all governments over the last couple of decades have really planned for the future of Australia, for what can be expected of this nation. Government should play an important role concerning our ability to enter world trade and supply the food, materials and minerals that this world demands. Perhaps if we were good Christian folk, good moral folk, better than we are purported to be, we would be paying more attention to these matters and ensuring that this nation can express in practical terms what basically is expected of us. Let us talk about the unemployment scene because it is related to what we are debating today. I know that the unemployment level has come down to 8.l3 per cent or 8.2 per cent, but let us not forget that, as the honourable member for Gippsland (Mr McGauran) said a week or so ago, there are 60,000 people employed under the community employment program. This is government employment. If we add that number to the number of unemployed throughout Australia we would probably have an unemployment rate of 10 to 11 per cent. That would be our level of unemployment if the taxpayer were not pumping up the employment level. I refer also to interest rates. I do not like to see high interest rates. I know there are economic measures today which are bringing about a rise in interest rates. However, we have the highest interest rates in the free world. That is not good for Australia. As a result of the economic policy of the Government our inflation rate is likely to rise. Only time will tell. We have to wait to see what will happen. I do not like what I see on the horizon and what it bodes for Australia in a year or a couple of years. I do not like to think that that will bring instability to the economy of this great nation of ours. I rose to speak very briefly about the actual allocations within the Department of the Treasury of administration funds to cope with the new tax reforms which the Treasurer has introduced. Have any of us ever stopped to think of what will occur within an accountant's office or a business office or what will happen in relation to our own affairs as members of parliament as a result of the tax on fringe benefits? What about all the dockets and the accounts? I ask honourable members to think of the work we will have to do when we take these to our accountants. I ask honourable members to think of the work involved for people in big and small industries and for farmers out in the field. Let us think of what the farmer and his wife will have to do to accommodate their accountants and legal advisers with information. Look at the tremendous expense we will thrust on the people of Australia as a result of the taxation reform-that added burden which the people of this country complain about today. The other day I said to an accountant who has 15 people on his staff that in two years he would have 30 people on his staff just to cope with these iniquitous measures. People will have to pay for accountancy and legal advice as a result of those. Let us look at what will happen when that work is transferred to the Taxation Office. For example, if there is a query about a bad assessment, look at all the extra information and advice which will have to be supplied by the accountant and by the person concerned. This must mean a tremendous amount of extra expenditure by the Treasury on its administration to look after its tax affairs. This will be the outcome of all the things we were debating yesterday and which we will talk about next week in the Parliament. This taxation reform involves extra cost burdens and worries which will be thrown on people. For aged people the assets test is quite enough worry without these extra things. Is there any need for this extra worry? Surely there is some simple tax reform or a simple taxation system that could be introduced by this Government-which we could assist with-which would make it simple for the Australian people to use. Surely there is something that would be easy for people to comply with. Surely there is no need for all the intricate matters which we are debating and talking about here today. I would love the Treasurer to say what plans the Treasury has made to cope with all these extra matters it will have to deal with. I have one further worry. This worry relates to money owed by the Government. If anybody owes the Government money he has to pay it. However, if the Government owes a person money-for example, for the resumption of land or for services or something of that kind-how long does that person have to wait? I ask the honourable member for Riverina-Darling (Mr Hicks) how often he has had to make representations to a government department on behalf of citizens within his electorate for a matter to be finalised. I am doing that kind of thing continually. At the moment I am making representations to the Minister for Local Government and Administrative Services (Mr Uren) about a matter concerning an area of land surrounding the Salt Ash weapons range. Two farmers who have worked hard for a lifetime are still waiting on the finalisation of business relating to a large area of land to be acquired by the Defence Department. Why should these people have to wait? For example, if the citizen owes the government money for a taxation assessment and he cannot pay, he has to pay 20 per cent interest on that money owing. What does the government pay the citizen out in the field to whom it owes money? The government does not pay interest. This is not very fair. This matter applies not only to the Federal Government but also to municipal or shire councils. This is a little lopsided. I think these things should be said. We should be aware that this is a parliament of the citizens. We should be reacting accordingly. Those are the issues I wanted to raise in this debate. Mr McGAURAN(Gippsland)(10.40) —As with my distinguished colleague the honourable member for Lyne (Mr Cowan), I have been moved to enter this debate on the Appropriation Bill (No. 1) following the reassuring tone of Government members. I suggest that those assertions of reassurance that all is well in the rose garden are either representative of the height of naivety or somewhat approaching deliberate falsehoods because, as all those people in small business and the rural production sectors of our economy know, things are not good. It has always been, for the most part at least, that big business and, certainly, big unions can take care of themselves. I wish to direct my brief remarks in this debate to those people caught between those two extremes, namely, small businessmen and rural producers. Those people know that they cannot get ahead, let alone get started, because of the impost of high interest rates which are the direct result of this Government's policy, because of increasing inflation and because of skyrocketing government costs and charges. I concede however that much of the responsibility for Government costs and charges falls within the bounds of State and local government as well as the Federal Government. On top of that we have a problem with a rigid labour market and indexed wages which does not take into account the capacity of small private sector participants to pay. Anybody involved in small business or farming knows that the picture is not as the Government seeks to portray it. The true picture is that nobody can get started in business because of, firstly, the non-availability of finance and, secondly, the cost of that finance. I ask the Minister at the table, the Minister for Sport, Recreation and Tourism (Mr John Brown), who tells us that he was a very successful small businessman before assuming parliamentary responsibilities, to tell us how he would start a business today in the meat processing trade. How could he as an individual with all the initiative and drive he displayed years ago start a business today and get it off the ground? I would be very interested to hear the Minister's answer. Figures released recently by the Australian Bureau of Statistics show that there is almost an equal number of people receiving either government pensions or employed by governments as there are people employed within the private sector. That means that for every person creating wealth and engaged in the private sector there is someone else to consume that wealth or, in the case of public servants, there is someone to distribute the wealth and to consume it in the form of wages. That is putting the situation in a nutshell. Big unions and big business have an undue influence on this Government. The small businessman and the farmer are caught and being squeezed between those two. Unless this Government, by way principally of taxation reform, looks at eliminating the impost on the small businessman and farmer these people will not get ahead and the results for this country will be devastating. The lack of competitiveness of our overseas trading exports is increasingly clear to the Australian electorate. The cost of huge government borrowings in terms of billions of dollars also is becoming very well known. Always the losers in this trend towards big government, big unions and big business are those people engaged in small business and the farmers. I seek the Minister's response not just to the specific question I put to him but also to how this Government, principally through taxation policy, will alleviate the burdens-and the resultant effect on the Australian economy-on small farmers and small businessmen. Mr JOHN BROWN(Parramatta-Minister for Sport, Recreation and Tourism)(10.45) —In summing up this part of the debate on Appropriation Bill (No. 1) 1985-86 on behalf of the Treasurer (Mr Keating), I am inspired to say that there was a marked contrast between the positive contributions by the two Government members, the honourable member for Stirling (Mr Ronald Edwards) and the honourable member for Rankin (Mr Beddall), and the speeches from the Opposition side. The honourable member for Berowra (Dr Harry Edwards) and the honourable member for Lyne (Mr Cowan) are two of the more highly respected senior members of the Opposition; their words are usually listened to with interest. I felt almost a feeling of sorrow. I could feel the envy coming through in their speeches for the way in which the Government has turned the economy around. In some ways, because they are decent Australians, there is a sense of satisfaction with the Government's achievements in the economic area because certainly there was nothing to point to in the previous seven years of their own government that in any way matched the achievements of this Government. In summing up, I make reference to a few of the points of the economy that are worth speaking to and then perhaps I will relate a comment or two to the contributions of the honourable member for Gippsland (Mr McGauran). In terms of economic growth, non-farm growth in Australia for the last two years has been 5 per cent and will probably be in excess of that for this year. Australia's growth rate has become the envy of the other Organisation for Economic Co-operation and Development nations and is more than twice the growth rate achieved by the previous Government in its seven years of office, which was a rather poor 2.1 per cent. I guess the best way we can measure confidence is in terms of consumption. Retail sales continue to rise strongly. They increased by 4.3 per cent in the July quarter to be 11.2 per cent higher than in the July quarter of 1984. I think it should bring joy not only to members of this chamber but to all Australians that Australians at last have hope and confidence in their nation and that instead of squirreling their money away in savings banks they are out spending it. That is the reason why our work force has risen so dramatically. In relation to the labour market, employment grew strongly in the year to September, rising by 210,900 jobs. The Government promised 500,000 new jobs in three years. Six months short of the three-year time span we are only 13,000 jobs short of target. In that period 487,000 jobs have been created in Australia. That is almost the total number of jobs that have been produced in the previous 10 years in Australia, including the seven years of the previous Government. The unemployment rate is down from 10.4 per cent in September 1983 to 8.1 per cent in September 1985. That figure is rather misleading anyhow because the expectations of Australians about getting jobs have risen to the extent that a lot more people are now registering as unemployed who, under the previous Government, had given up. With a large increase of jobs, that unemployment figure should be treated with a certain amount of reserve. One of the great indications of prosperity in the community is in the housing sector. In 1984-85 commencements numbered 152,000 units, which is the highest level since 1973-74. Of course, that amount of investment is spread over the whole of Australia in regional as well as in city areas. In the three months to August 1985 the number of approvals rose by 1.2 per cent. In terms of real private business fixed investment, we have recovered in 1984-85 by 4 per cent. The Australian Statistician shows that in current prices investment expectations are 11 per cent higher for 1985-86. In real terms we expect growth to be a little higher than last year. No matter which area of the economy we look at there is economic growth. That is the reason why I respect the comments of the honourable member for Berowra, who is a former Professor of Economics at the Macquarie University. That is why I am sure there is a little envy in Dr Edwards's comments because I know that as a proud Australian he is pleased to see the economy rise. I must relate some comments to the honourable member for Gippsland, who referred to my own experience in small business. I am quite happy to tell him that despite the best efforts of the cockies with whom I deal in my particular business, or rather with whom my partner deals these days, we have had a record year. It is the best year I have ever had. I am sure that that translates itself down to everybody in business in Australia. While his comments may have fallen on some people's ears, I think that they are treated with a fair amount of reserve because there is a confidence, a hope and a prosperity in the Australian business area that has not been evident for many, many years. While thanking everybody for their comments in this debate, I must reiterate that the Government stands proudly on its economic record over the last three years and I am sure that every proud and patriotic Australian, including a lot of members of the Opposition, will share in the joy and the belief that the Australian economy has been turned around and that we can look forward to a good number of years of increasing prosperity under this Government. Proposed expenditures agreed to. Progress reported. Bill presented by Dr Blewett, and read a first time. Dr BLEWETT(Bonython-Minister for Health)(10.51) —I move: That the Bill be now read a second time. The Bill before the House seeks to make a number of important changes in a variety of fields relating to the health portfolio. First, the Bill proposes substantial amendments to the Commonwealth Serum Laboratories Act 1961 to increase the competitive ability and the autonomy of the Commonwealth Serum Laboratories. Secondly, it proposes significant reforms to the medifraud provisions of the Health Insurance Act 1973. Thirdly, it provides, under a sunset clause, for the Health Insurance Commission to undertake planning and development of the Australia Card. Finally, it provides for a number of amendments mainly of a technical nature to various aspects of the health function. I first draw the attention of honourable members to Part II of the Bill which is intended to streamline greatly the day-to-day operations and to improve the commercial viability of the Commonwealth Serum Laboratories-or CSL-Commission. The need for these important changes has become apparent since the CSL Act was last amended in 1980, following an independent inquiry into the Commission's operations and capital works. These changes are the most significant changes to the structure and operations of CSL in its 69-year history. Clause 10 of the Bill seeks to enable CSL to make use of idle production facilities and resources when they are not being used for pharmaceutical production. The additional use of CSL's facilities in this way will, of course, decrease the overall cost of operations to the Commonwealth. Clause 11 will allow the Commission to undertake a number of normal commercial activities such as forming a company, buying and selling shares, or entering into a profit-sharing partnership. This clause removes a current constraint on CSL which is not imposed on its competitors and is intended to make the Commission more commercially viable in a highly competitive industry. I would point out that any transactions of this nature will require the Minister's approval where CSL will have a controlling interest. Clause 20 provides for possible reimbursement to the Commission if, as a result of a direction given to it by the Minister, it suffers a financial loss. Other provisions in the Bill are designed to help the Commission improve its efficiency, effectiveness and accountability. I will briefly outline some of these matters: The current constraint which prevents any person with a direct or indirect interest in any pharmaceutical enterprise from appointment as a CSL commissioner is to be removed. The term of appointment for commissioners is to be changed from the current four years to not less than three and not more than five years. These two changes will broaden the range of people eligible and available for appointment. A legislative requirement for declaration of interests by commissioners is being introduced, formalising a practice which has existed for many years. The Commission's Director, whose title is to be changed to Managing Director, will in future be appointed by the Commission itself, rather than by the Governor-General. Such changes recognise the importance of the chief executive officer and the controlling body of a government authority which is expected to be competitive and commercially viable and to play a leading role in public health in Australia. In relation to Commission staff, the requirement for Public Service Board approval of staff terms and conditions is removed-a necessary step to allow the Commission to be more innovative and competitive in the labour market place. The Minister will be required to consult with the Commission before giving it any written direction which will affect its operations; such direction will have to be published in the Commonwealth Gazette within 21 days. The Commission is to be covered by the general provisions of the Audit Act 1901 in relation to its accountability. These are the principal changes proposed in the part of the Bill relating to the Commonwealth Serum Laboratories Commission-changes which will enhance the operations and the commercial effectiveness of the Commission. In relation to the financial impact of the changes, in only one area is there any possibility of a cost to the Government. I refer to the possible reimbursement to the Commission for any financial loss resulting from a direction given by the Minister. Such a direction would be given only as a last resort following consultation with the Commission and after other avenues of action in accordance with the legislation has been exhausted. It is impossible to quantify such a cost; it would depend entirely on the circumstances at the time. On the other hand, an increase in revenue for the Government is expected. The improved commercial viability of the Commission should produce increased dividends. In addition, cost savings for the Government can be expected from the increased use of production facilities. These changes will further prove the advantages to Australian citizens of having a public window into the pharmaceutical industry. I now turn to a number of provisions in the Bill which propose amendments to the Health Insurance Act. Section 3B of the Act currently provides for the issue of a certificate by a medical practitioner stating that a person is in need of acute hospital care for a period of up to 35 days. The section ensures that full benefits are paid for long term acute care hospital patients. Without this certification all patients are automatically classified as `nursing home type patients' after 35 days in hospital and their health fund benefits are reduced accordingly. Experience has shown that, for various reasons, medical practitioners sometimes fail to furnish certificates at the appropriate time. As there is currently no retrospectivity allowed by the legislation, some acute care patients have been financially disadvantaged through reduction of their hospital benefits to nursing home levels. It must be pointed out, however, that the health insurance industry has behaved most responsibly in this area, and has usually made ex gratia benefit payments in such circumstances. Clause 28 of this Bill proposes that retrospective certification be allowed; it has the support of the health insurance and private hospital industries, and of the Australian Medical Association. The amendment will correct a current anomaly under which the health funds cannot share the liability for ex gratia payments via the reinsurance arrangements. Commonwealth outlays will not be affected, as the Commonwealth bed-day subsidy continues to be paid whether the patient is classified as `nursing home type' or `acute care'. The Bill proposes a further change to this section of the Health Insurance Act-an amendment of the definition of `nursing-home type patient' in sub-clause 26 (2) and a provision in clause 27 which together enable the Secretary to my Department to exclude individual patients or classes of patients from the nursing home type patients arrangements. This would be done through a determination which would be subject to parliamentary scrutiny and disallowance. To ensure proper consideration of the medical circumstances of each case, the determination power would be delegated to senior Commonwealth medical officers within my Department. The development of a review process through the Acute Care Advisory Committee arrangements, plus monitoring of the nursing-home type patient arrangements, has pointed to some justification for the exclusion of certain types of patients from those arrangements. These might include, for example, certain long term acute care psychiatric patients and terminally ill cancer patients. The types of patients who might be covered by this amendment are to be discussed with the medical profession and the health insurance organisations before any individuals or class of exclusion is declared. The purpose of this amendment is to provide an appropriate mechanism to allow an exclusion of general classes of patients, whereas currently only individual exclusions are permitted. Again, there will be no effect on Commonwealth outlays, nor will health insurance organisations be affected as it is intended that any excluded class of patients would be those to whom section 3B certificates now routinely apply. There should be a small administrative saving through a reduction in the numbers of certificates issued by doctors and monitored by the health funds. Clause 37 will amend section 20 of the Health Insurance Act to empower the General Manager of the Health Insurance Commission to determine how Medicare benefits should be paid. The new provision is similar to one in the social security legislation. The Commission has always followed a policy of limiting cash payments for Medicare claims at its branch offices, with benefits above a certain sum paid by cheque and sent to the claimant within a few days. It has adopted this policy, which is similar to that of other health insurance organisations, for sound business reasons. First, the Commission's experience over many years indicates that for large amounts the use of cheques posted to a valid address acts as a deterrent to claimant fraud. Secondly, cash limits enable the Commission to estimate reliably a branch's cash needs for a day's trading, with advantages both to the Commission's clients and its own operations. Thirdly, the limiting of cash required to be held overnight at branch offices reduces their attractiveness as possible targets for robbery. The Commission believes its policy is soundly based and prudent, and through this Bill seeks to ensure that the policy is reflected and supported by legislation. At the same time, it is very mindful of its responsibility not to disadvantage claimants in genuine hardship. Branch managers will continue to have the discretion of paying larger benefit claims in cash or by an immediate cheque. The Bill also facilitates the implementation of a Government commitment, foreshadowed in the 1984 election policy speech, to `extend Medicare to provide reciprocal health care arrangements for countries with which Australia has close ties'. As honourable members may be aware, negotiations to this end have since begun with the United Kingdom, Italy, Spain, Greece, Yugoslavia, Eire and New Zealand. Reciprocal agreements will allow short term visitors from such countries to Australia access to hospital and medical services for medical conditions requiring urgent treatment, just as Australian visitors to those countries will have similar rights. The agreements will also provide full access for Australian diplomatic and consular staff and their families to the national health schemes in those countries with which agreements are reached. This Bill amends the Health Insurance Act so that diplomatic and consular staff and their families posted to Australia will be entitled to full access to Medicare. I turn now to those provisions of the Bill which propose changes in relation to the recognition of medical specialists in Australia. By virtue of clauses 29 and 44 the Bill seeks to simplify and streamline the arrangements whereby practitioners are recognised as specialists for the purposes of the Health Insurance Act. At present this is undertaken by ministerial reference to a specialist recognition advisory committee which takes into account an applicant's qualifications, experience and standing in the medical profession, together with the nature of his or her practice. Under the new arrangements, practitioners will, in general, be automatically recognised as specialists if they are fellows of specified specialist colleges and they have an appropriate qualification obtained by successfully completing a prescribed course of study; or if they are registered as specialists under the laws of the States or Territories. The Minister will retain the right to refer applicants as at present to a specialist recognition advisory committee where automatic recognition does not appear appropriate. Among other proposed changes are the following: Recognition is to apply on a national basis rather than be restricted to the State or Territory of residence or practice. There is to be a capacity to place a limit on the period of recognition of overseas practitioners temporarily requiring specialist or consultant physician recognition in Australia. The Bill provides that to offset administrative costs a fee-of $30, to be prescribed by regulation-should accompany each application. This fee will produce estimated annual revenue of some $16,500. The more streamlined handling of applications from fellows of specified colleges will result in some small savings. In relation to the $30 fee, I would make the point that recognition as a specialist or consultant physician entitles the practitioner to receive higher rebates for his or her services under Medicare. The Bill before the House proposes a number of changes to the penalty and disqualification provisions of the Health Insurance Act. These changes represent the most significant amendments contained in the Bill. Honourable members will recall that the present provisions were introduced some three years ago as part of the previous Government's approach to medical benefits fraud-an approach which proved to be unreasonably rigid and insensitive and, in some cases, unnecessarily harsh. The proposed new arrangements address a number of the shortcomings of the existing provisions. Before outlining the major features, let me first reiterate the Government's firm view that it is only a minority of practitioners who abuse the Medicare system and bring dishonour to their profession. I have no doubt that the great majority of practitioners will support these initiatives. Under the current legislation there is no distinction between the penalties applying to practitioners found guilty of medifraud offences regardless of whether the offence was intentional or the result of reckless or gross careless conduct. No matter the circumstance, disqualification from participation in Medicare applies automatically for three years, where two or more offences are found proven. The Minister does have power to moderate such disqualifications. However, his power is limited only to situations where special circumstances exist, particularly with regard to patient welfare. Thus, moderation cannot be given where the facts otherwise indicate that it would be reasonable to do so. Another shortcoming relates to the recovery of benefits wrongfully paid. There is currently no specific provision in the Health Insurance Act relating to recovery and, as a matter of equity, the Government has been able to recover only those overpaid benefits paid directly to a practitioner. Recovery from innocent patients is clearly not acceptable. Further, the counselling of practitioners-a particularly effective means of ensuring that doctors fully understand their legal obligations-has been jeopardised by a growing belief that in the absence of privilege for their confidential discussions with medical counsellors prosecution could ensue. The Bill before the House addresses each of these problems. It proposes a more flexible system for dealing with both wilful and innocent misstatements by practitioners with these major provisions: The recovery of wrongfully paid benefits from the person responsible for making the false or misleading statement associated with the claim; The introduction of a summary offence provision for the making of false or misleading statements and of an indictable offence provision for knowingly making false or misleading statements; and The establishment of a new, independent Medicare participation review committee which is to determine whether the services of offending practitioners should continue to be eligible for Medicare benefits. The new recovery provisions will apply in all cases where an overpayment has occurred as a result of misitemisation or other misstatement. It will also provide a means of recovery from the practitioner in cases where the practitioner is responsible for the misstatement but the claim has been lodged by the patient. Decisions to recover will be made at a senior level in the Health Insurance Commission. Wherever practicable, recovery will be achieved by negotiation between the Health Insurance Commission and the practitioner concerned, but the Bill does recognise the right to pursue or contest recovery of a debt in civil proceedings. The Bill also provides for interest to be payable on outstanding debts in cases where a practitioner refuses either after official notification of a debt to make restitution within a specified time or defaults on an agreement to repay. Similar provisions will apply where recovery becomes the subject of civil court proceedings. New offence provisions introduced by the Bill provide that the making of a false or misleading statement will become a statutory, but summary, offence. It will not be necessary for the Crown to prove intent, but a statutory defence is available to a defendant who can establish, on the balance of probabilities, that he or she did not know, and could not reasonably have been expected to know, that either the statement was false or misleading or was capable of being used for obtaining benefits. The Bill also includes a protection against double jeopardy by specifically prohibiting the punishment of a person under more than one provision in the Health Insurance Act in respect of the same offence. Prosecutions could be commenced in circumstances where it is apparent that the Medicare arrangements are being abused, but not necessarily in a deliberate or intentional manner. Prosecutions under this provision can be instituted within three years of the commission of the alleged offence. This period is necessary to ensure that the offence provision is effective. Similar periods apply elsewhere in Commonwealth legislation. By their nature, offences involving abuse of the Medicare scheme may not be detected until much later, for instance where accounts spanning a considerable period are received. Naturally, as we are dealing with a summary offence, penalties are much less than those provided for in the provision dealing with indictable offences. I turn now to a new offence provision relating to persons who intentionally make a false or misleading statement which is capable of being used in connection with a claim for Medicare benefits. This is an indictable offence, and the onus will be on the prosecution to prove all elements of the offence beyond reasonable doubt. There is, of course, no time limit for prosecutions for indictable offences. Of course, the Director of Public Prosecutions will be responsible for deciding both whether a prosecution should be commenced and, if so, under which provision. I refer now to the proposed establishment of the Medicare participation review committees. They are to consider, following a successful prosecution against a practitioner, whether the nature of the offence is such that the practitioner has so abused the position of trust conferred by Medicare that action affecting the practitioner's continuing participation in Medicare is warranted. Such action could entail counselling, reprimand, or disqualification from participating in the Medicare arrangements for a period up to five years. A practitioner will be referred to a committee in all cases where an offence under the Health Insurance Act or a related Crimes Act offence is found proven. The committee is to consider, first, whether in fact any action is warranted. If it decides that action is not warranted, the matter will be immediately disposed of. Where the committee decides that some action may be warranted, the practitioner will be able to appear before the committee and be represented. There is provision for partial or full disqualification. A partial disqualification would mean that a service, or perhaps some services, when rendered by the practitioner would be ineligible for Medicare benefits. A committee could consider a partial disqualification appropriate where, for example, a practitioner has abused the system in respect of one item in the schedule or where full disqualification may seriously disadvantage a particular community. The new arrangements provide for the issue of guidelines by the Minister to assist committees in the performance of their functions and ensure a consistent and even-handed approach. To this end, the guidelines are being prepared in consultation with the professional bodies. The guidelines will be subject to the normal parliamentary scrutiny and disallowance provisions. A right of appeal to the Administrative Appeals Tribunal from decisions by the committee will exist. It is proposed that the committees comprise: An independent chairperson with legal qualifications and considerable legal experience; a person, nominated by the Minister, who is a member of the same profession as the practitioner before the committee; and in cases involving medical practitioners, a person nominated by the Australian Medical Association; or in cases involving non-medical practitioners, a nominee of the relevant professional association. Relevant professional associations will be consulted when considering the appointment of chairpersons. As honourable members can see, the committee will be an independent body which well be competent to determine, on the basis of evidence put before it, the matters referred to it. This Bill also provides for the extension of statutory privilege for information obtained by medical counsellors during interviews with practitioners. As I said earlier, there has been a growing belief that confidential discussions with counsellors can lead to prosecution of practitioners. This amendment, which will cover both oral statements made in interviews and any written records of them, will protect the frank and free discussion so necessary if the objectives and benefits of counselling are to be achieved. I should perhaps point out that counselling is intended to be quite separate from the investigation of persons suspected of committing offences, and that the extension of privilege will enhance, rather than detract from, the effective administration of Medicare. Another aspect of the current legislation addressed by the Bill is that it is silent on who is to fill in the practitioner's account or receipt. It is clearly not appropriate for it to be the responsibility of patients. Hence, the Bill amends the Health Insurance Act to provide that Medicare benefits are payable only where a practitioner or his staff includes the prescribed information on accounts. In summary, the information-to be prescribed by regulation-that will be necessary for the payment of Medicare benefits will be: Identification of the practitioner by name and either practice address or provider number; Sufficient information to enable identification of the patient; and A description of the services provided sufficient to identify the Medicare benefits schedule item relating to those services. The new provisions will enable the Health Insurance Commission to have sufficient information to pay benefits. The less prescriptive requirements should meet with the approval of practitioners. It will be a matter for their own convenience if they continue to include item numbers with short descriptions of the services, as many do at present. Honourable members will note that the transitional arrangements include a provision enabling practitioners who are currently disqualified to apply to the Medicare participation review committee for a review of their disqualification terms. The committee will have the power to moderate such terms-It will not have power to increase them. Perhaps I should emphasise that the Bill was drafted before the recent report of the Joint Parliamentary Committee of Public Accounts into pathology was released. This report is now under consideration by the Government. It is possible, therefore, that further amendments of the offence provisions of the Health Insurance Act will need to be made following full consideration of the report. The measures I have outlined are the product of an extensive process of consultation with those professional associations whose members are most affected by them. The new arrangements have been endorsed by the Australian Medical Association, the Australian Optometrical Association and the Australian Dental Association. I believe the new scheme will provide a fair and effective framework for dealing with future cases of abuse and misuse of Medicare. As such they are a major advance on the present legislation, which has done little to curb such abuse and misuse while at the same time antagonising the great majority of practitioners who are honourable and honest in the practice of their professions. I turn now to clauses 57 to 66 of the Bill which deal with another significant Government initiative-the introduction of a national identification system using cards to be known as Australia Cards. As honourable members will be aware, the system is an important part of the Government's planned reform of the Australian taxation system, as outlined to the House by the Treasurer (Mr Keating) in his statement of 19 September 1985. As the Treasurer indicated on that occasion, the Australia Card is a weapon in combating tax evasion and reducing welfare fraud in the community. Because of its acknowledged technical expertise, it is intended that the Health Insurance Commission, which administers Medicare and Medibank Private, will, under substantive legislation to be brought forward in the autumn sitting next year, be given responsibility for administering the identification system. In the meantime, in order to enable the Commission to undertake planning and development work necessary for the Australia card system, an amendment is required to the Health Insurance Commission Act. That is the purpose of this part of the Health Legislation Amendment Bill. Various methods of authorisation were considered but none of them provided a completely satisfactory legal framework within which the Commission could carry out its planning and development role. It was important, therefore, to prepare this enabling legislation in advance of the substantive legislation. The Government intends that the national identification system become fully operational from July 1989. As a first step, it is planned that the issuing of Australia Cards begin in March 1987. Thus the Commission has a period of 18 months from now to undertake the necessary planning and development for the card issue. I emphasise that this enabling legislation allows for no more than planning and development work. For this reason, a sunset clause has been included which means that the legislation will cease to have effect after December 1986 unless substantive legislation providing for the establishment and administration of the Australia Card program has been enacted before that date. In accordance with the specific provisions of the Health Insurance Commission Act which require a system of cost apportionment to be applied when determining the assets and breakdown of expenditure by the Commission with respect to its various functions, other machinery changes to the Act have also been included. These will ensure that correct and proper financial accounting takes place within the organisation. In support of this part of the Bill, let me simply say that the Government is convinced that the system is crucial to ensure that everyone in the community contributes fairly towards the cost of providing government services and that no individuals or groups take more than their fair entitlement out of the community purse. The cost to the Government for the planning and development by the Health Insurance Commission of the Australia Card identification system is estimated to be $3.5m during 1985-86. The amount of expenditure in subsequent years is dependent upon the enactment and timing of substantive legislation providing for the Australia Card identification system. I commend the Bill to the House. Debate (on motion by Mr Porter) adjourned. Consideration resumed. Schedule 2. Department of Community Services Proposed expenditure, $369,264,000. Department of Social Security Proposed expenditure, $503,265,000. Department of Health Proposed expenditure, $658,437,000. Department of Veterans' Affairs Proposed expenditure, $900,732,000. Mr BLUNT(Richmond)(11.19) —Today we are considering the appropriations which relate to the Department of Social Security. The amounts involved in Appropriation Bill (No. 1) 1985-86 are substantial. Unfortunately, the time available to me does not permit a detailed examination of the entire range of subjects covered. The past 12 months have been significant for the Department. The Government has chosen to divide the responsibilities and create a new department known as the Department of Community Services. Part of the existing responsibilities have been left with the Department of Social Security. During the year the Auditor-General conducted a review of the Department of Social Security's activities. Some of the comments made in the Auditor-General's report have a bearing on the appropriations we are considering today. The Auditor-General undertakes periodic reviews of departmental activity. As part of those reviews he undertakes an audit of the administrative procedures of departmental offices. In his latest report some of the comments he made concerning departmental procedures are worthy of consideration and hopefully review by the Minister for Social Security (Mr Howe) in the coming 12 months. At five of the regional offices of the Department-to be fair, there are 209 or 210 regional offices-the Auditor-General undertook a review of the procedures adopted by the Department to establish the identity of applicants. On the basis of that review he concluded: These omissions represented an approximate 10 per cent failure rate in the application of or evidencing of adequate identification procedures. He considered that to be unsatisfactory. The Auditor-General also undertook reviews at some regional offices visited in New South Wales and one in Western Australia. His report stated: . . . it was noted that selective intensive reviews were not being performed for considerable periods. Regional management attributed this position to shortages of field officer resources due to introduction of the assets test and other priorities. This was, of course, a political decision on the part of the Government to allocate departmental resources to the implementation of the assets test. At a later time today I will make some comments about the implementation of the assets test and the delays encountered in certain aspects of the administrative procedures. I am sure that other speakers in this debate will also comment on the implementation of the assets test and its implications for members of our community. The Auditor-General-these items to which I am referring are more illustrative than anything else-also checked on the procedures adopted by the Department in the verification of employers' reports. The Auditor-General said: Cases detected at regional offices visited where either employers' reports seeking information in regard to an applicant's date of cessation of work or income details were either not sent or not followed up represented a failure rate of almost 20 per cent of cases selected. He then stated: This demonstrates serious breakdown in a key contol. As part of the audit conclusion, the Auditor-General stated: The findings outlined above reflect a high incidence of breakdowns within the system and are of concern to Audit particularly as irregularities in the operation of key controls have been the subject of recurrent previous criticism. These latest results, the increasing number of fraudulent cases being reported, and the continuing rise in overpayments, indicate the need for greater departmental activity in monitoring of the area. It is recognised that recent initiatives taken by the Department including those in relation to proof of identity have not yet been evaluated and the impact of these and other initiatives in progress such as in measures for quality assurance will be reviewed in subsequent audits. There has been considerable Press comment as a result of the Auditor-General's report. Extrapolations were made from the findings contained in that report that the degree of overpayment could be as high as some $350m. I would be the first to acknowledge, not simply because the Minister is in the House but simply because I have some respect for the mathematical accuracy, that those extrapolations could be quite dubious. However, I think the principle that is covered in that report is very important. There is an absolute need to ensure the integrity of the payments system for the Department of Social Security, to the extent that there are failures in the system because the Government, for reasons of its political priorities, decided to concentrate on the assets test is alarming. The Australian people cannot be expected to accept the explanation given by the Minister that the overpayment rate represented in the order of a one per cent failure rate in the system of total payment. The order of magnitude of these overpayments, as suggested by those extrapolations-again I say that they could have a dubious statistical base-is such that I believe that the Minister has a responsibility to the Australian people to conduct a thorough review of procedures adopted by the Department to ensure that there is minimisation of overpayment and the system is of high integrity. It is incumbent upon him, as Minister, to ensure that the funds of the Australian taxpayer-scarce resources-are not wasted. In making my introductory remarks I said that part of this problem arose from the assets test and the allocation to the implementation of the assets test of staff from the Department who would normally be involved in review procedures. Obviously, notwithstanding that this reallocation of staff resources has been disruptive on the normal procedures of the Department, enough staff has not been allocated to the administrative procedures of the assets test. We learn from information provided in another place that the approximate delay for appeal procedures for assets test review cases is some 19 weeks and that officers of the Department believe that the average time taken to process a request for a review under the assets test is some six months. The Opposition believes that this is a totally unsatisfactory situation. People who are potentially in difficult financial circumstances, because they do not perhaps fit the hardship provisions announced by the Government which cater for people who have been affected by the assets test, cannot be expected to wait six months for a review of the impact of the assets test on them to be undertaken. I know that the Minister will probably respond and say that there is a fast lane for people who are in obvious circumstances of hardship, but this again is not satisfactory. It is very difficult to define exactly what hardship is. I do not believe it is possible to draw up a set of guidelines that will take account of the real circumstances that people find themselves in. Unforeseen financial burdens can arise almost overnight and change a person's circumstances after he has been assessed by departmental officers as not being a genuine hardship case. Another matter to which I would like to address a few remarks is the implementation of Stratplan. Stratplan is the Department's upgrading of computer facilities to provide a networking operation of information on a real time basis through regional offices throughout Australia. When this proposal was introduced it was suggested that it would result in not only better service but also considerable cost and staff savings. It concerns me that there has been what appears to be a cost overrun in the implementation of Stratplan, that it is not on schedule and that staff savings will not be realised. If the Minister is in a position to provide detailed comment on the cost of implementing Stratplan hardware, the necessary changes to departmental furniture and fittings and other costs that have arisen out of industrial relations matters, I am sure that members of this Parliament would be particularly interested. It seems curious to me that the spending of some $250m on implementing a very modern and technologically sophisticated computer system will not result in any direct staff saving. It is incumbent upon the Minister to explain the exact impact of Stratplan on the costs of the Department and its future operating responsibilities. Prior to the commencement of this debate the Minister for Health (Dr Blewett) introduced a Bill which, in effect, will provide for the Australia Card. The Australia Card is an extremely controversial proposal introduced the other day by the Government as part of its tax package. Obviously it will have an impact on the collection of tax revenue throughout this country. Also it is perceived by members of the Australian public as having an impact on the matter that I originally addressed, that is, overpayments of social security benefits. The Minister for Social Security owes the Australian people an explanation as to exactly how the proposed Australia Card will be used by the Department of Social Security to identify clients and ensure that overpayment, overservicing, fraud and other abuses of the system do not take place. As I said earlier, the Opposition is concerned about ensuring the absolute integrity of the Australian welfare system. It does not believe that any government should permit the continuation of a system which allows fraud and manipulation by certain minority segments of the Australian community. Mr BALDWIN(Sydney)(11.29) —I take this opportunity to make a number of observations about the recent decision of the New South Wales Government to reduce drastically funding for emergency cash relief and the associated controversy about which tier of government ought to shoulder responsibility for these payments. The appropriations for both the Department of Community Services and the Department of Social Security have a bearing on this matter; the former because of its involvement in funding the activities of non-government welfare organisations that provide this form of aid and the latter because the New South Wales Government's case for withdrawal hinges on the inadequacy of Commonwealth income support payments. The Western Australian and South Australian State Governments have also signalled their intention to withdraw from emergency cash assistance next year. Victoria has already done so but, apparently, continues to indirectly provide some emergency assistance through a poor box scheme involving the appropriation of part of revenue received from fines. I understand that that is of the order of $1m. The Western Australian Government spends by far the most per capita of all the State governments on this form of assistance. I seek leave to incorporate in Hansard a table showing the per capita spending of each State and Territory government on emergency aid. Leave granted. The table read as follows- STATE EXPENDITURE ON EMERGENCY ASSISTANCE, 1984-85 1984-85 Expenditure Population as at 31 December 1984 Per-capita Expenditure ($) (,000) ($) New South Wales... 12 782 000 5 442.0 2.35 Victoria... 0 4 099.7 0.00 Queensland... 586 336 2 526.4 0.23 South Australia... 1 160 000 1 358.3 0.85 Western Australia... 4 900 000 1 394.0 3.52 Tasmania... 527 262 439.6 1.20 Northern Territory... 624 000 141.3 4.42 Australian Capital Territory... 276 322 247.7 1.12 Mr BALDWIN —It should be borne in mind that this table fails to take account of differences between States in terms of the provision of non-cash benefits such as transport concessions. Also in some cases the figures include in the total amount of State expenditure grants to non-government welfare organisations for emergency relief. The New South Wales Government's decision was announced in its recent Budget. Its emergency cash assistance program ceased to exist in its present form from 1 October and was partly supplanted by a new child welfare assistance program under which cash assistance will be limited to `families where children would otherwise be put at risk or would require substitute care'. Henceforth, no cash assistance will be provided by the New South Wales Government to the single poor. They will be forced to rely on non-government welfare organisations such as the Smith Family which, without exception, insists that it will be unable to take up the slack resulting from the State Government's withdrawal from this area. In addition to cash assistance, the New South Wales Government also provides emergency assistance in several other forms. The total allocation for 1984-85 was roughly $13m. Part of the State Government's complaint is that the cost of this assistance has escalated rapidly in recent years. I seek leave to incorporate in Hansard a table showing the breakdown of New South Wales expenditure for 1984-85. Leave granted. The table read as follows- Cash... 8,405,000 Clothing... 1,715,000 Spectacles... 2,355,000 Travel warrants... 307,000 Total... 12,782,000 Mr BALDWIN —The New South Wales Government's decision means reducing its total allocation to $8m for 1985-86. The forward commitment for subsequent full years will be $6.5m consisting of $4m for cash assistance and $2.5m for the continued provision of free spectacles. I must confess I am a little confused as to why free spectacles are included under the emergency assistance program, but that is another issue. The Commonwealth's effort in this area is in the form of grants-in-aid to non-government community welfare agencies. These funds are apportioned among Department of Social Security regions according to statistical evidence of need with special attention being paid to areas which have high ethic and/or Aboriginal populations. The appropriation for this purpose in 1985-86 is $6m, a marginal increase on that of 1984-85. There is no significant increase in Commonwealth spending through the non-government sector to offset the New South Wales Government's withdrawal. The Commonwealth has has no involvement thus far in funding the State Government's effort. The inevitable consequence of the State's withdrawal will be that a considerable number of people in need will suffer acute deprivation. We are starting to see a stream of the horrific accounts of the impact of these cuts, such as people collapsing after not eating for several days. It should be borne in mind that the single unemployed constitute one-third of the very poor. The New South Wales Government's rationale for its decision is set out in the State's 1985-86 Budget Papers in the following terms: The Government is reducing cash and other assistance because being a social security program it is not properly the responsibility of the State Government. If the guidelines for such assistance were not tightened, the cost of this program would substantially increase, claiming scarce funds necessary for meeting the State's recognised responsibilities for youth and other community welfare services. The New South Wales Government cites the fact that the vast majority of applicants for emergency cash assistance are recipients of Commonwealth pensions and benefits as evidence of the inadequacy of these payments. The solution, it is said, lies in substantially increasing the value of these pensions and benefits. The Commonwealth Government, for its part, acknowledges its primary responsibility for income support but insists that because of the irregular nature of the payments emergency cash relief should not be considered an income support payment. The Commonwealth further argues that this type of relief has traditionally been a State responsibility, that the States are better placed to administer it because of the better geographic distribution of their network of local offices and that over 98 per cent of Commonwealth pensioners and beneficiaries do not apply for emergency assistance. There has undoubtedly been a serious deterioration in the position of certain categories of pensioners and beneficiaries over the past decade. The present Federal Government has begun to reverse this trend, with overindexation improvements in pensions and benefits amounting to $1.5 billion since the change of government and the measures directed at poverty traps, announced with the Government's tax reform package. The Commonwealth has asked New South Wales, as a minimum, to delay its withdrawal from emergency assistance until the measures announced in this year's Budget and tax package come on stream next year. The above improvements have, however, only partly redressed the deterioration of the past decade and further substantial improvements are essential. Many of these payments remain substantially below the updated Henderson poverty line. The Commonwealth Government is morally obligated to make the maximum practicable rate of progress in this area. Nonetheless, even if major improvements in social security payments do occur, for the foreseeable future there will be a residual problem of people who for a variety of reasons find themselves in acute financial difficulties. It is sheer fantasy to imagine, as the New South Wales Government apparently does, that raising basic pensions and benefits to 25 per cent of average weekly earnings will remove the need for a program of this type. The argument hinges on the definition of `income support', with the Commonwealth insisting that irregular emergency assistance payments fall outside the definition and the States denying this. It would be possible to have this argument about a number of payments and benefits provided by the States. I take one example. In its current year Budget the New South Wales Government is planning to spend $72.5m on public and private transport concessions for pensioners; $52m for council general rates, water, electricity and sewerage charges; $32m for free drivers licences for eligible pensioners and $39m for special health care services including free ambulance transport. It could be argued that these concessions would not be necessary were Commonwealth pensions and benefits adequate. Does this make them candidates for the same sort of peremptory cut-off? The emergency cash aid program represents a miniscule proportion of the total budgetary outlays of both the Commonwealth and New South Wales governments. It is however immensely significant to those desperate people who are forced to rely on it. In the absence of a clear agreement or constitutional doctrine a definitive resolution of the argument as to which government is obligated to pay will be difficult. It is the sort of arcane issue that ought to be dealt with in the normal course of inter-governmental financial negotiations and not be the subject of this kind of brinkmanship. I understand that consultations between officers of the relevant Commonwealth and State departments are now taking place to try to solve the matter. I urge that this be treated as a matter of great urgency with every possible effort made by both departmental officers and Ministers to bring about the restoration of this form of assistance as soon as possible. Mr HODGES(Petrie)(11.39) —In this debate at the Committee stage of Appropriation Bill (No. 1) I will address my comments to the area of veterans' affairs and in particular to dependants' pensions, the proposed 40-year rule, changes to the assessing of pensions, particularly the area of disability pensions, and also, if time permits, travel arrangements for veterans. The ex-service community in my electorate of Petrie is very angry and very upset with the Hawke Government. Let me say at the outset that even traditional Labor supporters-veterans who were voting before some members of this House were born-believe they have been betrayed by this Government. Clearly, there is a non-partisan revolt in the ex-service community against the proposed Veterans' Entitlements Bill and its associate legislation, the Repatriation Amendment Legislation Bill 1985. I know the broad resentment about new repatriation legislation in my electorate is reflected across Australia. When the Government signalled its intentions to rationalise and simplify or, if you like, to update and consolidate Australia's repatriation system, it was a signal that had about as much warning as an earthquake and as big an impact on veterans. As honourable members will remember, the Treasurer recalled Parliament to pass the Repatriation Legislation Amendment Bill at the close of the May mini-Budget sittings. The Government introduced this legislation as a money Bill. On the grounds that it was a budgetary measure, Labor did not disclose to veterans beforehand the changes this legislation would bring about. This was a gross deception of the veteran community. Veterans have learnt the hard way that when the Labor Government talks about simplification it really means cuts. Whilst I applaud the attempts of the Treasurer (Mr Keating) to reduce personal income tax and the Budget deficit, this is not the way to go about it. I could suggest many other areas where Government spending could be cut, but we must not let it be done to veterans' pensions and benefits. The Government's abrupt introduction of the Repatriation Legislation Amendment Bill showed that the Government was hell-bent on reducing veterans' affairs spending. When the Government made its abrupt decision to introduce cuts in veterans' entitlements earlier this year there was a huge outcry from veterans and their dependants. This was a quite understandable reaction because the future quality of life of these people is determined by legislation passed in this Parliament as determined by the Hawke Labor Government. At that time I received telephone calls, letters, and personal visits from veterans and their wives and from war widows who were, and continue to be, confused and hurt and, I repeat, very angry at this Government's dangerous step to break an historic promise. This promise has endured longer than most that have been made in this building; it is a promise that said in quite clear and reassuring terms: `Men, go and fight for your country alongside our allies and we will look after you when you come home from the war-or, should you not return, we will look after your wives and children'. It was the late Dr H. V. Evatt who in 1942 said: The Government regards the honouring of the promises made to fighting forces and their dependants as an integral part of its war efforts. This is the soon to be broken promise. The Repatriation Legislation Amendment Bill 1985 was the first step in breaking the promise; the passing of the Veterans' Entitlements Bill will complete it. Despite the Government's stated intention to simplify repatriation legislation, the Veterans' Entitlements Bill is very complex. I do not have the time to discuss its implications in full, but I warn honourable members that they are in many cases bad news for veterans. Another area of concern is the abolition of dependants' pensions. Such pensions usually involve only small amounts which this Government considers are not worth the administrative effort and cost. The Minister for Veterans' Affairs (Senator Gietzelt), as a member of a socialist party, should appreciate that compensatory payments, however small, are important to the little people, the people this Government used to claim it represented. Furthermore, it is inconsistent for this Government to argue that paying out pensions that range from 40c per week to $4.50 per week for wives and from 14c to $1.38 for children is not worth while when the benefits of its own recent tax cuts do not amount to much more and in some cases not as much. The dependants' pensions are to be frozen for current recipients and no new pensions will be paid. Thanks to this Government, there is now to be no compensation for dependants who have to look after veterans with disabilities. Although they would be the last to question their war service, I would not be surprised to hear veterans and their dependants ask: `Was it all worth while?' The 40-year rule is unjust and unnecessary. It is based on an arbitrary deadline which in itself is debatable. The rule says that for widows whose husbands die more than forty years after war service, the Repatriation Commission will have to be `reasonably satisfied that the material before it raises a reasonable hypothesis that the claimed death or incapacity was war caused' before it will grant a pension. In determining eligibility for a widow's pension, the cause of death has to be established. Was it war caused? In cases where the cause or aetiology of a disease is unknown and cause of death cannot be determined, a pension will not be granted. It is tough luck for those wives whose husbands die a day, a week or a year after the deadline. Had their men passed away a day or a year prior to the cut-off date, their claim would be simple. Widows will miss out because of Senator Gietzelt's ridiculous and arbitrary 40-year rule. The Minister has said that very few conditions would take longer than 40 years to manifest themselves. The West Australian Law Reform Commission said that `long stop' approaches are wrong because some diseases, such as asbestosis, need at least 40 years coverage. The Western Australian Trades and Labor Council has said that limitation periods should be 50 years or should not exist at all. The 40-year rule should be abolished. For it to remain would cause considerable inequality and hardship for some widows. The Government has decided on the earliest possible deadline to reduce expenditure in veterans' affairs as much and as soon as possible. The Government's present route should be abandoned and no time limitation should be stated. If Australia's men, women and their families did not question some 45 years ago and some 70 years ago a call to arms fuelled by patriotism and backed up by pledges and promises of post-war care and support, they are now questioning these spurious changes. They will take revenge against honourable members opposite who support these changes in the only way left to them-they will vote against this Hawke socialist Labor Government. Let us consider the changes to the means of assessing disability pensions. The Government is altering the conditions under which veterans can apply for compensation increases on retirement. Veterans who previously received the general rate of pension at a level less than 100 per cent will not be able to make future claims for increased compensation at the highest rate-the totally and permanently incapacitated pension. What if a veteran's health deteriorates rapidly after retirement? It is feasible that this could happen. Indeed, it does happen. Aging exacerbates health problems brought on by poor health habits or incidents of early age. We all know about abuse and overuse of tobacco and tobacco products and poor dietary habits. Men whose disabilities stem from war service, even if not totally incapacitated during their working life, could easily see their health deteriorating in their late 60s or 70s. If the Government proceeds with announced measures, these veterans will have no chance of seeking further compensation. Of course it is reasonable to argue that it is necessary to compensate for disabilities which reduce the maximum remuneration package possible during a man's working life. The concept behind such compensation is to bring the veteran's ability to earn and provide for his family-his total possible remuneration package with the assistance of Commonwealth compensation-into line with ordinary members of the work force, whose quality of life and remuneration package realisation is not hampered in any way by war service disability. If these veterans will no longer be entitled to increased compensation as their dis- ability worsens, who will compensate them for a continued but also worsening quality of life in their retirement? Certainly it will not be this Government. We are committed, and were committed many years ago, to compensate veterans when their quality of life worsens with age; that is, where veterans sustained injury or disability in the first instance as a result of war service. Many Australian pensioners enjoy a healthy retirement. Unfortunately, that situation will not apply to some veterans in our community, who will be deprived after the age of 65 of making a claim for a T and PI pension. Mr SNOW(Eden-Monaro)(11.49) —I thank the honourable member for Petrie (Mr Hodges) for his contribution to and criticism of the Veterans' Entitlements Bill. Some of it was constructive, but he failed to mention that the legislation which passed both Houses included provision for a review of the legislation in six months. In that light, his criticism of the Minister for Veterans' Affairs (Senator Gietzelt) was somewhat premature and uncharitable. I compliment the Minister for his careful attention to representations I have made on behalf of veterans, Returned Services League sub-branches and Legacy about the legislation and its effect on individual veterans. We have the best veterans' entitlement system in the world. Let us keep it that way. I look forward to the Government's review of the effect of the Veterans' Entitlements Bill, which was anticipated in the May legislation. One of the loudest cries of the economic rationalists in the seven years of conservative government was that government expenditure on community services, social security, health, welfare and veterans ought to be directed only to those in need. Of course, little was done. Ideology gave way to pragmatism. It is true that the community services area was given the order of the boot. Although it was and is obvious that home care is better and more effective than institutionalised care, nothing was done about introducing it. When it came to saying no to the payment of benefits, no action was taken. Nothing was done about the person who invested $700,000 in a non-interest bearing account-at least interest free while he was alive-and received a full pension with full fringe benefits. He is now receiving probably $70,000 a year, paying the Government $20,000 to $30,000 a year in tax, and living nicely on about $40,000 a year-a saving to other Australian taxpayers of about $30,000 for that person alone. (Quorum formed) While in government, the Opposition's words were very different from its deeds. Its demotion to opposition suddenly made it a defender of the well off in word as well as deed. Those opposite do not tell us how they will cope with the welfare bill. They are good at telling the Treasurer (Mr Keating) to reduce it, but they are not very good at saying how it should be done. They were bereft of action in government and they propose none now. Similarly, the Minister for Health (Dr Blewett) was landed with legislation that meant that two million Australians were not covered by health insurance or had health assistance from government. In spite of entrenched opposition from some medical practitioners, community support for Medicare will make it very difficult for the airy-fairy scholars of privatisation and deregulation to replace the health system we have now. Medicare has been been well received by thousands of doctors, optometrists and pharmacists. In fact, a recent survey showed that it had a beneficial effect on the business of pharmacies. Medicare is not the only part of our health system that is in the gun-sights of the privatisers. The very concept of small business is in the gun, even in the health care field. A centuries old tradition used by human schemers to eliminate something popular is to pretend to support it. Nowhere is this more evident than in the retail pharmacy business. The deregulators who proclaim their prime purpose as the rights of small business are making some very interesting suggestions about retail pharmacy. First, in the name of efficiency they want the ownership of pharmacies to be freed from the ranks of the professionally qualified. This will mean that anyone can own chemist shops. My own view is that in this time of worrying drug use, a sure way of ethically controlling the sale of medications which are often essential for treatment yet dangerous if misused, would be to encourage, not discourage, the qualified ownership of pharmacies. The deregulators also want no restriction on the number of pharmacies owned. I ask: How can those who proclaim themselves to be the saviours of small business, the great employers of labour in Australia, the real expansionists in the Australian economy-these self-proclaimed supporters of small business-justify what will mean a reduction in their number? Monopolisation of the retail pharmancy trade will inevitably mean a drop in employment. That is what deregulation will mean. Just as the deregulation of the airlines in the United States of America reduced the number of operators by a third and increased country air far prices, the deregulation of pharmacies will eventually mean fewer operators, higher prices and fewer jobs. The support of these expenditures will show how this Parliament will align itself with the Government's firm economic management combined with compassion for those in need. Mr HALVERSON(Casey)(11.57) —Preparing and implementing budgets is not a challenge faced only by those in the political, bureaucratic or business sectors of our community. Budgeting is an exercise undertaken on a continuing basis, albeit with varying degrees of expertise, enthusiasm and success, by every individual, group or organisation in receipt of an income. In simplest terms, it is the allocation of available resources to cover necessary expenditures. When dealing with sensitive areas such as social security and health, it may be argued that available resources are not sufficient to cover necessary expenditures. If and when this occurs a government has two alternatives-to increase the available resources or to review or redefine what constitutes necessary expenditures. A responsible government should always thoroughly examine the latter option before contemplating the former. A prudent budget will allow for past, present and future needs and expenses. It will provide for known liabilities and unexpected contingencies. It is of little consequence whether a budget strategy is designed to cater for the financial situation which currently exists within a home, a business or a nation. The same basic challenges confront those involved in the budgetary process and the same basic principles of sound economic judgment, management and administration must be applied if, in the final analysis, the books are to balance. There are several significant factors that provide unique advantages for those who are responsible for planning a budget on behalf of government compared with corporate or home budget strategists. Not the least of these is the fact that governments have the opportunity to decide how much they are going to spend and then to set about raising the required amount through borrowings, taxes and other imposts. In the 1985-86 Budget, an increase of 8.4 per cent in total spending has been funded by an increase of 12.6 percent in total revenue. Welfare benefits alone will cost taxpayers an additional $1.244 billion this financial year. The rest of us, including most of the business community, must tackle the problem from a quite different angle. Our budget deliberations and decisions are influenced by having to tailor our expenditure to suit a known, usually rather inflexible, income figure. Whilst we have to adjust our spending according to our anticipated income, the Government enjoys the luxury and flexibility of being able to adjust its income to suit its anticipated spending. As a consequence of this state of affairs-fortunate for the Government but unfortunate for the taxpayer, there is a tendency for the Government to be rather more extravagant and generous than is either necessary or justifiable. This applies not only when assessing the real needs and reasonable requirements of those eligible to receive assistance and/or benefits, but also in regard to the costs associated with administering their provision. It is a shame that the world's best Treasurer does not heed Mr Micawber's wise though simple advice to David Copperfield when he said: Annual income twenty pounds, annual expenditure nineteen pounds nineteen and sixpence-result happiness. Annual income twenty pounds, annual expenditure twenty pounds and sixpence-result misery. Mr Micawber's recipe for budgetary success was based, quite correctly, on restraint as the major ingredient. It is apparent that restraint is not a popular word in the vocabulary or budget strategy of the Hawke Government, especially in some of the areas of spending that we are considering in this debate. It is an indisputable and somewhat sobering fact that this socialist Government is the biggest spending Australian government-apart from the Whitlam extravaganza-in over three decades. Too little account is being taken of the long term results, ultimately the budgetary consequences, of policies designed to win short term approval from certain sections of, and powerful lobby groups within, the electorate. The 1985 Budget, presented in a novel three-part format-which reflects the fact that the Government knows that it falls into the bad news category and so has adopted the `breaking it to them gently' technique-certainly lends support to the theory that disasters come in threes. Despite the Government's attempts to convince us that things have never been so good, it is obvious that the reverse is the case. The Treasurer (Mr Keating) and the Prime Minister (Mr Hawke) seem to believe that, if they keep saying that everything in the garden is rosy, we will eventually accept their protestations and propaganda as being the truth, that we will ignore the reality and accept the myth. Of course, we cannot and we will not. It is not possible to ignore the fact that this country is now so far into the red-honourable members may interpret that in any way they wish-that the national public sector debt is now equivalent to an amount of more than $12,000 for every employed person. Provision for the repayment of interest on the Federal government debt now exceeds Budget provisions for spending on education, health and defence. It rivals Federal outlays to State and local governments. Total government spending now accounts for almost half of our national income. The average Australian wage earner now works for almost six months of each year to pay the bills of government. Some of the major factors contributing to the ever increasing enormity of these bills of government, as previously noted, are the costs involved in providing community, social security and health services. Already, personal benefits payments account for over one-third of all Budget outlays. Over the past 10 years there has been a 20-fold increase in the number of people receiving the unemployment benefit, and a five-fold increase in the number of recipients of the supporting parents benefit. The over 50 per cent increase in the number of invalid pensioners and the almost 35 per cent increase in the number of age pensioners seem almost modest in comparison. Faced with these figures, one would hope that the Government would attempt to redress the welfare payments spiral by helping people to help themselves. But, no-those who endeavour to build up a nest egg are portrayed as wealthy parasites who rip the system off. A responsible and thrifty approach to providing for the future is, under this socialist Government, simply not acceptable. Self-reliance is not regarded as a virtue, and the acquiring of assets has, in effect, become an offence punishable by law. On the one hand, the Government is prepared, even though it cannot really afford to do so, to maintain one of the most easily `tapped into' welfare payment systems in the world. On the other hand, it imposes penalties for those who are effectively reducing the long term burden on the long-suffering taxpayers by attempting to create some modicum of financial independence and security for themselves and their families-a sort of `the more you do for your country, the less your country will do for you' mentality. Nowhere is this appalling state of affairs more graphically illustrated than in the case of the 13,272 war veterans who have had their pensions cancelled or reduced in the last financial year because of the assets test. Additionally there is growing evidence to show that very few pensions have been restored under the hardship provisions. So much for the promises of a Prime Minister who has a growing reputation for erring on the side of generosity. Under the Hawke Government this is how a grateful nation says thank you. There is more of the same in store under the Veterans' Entitlements-or rather lack of entitlements-Bill. People who are deserving of a little government generosity are denied it whilst those who have done little to deserve it are ready, willing and able to exploit the system to the full. Let us briefly consider the health services cost spiral. Spending on health services is up by almost 10 per cent. Medical benefit payments under Medicare are up by 11.4 per cent. These costs are escalating more rapidly than revenue from the levy. Benefits are estimated to increase by $255.6m compared with the levy revenue increase of only $130m more than last year. These expenditure estimates may prove far too low once the impact of the recent severe influenza epidemic has been properly and fully taken into account. Sooner or later-certainly sooner than most people would care to think about-this country will have to face the problem of having too many people lining up in the receiving queue and far too few in the contributing queue. Mrs KELLY(Canberra)(12.07) —Mr Deputy Chairman, I would like to refer to- Mr Tim Fischer —Are there too many restaurants in Canberra? Mrs KELLY —Talking about restaurants, in my speech yesterday I mentioned a meeting of restaurateurs which I had attended yesterday. Honourable members will be interested to know that of the 300 restaurants in Canberra only 11 were represented at that meeting. Today I wish to address the subject of fraud and overservicing in the health area, the administrative responsibility for that and the recent decisions taken in relation to the movement of that function from the Department of Health to the Health Insurance Commission. Honourable members may be aware that the Joint Committee of Public Accounts has been examining the medical fraud and overservicing issue for a long time. In fact, the honourable member for Mitchell (Mr Cadman), the Opposition shadow Minister at the table, has been with me on this Committee and involved in this issue for many years. Over the last few years the Committee has criticised the Department of Health over its administration of this very important area of responsibility. As the honourable member for Casey (Mr Halverson) said, a very high percentage of government money goes into the health area. It is important-in fact, it is critical-to any government to ensure that that money is spent correctly and not wasted in the area of fraud and overservicing. As a result of the investigation and report of the Public Accounts Committee there have been many changes in the structure of the Department of Health. I think the current Minister for Health (Dr Blewett) has been very responsive to the recommendation of the Public Accounts Committee. There are still, however, many areas which need to be further investigated. I will refer to those later. First of all, I congratulate the Minister on the very quick action he took in moving the medical fraud and overservicing area from the Department of Health to the Health Insurance Commission. I am sure this will lead to a more efficient health system. In September last year the Committee examined the new Secretary to the Department of Health and asked him where he considered the fraud and overservicing function should be positioned in the administrative structure. The Secretary said he would take that question on notice and investigate the matter. In response to that request, he commissioned Price Waterhouse Associates, the accountants and management consultants, to review the fraud and overservicing system and to report to him and the Minister for Health on possible options for future developments in relation to that. Although all the recommendations of that firm were not accepted by the Government-I think some members of the Committee would have some criticisms of some of the aspects raised in the report-action was taken very quickly by the new head of the Department. After consideration of previous reports of the Public Accounts Committee and the views of individuals on the Committee, the Minister appeared before the Committee earlier this year and stated that he had decided to transfer the medical fraud and overservicing area from the Department of Health to the Health Insurance Commission. The Minister did that for a number of reasons. I will refer briefly to those reasons. The first one was the need to limit duplication and waste between the Department of Health and the Health Insurance Commission in areas such as data handling, contact with the medical profession and fraud investigation. It was ludicrous that certain data collected by the Health Insurance Commission had to be handed for further processing to the Department of Health. That represented a crazy duplication of material that needed to be dealt with quickly and efficiently. The second reason for the movement of this administrative responsibility was to give effect to the very desirable principle that all operational aspects of Medicare should be brought together in the one organisation. Also it was important to eliminate the need for unnecessary and therefore wasteful transfer of data between the two organisations and, finally, to establish the foundation for new approaches to addressing abuses of Medicare benefits and arrangements. This was a very welcome change. The actual administrative functions have only just started to take effect in the Health Insurance Commission. In fact, it was only from about May this year that the Commission took over fully this responsibility. However, in that time I think we have already seen substantial changes. One of the most significant changes has been with regard to the material that is now able to be provided to committees investigating the medical fraud and overservicing area. This material was provided to the Public Accounts Committee in relation to its report on medical fraud and overservicing in the pathology area. The material in the report provided had previously existed in the Department of Health but it was made available only because of the introduction of the Medicare system. I do not believe that the material available in the report has been given the sort of publicity that it deserves. The main reason is that the great majority of the discussions on this report has been concentrated on a Dr X. That matter is referred to in about only two pages of the report. I think in time the report will prove to be one of the most significant reports brought down by the Public Accounts Committee. In that report for the first time we see a profile of the pathology industry. That was possible only because of the material made available since the inception of Medicare. I would like to take a little time to refer honourable members to the material that has become available through the Health Insurance Commission. That material profiles the pathology industry and describes the concentration of ownership in the pathology area. The Committee does not imply that this concentration of ownership is necessarily bad. The profile reveals that the top 25 pathology companies in Australia perform an enormous percentage of the pathology work done. In fact, the top seven companies perform a very significant proportion of the pathology services performed in this country. In the breakdown of material available from the charts provided in the Committee's report we were able to see the number of pathology services per patient. That is very useful information because a comparison of the various pathology companies enables us to see where there is a wide variation in the number of pathology services provided per patient. That may not necessarily be bad. However, it does alert investigators to the possible need for investigation in that area. Also the profile shows the Medicare benefit paid out per patient. When honourable members look at this report they will be amazed to see the cost to the taxpayer in the pathology area. When one looks at the pathology groups in the top 25 for the March quarter 1985, the Medicare benefit per patient who receives pathology services varies from about $66 to $114. That is an extraordinary amount of money. Governments cannot just keep providing an open cheque in this area of pathology services, so it is critical that the Government investigate thoroughly the areas where there is a likelihood of fraud and overservicing. Just to reiterate the point that I made earlier, the Committee does not say that the large pathology services are practising fraud in this area or are overservicing. We are not saying that at all. Big does not necessarily mean bad, but what the report does is alert the community to the high concentration of ownership that exists in this industry and it also gives us the opportunity to compare the costs per service of the various pathology companies. I recommend a detailed analysis of that report to honourable members. I am very pleased to see now that the media is taking up this whole general area of pathology fraud. I noticed in the National Times this week a very good analysis of it and I understand that the Sydney Morning Herald is doing further work on it. It is unfortunate that the main focus of the debate on this issue has been on two pages related to a Dr X, but I recommend the total report to honourable members. Mr TIM FISCHER(Farrer)(12.17) —I wish to dwell on the estimates in relation to the Department of Veterans' Affairs, which are of critical importance. This whole policy area has been the subject of a good deal of controversy throughout the calendar year 1985. In fact, Appropriation Bill (No. 1) 1985-86 provides estimates of $423,836,000 for administration, $104,346,000 for the Defence Services Homes Corporation and, more significantly, $8,220,000 for the Australian War Memorial which I freely acknowledge is an increase of $1.5m. I will be visiting the Australian War Memorial next Monday. I look forward to that. Earlier this week I had information made available to me and therefore had good and proper reason to say that the War Memorial has been haemmorhaging badly at the specialised middle management level. The spate of resignations at the War Memorial far exceeds what might be regarded as reasonable turnover. They are not resigning for essentially personal reasons, as has been suggested elsewhere, but for other reasons. There is a problem or there are problems there. I do not particularly point the bone at anybody, but I stick to my guns in respect of the comments I made on the Australian War Memorial and I will further pursue that matter down the track. The Department of Veterans' Affairs estimates reflect changes which were brought about associated with the mini-Budget earlier this year which resulted in a spate of cutbacks introduced in relation to veterans' entitlements. This House next Thursday or thereabouts is scheduled to have the revised Veterans' Entitlements Bill presented to the Parliament. We await that with a great deal of interest. The coalition will study that Bill clause by clause to determine its final attitude on a Bill which may well be changed from the exposure draft. Therefore, it does deserve a clause by clause study in the interests of all the veterans in Australia. At the moment those veterans are very concerned over a number of the provisions of the Veterans' Entitlements Bill and some of the unjust and arbitrary sections of it. I am very pleased to support the strategy of the Returned Services League of Australia and veterans' organisations. I have taken on board submissions from those organisations. Since being appointed shadow Minister for Veterans' Affairs, in recent weeks I have travelled to Sydney, Brisbane, Melbourne, Penola in South Australia and elsewhere to ensure that I have the latest information from veterans' organisations in respect of their reactions to the draft Veterans' Entitlements Bill. I serve notice that the coalition will be taking a responsible but comprehensive approach to the Veterans' Entitlements Bill because in fact it does reflect, and its provisions certainly will reflect, on the estimates of the Department of Veterans' Affairs. More particularly, it will reflect on that which is provided for those who served their country in time of war. Our commitment is a responsible absolute commitment to those who served their country in time of war. Turning to two special areas which are reflected in the estimates before the Committee, I would like to highlight the changes that have taken place in travel allowances flowing from administrative decisions partly announced in the mini-Budget and applicable since 1 July last. I refer to the decision by the Department of Veterans' Affairs and by the Minister for Veterans' Affairs (Senator Gietzelt), presumably, to almost halve the travel allowance for veterans going for medical treatment, medical referral or examination who use their private vehicle. The rates varied from 18c to 27c and have been reduced to a flat rate of 11.16c per kilometre. The interesting thing about that rate is the fact that the comparable Public Service travel rate for smaller-sized vehicles is some 23.3c per kilometre-double what the Department is prepared to pay a veteran encouraged to use his own car to avoid more costly methods of travel. It is not good enough that, at the same time as reducing the travel amount per kilometre, the Department has imposed a day allowance at a flat rate of $40. That is again another substantial reduction at a time when costs for meals and travel are continuing to increase rapidly. This will impact especially where there are areas of no public transport and has the danger of making it especially difficult for veterans in gaining adequate transport arrangements associated with these cut-backs in travel allowances for veterans. I contend very strongly that the changes on travel allowance are unfair and are arbitrary in their across-the-board approach. I recognise that there were some excesses in the previous travel allowance system which had to be addressed by the Government. However, by adopting the across-the-board approach to veterans right across Australia-whether they be in the electorate of Cowper, where the honourable member (Mr Nehl) has assiduously pursued this matter as well as the assets test, or in other electorates-these cut-backs will have a very harsh application on veterans who have served their country in time of war. I would like now to deal with the changed arrangements for dental treatment which applies to veterans. I refer to two decisions. The first decision imposes a $300 maximum limit for four categories of dental treatment. On top of that, it changes arrangements in terms of providing direct access to prostheses. This is to apply in the three States already registered and to additional States where registration legislation is in train. There is considerable concern in the veterans' community that the upshot of all those changes in the area of dental treatment is that the veteran is receiving second class arrangements in terms of dental health care at a time when many of them are reaching an age where that is becoming more and more a critical issue for them. Veterans particularly resent the arbitrary $300 limit on four categories of dental treatment which has been applied across-the-board without recognition of the special arrangements that could have been arrived at to take account of the abuses and excesses that may have been occurring. Instead, we have the Department of Veterans' Affairs and the Minister for Veterans' Affairs adopting this sledgehammer across-the-board approach with the resultant deterioration in the service which is available to veterans. It is not possible in the time available to track through the many other detailed aspects of the estimates for the Department of Veterans' Affairs other than to say that last financial year, as determined in evidence given to the Senate Estimates Committee, 13,272 veterans had their pensions slashed, reduced or cancelled by Labor's assets test. Mr NEHL(Cowper)(12.25) —I thank the Minister for Social Security (Mr Howe) for his courtesy in enabling me to participate in this debate. It will come as no surprise to honourable members that in a debate on social welfare I wish once again to raise in this House the in- iquitous assets test. I pay tribute to the Minister for the changes he made earlier this year in the hardship allowances. They have been helpful to many pensioners in Cowper and throughout Australia. But I say to the Minister clearly and unequivocally that those changes have not gone far enough. In fact, they have not addressed what I believe to be the most significant problem within the assets test. I refer to the question of curtilage, the restricted area around family homes on farm properties. People throughout Cowper and throughout Australia are being unfairly discriminated against because of the curtilage provision. Those who have farms comprising perhaps 150 or 200 acres-farms where they have lived all their lives, where they have married, where their children have been born, where their husband or wife may have died and been buried-are being forced either to do without the pension entirely or in part, or to sell and move off their farms. I submit in all sincerity that this is unfair and unjust. I suggest to the Minister that the Government should take a very close look at the curtilage provision. Take, for instance, a farm property valued at $250,000 with a curtilage area of 2 1/2 hectares which is valued at $50,000 and the rest of the farm valued at $200,000. In such a case, the person concerned loses the pension entirely. But another pensioner who lives in Sydney, Port Macquarie or Coffs Harbour who has the same total asset value of $250,000, comprising $50,000 in liquid assets and $200,000 in a house, will keep the pension entirely. However, the rural pensioner who has the same value of assets loses the pension. This is totally unjust and discriminates against rural pensioners. I take this opportunity to plead with the Minister and the Prime Minister (Mr Hawke). I have no false pride on this. I believe it is so vital to the elderly people of Australia that, if necessary, I will go down on my knees to seek special consideration to this problem of curtilage. It is vitally important and I thank the House for its courtesy. Mr HOWE(Batman-Minister for Social Security)(12.28) —I wish to thank honourable members who have contributed to this debate. In broad terms, it is interesting that there are two main thrusts in this debate. On the one hand we have the people who believe that the measures foreshadowed in the Veterans' Entitlements Bill that has been available for scrutiny and subject to review are far too harsh and tough. Furthermore, the honourable member for Cowper (Mr Nehl) again said that the assets test is far too tough. On the other hand, a number of speakers in this debate said that the Government must be very much tougher indeed. The honourable member for Casey (Mr Halverson) articulated this view very clearly, and I understand that his view is widely shared within the Opposition. He said that there is an economist by the name Micawber who suggests that the Government should adopt a Micawber-like, book-balancing, accountant's approach to expenditure. He talked of the misery endured by the individual who spends one sixpence over income. The honourable member for Casey suggested that expenditure on social security had gone mad. I think he said that half the Budget was going into the area of social security, that it was increasing rapidly and getting hopelessly out of control, and that therefore the Government needed to take a very much tougher approach. The honourable member for Casey does not know what he is talking about. If one looks at the trend in social security expenditure in recent years, one finds that, expressed as a percentage of total outlays, expenditure on social security and welfare has been declining since we were in government. It peaked in 1983-84 but has declined since. Over time one could say that roughly social security and social welfare as a percentage of total outlays has been relatively stable-around 27 to 29 per cent, peaking in 1983-84 for a reason I shall return to. If we look at social expenditure as a percentage of gross domestic product, we see again that the pattern is not one of great increase, but rather of a peak again in 1983-84 and then a decline from 8.8 per cent in 1983-84 to 8.2 per cent in 1985-86. There is a very good reason for that and it is important, if a more radical and more ideological approach is to be adopted by the Opposition, that its members think through what they are saying. It is all very well for the honourable member for Casey to make a series of generalised statements about the Micawber approach to economics that will be adopted by the coalition parties whenever they return to government and on the other hand to take the view that the Government should not touch veterans. Let us examine the reasons for increases in social security expenditure. As I said, expenditure peaked in 1983-84. Interestingly enough, if one goes back one finds that as at September 1983 unemployment had reached 617,000. Those people were unemployment beneficiaries. If we come to 27 September this year, we see from the most recent figures that the number of people on benefits totalled 534,000. Over that period this Government has done what the previous Government did not do. It has reversed the unemployment trend, which means that the Government has achieved significant savings in social security expenditure. These significant savings reflect the fact that the Government is getting on top of the problem of unemployment, or at least is making some progress. Let us look back over a decade at what has been occurring in social security. It is important for Opposition members, if they are to become more ideological and to take the view that what is needed is a radical change, to look at what has occurred historically. Over the last 10 years unemployment has taken a huge whack of social security expenditure-from something like $500m in 1975 to more than $3 billion in the recent financial year. There has been that massive increase in social security expenditure. It will be established to anyone who seriously looks at the figures that overall expenditure has been relatively stable in recent years as a percentage of the Budget and gross domestic product. There has been a redistribution of the social welfare dollar over the 10 years I am referring to since Labor went out of government in 1975. More and more money has had to go to pay people who are not in the work force. In 1975 a very high percentage of the poor were the aged. If one examines the current situation in 1985, one finds that the aged are not generally poor, unless they are renting. The people who are poor in the aged population are not the people affected by the assets test. I know there can be emotional arguments on this matter, but essentially those who are poor in the aged population are renters. One need only look at the level of rents in any of the major cities of Australia to appreciate that it is impossible for people to live in private rental accommodation and survive if all they have is a pension and perhaps a supplementary rent allowance. One has to acknowledge that there is real poverty in this area. In terms of the overall population, in my view, new groups of people have become extremely poor. Those people are led by the unemployed, who have received a level of benefit which, generally speaking, is much less than the pension. The age pension has been indexed and has kept up with inflation. People in receipt of the unemployment benefit have not received that kind of assistance. It is important to note that, whatever one might say was good about the Fraser Government, there was a terrible prejudice in that Government against the unemployed. The graph shows that there was a massive growth in the number of unemployed during the Fraser years. The Fraser Government had a terrible prejudice against those people whom it believed did not deserve real levels of assistance. For example, the single adult rate of unemployment benefit under the Fraser Government declined by 7.5 per cent and the junior rate, the benefit received by the young unemployed, decreased by 63 per cent. So one group of people got a very bad deal under the previous Government, and I do not think that anyone on the other side of the chamber could honestly disagree with that proposition. A person who was unemployed and in private rental accommodation during the Fraser years would have been in great difficulty. Another group that grew as a percentage of total beneficiaries during the Fraser years was the group of people who were affected by unemployment because of other factors. The only people who were able to get into the very tight labour market were people with skills and training, the young, the vigorous and so on. Let us consider the other groups which grew. The two major categories were invalid pensioners, who are very often people with some disability which makes it hard for them to get into the labour force, and supporting parents. What did the Fraser Government do for supporting parents, many with very young children, who could not get out into the work force? During the Fraser years the mother's guardian's allowance decreased by 10.4 per cent. The Fraser Government did not index family allowances-that was a transfer across the Budget. The additional children's allowance decreased by nearly 28 per cent during the Fraser years. Everyone knows that, apart from private rental accommodation, the other indicator of poverty in respect of pensioners and beneficiaries is costs associated with children, which are so great. One can only imagine how people survive on the benefits they receive. How would the honourable member for Cowper survive on those benefits if he had to live with one or two children in a crowded flat in an inner city or western suburbs area of Sydney, where rents might be $60 or $70 a week? How would he survive on the single rate pension, at about $90, with an additional pension and benefit of perhaps $10 under Fraser, and perhaps a few more dollars by way of the mother's guardian's allowance, and paying the level of rent I have mentioned, as well as coping with all the other pressures that have to be faced? (Quorum formed) Under the Fraser Government we had declining levels of payments to the very poor. This Government has sought to target any increase that have been available, not to beneficiaries in a general sense but to the people who we believe are very poor. I think it is very sad that the shadow Minister for Social Security, the honourable member for Richmond (Mr Blunt), should come into the chamber and, in the debate on the social security budget, not say a single word about the problem of poverty in the Australian community. We cannot have 500,000 to 600,000 people unemployed, as we have, or the social conditions that have existed in this country over the past 10 years, and not have a great deal of poverty. The problem faced by governments, using the tight fiscal approach that this Government has adopted, is how to do something about poverty, which I believe most Australians consider to be anathema and something which ought not to exist in this country. The honourable member for Richmond expressed great concern about the integrity of the social welfare payment system. I think he would have been much better served if he had spent a little time dealing with the integrity of the Opposition spokesman on Public Service matters, who extrapolated some figures out of the Auditor-General's report and came up with the massive figure of $350m of supposed overpayments which have been lost to revenue. The claim bears no relation to reality. It was based on the activities of five offices before we had improved the identity checks. He made a big thing about that. The honourable member for Richmond referred to this and said: `Well, of course, his mathematics are not all that good'. Nevertheless, he reinforced the figure of $350m. No reference was made to the fact that the procedures had been sorted out in respect of the five offices that were the subject of study in regard to identity checks. Frankly, he has a long way to go in that area. The honourable member for Richmond referred also to the problems we have had with the assets test. I acknowledge that there have been problems associated with this test, but ultimately, when we get right down to it, the problem for conservatives is that they build a class bias into every argument. In the final analysis, they will come in here and rant and rave, but we know ultimately whom they are seeking to look after. That is what they are not prepared to face up to and that is why Mr Valder had to try to put a bit of steel into their backs. There is not much steel left in the conservative parties, but Mr Valder at least, one would have thought, holds the official view in relation to the assets test. There are some concerns about the Stratplan which I think were dealt with during the hearings of a Senate Estimates committee. We will come back to the question of identification cards when the relevant legislation is ultimately introduced. It has been good to hear the discussion that has taken place. However, I believe that poverty represents, if not the most important, then one of the most important issues that face this country. Governments have been singularly unsuccessful in reducing poverty. I hope that this Government is at least targeting what it is doing in the right areas and moving in the right direction. I hope that as a result of the policies adopted by this Government, not just in this Budget but looking at three or four Budgets together, this country will move towards a much fairer society. I believe that that is what we, as a Labor government, ought to be about. Proposed expenditures agreed to. Progress reported. Sitting suspended from 12.47 to 2 p.m. Mr HOWARD —I refer the Prime Minister to the Government's decision requiring the United States of America to reduce the number of its naval visits to Western Australian ports. In view of the increasing build-up of the Soviet Navy in the Indian Ocean, the Pacific Ocean and the South China Sea, and the deteriorating defence relationship between the United States and New Zealand and its serious implications for ANZUS, how can this decision be justified? Mr Halverson —Don't tell me you have lost that file as well! Mr HAWKE —No, I have not lost that file. I can assure the Leader of the Opposition that I have lost no relevant file on this matter. It is of interest to me that at last the Leader of the Opposition has addressed himself to the area of our international relationships and, in particular, he has done it in regard to our relationships with the United States. I suggest that the Leader of the Opposition is the last person who has any credibility when it comes to talking about relations with the United States. I remind him of something which he would rather forget. On 5 October 1984, just over a year ago, he was asked about the President of the United States. This is what the Leader of the Opposition had to say about the President of the United States, Ronald Reagan: There is still too much of the actor in him to really convince me. That was the Leader of the Opposition, the alternative Prime Minister of this country, speaking about the United States President. This shows the quality of a man who purports to lecture me. If I have something to say about the position of this country on a fundamental issue, such as racial equality in South Africa, which indicates that I have a difference of opinion with the Prime Minister of Britain-as I do-he lectures me and says: `Why should you be getting up and saying things like that about the head of another state?'. He is the very same man who, in respect of the President of the United States, says: `There is too much of the actor in him to really convince me'. What sort of basis does this give the Leader of the Opposition to address himself to this matter? As to the factual situation about our relationship with the United States and the judgment that is made by the President of the United States, who was derided by the Leader of the Opposition, I remind the House of what the President of the United States has recently said about his assessment of the relationship between the United States and Australia which takes into account fully the range of decisions and attitudes expressed by this Government. This is what the President of the United States said recently when the new Australian Ambassador to the United States presented his credentials to him: I have taken note of your remarks and want you to know that I and others of the American Government share your appreciation of the close and enduring relations between our two nations. Your Prime Minister has publicly stated that our relations have never been closer and I believe that is truly the case. I say to the Leader of the Opposition: `There you have a judgment out of the mouth of the President of the United States, the man who is able to make a judgment and assessment of the relationship between our two countries on the basis of all the decisions that have been taken by this Government in regard to not only the particular issue he raises but also a whole range of policy issues which determine the nature of our relationship'. It is a judgment of the President of the United States and not that of this myopic creature whose position is to abuse the President of the United States. The judgment of the President of the United States is that, looking back over the period when the Opposition had the opportunity of conducting this relationship and establishing a position between Australia and the United States, the relationship established by this Government with the United States is better than it has ever been. In those circumstances for the Leader of the Opposition to pretend that any decision that has been taken by this Government represents some diminution or hurt to the relationship is revealed for the hypocritical nonsense that it is. Mr JACOBI —I preface my question to the Attorney-General by saying that he would agree with me that far more money is being fleeced from our community by the end of a ball point pen than at the end of a smoking .38. Mr Tuckey —What about government advertising? Mr JACOBI —Would my good friend like to debate it? Mr SPEAKER —Order! The honourable member for O'Connor will not find me so tolerant this afternoon. Mr JACOBI —Given the appalling escalation of pin-stripe crime, does the Attorney-General see an urgent need to reappraise the structures by which that sort of crime is dealt with in the legal system? Will he take steps to set up a separate commercial division within the Federal Court of Australia to deal with extremely complicated commercial crime? Will he consider that such courts comprise specialist judges and expert assessors in prosecutions for breaches of commercial law? Mr LIONEL BOWEN —The honourable member for Hawker raises a very important matter in terms of the modern problems facing all administrations throughout the world in bringing what is called white collar crime-or, as my colleague says, pin stripe crime-to justice. The interesting thing about the law-it is not always recognised-is that it is continually reforming itself to meet the challenges of society, particularly in the area of crime. A recent conference in Milan which Australians attended-I was able to lead the delegation-passed a unanimous resolution indicating that organised crime, and that relates to the matters to which the honourable gentleman referred, is on the increase. It is no longer confined to national borders; it is international; it is very sophisticated; it involves the transfer of substantial sums of money and the criminals having very expert knowledge of commercial transactions and how to move volumes of money across the world. That conference came to the unanimous conclusion, particularly as the result of an Australian initiative, that there needed to be international co-operation to talk about what mutual assistance treaties would mean. They would mean countries giving financial records and information to other nations where that evidence would be of some interest in tracking criminals who were engaged in what is called pin stripe crime. Apart from gathering the evidence the honourable gentleman is adverting to the fact of being able to get the evidence readily analysed, assessed and dealt with in a very effective and expedient way. At present some trials run for very long periods. There has been some criticism that perhaps the juries may not readily understand all the ramifications. I am a very firm adherent to the jury system, and I do not know that the honourable gentleman is against that system. I understand the thrust of his question to be that perhaps there needs to be a different type of jury that might be able to assess some of the commercial problems submitted. It will always be necessary for law reform to be looking at this matter. I pay tribute to those who are actively engaged in the administration of justice in Australia, at both Federal and State levels, particularly in the courts. They see the need all the time to be suggesting reforms which will bring about justice in a fair, effective and cost-effective way. A committee has been virtually set up to talk about the effective administration of justice. It does not operate on an official basis but it is talking about ideas that might be thought through that would include matters such as this. I make the point that the jury system is vital to our democratic society. We always recognise, though, that we might need certain aids for both judge and jury-that could mean part of the jury itself-so that there can be a ready analysis of the evidence submitted. More importantly, perhaps, there needs also to be reform so that evidence can be submitted more effectively and expeditiously than at present. All these matters are the subject of review. I assure the honourable gentleman that getting the co-operation of everyone in Australia to do that is foremost in my mind, and I think we would have that co-operation. It is also clear that to get the initiative to bring these changes about we need to have the political will to do it, and that certainly obtains at this level. We would also need to convince the judges and administrators of justice that there are alternatives. I do not believe at this stage that we need to set up a special division of the Federal Court because the Court itself has sufficient qualifications to deal with matters commercial. I think the honourable gentleman's question relates to Federal criminal activity which is usually dealt with in the State courts. I am sure that we will get co-operation there. He has raised a number of interesting matters which will be the subject of continuing debate in this nation in the coming 12 months. Mr SINCLAIR —In the light of the briefing the Prime Minister has just received from his Minister for Defence on the subject, I ask whether the Prime Minister is aware that for logistical reasons nuclear powered ships are vital for the United States Navy's Indian Ocean patrols and that HMAS Stirling in Western Australia is an ideal port for rest and recreation for crews on those patrols because of its safety and suitability for handling nuclear powered vessels. In the light of the special relationship with the United States about which he has just advised us in answer to the Leader of the Opposition's question, can he advise the House what explanation he intends to offer to President Reagan for his Defence Minister seeking to follow the Lange line in requesting a reduction of United States naval vessel visits to Western Australian ports? Mr HAWKE —This pathetic attempt by the shadow Minister for Defence to equate the clear position of the Australian Government's relationship with the United States of America with the quite separate and sovereignly independent position of New Zealand holds no water, as he knows. From the time when the difficulties between New Zealand and the United States emerged, the position of my Government has been made quite clear to and has been welcomed by the United States Government. None of his bluster will change the facts. The facts are clearly that the United States completely understands and accepts the policy position of the Australian Government, which policy position is calculated to maintain the security relationship of this country which exists under the ANZUS Treaty. It is a matter of regret to us, as I have publicly expressed and have also put to the United States Administration, that Australia no longer has a trilateral operation because of the impasse between New Zealand and the United States. In the meantime, we have ensured at the level of President and Prime Minister, Minister for Defence and Secretary for Defense, Secretary of State and Foreign Minister and at officials level that all discussions have taken place to ensure without any qualification the maintenance of the security relationship between this country and the United States. That is a fact which is understood and accepted here in Australia, in the United States of America and in New Zealand. The only place where apparently it is not accepted is in the minute mind of the shadow Minister for Defence. The facts are, as I have put them, that as a result of all the discussions that have been held at the presidential and prime ministerial level and at the level of the relevant Ministers, the United States has expressed its total confidence in and satisfaction with the arrangements made between this Government and the Government of the United States. Ms JAKOBSEN —My question, on the same subject, is addressed to the Minister for Defence. Has the Minister seen claims by the Opposition defence spokesman that Australia is doing a Lange on the question of United States ship visits? Mr BEAZLEY —I am grateful to the honourable member for her question because it enables me to make a point or two about the historic record of the Opposition in this regard and also clarify one or two points made quite erroneously in questions raised by the Leader of the Opposition and the shadow defence spokesman. The first point I want to make is that, like most of the statements of the shadow Minister for Defence, what he said was absolute nonsense. He has followed up on his great Press release, which I managed to deal with the other day, in which he failed to recognise a reannouncement of his own policy with yet another statement which is, however, more mischievous than his initial failure. It represents what has been a long-standing effort by the Opposition to utilise matters related to the United States alliance not for debate on their intrinsic and essential merits in the area of national security but for political purposes in a way that has led a substantial proportion of the Australian population to mistrust the Opposition absolutely on this question. This has done material damage to the United States alliance, particularly among young people. The fact of the matter is that we are not doing a Lange. American vessel visits to this country are welcome, and they are welcome in their present numbers. Those numbers are determined not by a port visit policy in this country but by the operational requirements of the United States Pacific Fleet. The number of visits to ports increases and reduces over time according to those operational requirements. So if in any particular period there is an operational requirement for more substantial numbers of ships to be in the Indian Ocean as opposed to the north-west Pacific, we are likely to get more port visits. For some considerable time United States policy has meant that that country has been interested in a wider variety of port visits in Australia. That is a standing position of the United States; it has been operational for some considerable time. This statement by the Opposition defence spokesman represents an example of the Opposition attempting to have its cake and eat it too. If we recollect past elements of the debate, accusations have come from the Opposition parties, particularly in New South Wales and Victoria, that there is a reluctance on the part of this Government and a certain reluctance on the part of State governments in New South Wales and Victoria to accept substantial numbers of or indeed any port visits by United States warships. An impression has been created over time by the Opposition-it does not reflect reality-that this Government is trying to isolate port visits to an area in Western Australia where it is known that they are politically welcome and that there is no problem there. Mr Tuckey —They are. Mr BEAZLEY —They are welcome; I agree. The Opposition states that there is a reluctance to see those visits take place elsewhere. That is a nonsense. The objective of discussions I had in the United States shows that that statement by the Opposition continues to be a nonsense. I discussed this matter with the relevant American officials when I was in the United States. There was not a reluctance to contemplate the possibility of more extensive port visits elsewhere in Australia, there was a positive delight in so contemplating. The Leader of the National Party pointed out quite correctly the desirability of Western Australia as a point of port access for operational purposes in the sense that American operation in the Indian Ocean requires a place for rest and recreation visits. In any adjustment to the relative numbers visiting different ports, that will be taken into account. It is not the objective of this Government to impose unnecessary costs on the United States. The United States is not particularly worried about those additional costs. They are quite cheerful about the prospect of port visits elsewhere in the country. The Leader of the Opposition and the Leader of the National Party managed to pick up exactly the wrong end of the stick of this issue of our relationship with the American alliance. Mr Sinclair —Have a word to Gareth, he is Acting Foreign Minister. Mr BEAZLEY —This represents a continuing of the very strong relationship we have with the United States. It was not implied either by the representative in the Senate that this represented a desire on our part to see a diminution of American port visits. Those opposite should read his answers in totality, not Press reports of them or other people's Press releases based on them. Given the number of port visits to this country, this policy may represent some degree of diminution in the number of visits to Western Australia and an increase in visits elsewhere, but it probably will not because that will depend on the aboslute number of port visits made by the United States. So an increasing number of Australians will experience port visits. We will not find ourselves in the situation in which the Opposition has accused us in the past-they have apparently forgotten-of being reluctant to accept port visits all over this country. Mr N. A. BROWN —I ask the Prime Minister whether he can assure the House that neither he, any member of his personal staff, nor any of his parliamentary colleagues was in any way involved in initiating or drafting the minute from Mr Visbord, the Acting Secretary to his Department, to the Prime Minister concerning the Australian Bicentennial Authority. Will he now table the minute, include the earlier drafts of that document, and the other documents which subsequently led to the minute being prepared? Mr HAWKE —The minute I tabled in this House represented without qualification the opinion of Mr Visbord over whose signature the minute was tabled. Mr LEE —I ask whether the Minister for Health is aware of the report appearing in this morning's Sydney Daily Telegraph claiming that `rebel doctors are planning to sabotage the Medicare system. Recommendations to this effect will be put to a meeting of surgeons in Sydney tomorrow'. Is he aware of statements made by the leader of these surgeons that the Federal Government has not moved at all on deregulation of private hospitals, one of the elements of the settlement package arrived at early this year? Can the Minister advise the House whether the Federal and New South Wales governments are fulfilling the commitments made to the medical profession following the doctors' dispute? What courses are available to the Government should the surgeons concerned embark on their self-proclaimed sabotage campaign? Have the doctors concerned been encouraged in their sabotage campaign by the reckless support of the Leader of the Opposition and the shadow Treasurer? Dr BLEWETT —My notice has been drawn to the fact that the medical saboteurs of the New South Wales public hospital system are again raising their heads. They have the gall to question the Government's honouring of its commitments under the negotiated settlement. Two points are to be made about that group of procedural specialists in New South Wales. First, they are the people who did everything possible to sabotage the negotiated settlement and were overwhelmingly repudiated by the rest of the profession, both in New South Wales and in the country. Secondly, they are the people who in the newspapers this morning boasted that they have not returned to work, that they have not honoured the other side of the agreement. Yet these are the people who question the Government's performance. The Government has already honoured every immediate commitment it made in that negotiated settlement. The increased remuneration for doctors and the arbitration procedures have been carried through. Section 17 was repealed. The $50m capital funding for the public hospital system has been organised and is in the process of being paid to the States. The reclassification of patients as required has been carried through. The major health insurance changes have been made and the protection of community rating has been carried through in legislation. Every immediate commitment by the Government has been honoured. Yet we have not had the response from these people who now talk about questioning our commitments. One part of the agreement is yet to be fulfilled. At the time it was made clear that the issue of the deregulation of private hospitals would take more time than any of the other commitments. That is because it is not just this Government that is involved, not just those few medical procedural friends of the Opposition; the issue of deregulation of the private hospitals in this country involves all the medical profession, all the State governments, the health insurance industry and the private hospitals. All those groups have made it clear that they will not be stampeded into decisions by this militant clique. Finally, let me say that while this Government subsidises the private hospital industry to some $140m a year, we will not resile from our commitment to protect taxpayers' money. Mr SPEAKER —I call the honourable member for Bradfield. Government members interjecting-Boring! Mr CONNOLLY —I am sorry it is so boring, but the Government keeps giving us new information almost on the hour. In view of the Prime Minister's decision yesterday to restructure his Department to overcome his clear responsibility for the shambles he has created for the Australian Bicentennial, can he tell the House whether it is a fact that the first knowledge his Department had of Mr Reid's letter of 19 August, which contained details of the elements to be negotiated in the settlement with Dr Armstrong, was when he tabled it in this House on 19 September? Is it also a fact that the Prime Minister gave Mr Reid certain assurances sought in that letter during a telephone conversation with him on the same date? Why did he fail to bring the letter to his Department's attention earlier for information or advice or seek from the Department the letter relating to Dr Armstrong's appointment until after he had already approved the settlement? Mr HAWKE —As is typical of nearly everything that has been said by the Opposition in this case, the honourable member's question ended with a misrepresentation. He referred to my approval of the settlement. If the honourable member for Bradfield would take the trouble to look at the documents which have been tabled in this House he would see that the very essence of the letter of 30 August, which was written by me after advice taken from the Department on receipt of the letter from Mr Reid on 28 August, was to point out to Mr Reid, the Chairman of the ABA, that under the legislation-legislation brought in by the former Government-I had no authority to approve or otherwise. The quality of the question that has been addressed to me may be adjudged by the fact that those opposite still insist on a grotesque misrepresentation of what happened in this case. I repeat, in the hope-probably unfounded-that even the dull member for Bradfield will understand, at this late stage, if he has not to this point, that under the legislation for which honourable members opposite were responsible I had no authority to approve the settlement, and I did not approve it. In those circumstances the whole of the honourable member's question falls to the ground because it is posited on a complete misrepresentation. The facts relating to the conversation of 19 August are quite clear. They were based upon my having spoken to Mr Reid on 15 August. I will state the facts again. As I said, hopefully the honourable member will understand. On 15 August I indicated to Mr Reid my belief that the services of Dr Armstrong should be terminated. I put that to the Chairman. He said to me that he would go away and think about it. That he did, and also he had conversations with Dr Armstrong. He spoke to me on the telephone on 19 August, the day the honourable member mentioned, and on that day I had already received from him the letter of that date in which he set out certain factors which he would regard as relevant. Let me make it clear again that in that conversation Mr Reid made it clear that the order of the amount that would be involved related to the fact, as he put it, that there would be six years of the contract to buy out. That measures the order of the figure that has been talked about. He insisted in that conversation-I hope that the honourable member will get this through his thick head-that as a matter of law and propriety he would conduct those negotiations. That was his job and his responsibility and he went away to do it. Following the carrying out of those negotiations, as Mr Reid insisted he would do, on the basis of this contract to buy out for six years, a letter came back dated 28 August. I took advice on that matter. The advice I received was the appropriate advice not merely from my Department but also from the Attorney-General's Department to my Department that I had no authority under the law to approve the settlement. I wrote to Mr Reid in those terms. It is crystal clear, therefore, as it has been since I tabled these matters in the House, that I did not approve the settlement, as I did not have the authority to do so. Mr GRACE —Is the Minister for Science aware of the expedition to the Antarctic being organised by the Greenpeace organisation? Can he advise on the capabilities of the expedition and, more particularly, the capabilities of the vessel to cope with the difficult and dangerous conditions it is likely to encounter in the Antarctic? Mr BARRY JONES —I am aware of the planned expedition. Greenpeace plans to send a vessel to the Antarctic this summer to set up a four-man wintering station. It is planned that the expedition will leave either Sydney or Hobart in late November or early December. Under the Antarctic Treaty, the nation from which an expedition departs has an obligation to report details of that expedition to other Treaty nations. The provision of these details is regarded as essential for the safe conduct of expeditions since it provides Antarctic Treaty nations with information on all operations there, enabling help to be quickly given or sought in an emergency. The Greenpeace organisation was requested by letter on 21 June to provide the necessary details to this Government for distribution to Treaty nations. It was acknowledged on 31 July, but the full information required has not been provided. This hampers Australia in discharging its obligations under the Treaty and also raises very serious doubts about the ability of the expedition to cope with Antarctic conditions without seeking assistance from other nations. In particular, there are doubts about the vessel named Greenpeace, which is an ocean-going tug from Baltimore, registered in Miami. We are told that it has been strengthened in some ways by modification in Amsterdam with additional frames, bow plating and protection for the propeller and the rudder. These modifications were meant to improve the performance in ice conditions, but its ice capability has not been advised. It is not known whether the ship was insured and it is admitted that the vessel does not have a Lloyd's survey covering ice classification. We have no information about the crew's experience in Antarctic waters or work in ice conditions generally. There is no clear information about the vessel's route, the exact location of the over-wintering base that Greenpeace intends to set up or details of the crew's programs I say this to the House: As the rendering of assistance to this expedition by Australian or other nations would hamper programs and involve risks to personnel and equipment and could prove costly, we must continue to seek further information on the self-sufficiency of the expedition. I say this to the Greenpeace people: Remember that ice beat Napoleon, and it may be that there will be a similar fate for Greenpeace. In the view of the Government the crew faces quite unacceptable risk. We cannot stop the expedition as we have no legal power to do so, but we have a moral obligation to warn Greenpeace and those people who support the expedition here that it runs a quite unacceptable risk of being stuck in a situation in which we will be powerless to assist. I think, because of that, Greenpeace itself should make a decision not to go. However much we respect the organisation's motives for going to the Antarctic, that risk-35 lives might be put at risk, and it would be quite outside the physical power of Australia to come to the crew's assistance-is in our view much too high. This view has been put very strongly by the Department of Foreign Affairs and my own Department without avail, so far as Greenpeace is concerned. Mr SPENDER —I refer the Prime Minister to the well publicised advice of his close and warm colleague Senator Richardson that three scapegoats should be found for the Prime Minister's incompetent handling of the Australian Bictentennial Authority affair. I ask: Has he taken that advice? Have any officers of his Department been demoted, relieved, disciplined or transferred? If so, why? Mr HAWKE —Mr Speaker, I have to say that I have received no such advice. If I may lapse into the Australian vernacular, which is good enough for me: I received no such advice from my good friend and colleague Senator Richardson. He said nothing about looking for scapegoats. Mr Speaker, as I made clear to the House yesterday, there was an awareness within the Department itself that there had been incompetence. I certainly had some rather harsh words to say to those involved. In the event, I am able to say to the House that the acting permanent head of my Department has proposed certain changes to the Department. He made those proposals to me this morning. I have endorsed them and asked that they proceed. These involve the establishment of a separate Bicentennial Division in my Department under Mr Ron Harvey. It will be supported by two branches. It will report to Mr Neil McInnes, a Deputy Secretary in the Department. I believe that all those honourable members who know Mr Harvey will share the very considerable confidence in him that I have. Mr Carlton —How much will it cost-$500,000? Mr HAWKE —Now we are asked how much that will cost. Honourable members opposite cannot have it both ways. They want to say that there is a problem. They say that the situation has not been handled correctly. I immediately take moves to ensure that there will be a division set up within the Prime Minister's Department to handle this. What is the miserable little reaction of honourable members opposite? They ask how much it will cost. Honourable members opposite ought to make up their minds about which way they are going on this issue. The reason why there has been extreme difficulty in the handling of this matter is that honourable members opposite passed legislation which created very considerable difficulties. I think it is appropriate that it be on record that it is not just the present Prime Minister who inherited the mess of the past who feels that this is so; it is somewhat relevant to know what the Prime Minister of the time, Mr Fraser, has now had to say about this matter. If I say that the legislative arrangements that were made then were unsatisfactory, honourable members opposite may not take any notice of that because of the way their little minds work. Perhaps honourable members opposite have not distanced themselves so far at this stage from their previous leader as to ignore what he has had to say. Mr Duffy —Who said this? Mr HAWKE —Mr Malcolm Fraser. I think it would be a matter of some interest to hear what Mr Malcolm Fraser had to say on this subject on 2 October. I have a transcript of an interview of Mr Fraser by Jane Singleton, an interviewer of whom I am aware. I know she is a real person. Mr Malcolm Fraser stated: Some time ago I wrote a letter to the Authority about the programs that the Authority was developing and I don't think that they depicted adequately the nature of Australia and what Australia is about. I had my own arguments on that basis with the Authority. Resignation payment, or whatever one might call it for Mr Armstrong, was a total nonsense and quite unjustifiable. If the Prime Minister is not happy with the way things have moved up to this point, nor am I. He went on to talk about the problems with the structure of the Authority. He said: . . . all I can say is we thought we were doing this sensibly at the time. It was supported by the Parliament and I think virtually unanimously, I'm not aware of anyone having voted against the legislation that was established. One of the things I've come to reflect upon, having been out of Parliament, is that independent commissions are generally a bad thing because Ministers and Departments ought to maintain control because Ministers can be made accountable through the Parliament. There honourable members opposite have their own previous Leader-- Opposition members interjecting- Mr SPEAKER —Order! I suggest that honourable members on my left show some respect for the House and remain silent. Mr HAWKE —As usual on this matter, honourable members opposite are completely incapable of following the logic and the facts of what is being said. The Prime Minister of the time, Mr Fraser, is saying that because of the way in which the Authority was set up the possibility of having proper ministerial accountability and control was made more difficult. That is the point I have been making. Obviously, in hindsight, Mr Fraser is contemplating that it would have been sensible to do it in another way. I believe that is the case. If in fact we had not had the arm's length situation which was created by honourable members opposite, the sort of control that one would wish to have in fact would be easier to have. I am simply saying that what we have done now, in the circumstances of legislation passed by honourable members opposite, is decided to establish a new division within my Department which, within the difficulties created by that legislation, will provide a better opportunity of control and accountability so far as that is possible under the legislation passed by honourable members opposite. Honourable members opposite cannot have it both ways. Honourable members opposite, by their legislation, have created difficulties and difficulties have emerged. We have now moved to create a new division to try to have the best possible control and accountability. Honourable members opposite should not come up now with nonsensical interventions about how much it will cost. Either honourable members opposite want to have the best sort of system or they do not. Mr ALLAN MORRIS —Can the Treasurer advise the House whether the Government has finalised its taxation reform package? How does the Government's progress in this area compare with that of other groups in the community which purport to have an interest in developing policy on taxation? Mr Sinclair —Mr Speaker, I raise a point of order. This question is canvassing a matter which is currently before the House. The tax reform package is currently under debate and legislation is before the Parliament. It is not proper under our Standing Orders for such matters to be canvassed at Question Time. Mr SPEAKER —Order! The honourable member has asked whether the tax reform package has been finalised, not about the specific question of the tax reform package. Mr HAWKE —Mr Speaker, in those circumstances, I ask that further questions be placed on the Notice Paper. Mr SPEAKER —I have received a letter from the Leader of the Opposition (Mr Howard) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The implications for the principle of ministerial responsibility arising out of the Prime Minister's handling of the $500,000 payment to the former Chief Executive of the Australian Bicentennial Authority. 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 HOWARD(Bennelong-Leader of the Opposition)(2.48) —Those souls on the other side of the House who may have imagined a couple of days ago that this matter was dead, buried and finished might feel a bit disappointed today that it is very much alive and kicking. Honourable members opposite might also reflect for a moment on the fact that the one person they have to thank for that is their own Leader, the Prime Minister (Mr Hawke). If ever a person revived something on its death bed-I have to confess that it was just about running out in political terms-the Prime Minister did so. There he goes, running out of the House. That is the sort of regard the Prime Minister of this country has for the concept of ministerial responsibility. On earlier occasions the Prime Minister may have deflected ministerial responsibility from himself. He may not have taken the matter as seriously as the Opposition and the public of Australia would have liked him to do. But over the last 24 hours the Prime Minister has turned the principle of ministerial responsibility on its head. The Prime Minister of this country has established a new principle: The greater your blame, the deeper your implication and the more you are responsible for a mess, the more scapegoats you find. The real architect of the shambles of the last few weeks relating to the Australian Bicentennial Authority is not the former Chief Executive, it is not the former Chairman of the Bicentennial Authority and it is not the three officers of the Department of Prime Minister and Cabinet who have apparently been demoted because of their role in the matter; the real person to blame and the man who does not have the courage to cop it and to admit responsibility for it is the Prime Minister of this country who has just walked out of the chamber. Over the last 48 hours the Prime Minister has added political cowardice to deceit and incompetence in his handling of this matter. On 11 September he dissembled to the Australian public a pretence that he had nothing to do with it. When he was found out on that he tried to blame Mr Reid. He tried to seek refuge in the opinion of the Solicitor-General. He came running into the Parliament in response to a matter of public importance and he huffed and puffed himself up and right at the end one could see him shaking with excitement when he announced: `Here is the king hit; here is the report of the Solicitor-General. That is going to fix you; that is going to silence you'. Unfortunately, it was one of those reverse exocets because instead of king hitting those on this side of the House who brought the Prime Minister into account, it swung right around and king hit the Prime Minister. It demonstrated two things. It demonstrated that if only the Prime Minister had exercised normal administrative prudence and gone to his Department on the 15, 16, 17, 18 or 19 August and said: `Look, this is what I am going to do. Will you tell me whether it is okay? Will you go and talk to Trevor Boucher and get him to check out the tax aspects? Will you go to the Attorney-General's Department? Will you talk to the Solicitor-General? It is $400,000 and we are dealing with the Chief Executive of the Authority. Is it okay? Am I doing the right thing by the public? Am I discharging my ministerial responsibilities?' But, no, that is too simple a suggestion for this man and his minders. He decides to do it all himself. The inevitable question is asked: But if the Solicitor-General's opinion was so crash hot, why on earth was it not obtained before the horse had bolted? Why was it not obtained before the money had been paid over? Why on earth was it not obtained before the Prime Minister had said: `Yes, good on you. Err on the side of generosity. Thanks, John, for doing such a terrific job? The other question that is raised is that if in fact it was not so crash hot, if the Prime Minister's original view on 17 September was that the opinion of Allen, Allen and Helmsley was okay, what grounds were there for dismissing Mr John Reid, particularly as the report of the Solicitor-General on the subject of tax minimisation significantly enough did not say there was any tax minimisation? What did the report of the Solicitor-General say about tax minimisation? It completely cleared Mr Reid of any implication regarding tax minimisation. That report was completely unable to support the claim made by the Prime Minister that the whole arrangement had the colour of tax minimisation. Either way, that particular little king hit turned out to be a reverse exocet and the matter was back on the front pages and up and running again, not so much because of arguments that have been put but because of the Prime Minister's craven inability to understand one simple fact. That fact is that once a Minister is caught out and has made a mistake, the best thing to do is to come into this place and say: `I made a mistake. I accept responsibility for it. I will see that it does not happen again and I will try to lift my game to ensure that it does not happen again.' However, if there is one thing we now know for certain it is that one cannot ask this Prime Minister to ever do that. The more he is caught out, the more he is to blame and the deeper he is in we know what he will do-he will blame others. He blames Reid. He blames the Opposition. He blames his Department. He blames the public. He blames everybody, of course, but himself. There is a simple rule now that if anybody wants to stay in his job he must either be a Minister in this Government or a State secretary of the ALP. The other thing that we are interested in demonstrating this week is the double standard of this Prime Minister when it comes to misconduct. Apparently a Governor, who according to the Premier of Victoria accepted a free trip, has to go but a State secretary who engages in political dirty tricks can stay in his job. That is the sort of standard that rules in the Labor Party in Victoria, the home State of the Prime Minister. This little episode has been brought along and kept going by that first great reverse exocet. The second great reverse exocet was delivered by none other than the great number cruncher from Sydney, Senator Graham Richardson, seen scurrying in and out of the Prime Minister's office most of yesterday afternoon, no doubt trying his hand with a little bit of drafting here and there and no doubt making a lot of suggestions. He appeared on radio station 2GB and said that it was absolutely terrible that people cannot rely on anybody these days and that poor old Bob had been let down by all those bunglers in his Department. There was no mention of the fact, of course, that bungler Bob had not even told his Department about it. He kept them in the dark. It is bad enough a Minister shirking his ministerial responsibilities when in reality his Department was told everything and he sticks to the Westminster principle because in the long run if one is to have respect and support from his department one has to endure, to some extent, the thick and thin of the competence or otherwise of his department. However, it is a bit rough on a department when it gets kept in the dark and then it gets blamed to boot. That is what happened with the Prime Minister's Department. The most critical failure in this whole issue was the fact that the Prime Minister did not send Mr Reid's letter of 19 August to his Department. The first time the Prime Minister's Department knew about that letter of 19 August was when it was tabled here one month later, namely, 19 September. According to the evidence before the Senate Estimates Committee, Mr Rose of the Prime Minister's Department said: `We were completely in the dark until we got the letter of 28 August. We did not really know the background of it'. It really is a bit rough. It is one thing to blame your department, to publicly humiliate it and to extract a most cringing and humiliating confession from your Department when it has not been kept in the picture. It is the height of shabby treatment for a Prime Minister to kick his Department to death when in fact he has kept it in the dark. He has led his Department up the garden path. The people who have been misled by this have been the Department of the Prime Minister and Cabinet and the public of Australia. They are the people who have been misled, and not the Prime Minister of this country. Over the last 24 hours we have seen the most monumental exercise in turning the very principle of ministerial responsibility on its head. We have a new Hawke's edition of May's Parliamentary Practice dealing with ministerial responsibility. He has written a new chapter on ministerial responsibility according to Bob Hawke. That chapter says that the only principle that applies is that you never resign, you never say you are sorry, you blame somebody else and above everything you never admit that you could ever possibly make a mistake. That is the principle by which this Prime Minister has lived and behaved throughout the whole of this episode. That particular piece of conduct makes very strange comparison with some of the utterances and immortal words of his colleagues on the subject of ministerial responsibility. Back on 25 August 1982: Ministerial responsibility, I remind the honourable members, does not concern the question of what one knew; it concerns the question of what one ought to have known. Mr N. A. Brown —Who said that? Mr HOWARD —That is the Deputy Prime Minister, the present Attorney-General, the first law officer of the Commonwealth. He ought to know something about ministerial responsibility. However, let us go on because it gets better. On 25 August 1982: If actions (of Ministers) in their Department are such that a scandal is created- honourable members have to admit that has happened here- and someone should take the blame, they should be men enough to stand up and say: `We should have known about this'. Mr N. A. Brown —Who said that? Mr HOWARD —The present Minister for Employment and Industrial Relations (Mr Willis). It gets even better. The shorter it is the better it gets. On 7 September 1982: Ignorance is no excuse. That was the present Minister for Foreign Affairs (Mr Hayden). But the climax is really this-coming right up to date on 27 March 1985, only this year. Labor was in government then and could not claim refuge in the proposition that when in opposition one blurs the position a little. This is what the Attorney-General (Mr Lionel Bowen) said. He said that he did not blame departmental officials. He went on: `It is a matter of who is the boss-the Minister at the time'. That happened to be the view of none other than the Deputy Prime Minister and Attorney-General. It is no wonder that the Prime Minister has walked out on the debate on this matter of public importance. It is no wonder that he failed to answer any questions directly and honestly on this matter today. It is no wonder that he refused to tell the Deputy Leader of the Opposition whether some of his minders had heavied anybody in his Department on that minute. It is no wonder he cut and ran on that subject. It is no wonder he has refused from the very beginning to give a straight answer on this subject to the Opposition. It is no wonder that day by day he has got deeper and deeper into the mess on this subject because he will not accept one simple code of conduct that somebody at the peak of a government has to accept, that ultimately if one makes a mistake, one must have the courage to admit it, own up to it and stop blaming other people. This Prime Minister has been guilty of a lot of things and a lot of mistakes on this matter. His administrative competence has been shockingly short of reasonable requirements for a Prime Minister. He has bullied; he has hectored; he has abused; he has dishonoured the trust of leading businessmen in this country who sought to serve the Government in an honourable fashion. He has deceived the public. He has misled this Parliament. His ministerial standards have been poor, his adminstration has been sloppy. He has sought to have it both ways. He has walked out of the chamber but to his incompetence and his dishonesty and the way in which he has misled the Parliament, he has added one other very important and crucial failing for a person who is the leader of a government. It may be bad enough that a Prime Minister's administrative abilities have been found wanting. It may be bad enough that in this whole sorry affair he has been shown as a person who normally does not take prudent advice. It may be bad enough that he sacked somebody in the person of John Reid who was doing no more than the Prime Minister's bidding throughout the whole of the affair, but of all the things the Prime Minister has done wrong, the one that condemns him most and the one that I believe the Australian people will hold against him the most is that at the end of the day when he was caught out, when he had nowhere to turn, he did not have the courage to say: `I am to blame for this. We are all human. I will see it does not happen again'. He could not bring himself to do that. He had to seek cowardly refuge in blaming others, casting around for scapegoats among public servants, businessmen and, who knows, among people on his own personal staff. I believe that that piece of political cowardice of the Prime Minister is the worst feature of his conduct in this whole affair. Mr YOUNG(Port Adelaide-Special Minister of State)(3.03) —I knew the day would have to come when someone from the former Fraser Ministry would have the gall to talk about ministerial propriety in this place. Ministers in that Government were the greatest bunch of blunderers this country had seen since World War II. We can go through a whole regime of ministerial misdemeanours during the period 1975 to 1983 under the leadership of Malcolm Fraser. Yet the Leader of the Opposition (Mr Howard) got up in this House today and spoke about the Prime Minister (Mr Hawke) and the events of the Australian Bicentennial Authority as if they were far and above more important than some of the issues that occurred during 1975 to 1983. One can readily understand why members of the Opposition wish to continue talking about the Bicentenary in view of the news yesterday that another 57,000 jobs had been created under this Government, making in two-and-half years 487,000 new jobs. Why would not Opposition members want to talk about the Bicentenary? They do not want to talk about the economy; they do not want to talk about jobs; they do not want to talk about the centralised wage fixing system which has given everybody the opportunity to get proper and increasing economic growth in this country. They want to talk about the Bicentenary, which no one else in Australia was talking about. They were all talking about more important issues, as they should. If Opposition members want to talk about the Bicentenary, I suggest we should compare our per- formance in government with their performance in government in that period of almost eight years. There are three classic examples of what the Fraser Government did about ministerial behaviour. First, I refer to the right honourable member for New England (Mr Sinclair), the Leader of the National Party, on the question of Asia Dairy Industries (Hong Kong) Ltd. In 1981 a Senate committee found on the balance of probabilities that Mr Sinclair was told that a rebate arrangement by Asia Dairy Industries involved a breach of a General Agreement on Tariffs and Trade arrangement. The committee also referred to financial irregularities in the operation of the Australian Dairy Corporation and a lack of accountability. What happened to Mr Sinclair? He stayed in the Cabinet up until the Government was defeated in 1983, and now he sits opposite as a person who wants to be Deputy Prime Minister of this country under the leadership of Mr Howard. So much for ministerial behaviour. In 1982 Mr Justice Woodward in the Report of the Royal Commission on the Australian Meat Industry said: I am bound to record my view that the Minister, Mr Nixon, did not deal with the allegations adequately and effectively. Mr Nixon submitted his resignation which was not accepted by Mr Fraser, who in turn proceeded to do a hatchet job on the Royal Commissioner. When the Royal Commissioner said that the Minister was responsible and should accept responsibility for what had occurred during this unhappy episode, Mr Fraser got up here, exactly where I am standing today, and said that the Royal Commission had got it all wrong. He said: `My Minister is innocent, irrespective of what the Royal Commissioner said'. And what happened to Mr Nixon? He stayed in the Cabinet again up until the Government was defeated in 1983. If Opposition members want to talk about ministerial behaviour, in 1982 there was another classic example, when the report of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union made devastating criticism of the administration of the Attorney-General's Department and revealed the scandal of the previous Government's total neglect of the tax system which allowed the growth of the tax avoidance industry. Both Senator Durack and Mr Howard then blamed everybody else except themselves. Where is Senator Durack today? He was Attorney-General during the time of the Costigan report which found the Attorney-General's Department guilty of neglect, especially in the Western Australian office, but Senator Durack was there right up until 1983. Now he sits in the Senate, waiting for the emergence of another Liberal-National Party government when he will be Attorney-General again, in spite of what Mr Costigan said. Was not Costigan's a lovely report? Tax evasion files were being put into drawers and forgotten about. The House will also remember the classic description by Mr Costigan in his report about what was happening. The Deputy Crown Solicitor's office in Western Australia was running a call girl racket from the Attorney-General's Department. A caller would ring up and they would reply: `Can I be of service? Who are you calling?'. The caller would say, `I want the Attorney-General's Department'. They would say: `Well, it is $40 for a short time'. The caller would say: `What are you talking about?'. They were running a call girl racket from the Attorney-General's Department in Western Australia, and Senator Durack is going to be the next Attorney-General in an incoming Liberal- National Party government. So let us compare just those three illustrations of what occurred between 1975 and 1983 with what Opposition members are talking about today. Let me tell the House what Senator Durack said when the criticism was made of him. I quote from the Hansard of 7 September 1982: Senator Button suggests that I am to be criticised because I said that I knew nothing about the mismanagement over a particular period of a tax file in the Deputy Crown Solicitor's Office in Perth. I suppose that something new since we had the earlier debate is that on a Nationwide program reference has been made to a file and opinion given in the Deputy Crown Solicitor's Office in Sydney. The honourable senator asks why I did not know about that either. The fact is that I did not know about either the Brinsden opinion or the Lockhart opinion until recently. The reason is that the officers of the Deputy Crown Solicitor's Office, although within my Department, deal with a large number of cases. That is the business of the officers; they do not keep telling me what they are doing from day to day or from week to week. This is the most childish conception of ministerial responsibility. How on earth does anybody believe in this day and age, with departments as large as they are and with the enormous activities of government, that Ministers can know or ought to know of all the ramifications of the actions of their departments. So said Senator Durack in 1982. Now we have a complaint from the Leader of the Opposition that the Prime Minister, personally, in February of this year, when all the files of the Department of Administrative Services were handed over to the Department of the Prime Minister and Cabinet, should have sat down and gone through all of them to see what was on record and then taken responsibility for it. The Leader of the Opposition says today how terrible it is that the Prime Minister of this country should criticise a couple of public servants. He is lucky that Clyde Cameron is not here to talk about the Public Service. If he were, the honourable gentleman would have heard a lot more about it. Let me tell the Leader of the Opposition this, if he is listening in his little cubbyhouse wondering what is going to happen to him in the future: This country would have been a lot beter off if in the period from 1977 to 1983, when he was Treasurer, he had spoken to John Stone in the way the present Prime Minister talked to his public servants yesterday about their responsibility. The fact that the Leader of the Opposition allowed John Stone to put all his policies into operation in that period and to treat him with absolute contempt meant that we kept getting more and more unemployment. The John Stones of the world have a crisis mentality. They do not believe that economic problems can be solved with full employment. The John Stones of the world are happy if there is 20 or 30 per cent unemployment and nil inflation. That is the person the honourable member for Bennelong should have stood up against between 1977 and 1983. The honourable member for Bennelong also talks about ministerial responsibility. John Stone came along before the 1983 election and said to the honourable member: `Minister, I think we are approaching something like a $9.6 billion deficit this year'. What did the honourable member for Bennelong do, as he always did? He went running off to Malcolm. He said: `Malcolm, look what we have got. We have this horrible thing. I have just been advised by Treasury that we are going to have a $9.6 billion deficit in 1983-84. Should we tell the public? Malcolm said: `Break it up. We are not going to tell them now. It is only three weeks before the election. Go and hide yourself'. (Quorum formed) The Leader of the Opposition put the proposition to us just 10 or 15 minutes ago that the Prime Minister should be honest with us, tell us everything that went on, and admit that he had made a mistake. I refer honourable members to the actions and activities of the Leader of the Opposition, when Treasurer of this country, in the weeks leading up to the 1983 election. He had been told by the Treasury what was going to happen to the deficit in 1983-84. The honourable member was interviewed on 21 February 1983, just before the election. He was asked: If you are still the Federal Treasurer in August, what will be the size of your deficit? The honourable member answered: I really cannot say at this stage because it's too early in the piece. On present indications it would be trending higher than the existing deficit of about $4,000 million. He said it was trending higher than the existing deficit of $4 billion when he had already been told by John Stone that it was going to be $9.6 billion. Who has done the most damage to this country? Let us compare the activities of the Leader of the Opposition between 1977 and 1983, up to and including his role in misleading the Australian public during the 1983 election campaign, with what we have had in the debate about the Australian Bicentennial Authority. What the Prime Minister did in respect of the Bicentennial Authority has proved to be absolutely correct, and it has been backed up by the Opposition's former leader, for whom they now do not have much respect. Big Mal, who had them all terrified when he was here, told them today that if he were to do it again he would set up the Authority quite differently from the way he did it in 1980. Also at today's Board meeting was the person who played the more constructive role in trying to get things back on the track and the Authority working towards 1988, the former leader of the National Party of Australia, Doug Anthony. It is only the very small group which sits in opposition, the Liberal and National parties, which wants to carry on the fight about the Bicentennial. As I said at the outset of this debate, the reason members of the Opposition want to talk about the Bicentennial is that they do not have any right to go out into the community and talk about any of the other issues. How many of them are going to go home at the weekend and say to their constituents: `Isn't it terrific? Another 57,000 people are in jobs since last month. We can take some credit because we are in the national Parliament and we have 57,000 more people working this month than were working last month. There are now 487,000 more people working in this country than there were at the time of the summit in 1983'. No, that is of no interest to them. Really, they want interest rates on housing loans at 25 per cent, they want a 25 per cent inflation rate, and they want 15 to 20 per cent unemployment, as in Britain. Then they will really be happy. They will all be sitting up looking very gleeful when Australia has the economic circumstances which might catapult them back into office. What the Opposition really cannot come to grips with is the fact that this country has a very good government. This is the first week in the 12 years I have been a member of this place that I have ever seen the Opposition discipline its back bench by not allowing them to ask one question. Opposition back benchers have not asked one question. They were told: `Please do not ask about any economic issues. Let us continue all this week to talk about the Bicentennary'. The Opposition wants that to be the major issue in the country. We still have a long way to go. We still have 8.1 per cent unemployment. We have brought it down from 10.2 per cent. We have tens of thousands more people in houses than would have been the case if we had not introduced the first home owners scheme. Magnificent strides forward have been made in almost every facet of Australian living as a result of the election of the Hawke Labor Government in 1983. They are the important issues to the Australian people. We will get the Bicentennial Authority back on the track and everybody will be able to enjoy the fruits of that effort in the festivities of 1988. The Opposition, through its Leader, can get up here and yelp and howl about the Bicentennial for as long as it likes. The real crunch issues, which are the issues that put it out of office in 1983, are going to be the issues that keep us in office in 1987. I hope, and I am sure everybody on the Government side of the House hopes that the Opposition continues to talk about the Bicentennial while we keep putting the runs on the board. Madam DEPUTY SPEAKER(Mrs Child) —Order! The debate is concluded. 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, the petition of the undersigned respectfully showeth: that the recent cuts announced in the Mini-Budget to Day Care Services are a reversal of A.L.P. policy to make child care services available to all at an affordable cost. Further, that the fee rises arising from the cuts will cause great hardship to the majority of families using these services. Your petitioners therefore humbly pray that your Honourable House fully restores all Federal funding to children's services in Australia, and your petitioners as in duty bound will ever pray. by Mr Blanchard,Mr Blunt,Mr Hollis,Mr Howard,Mr Nehl and Mr Webster. To the Honourable Speaker and Members of the House of Representatives. Humble Petition of the undersigned citizens of Australia respectfully sayeth: That we the undersigned are totally opposed to any taxation change which involves a tax on Health Fund contributions or benefits. That we are already required to pay a 1 percent levy to partly finance the Medicare scheme and that we would regard any further taxation of our health insurance arrangements as unfair and unreasonable. That therefore we urge the Government to ensure that there is no taxation on illness and no special taxation on those who seek to insure themselves against the cost of private health care. And your petitioners as in duty bound will ever pray. by Mr Beddall,Mr Dobie,Mr Price and Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth that whereas: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that `the existing Australian National Flag be changed only with the approval of the Nation as expressed in a Referendum'. And your petitioners as in duty bound will ever pray. by Mr Beale,Mr Halverson 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 the future; The the presence of the Union Jack on the flag represents not a subservience to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression; Nonetheless recognises the rights of Australians should they wish as a people to change the design of their flag. Your petitioners humbly pray that no change be made to the Australian flag except with the consent of the people in a referendum. And your petitioners, as in duty bound, will ever pray. by Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of concerned Australian citizens respectfully points out: That, for our survival, an effective Worldpeace Initiative needs to be established which will work towards mutual understanding, world disarmament, economic well-being for all, fulfilling employment, a sustainable society conserving natural resources and revitalising soils essential for growing a plentiful and healthy food supply and tree cover. By achieving these objectives, Australia can set an example for the rest of the world to follow. Your petitioners therefore humbly pray that your Honourable House will: 1. Create an Australian ministry for peace specifically devoted to peace-building and the non-violent resolution of conflict; 2. Convene a national summit for survival to discuss the issues of world disarmament, security and national and international co-operation; 3. Support the United nations world disarmament campaign by allocating the equivalent of at least 10% of our military expenditure to fund peace activities; 4. Actively assist the international year of peace in 1986 by initiating programs for peace education, self help development and environmental repair; 5. Develop national employment programs to give priority to the planting and growing of forests, food-producing trees and other crops to assist the greening of Australia. 6. Implement national recycling programs to reuse water and to compost all presently wasted domestic sewage-sludge and organic garbage with mineral-rich gravel dust, a by-product from rock quarries and mines, into hygienic humus, a natural fertiliser, for use in revitalising impoverished soils. 7. Propose to the United Nations General Assembly that 1989 be declared international year for repairing the earth. And your petitioners as in duty bound will ever pray. by Mr Hollis and Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of concerned Australian citizens respectfully points out: That, for our survival, an effective Worldpeace Iniative needs to be established which will work towards mutual understanding, world disarmament, economic well-being for all and full employment. This initiative will help to ensure a sustainable society conserving natural resources, and revitalising soils essential for growing a plentiful and healthy food supply and tree cover. By achieving these objectives, Australia can set an example for the rest of the world to follow. Your petitioners therefore humbly pray that your Honourable House will: 1. Propose to the United Nations General Assembly that 1989 be declared international year for repairing the earth. 2. Implement action programs leading up to 1989 which will include: (a) Actively supporting the international year of peace in 1986 by reallocating at least 10% of our military expenditure to fund environmental repair programs. (b) Implementing national recycling programs to reuse water, and to compost into hygienic humus all presently wasted organic garbage and sewage-sludge mixed with fine ground powder from mineral-rich gravels and rocks, to use as a natural fertiliser in revitalising impoverished soils; (c) Developing national employment programs to give priority to the planting and growing of healthy forests, food-producing trees and other crops and vegetation to assist the greening of Australia. And your petitioners as in duty bound will ever pray. by Mr Staples. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of concerned Australian citizens respectfully points out: That, for our survival, an effective World peace Initiative needs to be established which will work towards mutual understanding, world disarmament, economic well-being for all and full employment. This initiative will help to ensure a sustainable society conserving natural resources, and revitalising soils essential for growing a plentiful and healthy food supply and free cover. By achieving these objectives, Australia can set an example for the rest of the world to follow. Your petitioners therefore humbly pray that your Honourable House will: 1. Propose to the United Nations General Assembly that 1989 be declared International Year for Repairing the Earth. 2. Implement action programs leading up to 1989 which will include: (a) Actively supporting the International Year of Peace in 1986 by reallocating at least 10% of our military expenditure to fund environmental repair programs. (b) Implementing National Recycling Programs to reuse water, and to compost into hygienic humus all presently wasted organic garbage and sewage-sludge mixed with fine ground powder from mineral-rich gravels and rocks, to use as a natural fertiliser in revitalising impoverished soils; (c) Developing National Employment Programs to give priority to irrigation systems and the planting and growing of healthy forests, food-producing trees and other crops and vegetation to assist the greening of Australia. And your petitioners as in duty bound will ever pray. by Mr Tickner. To the Honourable the Speaker and the 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 US Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. And your petitioners as in duty bound will ever pray. by Mr Kent and Mr Staples. To The Honourable Speaker and members of the House of Representatives in Parliament Assembled. We the undersigned citizens of the Commonwealth do humbly pray that the Commonwealth Government: 1. Uphold the principle that the seeds and cuttings of plants are a public resource and a common heritage to all and that accordingly seeds should be freely available to all, freely multipliable, able to be sold, exchanged, exported and imported by anyone who wishes. This is seen as a matter of national food security. 2. Recognize that plant breeding is a highly co-operative venture often involving private enterprise at the very last stages after basic seed collection, storage, and research has been publicly funded. 3. In view of the aforementioned paragraphs, recognize that any system giving `property' or ownership rights over seeds to individuals, organisations or enterprises is inappropriate and unjust. 4. Recognize that legislation establishing plant patenting schemes overseas has had serious adverse effects namely: (i) a slowing-down of scientific information exchange and exchanges in basic plant breeding materials, that is, germ plasm, (ii) subordination and/or curtailment of public breeding programmes, (iii) farmer unrest at seed prices, (iv) monopoly control of seed production and sales has passed into the hands of giant petrochemical and drug corporations also marketing crop chemicals, (v) increased uniformity of crop varieties leading to a vulnerability to pest and disease attack. 5. Reject any proposal to legislate for any system such as the drafted Plant Variety Rights Act, which gives exclusive ownership rights over seeds to individuals, organisations or enterprises. And your petitioners, as in duty bound, will ever pray. by Mr Milton and Mr Staples. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. We the undersigned call upon all Members to pay due respect to all returned service personnel. Your Petitioners therefore humbly pray that all changes to benefits for veterans', and conditions of service for military personnel, as announced in the May Economic Statement, be withdrawn as to allow sufficient time for sensible community debate before any veteran or service person can be unfairly disadvantaged. And your petitioners, as in duty bound will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representative in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that: As residents of the towns of Ayr and Home Hill and surrounding districts, your petitioners do humbly pray that the Australian Government, in recognition of the present plight of the sugar industry in our region and other parts of Australia, and in recognition of the importance of the industry to the economic and social well-being of our community, provide urgent financial assistance to that industry to ensure the survival and future viability of our local economy. And your petitioners, as in duty bound, will ever pray. by Mr Braithwaite. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This humble petition of the undersigned citizens of Australia respectfully showeth: 1. That ethnic public broadcasters are not represented by the national organisations, The Public Broadcasting Association of Australia or the Special Broadcasting Service. 2. That public ethnic broadcasters nationally have formed an Interim National Committee to represent the interests of public ethnic broadcasting and that neither the special broadcasting service nor the government as represented by the Minister for Communications have, to date, been prepared to negotiate with the Committee. (Interim National Ethnic and Multicultural Broadcasting Committee). 3. That the main concern of this committee is the desire of ethnic broadcasters to maintain the Special Broadcasting Service as the funding authority, for the time being, as proposed in section 6.76 of the report of the ``Committee of Review of the Special Broadcasting Service''. 4. That The Interim Committee which represents 90% of all subsidised public ethnic broadcasting in Australia does not wish to see the authority for funding transferred to the public broadcasting foundation in which they have expressed no confidence. And your petitioners, as in duty bound, will ever pray. by Mr Cross. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled, the humble petition of citizens of Australia respectfully show: As a part of the world wide campaign by women in the final year of the United Nations' 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 Hollis. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth: We are concerned that the closure of the Enterprise Migrant Hostel will be detrimental to the long-term settlement prospects of migrants in Victoria as well as detrimental to Ethnic Communities who have settled in the Springvale area. In addition, the long-term development of commerce and industry in the area will be adversely affected. We urge the Government to reverse this decision. And your petitioners as in duty bound will ever pray. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens respectfully showeth that they are opposed to the proposals contained in the Government's White Paper for the reform of the Australian Tax System in so far as they relate to the imposition of further capital gains and wealth taxes. Your petitioners humbly pray that the House of Representatives in Parliament assembled will call upon the Government to reject any proposal to increase the burden of capital gains and wealth taxes on the Australian people. And your petitioners as in duty bound will ever pray. by Mr Nehl. To the Honourable the Speaker, and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That on 28 February 1985 the Senate passed a resolution that read: (i) that Australia, as a member of the United Nations should fulfil its obligation to promote and encourage respect of human rights and fundamental freedom, and should support the European Parliament's Resolution in respect of the Baltic States. (ii) that in order to do so the Australian Government should, on its own initiative, and by seeking the support of like-minded governments, bring the question of human rights and self-determination for the Baltic States before all appropriate forums of the United Nations, and especially before the United Nations Human Rights Commission, and, (iii) that the Department of Foreign Affairs should be directed to take all necessary steps in order to implement this Resolution. Your petitioners humbly pray that the members and the House of Representatives will concur with that resolution. And your petitioners as in duty bound will ever pray. by Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of certain concerned citizens of Australia. Respectfully showeth that the actions of trade unions have gone beyond their traditional goals of protecting workers' conditions and rates of pay and have reached the point where they are seriously affecting the economic health of the nation and its people. Your Petitioners therefore humbly pray: 1. That all Governments throughout Australia acknowledge and protect the Right to Work on behalf of all Australians; 2. That the total sovereignty of individual governments be recognised as a fundamental requirement of a workable, balanced Federal system of Government; 3. That all necessary steps be taken to protect the citizens of Australia from any compulsion, threat or intimidation to join any trade union; 4. That the supremacy of elected governments over the sectional interests of trade unions be recognised, and 5. That the provision of essential services be maintained, free from industrial disruption. 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. This petition of Australian residents shows that we strongly oppose the introduction of the `Australia Card' or any form of compulsory identity cards. We believe that the introduction of Identity cards will erode civil liberties; will create an increased risk of invasion of privacy; and will not result in any significant increase in Government revenue. We call on the Parliament to immediately reject any proposals for the introduction of compulsory Identity cards. And your petitioners as in duty bound will ever pray. by Mr Staples. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that: 1. They call on the House of Representatives and the Government of the Commonwealth to reject the recommendations of the Commonwealth Schools Commission contained in `Funding Policies for Australian Schools', concerning proposed increases in State aid to private schools and the proposed community standard for education funding. 2. They call on the House of Representatives and the Government of the Commonwealth to declare a three year moratorium (1985-1987) on increases in State aid to private schools and on grants for new private schools and for increased private school enrolments. 3. They call on the House of Representatives and the Government of the Commonwealth to re-affirm their primary obligation to government schools and to implement all 1983 ALP election promises for increased funding to government schools. And your petitioners as in duty bound will ever pray. by Mr Staples. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of citizens of New South Wales respectfully showeth: 1. Badgery's Creek and surrounding district are unsuitable sites for any major airport due to environmental, conservation and weather factors. 2. Many hundreds of people will be dislocated and many thousands more will be disturbed by the siting of an airport at Badgery's Creek and surrounding districts. 3. N.S.W. taxpayers cannot afford the cost of a second airport when at a minimum of cost upgrading and expansion of Kingsford Smith will satisfy the needs of N.S.W. air travellers in the foreseeable future. Your petitioners therefore humbly pray that your honourable House will not approve an airport at Badgery's Creek and surrounding districts. And your petitioners as in duty bound will ever pray. by Mr Grace. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: that the actions of trade unions have gone beyond their traditional goals of protecting workers conditions and rates of pay and have reached the point where they are seriously affecting the economic health of the nation and the people. Your petitioners therefore humbly pray: 1. That all Governments throughout Australia acknowledge and protect the Right to Work on behalf of all Australians. 2. That the total sovereignty of individual governments be recognised as a fundamental requirement of a workable, balanced Federal system of government. 3. That all necessary steps be taken to protect the citizens of Australia from any inducement, compulsion, threat or intimidation to join any trade union. 4. That there should be no preference in employment for people who are members of trade unions. 5. That the supremacy of elected governments over the sectional interests of trade unions be recognised, and 6. That the provision of essential services be maintained, free from industrial disruption. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: That the Hawke Socialist Government be called upon to remove the unjust and cruel Assets Test; That the Assets Test discriminates grossly against those people living on acreage blocks or in rural areas; That the introduction of the Government's grab for the assets of senior citizens is condemned as un-Australian; That the Government is requested to reconsider the Assets Test. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of the Federal Division of Fisher in Queensland respectfully showeth: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that `the existing Australian national flag remains sacrosanct from change'. And your petitioners as in duty bound will ever pray. by Mr Slipper. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of certain citizens of Queensland, Australia, respectfully showeth that we are totally opposed to any change in the Australian National Flag as declared in the Flags Act (1953). Your petitioners humbly pray that Parliament in its wisdom will take no action to change the Australian National Flag. And your petitioners, as in duty bound, will ever pray. by Dr Watson. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled, the humble petition of the undersigned citizens of South Australia showeth that: Without any warning and at the worst possible moment, the Federal Government has abandoned the pensioner patients in South Australia's Nursing Homes. These people are suffering undeserving hardship and trauma as a result of the Federal Government's decision to freeze the nursing home benefit levels in South Australia. The pensioner patients and those on fixed incomes now cannot expect any relief from recent significant fee increases approved by the Department of Community Services and which have coincided with the decision to freeze benefits. 80-85% of nursing home patients are pensioners and the majority are now required to pay in excess of their pension for their nursing care for the very first time. Some are paying over $5 per day on top of their pension. Many are looking for cheaper nursing care that does not exist. We request that the Federal Government: 1. alleviate the distress of South Australia's nursing home patients and their families by effective restoration of the principle that pensioner patients should not have to pay more than their pension for nursing home care 2. restore the review of the benefit rates in November 1985 3. resolve its concerns over health care costs with the South Australian Government rather than inflicting unnecessary suffering on nursing home patients. And your petitioners, as in duty bound, will ever pray. by Mr Wilson. Petitions received. The following Bills were returned from the Senate without amendment or requests: Northern Prawn Fishery Voluntary Adjustment Scheme Loan Guarantee Bill 1985 Foreign Fishing Boats Levy Amendment Bill 1985 Fisheries Agreements (Payments) Amendment Bill 1985 Qantas Airways Limited (Loan Guarantee) Bill 1985 Export Inspection Charges (Miscellaneous Amendments) Bill 1985 Export Inspection (Service Charge) Bill 1985 Export Inspection (Establishment Registration Charge) Bill 1985 States (Works and Housing) Assistance Bill 1985 Communications Legislation Amendment Bill 1985 Consideration resumed. Schedule 2. Department of Employment and Industrial Relations Proposed expenditure, $718,056,000. Department of Industry, Technology and Commerce Proposed expenditure, $300,512,000. Mr BURR(Lyons)(3.23) —I think it is appropriate that the Department of Employment and Industrial Relations and the Department of Industry, Technology and Commerce are being considered together during the Committee stage of our deliberations because clearly they are the two major factors that will impinge on the problems of unemployment in this country. I think we as a parliament should be addressing our minds to the problems of unemployment and ensuring that all the people of Australia can be profitably and productively engaged in work activities. I would like to make some comments on those matters this afternoon. Figures released yesterday by the Australian Bureau of Statistics have been given some currency in the media and have been accepted by the Minister for Employment and Industrial Relations (Mr Willis) as giving credence to the policies that are being pursued at the moment by the present Government. However, I cannot accept that we can look at the figures produced by the Bureau of statistics and claim that they are a credible record of unemployment in this country. They confirm that a total of 592,800 people are presently looking for work. I am not going to label political blame because I do not think it is fair and reasonable that we should do that. We as a parliament all have to say that our country has a very serious problem with unemployment and finding profitable and productive employment for our people. We as a country all have to take on board the responsibility of looking for policies that will overcome that. I do not think this is a matter from which we should aim to try to claim political mileage or score political points. It is a community and national problem of major dimensions and we should look at it in that light. However, we should not allow the Minister for Employment and Industrial Relations or the present Government to try to claim brownie points of success from the figures which were produced yesterday by the Bureau of Statistics. Clearly, we cannot look at a figure of 592,000 or 8.1 per cent of our people as being unemployed and claim that that is a success. That is my criticism of the Government-not the fact that we should be claiming some political milage on this side of the House but that the present Minister and the present Government are trying to claim that the figures produced are a success on the part of their Government. Clearly they are not. Clearly it is a disgrace that 8.1 per cent of our people are unemployed. Yet this Parliament and the wit of man are not sufficient to be able to provide productive employment for our people. That is a disgrace to our country. What is more, it is a disgrace for the Government to claim that it has had success in this area. The figures produced in the course of the Budget presentation underline further the serious problem we have in this country and the band-aid policies that are being produced by the Government to try to hide the seriousness of that problem. Mr Deputy Chairman, in calling on these departments for debate, you indicated the extent to which money is being spent on band-aid measures. I want to remind the Committee of the extent to which public money is being expended on those band-aid measures. I remind honourable gentlemen opposite that this year on training schemes alone we are intending to spend $1,103m. I do not criticise that. Training, in itself, is good. I think it is a darn good thing if we are training people to learn new skills and to keep up with modern technology in order to be able to advance the capacity of this country to compete on the international markets. I give the present Government my full support in that and I do not criticise that. What I do criticise, though, is the band-aid type of spending. I refer to the spending on schemes such as the community youth support scheme and the job creation and employment assistance scheme, which is receiving $446m of public money. They are band-aid schemes. Community based special groups have received $114m. The placement of delivery and information services has cost $156m. Good lord, I do not know what they are but, clearly, they are simply band-aid schemes to try to deceive the public as to how serious the employment situation is in Australia. Another scheme is the community employment program. I am sure that all honourable members have had experience with the community employment program because constantly we have proposals coming through our electorate offices. It is proposed to spend $291.4m this year on the community employment program. So, clearly, the Government is spending many millions of dollars of public money to try to provide band-aid schemes which hide the seriousness of unemployment. We can look at the other side of the coin and consider how much money is being spent to support those people who cannot be usefully and productively engaged in business and industry. This year unemployment benefits amounting to $2,989m, just on $3 billion, of taxpayers' money is being expended to support unemployed unproductive people. Clearly, if we could find productive and useful employment for these people would we be not only saving substantially on the amount of taxpayers' money that is being expended but also adding enormously to the productive capacity of the country. The greatest deceit is in the area of youth unemployment. It is the young unemployed who are being the most seriously affected because we are not giving them a chance in the world. On the latest figures that have been produced by the Australian Bureau of Statistics 58,600 people in the 15 to 19-year-old age group are looking for their first job. They still have not been able to find a place in our work force. It is an absolute disgrace. The Opposition has been putting forward policies that state that if we are to give these young people a chance in the world it is imperative that there be some alleviation of their wages. I understand that the Government does not accept that proposition. However, the Opposition holds rigidly to the view that if employers are to choose young people to join their work force the young people will have a much better chance if their wages are commensurate with their training, experience and degree of maturity. This would give employers much more encouragement and incentive to take on young people. I do not think we should be draconian and say that we want to slash youth wages, that we want sweat shop labour or anything like that. That is crazy. What we have to do in this country is recognise that young people are immature and inexperienced and there has to be a training period in order for them to reach the degree of productivity that employers are seeking from fully paid employees. We should be talking about a training wage for our young people. I well remember when I first joined the work force. The amount of the wage paid to young people varied from 16 years upwards and a person did not receive a full adult wage until he reached the age of 21 years. That reflected the degree of training and maturity of young people. I believe very strongly that we need to go back to the type of system that recognises that young people have to be trained and that they are gathering maturity as they advance in years. Our wage system should reflect those facts. Until we have a system that reflects the degree of training and maturity of our young people they will continue to be precluded from employment in this country. I strongly urge the Government to accept the common sense of that approach so that it can be reflected now-not when we are returned to government-in the policies pursued by the Government so that more young people will have the opportunity of entering the work force and gaining experience. Progress reported. Bill presented by Mr Lionel Bowen, and read a first time. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(3.34) —I move: That the Bill be now read a second time. I am introducing this Bill pursuant to the Commonwealth's obligations under the co-operative companies and securities scheme. A detailed description of the provisions of the Bill is contained in the explanatory memorandum which has been circulated. Co-operative Companies and Securities Scheme The formal agreement executed by the Commonwealth and all the States on 22 December 1978 provides the framework for a co-operative Commonwealth-State scheme for a uniform system of law and administration regulating companies and the securities industry. The scheme covers the relevant law operating in the six States and the Australian Capital Territory. Negotiations are now in an advanced stage with the Northern Territory Government and I expect that the Northern Territory will be joining the co-operative scheme in the near future. In accordance with the formal agreement, this legislation has been agreed to by the Ministerial Council for Companies and Securities. If passed by this Parliament, it will have the effect of automatically amending the corresponding State companies and securities legislation. Outline of Proposals The Ministerial Council released the first exposure draft of this Bill for public comment in June 1984. Following its consideration of the numerous public comments, the Ministerial Council directed that a number of changes be made to the Bill and a second exposure draft was made available in June of this year. Again, many valuable comments were made in the public submissions. A number of seminars have also been held throughout the country at which earlier versions of the Bill have been analysed in great detail. The Bill, therefore, is the result of a good deal of consultation with those who will be affected by it. I draw attention to some of the more important proposals contained in the Bill. Conditions Attached to Take-over Offers The Bill contains amendments to the Companies (Acquisitions of Shares) Act dealing with conditions that may be included in takeover offers. The thrust of the proposed amendments is to enable the National Companies and Securities Commission to refuse to register offers in certain limited situations, and to prevent a bidder from acquiring shares outside a take over offer-such as on the stock market-if the bid contains a minimum acceptance condition. These proposals are the essence of the compromise that I reached with the States when the matter was discussed at the last Ministerial Council meeting. I regard the very restrictive circumstances in which the Commission may refuse to register a proposed offer as a reasonable compromise and one that should be acceptable to the commercial community. The Government remains firmly of the view that the best judge of a takeover offer is the marketplace and the regulators should have minimal involvement in determining the merits of a takeover offer. These amendments enable the Commission to refuse to register a proposed offer where it contains prescribed conditions that depend on the bidder's opinion-so called `subjective conditions'-or depend on the happening of an event that is within the bidder's sole control. In addition, the amendments provide that once a takeover offer has been made, it cannot be withdrawn without consent of the Commission. Another amendment is designed to ensure that we do not have a repeat of the situation in the Johns Perry case in which an offeror, after waiving a condition, was able to retain the shares obtained even though the condition had not been fulfilled. Retirement Villages Many of the public submissions received on the first exposure draft of the Bill were opposed to the regulation of rights to participate in retirement village schemes under companies and securities legislation. The Ministerial Council has accepted that this legislation is not the most appropriate mechanism for dealing with this issue. From 1 July 1987, retirement villages will not be subject to regulation under the co-operative scheme, and it will be left to the Government of each State and the Commonwealth to determine the most appropriate way of addressing the various issues arising in respect of retirement villages, of which investor protection issues are merely one element. In the interim, the National Companies and Securities Commission has delegated all its powers concerning retirement villages to the State and Territory corporate affairs commissions. Each commission will administer the prescribed interest provisions in their application to retirement villages in the manner most appropriate to the needs of the particular State or Territory. So far as the Commonwealth's responsibilities are concerned, the Australian Capital Territory Corporate Affairs Commission will be completely exempting retirement villages in the Australian Capital Territory from the companies and securities provisions. Use of Extrinsic Material in Interpretation of Scheme Legislation The Acts Interpretation Act 1901 was amended last year to allow for the use of extrinsic material in the interpretation of an Act. These amendments were designed to facilitate giving effect to the intentions of the Parliament when Acts of the Parliament fall to be interpreted. The new section 15AB of the Acts Interpretation Act provides that if materials not forming part of the Act are capable of assisting in the ascertainment of the meaning of a provision of the Act, consideration may be given to that material to confirm the ordinary meaning of an Act. The amendments contained in this Bill propose that the Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980 be amended in line with the recent amendments to the Acts Interpretation Act. Recommendation Concerning Investments Concern has been expressed that some investment advisers may be paying more heed to matters such as the size of their likely commissions than to the financial situation and particular needs of their clients when recommending particular investments. Whilst this is obviously not true across the whole spectrum of the investment advice industry, it is clear that all those giving advice should have regard to their clients particular needs. Accordingly, it is proposed to require that dealers, investment advisers or their representatives have a reasonable basis for making any recommendation with respect to securities to a person who may reasonably be expected to rely on the recommendation. Liability of Directors of Trading Trusts Currently persons contracting with a trustee, whether an individual or a corporation, are entitled to be subrogated to the trustee's right of indemnity out of the trust assets to meet liabilities properly incurred. However if the trustee acts in breach of trust or in a manner which is not authorised by the terms of the trust, the trustee's right of indemnity, and therefore the creditor's right of subrogation, is lost. The problem this creates for creditors has been exacerbated by the widespread use of business structures involving a nominally capitalised corporate trustee to carry on business on behalf of a trust, together with other refinements, such as the careful siphoning of funds into the trust business. In such cases the creditor's primary right to sue the corporate trustee for the debt may well be worthless. I think there is a general recognition in the business community that the legal system cannot tolerate the continued use of artificial legal contrivances which result in the deliberate avoidance of liabilities legitimately owed to other persons. It is proposed to amend the Companies Act to impose personal liability on directors of companies acting as trustee when a debt has been incurred but the trustee company is not entitled to be indemnified out of the assets of the trust. In keeping with the broad principle that the directors of a trustee company should, in such circumstances, face a liability no more onerous than that borne by co-trustees who are natural persons, it is proposed to provide an exemption for `innocent directors' from the liability imposed by the new provisions. The explanatory memorandum gives more detail as to the manner in which `innocent directors' are defined. Priority of Debts Owing to Employees Where a company is being wound up, the Companies Act confers a priority under section 441 for the payment of certain debts over outstanding amounts owed to other unsecured creditors. The preferences allowed by the Act include amounts for employee's wages, presently limited to $2,000, and leave of absence, which is not subject to any monetary limit. However, the Act does not include any amount which might be due to an employee as a retrenchment payment in consequence of the termination of his employment. These limitations operate harshly as against employees, particularly those employees who have forgone wages for a considerable period in the hope that the company might be able to trade its way out of difficulties, only to see it go into receivership or liquidation. Furthermore, the absence of any present entitlement to a priority for redundancy payments is anomolous. As an incident of employment it is indistinguishable from the priority already granted in respect of other employee entitlements such as accrued leave. Accordingly it is proposed to amend the Companies Act to remove the upper limit on the preference for employee wages and to allow a priority for full retrenchment payments to which the employee is otherwise entitled under an industrial award. One class of employee that will, however, not gain the benefit of these amendments is that of directors who may be employed in another capacity with the company. It is important that directors not be provided with any incentive to allow a company to continue trading in an insolvent position in the secure belief that their personal entitlements will be protected. The directors, as controllers of the company, are also in a unique position, not shared by other employees, of being able to largely determine their own levels of remuneration and other entitlements and to direct such payments to their relations. Therefore, for director employees, their spouses and relatives, the existing limits will remain on the priority for wages, an upper limit of $1,500 will be imposed for the priority for leave of absence, and they will not enjoy priority in respect of any retrenchment entitlements they may otherwise have. Financial and Regulatory Impact Statement The changes made by this Bill should not result in any additional costs to the National Companies and Securities Commission, and there should not be any other financial impact on Government revenues and expenditure. Some proposals in the Bill are of a clearly de-regulatory nature and will involve a reduction in business costs. One example is the proposal that the promotion of interests in retirement villages no longer be subject to the prospectus and trust deed requirements of companies and securities legislation. Other proposals will involve some increased costs on the commercial community which the Ministerial Council has assessed as being necessary to satisfy important public interest considerations. For example, the imposition of personal liability on directors of trading trusts in situations where they have acted in breach of trust is necessary to ensure that the legitimate interests of creditors are not defeated. The Government commends this Bill to the House. Debate (on motion by Mr Spender) adjourned. Madam DEPUTY SPEAKER(Mrs Child) —Order! It being 3.45 p.m., I propose the question: That the House do now adjourn. Mr Lionel Bowen-Madam Deputy Speaker, I require the question to be put forthwith without debate. Question resolved in the negative. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS(Fremantle-Minister for Trade)(3.46) —I move: That the Bill be now read a second time. This Bill establishes a new statutory authority, the Australian Trade Commission, with effect from 1 January 1986, or soon thereafter. One single statutory authority will replace the Export Finance and Insurance Corporation, the Australian Overseas Projects Corporation, the Export Development Grants Board, the Trade Commissioner Service and the marketing and promotion areas of the Department of Trade. The EFIC and AOPC Acts and the administrative provisions of the Export Market Development Grants Act will accordingly be repealed. The Department of Trade in the continuing performance of its trade policy and overseas trade relations roles will administer a modified form of the Trade Commissioners Act. Under this Bill the Australian Trade Commission is given prime responsibility for the development and implementation of programs for the encouragement, facilitation and promotion of the export of Australian goods and services. To achieve this goal the Bill provides the Commission with the powers of the existing Acts which established EFIC, AOPC and EDGB and with a number of new and expanded powers. I will elaborate on these shortly. The establishment of the Australian Trade Commission must be viewed in the context of this Government's record of improving the efficiency of public bodies. In the latter half of 1984 it introduced what is believed to be the most significant and wide ranging reforms to the Australian Public Service since Federation. The principles underlying those reforms are being progressively carried into other areas of government activity to make them more effective. It is essential that in the vital area of promotion and encouragement of exports, government authorities operate at maximum levels of efficiency. The Government believes that by strengthening and reforming its own institutions it can better pursue its aim of creating a more internationally competitive and export oriented Australian economy, particularly in the manufacturing and service sectors. It considers that the interaction between the public and private sectors is such that the efficiency and effectiveness of one sector is highly dependent on the efficiency and effectiveness of the other. Only by first putting its own house in order can the Government expect a higher performance from the private sector. In establishing the Commission, the Government is also responding to the evident need for new and constructive moves to meet the major trading challenges which face this country. Honourable members will recall that in my statement to the House on 13 May I drew particular attention to the serious deterioration in Australia's trading performance. As a world exporter, Australia's ranking has slipped from eighth to twenty-third over the last 30 years. Our share of the world export market has dropped from 2.6 per cent to 1.2 per cent and the international purchasing power of our exports has shown weak growth over the last 30 years by comparison with other major trading nations and actually declined in the decade to 1983. We have also lost ground in most major overseas markets including Japan, the Association of South East Asian Nations and the Western Pacific. The problems facing Australia in its trading situation have been brought into sharp focus this financial year by the general weakening of our current account since the beginning of the 1980s and the related build-up in our international indebtedness. For 1984-85 the current account deficit reached $10.2 billion, almost 40 per cent above its level of $7.4 billion in 1983-84. Overall in the 1980's our current account deficit has averaged around 4.5 per cent of our gross domestic product, well above the long term average of the 1960's and 1970's of 2.5 per cent. This succession of large current account deficits has been due to a number of complex factors and has contributed to the rapid growth in Australia's net external indebtedness which is estimated to have increased from $7.3 billion in June 1980-6.3 per cent of GDP-to $52.0 billion-25.1 per cent of GDP-in June 1985. Most of this external debt has been incurred by the private sector. The Treasury estimates that servicing this debt, public and private, absorbed about 34 per cent of the volume of our exports in 1984-85. The deterioration in Australia's current account position and increasing indebtedness have contributed to the depreciation of the Australian dollar since the beginning of 1985. The change in sentiment towards the currency no doubt reflects, in part, changed international perceptions about Australia's trade performance. The depreciation of the Australian dollar will help to improve Australia's trade and current account positions over time but it alone will not redress the structural weaknesses in Australia's trading pattern, which have become increasingly apparent over recent decades. Australia's poor performance can be ascribed to many factors. Two stand out-the composition of our exports and the inward-looking nature of manufacturing and service industries. Over the past three decades world demand for agricultural and mineral commodities, which account for some 75 per cent of our exports, has grown more slowly than the demand for manufactures and services, for a variety of reasons, these include adverse terms of trade, sluggish world demand and escalating protectionism in the major developed countries. To compound these difficulties, Australia's manufacturing industry has been ill equipped to share in the fastest growing area of world trade. While manufactures exports have increased their share of world trade from 53 per cent to 60 per cent over the past twenty years, manufactures share of Australia's export mix has remained relatively static at around 20 per cent. Australia also, so far, has been slow to capitalise on the rapidly expanding trade in services. It was Australia's deteriorating position in world trade which prompted my predecessor, the Hon. Lionel Bowen, to establish the National Export Marketing Strategy Panel, chaired by Mr Bill Ferris, Group Managing Director of Barlow Marine Limited and an active exporter. The Panel considered strategies for improving Australia's export performance in the manufacturing and service sectors and its report, which was presented to me earlier this year, contained proposals on a range of policies by which manufactures and services exports could be assisted, including export incentives, overseas aid, government purchasing, offsets and export finance. It also supported the efforts by the Government to direct its marketing resources to those industries and markets with the potential to yield the best returns. I take this opportunity to thank Mr Ferris and his fellow Panel members for the important contribution they have made. The Government acknowledges the significant role which primary products have played and will continue to play in Australia's economic development. The Government is also conscious of its responsibility to do its utmost to break down the barriers and distortions which are so disruptive to Australia's commodities trade. However, it is all too evident that any progress in this area will be painfully slow. These then were the factors which led the Government to undertake a major review of all the resources available in the Trade portfolio for promoting and encouraging Australian exports and exporters. Arising from this review the Government concluded that more efficient and vigorous export marketing efforts could be achieved by rationalising and consolidating its various export assistance agencies into one body, the Australian Trade Commission. In announcing the Government's decision on 23 April, I indicated that the Commission would act as a one-stop trade shop, providing exporters with a full range of advice and packages on assistance drawing all the Government's resources, including the promotion and publicity activities currently undertaken by the Department of Trade. This Bill, however, represents a good deal more than simply an administrative streamlining by the Government. By establishing the Australian Trade Commission as a body corporate, the Bill will enable the Commission to have sufficient flexibility and independence of management to respond quickly to changes in international market conditions. It will also be a source of valuable advice for the Government and provide an early warning mechanism on international changes and trends affecting Australia's trade. Since the Commission will have the power to charge for some services at present provided free, it will also more easily be able to identify those services which are of benefit to exporters and those regarded as of little value. The Government holds strongly to the view that very significant benefits will come from the guidance of a board of directors drawn principally from the private sector. Indeed, I am heartened by the very favourable reception that the interim board of the Commission, which I announced recently, has received. The business qualities of that board indicate the seriousness with which the Government is going about this task of putting the activities of the Trade portfolio on a more commercially oriented basis. The Bill provides that the board seek the overall guidance and direction of the Minister for Trade on major issues but on most matters of policy and day to day matters the board will have a free hand. In this regard, the Minister is specifically excluded from giving the Commission directions as to whether it shall or shall not enter into any particular contract, agreement or arrangement. The appointment of suitably qualified and commercially experienced members of the board will, therefore, be crucial to the success of the Commission. The establishment of a new organisation of the size and complexity of the Australian Trade Commission involves a great amount of planning and preparation. The formative stage of the Commission is now being guided by the interim board, which will have the assistance of a departmental team in drawing up the objectives, an appropriate organisational structure and an operational plan for the Commission. The board also has been asked to recommend candidates for selection as managing director and deputy managing director and advise on the nature and composition of the first Australian Trade Commission Board. To ensure that the Commission is established in the most professional manner I have approved the appointment of a number of consultants. In particular, advice is being sought on appropriate financial management information systems, organisational structures, corporate planning and legal issues. The advice of professional consultants interacting with a highly competent and experienced interim board is, I consider, an essential ingredient for a successful and professional organisation. Extensive consultations have been held with a broad cross-section of business leaders and major industry organisations on the proposed structure and activities of the Commission. The trade union movement, through the Australian Council of Trade Unions, also has had the opportunity to comment on the proposals on the establishment of the Commission, including staffing aspects. In addition, officers of the Department of Trade have held discussions with State government officials on the likely implications for the Commonwealth-State trade promotion program and other aspects of Commonwealth-State trade co-operation. I will now outline in more detail the main provisions of the Bill, particularly as they relate to the structure, functions, management and staffing arrangement of the Commission. As I indicated earlier, the Bill provides that the Commission will assume the powers, functions and responsibilities of the three statutory bodies in the trade portfolio-EFIC, AOPC, and EDGB-as well as the Trade Commissioner Service. It will also encompass those areas of the Department of Trade, including the regional offices, which are concerned with the marketing and promotion of Australian exports. Staff positions will total some 1400, of which around 370 are in Canberra, 580 overseas-including both Australian-based trade commissioners and locally engaged staff-and the remaining 450 include the regional offices of the Department of Trade and the EDGB, and the staff of EFIC and the AOPC. Final decisions on the organisational structure to incorporate the various elements into the Commission will be the responsibility of the Australian Trade Commission Board. However, based on discussions with the interim board and the advice of outside management consultants, it is proposed that initially the Commission will have a number of operating groups covering the functions of export finance and insurance, market assistance, overseas projects, export development, operations and corporate services. The export finance and insurance group will handle finance, insurance and related matters; the market assistance group will primarily assume the functions presently undertaken by the Export Development Grants Board; the overseas projects group will be responsible for the former activities of the Australian Overseas Projects Corporation, augmented by some of the activities undertaken by the Department of Trade in the projects area; the export development group will be responsible for the development and review of programs for encouragement, facilitation and promotion of exports; while the operations group will be responsible for the implementation of those programs. The corporate services group will provide for common management and co-ordination services. The Government has decided that the headquarters of the Commission will be in Canberra but the export finance and insurance and overseas projects groups will be located in Sydney, the present location of both EFIC and AOPC. Regional offices will operate in State centres. While the disposition of commission staff will become a matter primarily for the Board to determine, it is envisaged that the only staff whose location could be affected are about 30 officers of the trade publicity section in Melbourne who will be transferred to Canberra as part of a rationalisation of the promotion and publicity functions of the Commission. The House will be aware of the value which the Australian exporting community places on the services available from the Export Finance and Insurance Corporation-EFIC. Successive Labor governments have been responsible for changes to EFIC's operations so that Australian exporters might have access to support facilities comparable to those of their competitors. The 1974 restructuring of the Corporation by the Whitlam Labor Government introduced an export financing function to facilitate the provision of finance for medium and long term credit sales of machinery, capital equipment and services. This facility has proved highly beneficial to the Australian capital goods sector and since its inception over $600m in loans have been signed, supporting contracts valued significantly in excess of this figure. Further improvements to EFIC's facilities have recently been instituted by this Government. They include foreign currency options for the finance facility, the availability of 100 per cent cover against political risks and a pre-shipment finance guarantee facility. These evolutionary changes and an increasingly uncertain and competitive trading environment have seen a rapid increase in the value of Australian exports supported by the Corporation. In the year ended June 1985 the total value of exports supported was a record $3,200m, a fourfold increase over the past decade. EFIC has paid substantial claims to, or on behalf of, exporters over this period, but its income has been sufficient to meet all claims and build adequate reserves. The Government expects this situation to continue within the Australian Trade Commission. The integration of EFIC's existing functions into the Australian Trade Commission will not diminish in any way the Corporation's operational efficiency or the specialist services it provides to Australian exporters. The Commission will retain `Export Finance and Insurance Corporation' as the name under which it may conduct its export finance and insurance business, and separate accounts and reserves will be maintained for the export finance and insurance functions and liabilities. The expansion and rationalisation of EFIC's existing functions provided for in this Bill, together with the wider commercial environment of the Commission's activities, will provide the Government with a greater ability and flexibility to tailor its assistance in response to the rapidly changing needs of Australian exporters. Specifically, this Bill will allow the Commission to assume greater capabilities in the area of financing, bonding and financial advice and also provide for the Commission to play a greater role in the commercial application of aid funds. It will be easier for the Commission to introduce new or modified facilities as the need arises. I should add that such facilities have been, and continue to be, designed to complement the extensive range of services offered by other institutions, such as banks and insurance houses, which assist the exporting community. In 1978 the then Government established the Australian Overseas Projects Corporation and the Bill provides for the Commission to assume the AOPC's existing functions to assist Australian industry compete for overseas development project contracts. Against the background of only limited success and losses of some $2m accumulated over the past seven years the Government has looked closely at the future role of an AOPC type operation. In so doing it has had the benefit of a review undertaken by the AOPC Board. While AOPC has not been a profitable undertaking it has provided assistance to Australian organisations to gain business, totalling around $270m, which would, in all likelihood, not have occurred without its support. Clearly AOPC has fulfilled a useful trade promotion role and industry has indicated that there is a continuing need for this type of government support. Since its establishment the AOPC has operated under various constraints that have hindered its activities. These constraints will now be removed and the Commission will in consequence be able to take a more active role assisting Australian firms and organisations to secure overseas contracts. The decision-making authority on individual contracts will rest with the Commission. The opportunity also is being taken to make practical modifications in relation to acquiring and selling goods associated with overseas development projects and to the nature of business relationships which the Commission may need to form when undertaking such projects. The thrust of the changes is in accord with the considered views of the present Board of the AOPC. These changes are intended to enhance the Commission's ability to improve Australia's performance in relation to participation in overseas development projects. I would stress that the Commission's involvement in overseas projects will be solely in conjunction with and in support of Australian firms. Beyond the area of overseas projects, the Commission will be able to acquire and dispose of goods only in relation to its own needs or in association with Australian organisations. The Board will make its own assessment of any needs which may arise and ensure that any decision made is a commercial one. This recognises the Commission's potential to mobilise its overseas and other resources in securing trading opportunities on behalf of Australian businesses. The Commission will also administer export market development assistance schemes. This will involve responsibility for the administration of the export market development grants scheme, a role which has been performed by the Export Development Grants Board since June 1974. The Government has decided that the existing Export Market Development Grants Act should be retained with only the administrative section being repealed to transfer the function to the Australian Trade Commission. The House will recall that legislation to amend the scheme to make it more cost-effective, to eliminate abuse, and to restrain government spending in this area was passed by the House earlier in this session. In addition, the Commission will monitor the effectiveness of the EMDG scheme or any future scheme, and recommend such measures as may be required to meet the trade facilitation objectives of the Commission, including the introduction of new schemes, consistent with Australia's international obligations, to encourage Australian exporters to investigate and develop overseas markets. The Commission will be responsible for the role currently undertaken by the Department of Trade in overseas marketing, promotion and publicity. Trade Commission officers serving in overseas posts will represent and service the wider activities of the Commission. The Commission will build on the work already commenced by the Department of Trade in identifying those industries in Australia which have export capability or export potential and also those markets requiring and justifying special efforts. In view of the nature of most of the functions of the Commission which I have outlined, it will be neither feasible nor appropriate outside the insurance area to recover a significant proportion of the Commission's costs. An annual appropriation will, therefore, be required from the Budget. In 1985-86 the amount will essentially represent a transfer of funds from the Department of Trade. For 1986-87 and subsequent years in respect of property and overseas common services, funds from the Department of Foreign Affairs and the Department of Local Government and Administrative Services will be transferred to the Commission. Apart from the cost of purchasing commercial insurance, the establishment of the Commission will be achieved with no increase in net government outlays. The estimated net expenditure for the Department of Trade in 1985-86 is $229.7m and of that amount an estimated $130.7m will be allocated to the Australian Trade Commission for the six-month period January to June 1986, taking account of the budgeted revenue from the sale of the Commission's services, estimated at $2.5m. The estimated net expenditure for the Commission in a full financial year will be of the order of $200m. The Commission's commercial obligations will be backed by an unqualified government guarantee. In addition to the normal requirement for statutory authorities to report annually to the Parliament, the Australian Trade Commission will be required each year to prepare a three-year corporate plan setting out details of its objectives, policies and strategies. An essential aspect of the corporate plan will be the identification of staff and other resource implications of the Commission's proposed objectives and strategies. The corporate plan and any variations to it, will require the approval of the Minister. As mentioned earlier, the Australian Trade Commission will be managed by a board of a commercial character which will comprise a chairperson, a deputy chairperson, a managing director, a Government member and not fewer than five nor more than seven other members. The members of the Board will be appointed by the Minister for Trade. The Managing Director and Deputy Managing Director will be appointed by the Minister for Trade, having regard to the views of the Board. The remuneration and allowances for these appointments will be determined by the Remuneration Tribunal. Staff of the Commission will be employed under terms and conditions determined by the Commission with the approval of the Public Service Board. I will be directing the Commission to ensure that terms and conditions of employment will be no less favourable than those currently in force in the Australian Public Service. The long service leave and compensation Acts will apply and the necessary regulations made in respect of the application of the CE(RR), maternity leave and superannuation Acts. The principles of industrial democracy will be followed by the Commission. I will be instructing the Board of the Commission to commence discussions with Commission staff with the view to implementing agreed and appropriate industrial democracy practices. Similarly, the Commission will be expected to follow an equal employment opportunity program. Consequent upon the establishment of the Commission, the Department of Trade will be left with a staff of about 490 positions and an annual appropriation of about $22m. The Department will concentrate its resources on matters of trade policy and broad strategic issues, including those relating to market access, export support policies, multilateral and bilateral negotiations and government-to-government trade relations. It will also play an important co-ordinating role in relation to the activities of various Commonwealth Departments and authorities which impinge on our external trade with the object of developing a more cohesive approach to our international trade negotiations. The Government has decided that the Trade Commissioners Act will be retained to, among other things, provide a basis for some 20 overseas trade policy positions that will remain with the Department of Trade. The Act will, however, be amended so as to become the `Trade Representatives Act'. In the performance of its functions the Department will have a close and continuing working relationship with the Commission. This will particularly be the case overseas where Trade Commission officers will continue to undertake a trade policy role in countries where the Department has no representation. The Department will, of course, advise the Minister on policy issues arising from the operation of the Commission. Work is presently proceeding on a new structure for the Department of Trade and I will announce the revised arrangements when that work is complete. The Government recognises that Australia's export performance will not be lifted by a single measure but by the integration of all its trade, industry and economic policies in support of the private and public sectors. Since coming to office this Government has moved decisively to develop a more cohesive set of policies, aimed at creating an environment which is conducive to the development of internationally competitive and export oriented Australian industries. The Government's record speaks for itself; in less than three years it has turned the Australian economy around from deep recession to a rate of growth which is one of the highest in the Western world. The prices and incomes accord which the Government negotiated with the unions in 1983 has played a key part by contributing to the decline in the inflation rate, rapid growth, and consequently the dramatic decrease in real unit labour costs. The recent historic renewal of the accord has laid the basis for sustained economic growth and the preservation of the competitive advantage which our exporters have gained through the depreciation of the Australian dollar. In this climate the Government has created some 487,000 new jobs. Corporate profitability has been restored to historically normal levels and there has been a strong increase in investment. Industrial disputes are at their lowest levels for 17 years, considerably enhancing our reputation for reliability of supply. In industry policy the Government has, in close consultation with industry and unions, implemented a range of measures designed to assist and rejuvenate Australian industry. The Government's successful deregulation of important sectors has given a boost to the efficiency and dynamism of the economy and has provided a necessary stimulus to the export sector. There is still much to be done to meet the challenges ahead. I believe however that the measures taken by the Government over the past 2 1/2 years, together with those in train such as the establishment of the Australian Trade Commission, have firmly placed Australia on course to an improved export performance, continued economic growth and an enhancement in the living standards for all Australians. I commend this Bill to the House. Debate (on motion by Mr Moore) adjourned. Mr HAWKE(Wills-Prime Minister) —I seek leave to make a very brief statement. Leave granted. Mr HAWKE —During Question Time, in answering a question from the honourable member for North Sydney (Mr Spender), I commenced my answer by speaking in a manner which I believe, on reflection, may have been offensive to the honourable member. On immediate reflection I realised this. I have apologised to the honourable member. I believe it appropriate that I should do so in the House. Mr SPEAKER —The honourable member for North Sydney also seeks the indulgence of the Chair. Mr SPENDER(North Sydney) —Yes, Mr Speaker. I entirely accept what the Prime Minister (Mr Hawke) said. It does him credit that he comes in here to say what he said. I must say to him that he is not the first person to have attracted some humour- Mr SPEAKER —Order! I will not allow the honourable member to repeat the remarks of a former member for Casey. Mr SPENDER —I cannot recall that, I am sorry. Mr SPEAKER —I will remind the honourable member of it later. Bill presented by Mr Dawkins, and read a first time. Mr DAWKINS(Fremantle-Minister for Trade)(4.13) —I move: That the Bill be now read a second time. This Bill is complementary to the Australian Trade Commission Bill 1985 which I introduced earlier. Its purposes are essentially threefold: Firstly, to repeal the existing legislation relating to the Export Finance and Insurance Corporation and the Australian Overseas Projects Corporation; secondly, to effect consequential amendments to a number of Acts, principally the Export Market Development Grants Act 1974, and the Trade Commissioners Act 1933; and thirdly, to provide for transitional arrangements. I have already outlined in some detail the reasons behind the Government's decision to establish the Australian Trade Commission and the consequent need to repeal and amend existing legislation. I propose, therefore, to limit myself on this occasion to a few brief comments. The Australian Trade Commission will initially be staffed by members of the organisations now carrying out the functions to be transferred to the Commission. Of some 1,400 staff positions being transferred to the Commission, approximately 17 per cent will come from the Department of Trade in Canberra, 20 per cent from the Department's regional offices, 13 per cent from Australian overseas office staff including trade commissioner staff and 29 per cent from overseas locally engaged staff. The Export Finance and Insurance Corporation, the Export Development Grants Board and the Australian Overseas Projects Corporation will provide some 97, 76 and 19 staff respectively. The transition legislation provides that the terms and conditions of staff being transferred to the Commission will be those existing at the time of transfer, so providing continuity pending determination of terms and conditions to apply in the Commission. I have already indicated that I will be directing the Commission to ensure that the terms and conditions of employment will be no less favourable than those currently in force in the Australian Public Service. The Bill provides for the special appropriation of $143.2m from Consolidated Revenue to enable the Commission to operate for the January-June 1986 period. This amount includes $88.5m for the purposes of making grants under the Export Market Development Grants Act and $14.3m for the export finance facility. This provision of funds to the Commission was not anticipated in the annual appropriations. It essentially represents a transfer of funds from the Department of Trade to the Commission and, of course, involves no further expenditure. The Bill provides for the Minister for Finance to withdraw from the Department of Trade such amounts as have been appropriated in Appropriation Act (No. 1) and (No. 2) in respect of those activities transferred to the Commission. This is estimated at $130.7m. The balance of the $143m is essentially `Budget neutral' and will not add to net government outlays. It covers those costs relating to fees for services provided by departments of state, such as payroll services and the provision of common services overseas. These funds will be appropriated to the commission and will be offset exactly by an equivalent payment to a department of state for the services provided. Finally, I wish to clarify for honourable members that the amendments to the Export Market Development Grants Act in this Bill are essentially to transfer the authority for administering the Act from the Export Development Grants Board to the Commission. Honourable members will recall that substantial changes were recently passed by Parliament to make the export market development grants scheme more efficient and cost effective. No further changes to the EMDG scheme are proposed in this Bill. I commend this Bill to the house. Debate (on motion by Mr Moore) adjourned. Motion (by Mr Dawkins) proposed: That the House do now adjourn. Mr SHIPTON(Higgins)(4.17) —I wish to draw the attention of the House to the bogus Nunawading how-to-vote card affair. The Victorian Premier, John Cain, has admitted that the Australian Labor Party's Victorian Secretary, Peter Batchelor, made an error of judgment over the Labor Party's scandalous behaviour in the Nunawading by-election-- Mr Maher —I take a point of order, Mr Speaker. My reading of the newspapers indicates that this matter is sub judice. There are police investigations into it and I would asume that charges have been laid. Mr SPEAKER —Order! I understand the point of order raised by the honourable member for Lowe, but I doubt that any charges have been laid. Mr SHIPTON —I understand the honourable member's sensitivity but the Victorian State Secretary has admitted that he and other Party members helped to organise and distribute the bogus cards, which are subject, as the honourable member says, to a police investigation. The State Secretary has admitted that he personally paid for some of the printing costs. The question is, who paid for the rest? The Victorian Premier cannot distance himself and isolate Mr Batchelor by saying that Mr Batchelor was on a frolic of his own. He was, and is, the State Secretary of the Australian Labor Party and Mr Cain is the leader of that Party that went to the polls. The third man who might be able to throw light on the whole scandal is none other than a member of this House, the honourable member for Melbourne (Mr Hand), who is the Victorian President of the ALP. The honourable member has been recorded as admitting on the PM program that the ALP's involvement in the bogus card was a `hindsight' and a mistake in terms of judgment. The honourable member has not said, and I ask him to do so, whether he was involved in this hindsight. I believe that the honourable member for Melbourne has a responsibility to answer a number of questions. When did he first know about the bogus cards? Was he a party to the planning, preparation and printing of the bogus cards as State President? Mr Hollis —I raise a point of order. Mr Speaker, an attack has been made on another member of this House. I would like to know whether the honourable member for Higgins had the courtesy to inform the honourable member for Melbourne that that attack would be made so that he could be present. Mr SPEAKER —There is no point of order. Mr SHIPTON —I ask the honourable member for Melbourne how many conversations he and Mr Batchelor had about the cards? On how many occasions has he talked to the Premier-if he talked to the Premier-about the cards? Did he, as State President, have any involvement and did he at any stage condone the activities of Mr Batchelor in the preparation of the card. Did he initiate, or was he a party to, obtaining legal advice on the card? It would seem most likely that the Secretary would keep his President involved, and I ask him whether he was involved in such a venture. I believe that the honourable member must tell the House the answers. Did he, as State President, approve of Mr Batchelor's statement before it was made? Did he advise Mr Batchelor to make the statement, and did Mr Batchelor inform him that he was going to make the statement? Was this one of the matters that the honourable member talked to Mr Cain about before the Nunawading by-election? The honourable member has stated that he misled Mr Cain about the State ALP Conference regarding deregistration of the Builders Labourers Federation. Did he suggest that Mr Batchelor obtain legal advice? I ask the honourable member what, as State President and as a member of this House, was his role in the affair? When was the administrative committee of the ALP first made aware of the bogus card? Was the administrative committee of the ALP informed before legal advice was obtained or afterwards, and, if afterwards, when was the first time the matter was raised before the administrative committee of the ALP? I believe that we need a clear statement from the honourable member as to his role, if any, in this dishonest and shabby affair in Victoria. It is a scandal. What is the level of involvement of the State President of the ALP? Mr Maher —I raise a point of order. The honourable member for Higgins has implied that there is a scandal involved in this matter. I draw your attention to standing order 76, which says: All imputations of improper motives and all personal reflections on Members shall be considered highly disorderly. Mr SPEAKER —I can assure the honourable member for Lowe that I have been listening carefully to what the honourable member for Higgins has said. While he might have mentioned scandal, he has not imputed that scandal to the honourable member he is referring to. Mr SHIPTON —Mr Speaker, thank you for your ruling. I confirm that I have not imputed that scandal to the honourable member I was referring to. I carefully considered standing orders 75 and 76 and in accordance with practice I also informed the honourable member before the adjournment debate that I would be speaking on this matter. I ask the House and I ask the honourable member why he only spoke out when Messrs Batchelor and Cain had done so. If, as he states, Mr Batchelor made an error of judgment, why did he not come out earlier and make a statement as State President concerning the involvement of the ALP in the preparation of the bogus card? The matter is a most serious one and the question must be asked- Mr SPEAKER —Order! The honourable member's time has expired. Mr STAPLES(Jagajaga)(4.22) —I wish to speak on fowl plague and on this occasion I do not refer to the Opposition, but on another occasion I might need to do so. In the 3 July Countrywide program on the Australian Broadcasting Corporation, Dr Graeme Laver from the Australian National University's John Curtin School of Medical Research strongly criticised the Commonwealth Scientific and Industrial Research Organisation's Australian National Animal Health Laboratory following the fowl plague scare. Despite rumours to the contrary from one of ANAHL's oldest critics, the laboratory was deeply involved in the diagnosis and control of the recent fowl plague outbreak near Bendigo in Victoria. This was the first exotic disease outbreak that ANAHL had been called on to help fight, and it was certainly a very serious matter. A similar outbreak in the United States of America had recently resulted in the slaughter of 17 million birds and had cost the Government $60m in compensation payments alone. ANAHL's main function is to provide secure facilities and expertise to the desease control authorities in the States to help them in the diagnosis and control of exotic diseases of livestock. Accordingly, the Victorian Department of Agriculture called on ANAHL's assistance on 31 May, when it realised it was probably dealing with an exotic poultry disease at Bendigo. ANAHL was asked, firstly, to confirm the Department's tentative diagnosis of fowl plague; secondly, to determine whether the avian influenza virus isolated was pathogenic enough to cause the deaths observed-because if it was a low-virulence strain it would be necessary to look further for the cause of death; thirdly, to produce large quantities of safe diagnostic reagents for use in checking for further signs of the disease at laboratories throughout the country; and finally, to provide diagnostic assistance, where required, in monitoring the spread of the disease and the effectiveness of control measures. ANAHL's secure facilities are needed for this work to ensure it can be done safely, without risking the further spread of the disease. The laboratory received a sample of virus on 31 May and testing began immediately. This enabled it to confirm, on 3 June, the Department's diagnosis of fowl plague. As requested, the pathogenicity of the virus was also tested and it was found to be very pathogenic in chickens and turkeys, but not pathogenic in ducks. Diagnostic reagents were prepared from the outbreak strain and activated and tested to ensure no viable virus remained in them. This work was completed on 15 June and reagents were sent to the five States which had then requested them. Meanwhile, diagnostic work was carried out by ANAHL on futher samples from suspected outbreaks in South Australia and Queensland. Fortunately for Australia these turned out to be false alarms. The one thing the workers were not confident of being able to do was to sub-type the virus as they do not have access to the full range of diagnostic reagents. Therefore, they had to send virus samples overseas for sub-typing and at the same time obtain a limited range of reagents from the Commonwealth Serum Laboratories in Melbourne. This laboratory is the Australian World Health Organisation's reference centre for human influenza. It is of concern to me that ANAHL is restricted in its operations and care of the Australian livestock industries in this way. As it happened, there were no complicating factors on this occasion and, perhaps fortuitously, our scientists were able to sub-type the virus using these reagents. They thus obtained an accurate result on 8 June, ahead of the results from overseas which arrived on the ninth and tenth. In closing, I wish to congratulate the workers at the ANAHL laboratory in Geelong, many of whom I know very well. I single out for attention Dr Bill Snowdon, the officer in charge, and Dr Ian Parsonson, but include the nameless many who work with them. They have had quite enough to endure over several years of quite often unsubstantiated criticism. Their expertise and dedication are the greatest safeguard that we have in this country in a scientific way to protect our primary industries. I commend them for their work in general and for their rapid response on this occasion. I am sure that the Minister for Territories (Mr Scholes), who is the honourable member for Corio, is aware of the work that goes on in his electorate where this laboratory is situated. It is important, I believe, that the role of ANAHL be strengthened so that we have a very strong front line in the fight against exotic diseases in this country. Mr HICKS(Riverina-Darling)(4.27) —For some time members on this side of the House have been very concerned about the treatment that school cadet units have been getting and, more importantly perhaps, the treatment that the Army Reserve has been getting. School cadet units, of course, are now almost non-existent because of the treatment they have received from this Government, but at some schools the parents of students have looked after the units and have paid money out of their own pockets to try to ensure their survival because they really believe in that course of action, mainly because of the spirit of discipline that pervades the cadet units but also because of the way in which these young students learn to live with each other and learn bush craft and so on. I recently attended a camp of the Broken Hill Open Cadet Unit. All the young people of Broken Hill, both men and women, have been able to join the cadets. I was very impressed with the camp. Having said that, there is a lot the Government can do, including providing funding so that the young people can carry out those formalities and practices which the cadet units are formed for. Recently I received a letter from a member of the Australian Army Reserve. I will read the letter because it might point out the problems that the Army Reserve is presently facing. It reads: Dear Mr Hicks, I am a member of the Australian Army Reserve and am writing to you to inquire why the Federal Government has cut its allocation for transportation of its members of Special Conditions Units to their Headquarters. All members live considerable distances from Battalion Headquarters and when travelling by road transport sometimes take approximately 14 hours to get there. Air transport gets most members to camp in about 2 hours. Owing to this cut in funds, members in our unit have dropped considerably from 900 to 350 members. He said that in his town members had dropped from eight to two and he continued: This is mainly due to the inconvenience road transport puts on the members. Two days at every camp lost in travelling. If this trend continues, our Army Reserve will cease to exist. Should Australia ever need to defend itself I wonder where the trained personnel will come from. Perhaps you could raise this matter in Parliament. I am raising this matter in the Parliament because I think that history will show that Australia in the past has really been a nation of citizen soldiers. Although we are very proud of our regular forces, when it comes to a war, to any battle or to any police action, on many occasions we have had to rely on our citizen soliders, and the Army Reserve is the place we get them from. I am just asking the Government, on behalf of this young citizen soldier, to reconsider the way it is treating these people and to allocate more funds to the Australian Army Reserve. Question resolved in the affirmative House adjourned at 4.30 p.m. The following paper was deemed to have been presented on 11 October 1985: Banks (Shareholdings) Act-Regulation-Statutory Rules 1985, No. 263.