Friday, 15 November 1985 Mr SPEAKER (Hon. Harry Jenkins) took the chair at 10 a.m., and read prayers. Consideration resumed from 13 November. Mr BARRY JONES(Lalor-Minister for Science (10.01) —I move: That the Bill be now read a second time. This Bill proposes the amendment of the Petroleum (Submerged Lands) Act 1967 to provide for a cash bidding system for the award of petroleum permits in highly prospective off-shore areas. Following an amendment passed by the Senate on 12 November, the cash bidding legislation will require re-endorsement by the Parliament two years after the date on which it commences if it is to continue in effect. The Government is re-introducing this Bill following further extensive examination of the alternatives to cash bidding and, in particular, attempts to identify suitable modifications to the traditional work program bidding system. The end result of this evaluation, reinforced by industry's response to proposed modification to the work program system, has been to confirm the Government's view that, where competition is expected to be high, the cash bidding system is the most efficient and equitable means of awarding petroleum exploration and exploitation rights. As other countries and explorers in those countries have demonstrated, to their mutual benefit, the cash bidding system not only allows the industry to determine the amount the community should receive for the granting of these rights, but also represents a self-contained selection process. The system allows the explorer to determine and carry out an exploration strategy in the light of the commercial realities of the day, free from unnecessary government regulation. By contrast, in highly prospective areas, the present work program system, and various proposals for modification to the system that have been put forward by the industry and others, involve what I believe to be an excessive degree of regulation. This regulation does little to encourage exploration activity. In fact, it seems to imply that industry will do nothing unless forced to by the legal requirements of the permits issued by the Government. I would have thought that industry would be keen to see the removal of this form of government regulation and its replacement with a system which enables companies to operate strictly on the basis of commercial judgments. However, as we have seen on previous occasions, industry frequently prefers to operate in the relative comfort of a government-regulated environment. The Government has major reservations about increasing government regulation, particularly when there are better options available which would involve far less government regulation in the day to day activities of the industry. Many of these day to day decisions are best made by explorers in the light of economic and technical circumstances at the time. In many cases government involvement promotes uncertainty, delays and unnecessary conflict between government and industry. I believe that government should be setting the broad parameters in this area of off-shore petroleum activity and then letting companies get on with the job of exploration and development. While I and other members of the Government-and this is particularly true of my colleague in the Senate, Senator Gareth Evans, QC-have on a number of occasions this year put on record the rationale for cash bidding, a rationale that has never seriously been challenged, I believe these arguments bear repeating now. I think that the Opposition should recognise the efficacy of the cash bidding system contained in the Bill. The trigger for introducing the cash bidding system has been the significant shortcomings of the work program bidding system where there is high competition for exploration permits. In these circumstances, the work program system, first, encourages companies to propose substantial exploration programs that may later prove to be uneconomic either because of changes in economic conditions or a downgrading in prospectivity following initial exploration; and secondly, forces the government, where a work program becomes uneconomic, either to agree to exemptions from parts of the work program, which undermines the credibility of the system and is inequitable to unsuccessful bidders, or require the permittee to undertake the uneconomic exploration under threat of cancellation of the permit. Neither course is in the long term interest of the exploration industry. Thirdly, it requires a subjective selection of the winning bid where competition is high, as no amount of technical advice can differentiate readily between work programs of a similar character and size, nor can that advice predict whether the work program will actually be completed by the applicant; and, fourthly, it is costly and complex to administer, as work programs must be verified throughout the life of the permit in order to maintain the credibility of the system. Recent experience in the Gippsland Basin illustrates these difficulties. Applications were invited in 1980 for three permits for highly prospective areas, attracting 29 bidders overall with more than eight for each permit. Most bidders proposed large work programs, but a whole variety of different exploration philosophies were involved, and acute difficulties were experienced in choosing between them even after careful evaluation of the technical aspects of the proposals and detailed discussions with the applicants. In the end, after all this effort, there is no evidence that the Government got it right: One permit was surrendered after only four wells were drilled from a commitment of 12 wells; another is being surrendered after only seven wells have been completed from an original program of 19 wells; and the third permittee has deferred some commitments and applied for a reduced program. There is every indication that the same circumstances may be repeated if the work program bidding system is applied to the area of highly prospective acreage in the Timor Sea region. Following rejection of the cash bidding legislation by the Senate, the Government proposed a number of modifications to the work program bidding system aimed-to the extent that this is possible-at overcoming its major deficiencies.In summary, these proposed modifications, which reflected many of the suggestions industry made earlier in the year, would require applicants to identify minimum guaranteed `dry hole' exploration programs and separate `supplementary' work programs tied to the outcome of the initial exploration. Where a winning application cannot be determined on the basis of the minimum guaranteed `dry hole' program a number of discretionary criteria would be used to differentiate between applications. The proposed discretionary criteria would involve consideration of competing applications on the basis of the level of Australian involvement, whether new explorers are being introduced to the Australian offshore area, past performance and commitments to source goods and services in Australia, past performance and commitments to undertake research in Australia, and demonstrated willingness to explore in `frontier' areas. While the Government believes that modifications along these lines would improve the work program system, particularly in its application to less competive areas, these modifications do, nonetheless, in several respects, lead the Government in a direction quite contrary to that which we-and, perhaps the Opposition too-would prefer. It is clear that the modified system would significantly increase Government regulation of the industry, with no certainty that this regulation would overcome the economic efficiency and equity problems. The need for extensive discretionary criteria in the assessment of applications, a need recognised and in fact proposed by industry, is also at odds with the principles promoted by Parliament through, for example, the Senate Standing Committee for the Scrutiny of Bills. In short, the inherent weakness of work program bidding systems when used in highly competitive situations cannot be satisfactorily overcome. The efforts in devising a modified system have simply reinforced the Government's views about the economic efficiency, equity and administrative simplicity arguments in support of cash bidding. Accordingly, the release of the more prospective areas in the territory of Ashmore and Cartier Islands adjacent area which were identified earlier this year-the release of which has been held up first by the defeat of this Bill earlier this year in the Senate and then by the search for an adequate alternative work program system-will be made as soon as possible after this Bill receives the royal assent. What cash bidding will do is give explorers the opportunity to adopt the optimum and most economically efficient exploration philosophy based on progressive acquisition of information about the permit areas. Commercial judgments can be made about the appropriate level of exploration at any given time, without the heavy, albeit well-intentioned, hand of government regulation intruding. When calling applications for the award of an exploration permit under the cash bidding system, the Joint Authority will specify the period within which an application must be made the availability of a renewal option for the permit, summary details of the conditions of the permit and the matters to be taken into account in selecting the winning bid. Applicants will be required to apply for a permit over all the blocks on offer for each specified area. In their applications, bidders will be required to specify the amount they are willing to pay for the award of the permit. Further, the application will be required to contain details of the technical and financial resources available to the applicant to undertake exploration in the permit, and information on any other matters that the applicant wishes to be considered. The permits will not be subject to an exploration work program commitment. A fee of $3,000, of which 90 per cent will be refunded if the application is unsuccessful, will be payable on lodging an application. No reserve prices will be set for permit areas, but the Joint Authority will have the right to reject bids if they are considered inadequate on account of insufficient competition or if there is evidence of collusive bidding. Bids may also be rejected if the bidder is considered to lack the technical competence or financial resources necessary to undertake successfully complex off-shore exploration. This right to reject bids is available to the Joint Authority under the work program system. However, unlike the work program system, the cash bidding system requires the Joint Authority to specify these matters at the time applications are called. In this way bidders will be fully aware of all the conditions relevant to the selection of the winning bid. If, after assessment of all the bidders, only one bid remains, the permit will be offered to that consortium. If two or more bids remain, the permit will be offered to the applicant making the highest bid. In order to provide maximum flexibility to bidders, there is no obligation on the winning bidder to accept the offer of a permit. Not only would it be impracticable to force consortia to accept offers of a permit, but in attempting to do so competition would be restricted. A similar provision also applies under the work program system. If the highest bidder rejects the offer, the permit will be offered to the next highest bidder and so on. Once a consortium has accepted an offer of a permit and paid the amount bid, the permit will be awarded to that consortium as soon as is practicable which, unless there are some unforeseen circumstances, would generally be within one month. To ensure there is a clear incentive to undertake exploration in the permits and to discourage speculators from sterilising the acreage, only a limited renewal option will be available for cash bid permits. All cash bidding permits will be available for an initial six-year period and where the Joint Authority considers that the permit is sufficiently large, the availability of a single five-year renewal option for up to 50 per cent of the permit area will be announced at the time applications are invited for the acreage. However, given that cash bidding permits will cover very small areas in comparison with work program bidding areas, extended periods beyond the initial six year term and one five year renewal will not be necessary to explore the areas. There are already ample opportunities for a permittee to retain tenure over a discovery even after the permit has expired. The introduction of retention leases in separate legislation earlier this year provides an additional avenue for retaining tenure over any discoveries that cannot be immediately developed. In respect of security of tenure over a permit issued under this legislation, I emphasise that although the legislation will be in force for only two years in the first instance, there are safeguard provisions which guarantee that a permit will be able to run its full term, including renewal where relevant. Permittees will, of course, be required to meet all conditions normal for any permit such as any special environmental conditions and the compliance with the directions issued by the joint authority which deal, for example, with the manner in which activities must be undertaken. Summary details of these conditions will be made known at the time applications are called. During the initial two-year life of this legislation, cash bidding is to be used in the Territory of Ashmore and Cartier Islands adjacent area which is solely administered by the Commonwealth. Extension of the life of the legislation and its application to off-shore areas adjacent to the States and the Northern Territory will depend on the outcome of the review of the system's effectiveness in this two year trial period. The Government has no doubt that the cash bidding system will be a success. The legislation provides that the Joint Authority, which consists of the Commonwealth Minister and the relevant State or Northern Territory Minister, must make decisions on which areas are to be released under the cash bidding system. Not only will consultation take place through the Joint Authority process, but also the Government intends that there will be separate discussions which will take account of the sharing of revenue derived from cash bids. Accordingly, there are no revenue sharing provisions contained in this Bill. The States and the Northern Territory are already aware that cash bidding revenue sharing will be addressed in the context of discussions on sharing of resource rent tax revenue. As I indicated earlier, I believe it is worth while to address once again the unsubstantiated claims and criticisms that have been made against cash bidding. These are that cash bidding will reduce the amount of money available for exploration, that it will increase the costs and risks of exploration, that small to medium size Australian companies will be disadvantaged and that it is inconsistent with RRT. First, I deal with the argument that cash bidding will reduce the funds available for exploration. The assumption underlying this argument is that the funds available for exploration are fixed-that the Australian exploration industry is a closed shop within which a given amount of funds circulates, without either escaping or being topped up. There is no evidence to suggest this is the case. In deciding to bid for a particular permit, a company will design an exploration program that enables it to assess properly the petroleum potential and to estimate the expected return on investment in that program. The extent to which the estimated return from the program exceeds the company's required return will determine the size of the cash bid. If no excess returns are expected, the company will not bid. Similarly, the payment of a cash bid will not reduce activity in other exploration areas. Certainly companies may need to rearrange their investment priorities in a normal commercial decision-making manner. This however will not result in companies neglecting the evaluation of petroleum prospects which are expected to be profitable. Obviously, the most profitable prospects, which are likely to be in cash bid areas, will be explored first-but there is nothing wrong, from the point of view of the national interest or anything else, with exploration taking place in more prospective areas first. The decision to acquire a permit by way of cash bidding is essentially similar to a decision to acquire an interest in a permit by way of farm-in. When an exploration company decides to pay a premium by way of a farm-in its concern is that the permit and other permits in which the company has an interest are explored in a way which is consistent with the commercial realities of the day. Further, it is of no concern to the company what happens to the premium it has paid-whether it remains in the Australian exploration industry or not. A clear example of the cash bidding/farm-in analogy is provided by a farm-in arrangement completed earlier this year, in which an Australian company decided within 30 days to pay tens of millions of dollars to a foreign company for the latter's interest in an attractive permit. The Australian company's exploration budget was unaffected and the foreign company has no current intention to invest the funds in exploration in Australia. Farm-ins are an essential feature of the exploration industry. There is no suggestion that they result in reduced exploration, nor can it be sustained that cash bidding will result in reduced exploration. Rather than reducing funds, there is every prospect that the net effect of the introduction of cash bidding may be to add substantially to the pool of investment funds available for exploration in the medium term. It appears that a number of overseas companies with no previous experience in Australia, who have been very reluctant hitherto to compete against those with local knowledge and experience in work program bidding, have now expressed an inclination to participate in cash bidding, where they see their lack of on-the-ground experience as no hindrance. Secondly, I refer to the argument that cash bidding will be a disincentive to off-shore exploration because of the extra financial risk involved. Companies will take into account the expected risks and costs involved in exploring a permit when they are considering bidding for the permit, and the size of the cash bid will reflect that calculation. The cash bid in no way changes the risks or the costs involved, rather, it is the risks and costs which influence the size of the cash bid. Compared with the work program system, the cash bidding system will actually reduce the risks faced by companies. Under the cash bidding system, companies would be free to undertake the most commercially viable exploration program consistent with the prevailing economic conditions and prospectivity assessments. Under the work program system, by contrast, companies are committed to an exploration program designed up to six years in advance, and must face the considerable risk that changing circumstances will make that exploration program uneconomic. Thirdly, there is the argument that cash bidding will discriminate against most Australian companies, which do not have access to large amounts of exploration capital. Because of the very high costs, risks and level of technical skills involved, it will always be difficult for the smaller companies to participate in off-shore exploration. Irrespective of the method of awarding permits, it will be the stronger companies which dominate off-shore exploration. It is the applicant who values the permit highest who will be prepared to bid the most under either the cash bidding or work program bidding systems. As has been the case in the past, it is very likely that consortia including Australian companies would be formed to bid for permits under the cash bidding system. Although there are no Australian equity requirements at the exploration stage, many foreign companies seek to include Australian companies in their consortia because of the 50 per cent local equity requirement should petroleum be found and developed. Under cash bidding, there is no reason whatever to anticipate a change to this practice. Permits will be awarded under the cash bidding system without prejudice to the need to meet foreign investment criteria at the development stage. Fourthly, I refer to the argument that cash bidding is inconsistent with the RRT concept. The Government's view is that they are complementary measures which will collect for the community a share of the economic rent, or super profit, which results from the exploitation of Australia's petroleum resources. They are complementary in other ways as well. The existence of RRT, and the non-deductibility of cash bids against it, is a significant influence on the level of cash bids. Non-deductibility will mean that bids will be lower. At the same time the existence of an RRT regime in place alongside the cash bidding regime means that companies will not face the risk that in the event of a cash bid proving too low in the light of subsequent discoveries, some additional form of tax will be imposed to increase the community's take. By combining cash bidding with RRT, companies can bid with certainty as to the return the community expects, and can bid conservatively. There is no foundation whatever for the assertion that the Government's main motive in introducing cash bidding is revenue. The primary objective is to enhance the economic efficiency and equity with which highly sought after permits are allocated, and to overcome the deficiencies I have already detailed in these and other respects in the present work program bidding system. While there is, as I have already said, a secondary revenue objective-that is, to ensure, by the combination of cash bidding and RRT, that the community receives its appropriate share of economic rent-it should be clear from any examination of our proposed cash bidding legislation that the Government is not seeking to maximise revenue from this source. If revenue was the key concern, the Government would be offering large permits with unlimited renewal opotions; it would be encouraging speculators; and it would be allowing deductability of cash bids against RRT and company tax. I indicated during the second reading debate on the cash bidding legislation that if the cash bidding proposal was rejected, the Government would be proposing the introduction of two new imposts; signature bonuses for the award of permits in the more prospective off-shore areas, and retention lease premiums. The Minister has subsequently discussed these proposals with the industry and advises that these proposals represent a second best approach. As the Government anticipated, the industry is resisting these proposals in much the same way as it resisted cash bidding. However, the revenue shortfall created by the rejection of the cash bidding legislation, coupled with the difficult Budget deficit situation which the Government continues to face, remain important considerations. The Government has not yet finalised its consideration of the details of the signature bonus and retention lease premium measures. However, if the cash bidding legislation is passed it would not be appropriate to proceed with the signature bonus proposal and not be necessary to proceed with the retention lease premium proposal. No realistic estimate is possible of the amount of revenue that might be raised by the award of permits under the cash bidding system. It will depend on the number of areas released during each financial year and industry's appraisal and response to these releases. This Bill also proposes the amendment of the Petroleum (Submerged Lands) (Exploration Permit Fees) Act 1967 to exempt permits awarded under the cash bidding system from annual fees. Taking into account the reduction in administrative work and the small size of cash bid permits, it is not sensible to charge fees which might amount to no more than $400 per year. The amendments proposed in this Bill are essential to allow the introduction of an equitable, effective and administratively efficient system of awarding petroleum exploration permits in the more prospective off-shore areas. Before I intone the ritual words of committal, I should explain that unfortunately the explanatory memorandum is now being amended to take account of changes in the Senate and will be made available to honourable members at the first possible opportunity. I commend the Bill to the House. Debate (on motion by Mr Braithwaite) adjourned. Consideration resumed from 13 November. Mr YOUNG(Port Adelaide-Special Minister of State) —I move: (1) That the House concurs in the resolution transmitted in message No. 162 of the Senate relating to the resolution of appointment of the Joint Select Committee on Electoral Reform, and (2) That a message be sent to the Senate acquainting it of this resolution. Mr Speaker, I think all honourable members are aware of the success of the Joint Select Committee on Electoral Reform. Because other matters may come before the Parliament, such as is the case with the Macklin Bill, it is felt that, rather than try to sort them out and deal with them in the parliamentary sense in the first instance, it would be better for the Committee, which has access to constitutional and electoral experts who can appear before it and give it advice on matters such as this, to do so, and that we ought to extend the terms of reference of the Committee so that other matters that may be sought to be referred to the Committee from time to time by either House can be referred. The Committee has done an outstanding job since it was established under the chairmanship of the honourable member for Prospect (Dr Klugman) in May 1983. It still has a lot of work before it. An examination of the new laws as they applied to the 1984 elections will be coming before the Parliament very shortly. I know that a number of recommendations from the Australian Electoral Commission will be made for the Joint Committee to look at. I think the Parliament will be requesting the Committee continuously to look at these sorts of things. I have therefore moved that we extend this reference so that other matters that can be decided on from either House from time to time can be referred to it. Mr BLUNT(Richmond)(10.30) —The Opposition recognises the need to amend the terms of reference to this Joint Select Committee on Electoral Reform. However, we are concerned at the potential consequences of this amendment, which may allow some people to indulge in a witch hunt for party political purposes and may allow the Government to embark upon the implementation of some points within an agenda. We note the position in the Senate, with a member of that House proposing to introduce a private member's Bill to examine the question of one vote one value in Australia. I think it is apparent to every member of this House who knows anything about the Australian Constitution that it prohibits the notion of one vote one value. Unless this Government is proposing to amend the Australian Constitution fundamentally, to withdraw the guarantee given to Tasmania and some of the less populous States as to their representation in this place and in the Senate, the concept of one vote one value just does not fit into the Australian Constitution. I think perhaps the best place to have that sort of debate is in the Committee where, as the Special Minister of State (Mr Young) has said, there is access to expert legal advice. To understand the point I make those members of the Senate who have not read the Constitution and who have not been able to calculate the numbers of people who live and vote in the less populous States relative to the more populous States need give only some consideration to the vote for the Senate in, say, Tasmania, where each senator attracts about 32,000 votes, whereas a senator in New South Wales requires about 381,000 votes to be elected. That obviously is not one vote one value. If we address the question of representation in this place, the same thing applies. There is a guarantee of five seats to Tasmania. The enrolment in those five seats is considerably less than the enrolment in seats in the other States of Australia, and that makes a nonsense of one vote one value. As the Government has the numbers on this Committee and as the present Chairman has said on occasions, `We will try to keep things affable and amiable, but when it comes to the crunch we will use our numbers to achieve what we want', there is some doubt as to whether the Government is at present adopting a non-party political approach to electoral reform and review of the electoral laws in Australia. I am reminded of the events preceding the last general election and the comments made by the Minister in the evening, just as the polls closed. Madam Deputy Speaker, you will remember that as a result of the work of the previous Select Committee certain changes were made to the electoral laws of Australia, one of which affected the voting mechanism and procedures for the Senate. The Government at the time, this Government, decided there would be changes to the voting procedures for the Senate. Recognising that it was a major change and that perhaps Australians would be unfamiliar with that change, and because it would represent a fundamentally different approach to the voting mechanism which had been used in this country almost since Federation, it decided there was a need for an advertising campaign to make sure that everybody understood how to vote. I think the Minister said, at about five past six that Saturday evening: `It was a great advertising campaign. I think they did a great job and we are very pleased with it'. At about 10 past nine on Sunday morning, when the magnitude of the informal vote was apparent to everybody, I think he changed his mind. I wonder whether he now thinks we got value for our some $2m. I am also reminded of the comments of the Prime Minister (Mr Hawke) on that morning. He actually suggested that the people who supported his Party, the Australian Labor Party, were perhaps less capable of casting a formal vote than other people. I am amazed. I wonder whether, having suffered that sort of comment, they will vote for him and his Party again at the next election. Notwithstanding that, I recognise the need, as does the Opposition, for a continuing review of electoral laws in Australia. We sincerely hope that the Government does not intend to use its numbers on this Committee to force through some form of hidden agenda it may have to introduce some form of optional preferential voting. If the Government is going to move towards optional preferential voting on the basis that no person in Australia should be forced to vote for a candidate he does not support, perhaps it will seek to be consistent and extend that logic to its conclusion, which is that no person in Australia should be forced to vote. If one should not be forced to vote for a candidate one does not support-which is the Government's argument in relation to compulsory exhaustive preferential voting-the logic of course is that one should not be forced to vote at all. Given the attitude expressed by Labor governments in New South Wales in relation to this question, I wonder whether we have any hope of seeing a more equitable and fairer approach by this Government if it should choose to move on the issue of optional preferential voting. Of course, the Government would choose to do so only for its own party political advantage, recognising the political structure of the Opposition and the coalition between the Liberal Party and the National Party in Australia. It concerns me also that from time to time electoral reform is used as an excuse to grandstand in this place. Yesterday we saw members of the Government seek to debate a matter of public importance. Honourable members opposite described the recent Queensland electoral redistribution as a public outrage. They pretended that this place had the authority to discuss the responsibilities of a sovereign government of this country. Of course, as the Labor Attorney-General (Mr Lionel Bowen) said, electoral redistribution in Queensland is of no concern to this Parliament and to this Government. I hope that the Government will resist the temptation to exploit the advantage of its numbers on this Committee and in this place for party political purposes. I hope also that the Government will use its numbers to stop any other member of this Parliament seeking to grandstand and score cheap political points in relation to electoral reform and to indulge in some sort of witch hunt or bashing of one party or another-particularly if it has no representation on the Committee and is unable to answer the charges that some people would lay against it. We recognise that this amendment to the terms of reference of the Electoral Reform Committee will give it more flexibility. We hope it is the Government's intention to use the terms in an honourable fashion for the true purpose of improving the electoral system of Australia. Mr MacKELLAR(Warringah)(10.38) —I wish to add to the comments made by my colleague the honourable member for Richmond (Mr Blunt) in relation to the acceptance of the amendment to the proposed new terms of reference of the Joint Select Committee on Electoral Reform. I think the amendment gives more flexibility to the terms of reference of the Committee. I think it is sensible to allow, if one likes, extraneous suggestions, which would otherwise be debated in the Parliament, not to take up the time of the Parliament, initially at least, to receive a close scrutiny by the Committee which would allow if necessary a more informed debate later on in the Parliament. Therefore, I think it is wise to give the Joint Select Committee that extra flexibility. I think it will make the workings of the Committee sound. Also, it will enable the Committee to look at a wider range of suggestions than is presently the case. Another matter which I would like to bring to the Parliament's attention-it is not often that the House of Representatives has some difference with the Senate-relates to the Senate Hansard of 13 November. I was concerned to read on page 2040 of that Hansard that the motion for the resolution of appointment for the Joint Select Committee on Electoral Reform moved by Senator Gareth Evans and agreed to concluded with paragraph (1) (iii). The Hansard report then moved to the reference to the Committee of Privileges of the detention of a senator. I am not sure whether the fact that the resolution of appointment, which was agreed to, does not appear to have been accurately reported in the Senate Hansard has any effect on its validity. In fact, about half of the actual resolution, agreed to by the Senate, is missing from the Hansard report. The comments in relation to other matters made by my colleague, the honourable member for Richmond, do need a little underlining as well. It is obvious that the Government is seeking to move towards an optional preferential voting system. It perceives that system to be in the electoral interests of its Party to remain in Government. I reiterate the comment made by my colleague that if that is the intention of the Government, I hope that the logical conclusion will be pursued which would allow people to have a choice whether they vote. I know that under the present system a person is not forced to vote, but is forced to attend a polling place. To all intents and purposes, the vast majority of the voting public of Australia think that they are actually compelled to vote. I hope that the logical conclusion is pursued because it does seem to me to follow that if the argument is that a person should not be forced to vote for somebody that he does not wish to vote for, he should not be forced to vote at all. Mr YOUNG(Port Adelaide-Special Minister of State)(10.41) —in reply-I have a couple of things to say in response to the matters that have been raised, firstly, about the question of optional preferential voting. This matter has been discussed in the Australian Labor Party for a long time. It is just part of the cut and thrust of debate which takes place in this country as to the various policies of the Party. It is just the same as the National Party of Australia wanting weighted electorates so that the country elec- torates are much smaller than the city electorates, as was the position for a long period under conservative governments. I am not sure that the record is correct, but I understand that if we had had one vote one value in Australia in 1954, 1961, 1969 and 1980, we could have quite easily had very different governments to the governments that we had. We only had conservative goverments re-elected on those occasions because the voting system was weighted to give advantages to the conservative governments. As part of the national debate on this matter, the Australian Democrats have said that they do not support optional preferential voting for their very own subjective reasons-that is, that their influence in being able to allocate preferences would disappear for the House of Representatives. Because the Joint Select Committee on Electoral Reform is made up of all the parties, I suspect it will go on debating these matters. As for compulsory voting, it may be true that there is an argument for saying that in a democracy people should go and vote if they want to and they should not be compelled to vote. There is a great difficulty about that. If one analyses what is occurring and what has grown up in recent years, one will find a never-ending sequence of surveys of voter intentions have been carried out. They are done not only at election time now; they are done continuously. So we are all jumping up and down every Wednesday when the Bulletin appears to see what is going to happen 2 1/2 years off. It has reached a rather ridiculous stage in Australia, as it has in other countries. Honourable members might have noticed that in other countries and other democracies because the surveys have shown that one party is overwhelmingly going to win the election a lot of its supporters stay at home. The results have not turned out the way the surveys have predicted. So influences on what people are going to do and whether in fact they are going to go and vote can again be changed by the information which comes out prior to an election. Those sorts of matters ought to be looked at too. I think that the Committee is obviously a very constructive way in which to do all the preliminary work before it hits the floor of parliament. I do not think we are going to change too many views of the parties. They have been around too long and their views are too well entrenched. I do know that if we were to do to the national electoral boundaries what the National Party is doing in Queensland to its boundaries, the honourable member for Richmond (Mr Blunt) who spoke representing the National Party would be jumping up and down in here saying what a group of blighters we were for having gerrymandered the Federal system. There is no intention to do that here. I hope that the benefits of what we have done in giving Australia the great electoral laws of 1983-changes which the Hawke Labor Government brought in-will be with us forever. I think it is a very good idea for the Committee to look at all these matters when they are raised because the expectation outside is a rather simple one. Some people outside say: `Why don't you pass the Macklin Bill, because that means one vote one value for all the parliaments throughout Australia?'. Anyone who has spent a bit of time in Parliament knows that it is not quite so simple. People outside may have a different view of what are the powers of the Parliament vis-a-vis ideas put forward, whether they be in the form of a private member's Bill or a motion or an idea or a suggestion brought up in debate. Using the filter, if I can use that term, of a parliamentary committee before the matters are brought here is an excellent way of dealing with these matters. Question resolved in the affirmative. Debate resumed from 12 November, on motion by Mr Dawkins: That the Bill be now read a second time. Madam DEPUTY SPEAKER(Mrs Child) —I understand it is the wish of the House to debate this Bill cognately with the Australian Trade Commission (Transitional Provisions and Consequential Amendments) Bill 1985. There being no objection, the Chair will allow that course to be followed. Mr BRAITHWAITE(Dawson)(10.46) —In speaking to the Australian Trade Commission Bill 1985 and the cognate Bill, we must view them from the point of view that they represent the Hawke Labor Government's next step in the nationalisation of Australia's trade through politicisation, regulation and now legislation. I will give an indication of the heavy hand of that regulation and politicisaiton. We have a wages system and a prices and incomes accord in which the dictates are heavily regulated in favour of the Government. High interest rates caused by devaluation, which is another deliberate Government policy, are causing fuel price hikes. Tariff protection does nothing to improve trading. As well, this Government is reliant on deficit funding, and we have trade sanctions in quite a few areas. The Government has a policy of high taxation. The coal levy, introduced back in 1974, is still with us and is still collecting $70m in 1985-86 from a charge on the Utah company. I will say more about these points later on. I point out that there is very heavy regulation in the Government's attitude to trade. On the issue of politicisation, I must say that the morale of the staff of the Department of Trade must have sunk to an all-time low following the political appointment of David Combe to the Vancouver post to pay off a political debt. If the Government views that action in connection with what is proposed here it will see the contradiction that is there. One cannot speak on a Bill such as this without referring to the recent trade results for the month of October. I say in all sincerity that, although some people believe there is joy for the Opposition in these figures, there is no joy for anyone in these figures. Further, there will be no joy unless we take action to turn that situation around. It is a very sorry situation, dealing with a matter such as the success of trade, on which every Australian's standard of living depends, when it is implied that there is joy for anyone in the figures released. There is no joy for the Government and less for the traders. There is little hope in the short term, despite the suggested J curve effect. There will be no hope in the longer term unless we address ourselves to the problems that relate to trade and which are certainly not covered by this Bill. As to the balance of trade, the recent figure of $1.6 billion is an all-time record for a month. That figure relates to the combined trade deficit and net invisible deficit. Over the three years from 1982-83 to 1984-85, and including the October figures of $5 billion, the accumulated current account deficit is $29 billion. This should be a source of grave concern to many Australians. It is for this reason that we say that the Bill is a contradiction in many ways. It contradicts the political appointment of David Combe. It contradicts the export market development grants reduction which was passed by this House recently. The Confederation of Australian Industry has indicated on many occasions its objection to that and others have objected to the transfer of the Export Grants Development Board to the new Australian Trade Commission. Answers have to be given to the many questions about the quickening of the grant payments and whether the expected backlog of $73m at the end of this year will be overcome by the transfer of the Board to the Commission. As I say, there are grave doubts about that. The Bill does not address itself to the major problems facing trade. Something has to be done, quite apart from a commitment to the monetary system, to bring the system under control. Other controls are vital. The Bill is not a short term remedy. It is something that has to be put into place and the appointments have to be made. If any quick reaction is contemplated by the interim board, I do not believe that the Bill will find it. All this is happening while the Australian economy is still on its downhill slide. The Export Finance and Insurance Corporation, as part of a larger organisation, may not be as efficient as it has been in the past. It is suggested, again, that it could be cumbersome and less responsive and responsible to the tasks it currently undertakes. In that respect, it is a standing joke among Australian exporters that the Japanese have delivered before EFIC has even considered a proposal. I am saying that we require instant responses, but the Bill does not address itself to that. The argument in connection with the Bill is that it consolidates into one statutory authority three others that have stood in its place; it absorbs them. It must be pointed out to the Parliament that that statutory authority is being given a greatly expanded power, a power beyond what the other three bodies had. I return to the proposition that it is against the philosophy of the Opposition to create powers outside the scrutiny of the Parliament. I refer to our opposition to the extended powers for the Snowy Mountains Engineering Corporation with respect to trading overseas and the powers of the industrial health authority as examples of the Opposition's philosophy in this respect. The whole Bill is based on a matter of trust. It will not be of any surprise to the Government to learn that the Opposition is not likely to be trusting in the manner in which the Bill and the Commission will be implemented because in that matter of trust the Government has a record of broken promises over the last three years and its economic performance, which has been excused to this date, has been inadequate. The questions I ask of the Minister for Trade (Mr Dawkins) are: Why should the Opposition, or the traders who will be affected by the Bill by way of this new authority, expect a transfer of staff to improve morale within the Department? I understand that morale is not high. Will the expanded powers that are talked about still be maintained under parliamentary scrutiny? I believe that is not the case. Regarding the aspect of fee for service, can we expect more utilisation of the trade service by people overseas if they have to pay a fee for a commercial service? Does the Minister expect us to believe the exemption from taxation will be more likely to orientate the Commission commercially to a private practice situation? Clause 8 of the Bill provides that one of the functions of the Commission will be to facilitate and encourage trade. Will this prevent competition with traders, as we have already seen with respect to the Snowy Mountains Engineering Corporation? Regarding the forming of partnerships, companies and consortiums, does this mean that there will be a real interface with private business or will a predominant power be exercised under the functions clause so that it will actually take over the trading section? These are all exceptions that we are asked to carry on trust. Frankly, I do not believe that this will be the case. It has been said that the overseas representatives of the Australian Government have an important role in government to government negotiations regarding trade agreements. We do not disagree with that, but we cannot see how it cannot be done under the present structure. Also, we have to ask whether promoting Australia's exports, arranging trade introductions, et cetera, is actually a government role. If the potential commercial benefits are sufficient traders will set up and fund such operations themselves, without the help of the Government. They will do it through the auspices of committees, such as the various business sub-committees or branches of co-operative industry groups. Also, industry associations or private agents could organise themselves to perform this role-on a fee for service basis if required-on a purely private enterprise basis. One great criterion which this Government has said is a hallmark of its economic policy is allowing foreign banks into Australia. Surely it will now become part of their accounting and information services, which are spread right across the country, to deliver this type of information into the hands of a customer who asks for it. We see this as a difficult situation. Let me go back to considering the Department of Trade itself. I understand that recently an address was given by Bob Coombs of the Cattle Council of Australia to staff within Foreign Affairs, in which he suggested that a greater role had to be played by one department or another, or that there had to be an interlocking of the departments, so that interdepartmental frictions do not exist within the service overseas. A suggestion was floated by the Deputy Prime Minister (Mr Lionel Bowen) that perhaps the diplomatic and trade aspects of our representations overseas should be amalgamated, yet this legislation goes no way whatsoever towards correcting the existing situation. All we can say is that, on the implementation of this legislation, when the Commission is formed, it will still lack direction. No direction whatsoever is given to the Commission. This legislation has been described as rearranging the chairs on the Titanic; it does nothing to change the downward plunge. It is still heading in the same direction. Under the separation of powers by the Commission, the Minister could deny responsibility for anything that happens in trade. The last thing that we want in this country today is ministerial abrogations of that responsibility. Will the Minister for Trade do a Pontius Pilate-which is what we have had with all other Ministers who have responded to problems within the Australian Broadcasting Corporation-and say: `It is not our problem; it is the commissioners' problem'? Or will we have a response from the Government similar to the one we had in the case of Australia Post, where the Government said: `We cannot get them to deliver mail. It is up to the commissioners'? Trans Australia Airlines, Qantas Airways Limited, Telecom Australia and a whole host of other authorities have separate power without ministerial authority over them. I believe that this Commission will become just another one. We are just building another structure. This legislation does nothing to correct the present problem of inter-departmental jealousies. In fact, one might be cynical enough to say that it is a further step towards a socialist goal of nationalisation of our trade. The Opposition fears in all this that the legislation is actually a camouflage for the Government's failure on the economic front and that the Government intends to rely on the Commission as its flagship in trade. But it has not given that flagship any engine and it has not plotted any course for it. I believe that we have justifiable concerns in this regard. Let me come back to clause 77 of this legislation to establish how commercial this Commission will be. Clause 77 states that the Commission has to take account of contingent liability and, in that regard, it mentions only the aspect of depreciation. If this were a purely commercial enterprise it would be asked to account, through the uniform corporations Act, to state all liabilities. As this Commission will operate on a fee for service basis, how can a proper fee be established when other major contingent liabilities are not also to be recognised and transferred? In the transfer of staff from the trade service to the Commission, will account be taken of long service leave, annual leave, holiday pay, sick pay, superannuation and retirement benefits that have been accrued? All of those benefits to staff will require some commitment from and place a contingent liability on the Authority. In a proper commercial sense, those costs should be included in the fee for service figure and not a cash basis. Other corporations are asked to do this. I believe that the Australian National is moving in that direction. I put a question on notice on this matter to all Ministers. The reply that I received from the Minister for Immigration and Ethnic Affairs (Mr Hurford) gave me no answers. I shall deal with that matter a little more in the Committee stage. So there is no commercial basis on which the Authority can start. I appreciate the Minister's rather frank assessment of the trade situation. That is important, because we cannot address the problems as we see them unless we have an understanding of that situation. I suggest that all honourable members have a look at that part of the Minister's second reading speech which gives the recital on Australia's trading performance ranking, which has fallen, I believe from eighth to twenty-second in the last 30 years. This has accelerated within more recent years. The fact that we are actually losing markets overseas and are not maintaining them must be a serious consideration in addressing the problem. The Minister has recognised that our trading performance has been affected by a general weakening in our current account. I have already indicated that in the last three years and four months the current account deficit amounted to $29 billion. This was not all borne by the Government; there would have been some overseas contractual debt borne by the private sector. This is a matter for serious consideration. As I said, the Minister addressed this question honestly in his 13 May statement and in his second reading speech. While the Minister came up with some conclusions, basically, he excused the Government's performance for the wrong reasons. I turn to the end of the second reading speech, where the Minister maintains that the growth of the economy of Australia, other aspects and even, in fact, the depreciation of the dollar had some influence on trade, but these claims are not substantiated. The Minister also mentions that the prices and incomes accord has been the hallmark of the economic policy of this Government and how successful it has been, particularly with regard to the growth in jobs. I would like to have an account of that growth in jobs showing the growth in the Australian Public Service, the State Public Service and through the community employment programs and the number employed by the Australian manufacturing sector just to indicate how powerful the employment recovery has been. I shall say something about that later. The Government has given excuses; they have been the wrong reasons. We must actually gauge the results of the Government's economic performance as it affects trade. I mentioned at the beginning of my speech that the regulation of the economy has had the effect of nationalising trade in Australia. We cannot just say that this Bill will correct all the ills. It has to be recognised, and I believe that the Minister recognises, that there are external pressures. Perhaps the Bill can correct some of those pressures, but the internal pressures on trade have not been addressed. Controlling that problem is very much in the hands of the Government. I mention tariffs. In the Budget for 1985-86 there is a revenue commitment of $3.2 billion. The share of sales tax has to be added to that figure. The imposition of sales tax is actually a tariff. It is a major mechanism which has been built into Federal revenues for quite a few years. This has been the practice, to such an extent that it is a disincentive which prevents governments from looking positively at changes in the present tariff situation. Obviously, the tariff protections that were effective in the 1950s, 1960s and 1970s in order to build up Australian internal industry are not sufficient for the 1980s. I am heartened by the fact that a recent report of the Industries Assistance Commission suggested that it would look on a rolling basis at the effects of subsidies on the economy of Australia. I mention also what the wheat growers have said in connection with the general tariffs and import quotas. The Australian of 18 October stated: . . . general tariffs and import quotas applying to secondary industry have cut 17 per cent from the total value of agricultural commodities produced. This reduction represents a cost of $1.5 billion a year to the farming sector or about $9,000 per farm . . . So the costs of these tariffs are being highlighted all the time, as are the other protection mechanisms we have in Australia. That is one area to which the Government could address itself. It is right in its corner. The findings of the Industries Assistance Commission report on these subsidies-I think one would find the same in regard to tariffs-would be similar to those of the research and development survey recently taken. That survey found that 75 per cent of the applicants for grants could have survived without the assistance of those grants. The tariff situation is keeping some inefficient industries inefficient. I turn now to interest charges. Interest rates are very much a product of the Government's present philosophy. The present high interest rates are a deliberate policy to hold up the devaluing dollar. When the present Labor Government came to office it floated the Australian dollar, giving us a fluctuating exchange rate. I suggest that because of the mechanisms the Government is adopting as far as interest charges are concerned, the Australian dollar is not a floating dollar. It is being shored up to an unrealistically high level just because of the Government's interest rates policy. We have to consider the present situation as being a result of one of the Government's policies. The devaluation of the dollar has been heralded by the Minister for Trade (Mr Dawkins) as being of some assistance to Australian traders. I again instance the comparison in relation to our devaluation as shown in the Australian on 5 November: Whilst we have devalued our currency against the Japanese yen and the European currencies by up to one-third, our performance is reflected worst in the position of the New Zealand dollar, against which our currency has devalued by 33 per cent within 10 months. The Treasurer (Mr Keating) says that the Organisation for Economic Co-operation and Development has completely vindicated his policies. That vindication is probably based on the assessment given to the OECD representative by the Department of the Treasury on a visit he made of two or three days in this country. I suggest that the performance of our dollar and our economy is being assessed daily in the market exchanges, commodity exchanges and stock markets right around the world. If the devaluation of our dollar reflects that assessment, I do not know how the Treasurer can come into this House, praise himself and indulge in self-adulation saying that type of thing. In respect of interest rates, I indicate the benefit our competitors enjoy in overseas markets that are not enjoyed by manufacturers in Australia. Again, I take the markets that are our strongest competitors: The European Economic Community, the United States of America and Japan. When I obtained these figures the real interest rate in France was 5.8 per cent; in West Germany, 5.3 per cent; in the United States 8.9 per cent-that was the figure when I was there last month-in Japan 7 per cent. Australia's interest rate at the time I took these comparisons was 18.5 per cent. I believe that the prime rate is now 19 to 19.5 per cent. It is very important that we compare the rate of inflation in those countries with our own. In the same order, the inflation rate in France was 4.5 per cent; in West Germany, 2.3 per cent; in the United States, 3.5 per cent and in Japan 2 per cent. The Australian rate was 8 per cent. The real interest rate against which we must compete against our competitors overseas was almost double that of our major competitors. This is another area in which the Government is responsible. While there have been some benefits of the devaluation of the dollar for our overseas trade, they have been offset to a large extent by the extra cost of imports and the fact that tariffs have been allowed to remain as they are, interest rates have gone up by at least 4 per cent to 5 per cent and there have been higher fuel costs. So, devaluation is not a highmark of this Government's performance. Devaluation has meant for every Australian a decline in the standard of living. I turn to sanctions on the export of uranium, another Government policy. We have the ridiculous situation whereby, although uranium products could earn us precious dollars on the export market, we have cut their export. However, worse still I understand that on the Budget figures that we are paying $4m in compensation to companies not permitted to export. It is a ridiculous policy to declare some uranium good and some bad. That is one sanction that is affecting our overseas trade. Mr Hollis —We could export drugs, too, if you wanted to. Mr BRAITHWAITE —The honourable member interjects as though dragging down the trade figures, the Australian economy and the standard of living of every Australian to his level were a normal philosophy. Mr Dawkins —What about Afghanistan? Mr BRAITHWAITE —The trade sanctions against Afghanistan proved to be a disaster. It was a political exercise chased by an economic remedy. It did not work in Afghanistan and I believe that I can speak for the Opposition when I say that it will not work in South Africa. Mr Dawkins —You did Afghanistan. Mr BRAITHWAITE —I know, and I am admitting that it was a disaster, as was the boycott of the Moscow Olympics. I am prepared to give honourable members opposite credit when it is due and to take blame. Let us also look at the deficit. Another deliberate policy of this Government has been to hold up the deficit in order to maintain expenditure. In 1984 there was a deficit of $7.9 billion. In 1985 it was $6.7 billion. The budgeted figure for this year's expected deficit-it will go beyond this figure-is $4.9 billion. Within those years the total deficit of $19.6 billion has now generated an interest commitment of $6.7 billion. It is the third largest component of the Budget-higher than health, defence and education. So in the competition for funds to balance the Government's deficit there has been an increase in overseas debt. There is an increase in that debt every time there is a devaluation and the effect on invisibles as indicated in the report I mentioned previously. I refer also to taxation and the forthcoming tax package. Already we are all getting letters from major traders around Australia which indicate that they will be further penalised and will lack competitiveness on overseas markets. In fact, some traders have suggested that the tax package will jeopardise not only their future development and employment potential but also the markets they already have. A company such as Utah is already paying $70m in export coal levies and is now to be burdened with the forthcoming tax package. I have seen some figures in regard to what the costs of the tax package will mean for the rural, business and export sectors of Australia. The cost is said to be another $793m for 1986-87 and $1.2 billion for 1977-78. The tax package is another handicap deliberately brought in by this Government. The Government may say that the tax has to be high. I refer the Minister to a comparison by the World Bank of low taxing and high taxing nations. It suggests that low taxing nations have been able to increase their exports and labour productivity well in excess of countries which rely on high taxation. If the Government wants an answer to our diminishing export performance, it should look at its tax rates and the package presently before us. These are areas in which the Government can react and do so very quickly. I refer to the regulated wages system which operates under the prices and incomes accord. If the dollar devaluated even further in the last three weeks is was because of the 3.8 per cent national wage increase, its effect on our economy and what it will do right down the line to our exports. We have been judged on that decision. It is irresponsible of the Government not to recognise the error and try to do something about it. This Government has displayed an apparent neglect in bringing to heel the Australian Council of Trade Unions over indexation, over the effect of the Mudginberri dispute on our export trade and in so many other ways. We could begin recovery in the export trade by making sure that the prices and incomes accord is renegotiated to take account of the effect of the devaluation of the dollar. More particularly, we should make sure that increases in wages are indexed to productivity. If one looks at productivity during the slump over many years one sees that under the building industry award for 40 hours of work a week, the employer pays 1.9 weeks wages with all costs accumulated. Our whole internal situation is affecting our trade overseas. Already this legislation will be subject to at least 15 amendments, which means that it is not a perfect Bill. It does not really apply itself to commercial accounting principles and it is defective in many other ways. If we have a chance during the Committee stage, we will speak on those things. The Opposition believes that the Australian Trade Commission is just another statutory authority with increased powers and that it is taking those powers away from the Government. We oppose the legislation in that respect. Mr MARTIN(Macarthur)(11.16) —I listened with interest to the remarks of the honourable member for Dawson (Mr Braithwaite) and I will comment shortly on some of the points he raised. However, I think it is important that we should come back to the purpose of this morning's exercise, and that is discussion of the Australian Trade Commission Bill which establishes the Australian Trade Commission. I believe that it is incumbent upon us to recognise that the Commission represents a good deal more than simply administrative streamlining by the Government of a number of functions that exist under different groups at present. The Australian Trade Commission, as a body corporate, will 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. Finally, it will bring new initiatives to the export community because it will, in time, offer new services and a more effective and efficient means of export promotion in our overseas markets. This is rather significant because for too long now-the Government has certainly not walked away from recognition of this fact-Australia's trade competitiveness has not been good. Through the establishment of an organisation which will bring about a more co-ordinated approach to international trade by offering incentives, by helping trade promotion in advertising and so on, this will greatly improve Australia's position. As I said, this Government has not walked away from the fact of our present poor trade situation. In fact, the honourable member for Dawson referred to this by saying that the Minister for Trade (Mr Dawkins), in his statement to the House on 13 May, had given a very honest assessment of the problems associated with this position. The Government recognises that, but it intends to do something about it and this Bill is one of the major steps that will improve the situation. Quite frankly, there have been a number of major causes of the change in our competitive position. We have been downgraded; we have slipped from eighth to twenty-fourth in our trading position and we should be starting to reverse that situation. The lack of export orientation in our manfacturing industry presents fundamental problems for the Government in formulating and pursuing its trading policies. It is imperative for us to create conditions which will encourage improved export performance in the fastest growing areas of world trade, namely, manufactures and services. The Government recognises that and has put in place a number of measures that will support that. I refer specifically to the steel industry plan, and I quote from a statement made by the Minister on 13 May: The Government has also put into place a range of structural adjustment measures designed to assist and rejuvenate Australian industry. Special plans have been negotiated between government, business and unions in the steel and motor vehicle industries. The plans offer incentives for improved efficiency and modernisation of plant. They allow for a growing element of competition from imports, thereby imposing a discipline on domestic industries to match the performance of efficient producers in other countries. It is important to stop and look at the position. Through the steel industry plan this Government has negotiated, we have clearly seen a turn-around in that industry, particularly in the Illawarra. Mr Lee —The great Illawarra. Mr MARTIN —Yes, the great Illawarra. It is also incumbent on me to pick up another point which was raised by the honourable member for Dawson, and that is the relationship between the manufacturing sector, or the business community and the Government. He certainly indicated that this Government had involved itself in the accord, and we believe that that will be one of the cornerstones of industrial policy in this country for some time to come. He also said that there was something inherently wrong with government taking a role that more properly belonged to private industry. That is a load of nonsense. For example, in the case of Broken Hill Proprietary Co. Ltd (Steel) that company's performance in the overseas trade sector in the past has been poor and now it has done something about it. As part of the steel plan, BHP has now developed a steel manufacturers export project which provides Australian manufacturers with both incentive and opportunity to develop or expand export markets in two specific ways: Firstly, through the more traditional method of request to divisional sales managers in each State for flexibility of supply packages; and secondly, via the auspices of BHP's trading services division representation can be provided on an agency basis or as a principal. The project offers benefits to the Australian community in a number of ways. First, it gives rebate incentives on steel purchased for export products; and secondly, it provides marketing services and transport assistance through the trading services division to which I referred a short time ago. Obviously this has important benefits for an area such as Wollongong. Jobs are created because our export potentials have improved. We have incentives for other business to expand in the Illawarra area, and there is an overall lifting of both the regional and national economies. This is a further example of the Government working hand in hand with major business to do something about our trading position. Quite clearly, it demonstrates a commitment by members on this side of the House to enter into the spirit of economic reconstruction in areas that have been ravaged by the effects of the depression created by those opposite, and to do something about it. I refer also to the growth in trade that this Government is looking to, specifically in the Pacific rim. Traditionally our economic base has been dependent on the rural sector and, again, we have seen a downturn in that sector in recent times. We also looked to overseas markets in places such as Europe. The time has come-and this Government recognises it-to look more and more to the Pacific rim area. In recent weeks, albeit for a very short time, I had the opportunity to discuss this very matter with our trade commissioners in San Francisco. Mr Hollis —Very good discussions they were, too. Mr MARTIN —Yes, they were very deep and meaningful discussions. Quite clearly, there is a concern in California and the western States of the United States that there is a clear trading relationship that can prosper between the Pacific rim countries, including Australia. A number of statistics can be provided. This is the most dynamic area and the Government has recognised that. It has done so by developing a number of market activities-the China action plan, the North American special exercise, the Japan market strategy, and so on. It is also looking at traditional markets such as the Middle East. All these strategies are aimed at improving our economic performance in international trade. I turn quickly in the time left to me to some of the matters raised by the honourable member for Dawson. He talked about Australia's trade position and claimed that our performance, as shown in the export-import and trade announcements on the current account for October, reflected badly on the Government's performance in this area. That is absolute nonsense. After those announcements were made we saw the typical shock-horror headlines that some of the newspapers inflict upon the people of Australia-headlines such as `Crisis of confidence grips the nation'. This came from John Short writing in the Australian on 13 November. `Crisis of confidence grips the nation'-what a load of rubbish! What absolute nonsense! He went on to say that things were really crook because of the balance of trade and current account and totally misread the situation. For 2 1/2 years this Government has been putting in place economic policies that have seen this economy turn round. We have been right on every occasion. It is about time that honourable members opposite and others in the community-those in the business community and journalists reporting the performance of this Government-recognised just how well the Government has done. The deterioration in the balance of payments can largely be explained by seasonal factors. One cannot get away from that. In adjusted terms imports actually fell by 10 per cent, and after adjustment the deficit remains roughly at the September level. The improvement will come, as the Minister for Trade and as the Treasurer, Mr Keating, have said, as a result of the devaluation in the second half of the financial year. The Treasurer has been right in everything he has said. To take, on the other hand, a view put on the same matter by that respected economics writer in the Sydney Morning Herald, Ross Gittins, one saw shock horror headlines in the Australian, but the headline in the Sydney Morning Herald was `No cause for worry-yet'. Mr Gittins wrote: There is nothing particularly worrying about the overseas trade figures released yesterday, but there is no point in trying to tell the financial markets that. He went on in that article: So when you allow for these seasonal factors, the figures show no worsening in Australia's basic trade position during the month . . . But the Government's Budget forecasts are based on the expectation that imports will only begin to slow significantly in the second half of this financial year . . . So he recognises the thrust of Government policy and is able to see quite clearly that our policies will work and that the economy will respond. Mention has been made of the floating dollar. Frankly, this dollar of ours has been going up and down like the proverbial bride's nightie. Mr Hollis —Fiddler's elbow, please! Mr MARTIN —Very well, fiddler's elbow. I defer to my colleague from Throsby. But, frankly, the Government is totally in control of all aspects of the economic reconstruction of this country. Let us not lose sight of that fact because it is the case. There has been record growth. The subject of morale in the Department of Trade has also been mentioned. I assure the Minister for Trade, Mr Dawkins, who is at the table, that there is no loss of morale in the Department of Trade, particularly in the Wollongong area where the regional manager, Mr Graham Jackson, is doing a splendid job. I commend him on the job he is doing in encouraging export development. I conclude by saying that this Bill to create the Australian Trade Commission will simply bring about a change for the better. We shall see the opportunity created for market programs and promotion; we shall see a co-ordination which has been lacking in the past. The Government does not walk away from its responsi-bilities to take a far-sighted and detailed role in promoting Australia's exports and competitive advantage in the overseas markets. I think that, as with all our policies since we have been in government, this organisation too will work effectively and should be promoted. Mr SHIPTON(Higgins)(11.29) —In speaking on the Australian Trade Commission Bill I point out that its alleged aim is to streamline the Australian Trade Commissioner Service. That is nice rhetoric and it might look good to create a new bureaucratic monster, to set up a new organisation and to reshuffle the deck chairs on the Titanic, but I believe it will be only marginal in helping Australia's export industries. One has to attack fundamentals rather than create a new trade commission organisation to ensure the success of Australia as an exporter. The Bill will create a new bureaucratic monster without attacking or addressing the fundamental problems facing Australia and its economy. This week's balance of trade figures show a complete failure of the Government's trade, economic and financial policies. They are quite devastating-a $1.6 billion deficit for October, the most damaging that we have had. It is a direct result of the Government's failure to discount wages and of the failure of the accord, which is the centrepiece of the Government's economic policy in governing the nation. That failure puts Australia economically out of balance with the rest of the world. The accord is an agreement between the political and industrial wings of the Australian Labor Party, and I believe that it is the high point of union power by which this Government's wages and economic policies are determined. It is a written agreement which has just been renewed between the parent on the one hand and the child-namely, the parliamentary wing of the industrial trade union movement, the Australian Labor Party, and the Australian Council of Trade Unions. I repeat that the accord is the high point of union power. There is a written agreement dictating to the Government how it will govern and what its wages and economic policies will be. Here in Australia today the unions possess unprecedented power. Because of the accord, which automatically passes on inflation through a centralised wage fixing system and there has just been a 3.8 per cent increase under wage indexation passed on to Australia's wage earners as a result of the accord and the Government's economic policy-we have paid ourselves more than we can afford. Australia's export industries and the economy are becoming less competitive by the day. That is why the balance of trade figures to which I referred earlier for the month of October are so devastating. The deficit on our balance of trade is a direct result of the accord, the failure of the Government's wages and economic policies, and the Government's failure to address the competitiveness of Australian industry because of the high wage cost structure system. Mr Hodgman —We are technically bankrupt. Mr SHIPTON —Yes, we are technically bankrupt. We have failed and the accord locks us into a rigid system. We have failed to have what we need, and that is a flexible, less rigid system, because that is the way to address our exports. The Government should be looking at the fundamentals of the economy-at how we increase exports and how we make Australia more competitive. We need to address the whole wages structure. That is the way to have an efficient economy rather than to have the charade of this legislation which is now before the House and which is creating a new bureaucratic monster. The accord locks Australian employers into paying automatic wage indexation without any notice being taken of the capacity of an individual firm, enterprise or industry to pay or of its profitability. Recently across the board the Australian Conciliation and Arbitration Commission awarded a 3.8 per cent wage increase. This again is a direct result of the accord, the policies that flow from it and the deal between the ACTU and the Government. This is why Australian farmers, miners and small businesses are becoming uncompetitive. They cannot negotiate different terms, conditions and wage rates according to the capacity of an industry to pay and according to profitability, because of this rigid, inflexible, institutionalised accord under an equally inflexible and institutionalised Conciliation and Arbitration Commission. Those are the fundamentals which this Government should be looking at rather than coming to the House with the charade of a new Australian Trade Commissioner Service, and that is the way to help improve exports. As I have said, the accord sets the Government's policies and the Government is presiding over a most serious deterioration in Australia's trading performance. Ministers admit it. The honourable member for Dawson (Mr Braithwaite), who has spoken in this debate, congratulated the Minister for Trade on his frankness that over the past 30 years Australia has slipped as an exporter from eighth to twenty-third place. I have already said that the October trade figures are quite devastating. They comprise an all-time record for the last three years. Over the past three years our net balance of payments on current account, including the October figure, is $29 billion-a devastating current account deficit. The Bill does not address fundamental matters that vitally affect trade. As an exporter Australia is falling behind the rest of the world daily because of our uncompetitive cost structure and wages system as a direct result of the accord. We are losing ground daily. We have lost ground in the major markets to which we export-Japan and the Association of South East Asian Nations. We have a pitifully poor export performance. The Government has deregulated the financial system and the Opposition has been constructive in welcoming that. It has freed the Australian dollar, which is now subject to international market forces. Its value is that which buyers and sellers put on it when buying and selling Australian currency. On the one hand the Government has de-regulated the financial system and freed up the dollar, but it has not deregulated the wages system. As I have said, we still have a rigid, inflexible wages system which is highly centralised. In addition to its highly centralised nature, we now have this accord document to which I referred, which is the high point of union power in giving automatic wage indexation. The Australian economy now has a nearly deregulated financial system and a freed up dollar which is subject to international market forces, but it has an institutionalised, rigid and inflexible wages system. So there is a massive distortion in the economy because of the failure to deregulate wages. This Government is unable to deregulate wages. It is a prisoner of the trade union movement at any time, but it is now locked in by virtue of a written agreement called the accord. We need a flexible wages system whereby employers and employees within an industry can negotiate terms and conditions of employment according to the capacity to pay. That is how we will get increased export performance and more competitive Australian exporters and businesses. This lack of confidence of overseas investors in the Australian dollar is the reason for the record high interest rates we have at the present time, which again adds to the circle of uncompetitiveness of Australian industry. High interest rates add to the costs of the farmers about whom I spoke, the miners and the small businesses. A slow-down in the economy is starting to occur. We have talked in this House on previous occasions about the slow-down and its effect on home owners in the increased payments they will have to meet because of the record high real interest rates in this country. We will have a slow-down in investment. The uncompetitiveness of Australian industry on export markets is a direct result of the failure of the Government to discount wages-it cannot do so under the accord-for the full effect of the devaluation of the dollar. International markets have judged Australia as a poor performer as an exporter and as a nation because of the high cost structure and the nature of this inflexible wages system. That is why we have record high interest rates and that is why the circle is going round and round. Unless the Government grasps the nettle and discounts wages for the full effect of the devaluation that has occurred, we will become more and more uncompetitive. We are competitive now, with an inflation rate that is double that of our major trading partners. We are living in a fool's paradise. We have to take our own medicine. We have to discount wages for the devaluation of the Australian dollar. We have to reduce in real terms Australian wages. That is the only way we will have a competitive economy, competitive exporters, miners, farmers and small businesses. I move on to another matter in relation to the Trade Commissioner Service, that is, the appointment of Mr David Combe to the position of Australia's Trade Commissioner in Vancouver. I am most concerned that prior to Mr Combe's taking up his appointment recently the area of responsibility of the Australian Trade Commissioner Service in Vancouver was changed. Apparently the Vancouver Trade Commissioner Service office previously had responsibility for the State of Washington in the United States. The State of Washington, which is next door to British Columbia in Canada, has important defence facilities. Apparently the Government has now arranged that Australian trade with Washington State, which is important, will be dealt with from the San Francisco office of the Trade Commissioner Service instead of the Vancouver office. Mr Combe has been prevented from acting as Consul-General within the Washington State of the United States, which was apparently normal practice before Mr Combe took up his appointment. The Minister for Trade is in the House today and it is important that he should explain to the House the reasons for the change in the area of responsibility in this so-called streamlined Trade Commissioner Service provided for in the Bill we are now debating. Is this appointment the way to run an efficient trade office, particularly as San Francisco is five times further from Washington State than Vancouver? This changed arrangement to which I have referred in the administration of the Vancouver office of the Trade Commissioner Service and Mr Combe's appointment is the last so far, in a series of unexplained actions by this Government. The Melbourne Herald newspaper raised on a number of occasions questions about Mr Combe's appointment. On 29 July it asked a number of questions. We have a Bill before the House which is trying to streamline the Trade Commissioner Service, yet we have an appointment which has damaged morale in that Service. I have raised a question about efficiency in relation to Canada and the State of Washington. There are legitimate questions which need to be answered by the Government about the appointment of Mr Combe as Trade Commissioner in Vancouver. I believe that the Minister and the Government owe the House and the nation a complete explanation of the details concerning Mr Combe's appointment. The Government must answer the following questions: Why was the area of responsibility covered by the Vancouver office changed; who was the previous occupant of the position in Vancouver; why did that person vacate the position; were there any other candidates for the Vancouver Trade Commissioner job; were any interviews conducted for the position; was any person appointed, but the appointment not announced, prior to Mr Combe's appointment to the job; was that person subsequently told that he or she did not have that appointment; were any other positions offered to Mr Combe prior to his appointment; was the appointment made by Cabinet-perhaps our colleagues opposite could tell us whether the appointment was approved by Caucus-and was the appointment a pay-off for the damage Mr Combe suffered because of the shabby treatment he received from the Government during the Ivanov affair? I believe that the Minister owes the Parliament an explanation. The House should be given the complete reasons for Mr Combe's appointment as Trade Commissioner in Vancouver, and this debate on this legislation on the Australian Trade Commission legislation provides the Minister with an opportunity to do that. In conclusion, I raise one other issue about Australian exports, mainly the rural exports which are important to Australia. The position under the European common agricultural policy is that European producers are dumping their rural goods on our markets and are taking traditional European markets from us because of their highly subsidised agriculture. The common agricultural policy in Europe is the result of a very strong rural lobby. I believe that this Government-and previous governments for that matter-have forgotten the consumers in European capitals and cities with whom we have common interests. Australian exporters and the Australian economy and nation have similar interests to those of European consumers; that is, the provision of low cost, high quality rural products. I believe that the Trade Commissioner Service and the Government should make diplomatic efforts to work with and lobby members of the parliaments of Europe, the individual nation states, the European Economic Community and the European Parliament. Similarly, I believe that the Government should lobby and work with consumer groups in Europe in the common interest of Australian exporters to increase the efficiency and effectiveness of Australia's exporters to Europe and the rest of the world. I thank the House. Mr HOLLIS(Throsby)(11.45) —I am pleased to speak in this cognate debate on the Australian Trade Commission Bill and the Australian Trade Commission (Transitional Provisions and Consequential Amendments) Bill. I listened to what the two previous Opposition speakers said- Mr Cleeland —It wasn't very much. Mr HOLLIS —As my colleague says, it was not very much. The honourable member for Dawson (Mr Braithwaite) put the blame for all our trade problems down to taxation, and I was not sure for a while what the honourable member for Higgins (Mr Shipton) was talking about. He seemed to spend a lot of time talking about the prices and incomes accord. We heard the usual Opposition rubbish and he made a snide comment about the newly appointed Trade Commissioner in Vancouver- Mr Hand —He won't have a go at him outside. Mr HOLLIS —No, he will not have a go at him outside. It is coward's castle in here; members of the Opposition come in here and defame people but they will not repeat their comments outside. Our problems are not as simple as members of the Opposition have suggested. We all know that there have been problems in the trade area, but surely the Government is trying to offer a more effective service. The Opposition talks about the slip in our position in world trade over the past 30 years, but who had control of the treasury bench for most of those 30 years? It certainly was not the Australian Labor Party-it was the present Opposition. If there has been a slip in Australia's world trading position surely the coalition is responsible for it. After 2 1/2 years in government we are not prepared to let things go on as they have in the past under coalition governments. It was this Government's recognition of Australia's deteriorating position in world trade that prompted it to set up a panel to have an in-depth look at our trade position. Opposition members talk about trade and the way it was in the 1950s, the 1960s and maybe the early 1970s. We have a totally different world situation now. We cannot go back to those days; we cannot go back to the days when Australia exported so many of its minerals. We are in a much more competitive world; it is a whole different trading situation. Maybe some of us in this House should start to take a little notice of the warnings that the Minister for Science (Mr Barry Jones) has been giving us in the trade area. As I said before, I am not sure what the honourable member for Higgins was talking about. I notice that he has left the chamber; that shows the interest honourable members opposite have in trade. His speech for a while seemed to concentrate on industrial relations, as he spewed out his usual hatred of the accord. One wonders why the Opposition hates the accord so much. In 2 1/2 years the accord has given this country economic stability. The honourable member for Higgins has put all our economic and trade problems down to the accord; but it is the accord that has given us the economic stability that will enable our trade to grow. The honourable member also spoke about reshuffling the bureaucracy. I am not quite sure what he was talking about. He referred to the new arrangement being introduced and how all it will do is reshuffle the bureaucracy. Previous export efforts, while individually successful, often suffered from a lack of co-ordination with the various arms of government. With common goals and a single board of directors of a commercial character, the Australian Trade Commission will offer more efficient and effective services to exporters. Surely that is what we should be aiming for. I cannot let this opportunity go without mentioning the Opposition's pathetic attack on the newly appointed Australian Trade Commissioner in Vancouver. How low will member's of the Opposition go? They are on very dangerous ground when they start talking about government appointments because if we want to dig out some of the appointments that those opposite made, during those lean, hungry, disastrous years when they were in government, and look at the qualifications of those people, we may well have nothing but embarrassed silence from that side of the House. It is a truism to say that Australia lives by trade. Like other members of the Government, I welcome these initiatives in the trade portfolio. Under the proposed changes the Australian Trade Commission will assume the responsibilities, functions and powers of the Australian Trade Commissioner Service, the Export Development Grants Board, the Export Finance and Insurance Corporation and the Australian Overseas Projects Corporation. These organisations collectively employ nearly 1,000 people and have a combined budget in excess of $200m. This Government recognises the need for concerted action to overcome Australia's difficult trading situation, and streamlining the administrative machinery was a necessary first step in laying the ground work for an improvement in Australia's trade performance. The Commission will act as a one stop trade shop providing exporters with a full range of appropriate advice and packages of assistance drawing on all the Government's resources. This is an important aspect of this legislation. It will streamline the service that we can offer to exporters. The Commission will also have responsibility for overseas marketing, promotion and publicity, which is currently the responsibility of the Department of Trade. I also welcome the changes to the Trade Development Council. This long standing advisory group has been restructured by the Minister for Trade (Mr Dawkins). Its reorganisation forms part of the larger restructuring of the Trade portfolio. This restructured Trade Development Council has been reduced in size from 43 to 14 members. It will be a tripartite body embracing government, unions and business. When announcing the restructured Council the Minister for Trade said: The effective promotion of Australian exports, particularly in the rapidly growing manufactures and services sectors, is a key element in the Government's overall economic strategy. This requires the collaboration and co-operation of business, unions and government. The framework of the prices and incomes accord continues to be central to that process. I endorse that statement. The accord does continue to be central to that process. This Government has given special attention to developing Australia's trade with China. During the Minister's recent visit to that country he canvassed these trade issues. As well, the Minister has appointed a special trade representative with responsibility for trade with north Asia. This person is responsible to the Minister for Trade for the development and management of Australia's trading relationships with three of our major trading partners-Japan, China and the Republic of Korea. The appointment reflects the great importance that the Government places on the development of Australia's trade with this vital area. It is a high priority for the Government to sustain the momentum of the great advances which have been made in our trade relationship with China through the China action plan and sectoral initiatives such as the iron and steel initiative; to continue to develop a positive climate within which Australian firms can find new opportunities within the changing structure of the Japanese economy; and to develop and foster our very important trading relationship with the Republic of Korea, which will offer increased opportunities to Australian exporters as the Korean economy continues to grow. It is important to be aware of the Government's initiatives as applied by this legislation. Australia must continue to develop and extend its trade. There are areas in which we can do more, especially in South East Asia, India and the Middle East. Several trade displays and trade missions have recently been held in Middle Eastern countries, especially the Gulf countries, and I hope that the new Australian Trade Commission will assist these projects. In many respects India is an untapped market. I know that we do sell some good South Coast coal to India-coal from the electorate of my colleague the honourable member for Macarthur (Mr Martin), who has assisted in the sale of that coal to India-but the new Trade Commission should be looking at developing other avenues of trade with India. I refer particularly to the scientific area. I believe that there is a great market there. Although I admit, as a representative of a partly rural electorate, that there is an oversupply of dairy products in many parts of the world caused by the disastrous agricultural policy of the European Economic Community, I believe there is much that can be done to promote the export of Australian dairy products. Although perhaps we cannot export the traditional products, let us look at new products that can be developed and perhaps air-freighted to some of these huge markets on our doorstep. I have recently had discussions on this matter with the Shoalhaven Dairy Co-operative in my electorate on this matter. I am getting a sign from the Whip. In conclusion, I must say that I endorse the remarks of my colleague the honourable member for Macarthur who paid tribute to the tremendous work that Graham Jackson of the Department of Trade has been doing in the couple of years that he has had responsibility for the office of the Department in Wollongong. I commend the Bills to the House. Mr EVERINGHAM(Northern Territory)(11.56) —The honourable member for Throsby (Mr Hollis) said that the previous speaker, the honourable member for Higgins (Mr Shipton), hated the accord. I cannot put words into the mouth of the honourable member for Higgins, but I certainly detest the accord-that arrangement between big unions and big government acquiesced to by big business which, because of the impact it is having on the interest rates payable in this country, is taking food out of the mouths of Australian children. Let me explain how that happens. With high interest rates there are higher home payments and, of course, there is only so much in the family budget. Families have fixed commitments. They have hire purchase commitments and all the rest of it. With the Government skyrocketing interest rates through ceilings that have never been recorded before in this country, it is the food section of the family's weekly budget that is suffering. The accord is taking food out of the mouths of Australian children because it is the accord that is forcing up interest rates in this country. At first glance, given the description by the Minister for Trade (Mr Dawkins) of the new Australian Trade Commission as a one stop trade shop, it might have been thought that the new Trade Commission was a step in the right direction. It might seem that the drawing together of a number of different agencies under a single umbrella would assist Australian exporters and lead to a rationalisation of the multiplicity of corporations, boards, services and departmental authorities that have grown up in inverse proportion to Australia's declining export performance. However, a number of factors demonstrate that, in fact, the establishment of a new statutory authority, less answerable to either the Minister or Parliament, is a step backwards. A major factor is that the Minister's plans to establish the Commission have already failed to gain the support of the very people that the Commission is supposed to assist-Australia's business community. One might have thought that this Government, which is fond of proclaiming its special relationship with big business and congratulating itself on its record of consultation with industry leaders, might have asked Australia's present day and potential exporters how government might best assist them. Instead, the Minister comes to this House with a proposal that is transparently a product of bureaucratic empire building and the Minister's desire to be seen to be doing something on a grand scale. We are told that the new Commission will have a staff of some 1,400 people, and a budget in the order of $200m. It is clear from this that the new Commission will take on the full staffing and budgetary commitments of the various agencies that are to come under its wing. My inquiries have revealed that the Export Finance and Insurance Corporation has 96 staff, that the Australian Overseas Projects Corporation has 14 people working for it, that the Export Development Grants Board has 94 staff and that the Trade Commissioner Service some 550 people, of which 150 are based in Australia. Presumably the other 650 people to be employed by the Trade Commission are those presently working in the marketing and promotion areas of the Department of Trade. It is clear, firstly, that in establishing the new Commission the Minister has made no attempt to use the opportunity to reduce staffing levels-an attempt which one might have hoped would be a natural outcome of any decision to rationalise a number of agencies under the one roof. Secondly, and even more seriously, it is clear that the new Commission-a semi-autonomous and semi-commercial organisation-will start out burdened by the accrued, collective superannuation, long service leave, rights and entitlements of 1,400 public servants. The Minister offers no division of expenditure of the $200m budget for the Commission, but this House can assume that by far the greatest proportion will go towards fulfilling staff entitlements, rather than doing the job for which the Commission is designed-improving Australia's export performance. The Minister's record of performance in this portfolio has not been encouraging. Since the Minister took on this responsibility, the public's attention has been drawn to a number of interdepartmental squabbles between Treasury and Trade, and between Foreign Affairs and Trade, and conflict between the Minister and the departmental head about the Minister's apparent insecurity on policy making and public comment. Meanwhile, the Australian Chamber of Commerce earlier this year attacked the concept of an overseas trading corporation, apparently proposed by the Department, and overseas the sudden withdrawal of senior Trade Department officials in London, Brussels and Geneva has left both foreign and Australian businesses in a state of confusion. Given this muddle-headed record of administration and policy making, and given Australia's relentless decline as an exporting nation, it might be useful to the Minister to learn of successful approaches to the question of export encouragement undertaken by a country which, like Australia, is faced with a small domestic market and a resultant need to export to grow-to coin an old slogan. About nine years ago Sweden, a high cost country, which as the Minister would be aware has just half of Australia's population, completely reorganised its trade promotion efforts by establishing the Swedish Trade Council. A recent survey shows that Sweden now rates sixth on a list of 28 countries in international competitiveness, while Australia ranks sixteenth, having slipped from twelfth position in the past year. That might, incidentally, give the Treasurer (Mr Keating) something to talk about next time he is chatting with Simon Crean and Bill Kelty. However, my purpose is to give the Minister for Trade something to think about as he creates this monolithic statutory authority, and therefore I will acquaint him with the nature of Sweden's Trade Council-its equivalent of the Australian Trade Commission. The most relevant consideration is that the Swedish Trade Council is financed 50 per cent by government and 50 per cent by private enterprise. Its board is constituted from government and private enterprise in the same proportions. There are some 3,600 private enterprise members of the Council, who between them contribute some $27m-at today's exchange rate, so it will probably be different tomorrow-to the Council's budget, through membership and consultancy fees. The most significant point, of course, is that the Swedish business community is 100 per cent involved in and supportive of its country's export promotion and marketing organisation. We might compare that with the understandable lack of enthusiasm and unmitigated apathy shown towards the Minister's Trade Commission by the Australian business community. That is understandable, because it was not consulted and will not be involved. Simply stated, and in stark contrast to the successful Swedish model, Australian manufacturers and exporters are having imposed upon them a bureaucratic body for which they did not ask and they do not want. There are other lessons to be learnt from the Swedish experience and, of course, we could do with some in light of this month's trade figures. For instance, the Swedish Trade Council has a total annual budget of around $70m-as against $200m-and a total staff of 432-as against 1,400-including overseas employees manning 70 overseas offices, including two in Australia. There cannot, of course, be any justification for saying that because Australia has twice Sweden's population, it should have twice the number of employees in its overseas offices and twice the budget. Even taking into account the extra effort needed in export promotion and marketing, the $200m budget and 1,400 staff proposed by the Minister is clearly a further example of Government extravagance at its worst. It is ironic that this Government's response to its mammoth current account and trade deficit is to throw even more taxpayers' money at the problem. The total cost to the Swedish taxpayer of the Swedish Trade Council this year will be about $35m. With this new Commission, Australian taxpayers will be charged approximately six times as much for much less benefit. Lastly, the Minister might like to note that trade commissioners, market managers and assistant trade commissioners employed by the Swedish Trade Council are drawn not from the bureaucracy but from private enterprise. Indeed, they must have at least 10 years experience in export enterprise plus overseas experience in order to qualify for these jobs. They have a maximum term of five years in the job, at one post in one country, and then return to private enterprise life. Quite apart from the level of experience, stability and understanding such a system must bring to the Council's trade offices, the Minister should positively salivate at the implied savings in superannuation and long service leave that such a system would mean. I recommend most strongly that the Minister reconsider his approach, and he would do well to study the trade commission models established by the successful exporting countries of the world. He could do worse than give the Swedish Trade Council office in Melbourne a ring if he is short on ideas. The monolithic and extravagant Commission that the Minister seeks to impose upon Australian exporters and taxpayers will become just one more expensive and entrenched institution, outside the direct supervision of this Parliament or the responsible Minister. The Minister has shown rare honesty in detailing Australia's poor international performance, which must have left his colleagues breathless. They are constantly telling the country how well we are doing economically. I would also recommend to the Minister a paper from the Australian National University's Centre for Economic Policy Research, by visiting Professor Olson, and the Brookings study, `A View from the North' which both clearly demonstrate that Australia's rush to protectionism earlier this century has created today's trade deficit difficulties. `The View from the North' has nothing to do with the Northern Territory, being a view from the Northern Hemisphere, but it coincides very well with the view from the Northern Territory. The Territory is now establishing a trade development zone-the first such in Australia, although there are hundreds in the United States of America. Our zone faces the greatest economic growth centre of the world today in Asia and the Pacific, and the Northern Territory is undertaking, even in the face of Federal Government inertia, plans that could transform the nature of Australia's trade routes and priorities. The Northern Territory, like all Australia, has a very big stake in the future of Australia's trade performance. I know that the Territory Government and territory enterprise would be only too happy to advise the Minister on ways to go about increasing our trade prospects. I am sure that the Australian business community would also welcome the chance to be involved in a real way in trade promotion efforts. I ask the Minister to withdraw this Bill-a second time-and bring back to this House a proposal that will have the support and involvement of the Australian exporters of tomorrow. Mr LINDSAY(Herbert)(12.8) —The purpose of the Australian Trade Commission Bill is to establish the Australian Trade Commission as a statutory authority to consolidate and improve the Federal Government's support for export marketing activities. This Bill will enable the bringing together and integration of the various operational arms of the Trade portfolio into a single statutory authority. These are: The Export Finance and Insurance Corporation, the Australian Overseas Projects Corporation, the Export Development Grants Board, the Trade Commissioner Service, and the marketing, promotion and relevant management areas of the Department of Trade. I am informed that the functions of the Commission are primarily to develop and implement programs to facilitate and encourage the export of Australian goods and services. As previous speakers have said, the Commission will act as a one stop trade shop. It will provide exporters with the full range of appropriate advice and packages of assistance, The enormous resources of the Federal Government will be available to the Commission. The Hawke Government, an authentic Australian government, is determined that the Commission will have the benefit of the best business knowledge and experience available. Australia's export marketing efforts will be strengthened and made more effective. The urgent need for Australia to lift its export performance is evident to all. Unless Australia is able to lift its export performance dramatically and quickly, Australians face a sharp drop in living standards. The task before the Commission is immense. Years of incompetent Liberal-National Party government have almost extinguished Australia's export competitiveness. Australian manufacturers export only 8 per cent of goods while countries with similar living standards to Australia export up to 30 per cent of their manufactured goods. Australians will never forget that for 30 of the last 35 years the Liberal-National Party held Federal Government. During this time the Liberal-National Party presided over policies which saw Australia slip from eighth to twenty-third in world export rankings. Over the last 30 years, for most of which the Opposition was pretending to govern, Australia's share of the world export market slipped from 2.6 per cent to 1.2 per cent. While the Opposition governed, Australia lost ground in most major overseas markets including Japan, the countries of the Association of South East Asian Nations and the western Pacific. For example, Australia's share of imports fell from 8.4 per cent in 1970 to 5.3 per cent in 1980, a fall of 37 per cent. Australia's share of imports by the ASEAN countries fell 30 per cent. Machinery accounted for some 30 per cent of all goods imported by the ASEAN countries in the 1970s. Australia's share of imports of these goods by the ASEAN countries fell from 2.2 per cent in 1970 to a mere 0.9 per cent in 1980. Liberal-National Party policies resulted in the dominance-unusual by comparison with other major industrialised nations-of agricultural and mineral commodities in Australia's export mix and in the lack of real commitment by manufacturing industry in Australia to export: The Liberal-National Party coalition blamed Australian workers and said their wages were too high. But wages in Sweden are just as high and still Sweden has a thriving manufacturing export industry. The Hawke Government recognises that Australia's export performance will not be lifted by a single measure. Only a cohesive and co-ordinated set of policies, pursued with determination by government and industry, will create the economic environment essential for Australia's recovery as a major trading nation. Greater export of manufactured goods and services will be a major factor in rolling back unemployment. It is fact that for every $100m in exports, 5000 jobs are created. But all is not gloom. Australia is well placed geographically in the world's highest growth region. Australians are a skilled and inventive people, capable of designing and supplying quality products and services for world consumption, and there are many export success stories to learn from. The North Queensland region has a long history of exporting and has continued to develop new markets and new products. In 1983-84 exports from the North Queensland region amounted to $2,234,206,000-or 44.11 per cent of the Queensland total. On 11 November 1983, I opened the Townsville office of the Department of Trade. It was the first regional trade office located outside the capital cities. It was opened for one purpose-to service the strong export potential of North Queensland. Since the establishment of this office, transport infrastructure is being improved. Direct air freight linkages now exist with New Zealand, Singapore, the United States, Canada, Papua New Guinea and Irian Jaya. There has been a growth in new industries. Manufacturing industries include building materials, agricultural machinery, mining machinery and service, clothing, copper products, ethyl alcohol, food supplements and boats. New and expanding industries involving the production of fruit and vegetables, prefabricated housing, mariculture, security devices and food supplements are looking to export markets. Manufacturers are becoming more diversified and employment and exports generated by them are on the increase, with regular shipping from Cairns to Port Moresby. Papua New Guinea is now developing as a market for building materials and machinery, prefabricated housing and related products, agricultural and mining machinery and servicing, and pipeline systems. A high level of interest has been achieved and firms are beginnning to team together to offer better packages. In addition, North Queensland firms have been encouraged to apply for Papua New Guinea franchises to increase market penetration. Mining equipment, boats, seafood and security equipment are considered to have good prospects in North America. The Townsville office of the Department of Trade has assisted with market research and the seafood industry in particular has made considerable inroads. Boating has been identified as being a major growth industry in North Queensland and local manufacturers are already seeking assistance in entering the lucrative American market. The long term future of the northern fruit and vegetable industry is largely dependent on the exploitation of the ASEAN market. The findings of the Australian fresh tropical fruit and vegetable survey mission to South East Asia in 1984 have been of assistance to northern growers and much ongoing work is taking place, generated in part by crop diversification away from sugar and the Burdekin Dam due for completion in the near future. Having a direct air link between Townsville and Auckland allows for the quick movement of air freight to New Zealand. However, North Queensland is faced with stringent New Zealand quarantine regulations that have prevented large sales of fruits and vegetables in the past. New Zealand is considered to have good potential as a market for tropical fruits and vegetables. The reduction of shipping services from Cairns, Townsville and Mackay is of concern to north Queensland exporters. The withdrawal of Australian National Line and scan carrier links has impaired the region's ability to export and has forced some major mineral producers to charter shipping or freight goods south to Brisbane. Cargo centralisation of beef exports in southern ports has deprived Townsville of export trade of some 3,600 containers a year to the United States. Nevertheless, through the application of new technologies and processes in existing manufacturing operations, north Queensland exporters now have a chance to improve their overall cost structure significantly. This can only serve to increase exports from north Queensland. While there has been outstanding success by the Townsville office of the Department of Trade, it is clear that Australia's export recovery simply will not happen if its exports continue to be concentrated in the slowest growing segments of international trade-bulk agricultural commodities and minerals. Indeed, Alan Goodall, writing in the Australian of 1 February 1985, observed: In the medium to longer term, growth in import demand for agricultural products is expected to slow. The outlook for the mining sector does not suggest an overall major recovery from current low prices. In the same article, Mr Bill Ferris, whose national export marketing strategy panel produced a major report-sometimes seen as the basis for government-led export reforms-is reported as saying: We cannot, as a nation, continue with a manufactures sector which earns only 9 per cent of its revenues from overseas sales and contributes only 20 per cent of total national export income. Similarly, with the services sector, Australia's poor performance in exporting manufactures does not flow from demand factors but from the uncompetitiveness of our manufacturing base and the absence of a sufficiently outward looking commitment to growth. Both are within our power to solve. The Liberal-National parties have a lot to answer for. The long term lack of co-ordinated national industry policies and insufficient export support has been a major factor in Australia's poor export performance because it has prevented manufacturers from utilising Australia's resources to best advantage in establishing a national brand image. Australia's export performance clearly is out of kilter. In the excessive dependence on agricultural and mineral exports Australia's trade pattern has more in common with developing economies than industrialised countries. Many Australian manufacturers have neglected two basic requirements of any business-an entrepreneurial instinct and good salesmanship. For too long, they were content to rely on the domestic market without seriously considering exports. It is plain that many of them are unfamiliar with foreign currency transactions, trade regulations, Customs practices, export finance, overseas markets intelligence and foreign business customs. Despite abundant evidence to the contrary, many manufacturers have come to believe that exporting is not worth the effort and that their products are unacceptable. Australia's strength in manufacturing exports lies in the area of middle level technology, where manufacturers already have a very confident command of what is involved and a well established base, rather than chasing high technology rainbows. Australia can no longer ride on the back of commodity exports. One way Australians can raise their standard of living is through export income earned from manufactures and services. The Hawke Government has an outstanding record in providing a climate conducive to export. To sum up: These Bills are further evidence of the Hawke Government's commitment to national reconstruction, national recovery and national reconciliation. Mr SLIPPER(Fisher)(12.19) —Madam Deputy Speaker, I am pleased- Motion (by Mr Dawkins) agreed to: That the question be now put. Original question put: That the Bill be now read a second time. The House divided. (Madam Deputy Speaker-Mrs E. E. Darling) Ayes . . . . . . . . . . . 68 Noes . . . . . . . . . . . 52 —— Majority . . . . . . . . . 16 —— Baldwin, P. J. Kelly, R. J. Beazley, K. C. Kent. L. Beddall, D. P. Keogh, L. J. Blanchard, C. A. Klugman, R. E. Bowen, Lionel Lamb, A. H. Brown, John Langmore, J. V. Brown, N. A. Lee, M. Brumby, J. M. Lindsay, E. J. Campbell, G. McHugh, J. Charles, D. E. McLeay, LeoChild, J. Maher, M. J. Chynoweth, R. L. Martin, S. P. Cleeland, P. R. Mayer, H. Cross, M. D. Mildren, J. B. Cunningham, B. T. (Teller) Milton, P. Dawkins, J. S. Morris, AllanDubois, S. G. Morris, PeterDuffy, M. J. Mountford, J. G. Duncan, P. O'Keefe, N. P. Fatin, W. F. O'Neil, L. R. T. Free, R. V. Punch, G. F. Gayler, J. Saunderson, J. Gear, G. Scholes, G. G. D. Gorman, R.N. J. Scott, J. L. (Teller)Grace, E. L. Simmons, D. W. Hand, G. L. Snow, J. H. Hayden, W. G. Staples, P. R. Holding, A. C. Theophanous, A. C. Hollis, C. Tickner, R. E. Howe, B. L. Uren, T. Hurford, C. J. West, S. J. Jacobi, R. Willis, R. Jakobsen, C. A. Wright, K. W. Keating, P. J. Young, M. J. Adermann, A. E. Jull, D. F. Beale, J. H. Lloyd, B. Blunt, C. W. McArthur, F. S. Braithwaite, R. A. McGauran, P. J. Brown, N. A. MacKellar, M. J. R. Burr, M. A. Macphee, I. M. Cadman, A. G. McVeigh, D. T. Cameron, Ewen (Teller) Miles, C. G. Cobb, M. R. Millar, P. C. Connolly, D. M. Moore, J. C. Conquest, B. J. Peacock, A. S. Cowan, D. B. Porter, J. R. Dobie, J. D. M. Reith, P. K. Downer, A. J. G. Robinson, IanDrummond, P. H. Rocher, A. C. Edwards, Harry Ruddock, P. M. Fife, W. C. Shack, P. D. Fischer, Tim Shipton, R. F. Goodluck, B. J. Sinclair, I. McC. Hall, Steele Slipper, P. N. Halverson, R. G. Smith, W. Hawker, D. P. M. Spender, J. M. Hicks, N. J. (Teller) Sullivan, K. J. Hodges, J. C. Watson, DavidHodgman, W. M. Webster, A. P. Hunt, R. J. D. White, P. N. D. Humphreys, B. C. Katter, R. C. Price, L. R. S. Aldred, K. J. Bilney, G. N. Tuckey, C. W. Question so resolved in the affirmative. Bill read a second time. The Bill. Mr DAWKINS(Fremantle-Minister for Trade) —by leave-I move: (1) Clause 3, page 2, lines 3 and 4, omit ``an acting Managing Director of the Commission appointed'', insert ``a person acting as Managing Director of the Commission''. (2) Clause 33, page 18, line 40, insert ``Australia or'' after ``rendering in''. (3) Clause 56, page 29, line 26, omit ``(1) or''. (4) Clause 56, page 29, lines 29 to 33, omit sub-clause (4), insert the following sub-clause: ``(4) The Minister may- (a) determine the terms and conditions, including remuneration and allowances, if any, on which a person is to act under this section; and (b) terminate an appointment under this section at any time.''. (5) Clause 56, page 29, lines 34 and 35, omit ``as Managing Director in accordance with paragraph (1) (b) or''. (6) Clause 56, page 30, line 1, omit ``to act as Managing Director or''. (7) Clause 56, page 30, lines 10 to 15, omit sub-clause (9), insert the following sub-clause: ``(9) The validity of anything done by, or in relation to, a person purporting to act under sub-section (1) or (2) shall not be called in question on the ground that- (a) in the case of a person purporting to act under sub-section (1)-the occasion for the person to act had not arisen or had ceased; or (b) in the case of a person purporting to act under sub-section (2)-the occasion for the appointment of the person had not arisen, there was a defect or irregularity in or in connection with the appointment of the person, the appointment had ceased to have effect or the occasion for the person to act had not arisen or had ceased.''. (8) Clause 91, page 45, line 8, omit ``other person'', insert ``person employed by the Commission under section 60''. The amendment to clause 91 is designed to reflect the Government's intention to restrict the Australian Trade Commission's delegation of any or all of its powers or functions to persons employed by the Commission. While the same effect could have been achieved by the Minister using his power of direction under other provisions of the Bill, it was considered desirable to insert a statutory restriction. Clause 33 is to be amended to enable the Commission to provide finance in relation to services in connection with eligible export transactions which are rendered in Australia, for example, training and educational services. The clause already provides for the Commission to finance such services in foreign countries. The remaining amendments to clause 3 and clause 56, which are more of a drafting nature, have been made to reflect consistently the various references in the Bill in respect of the office of the Acting Managing Director. Let me just make a few observations, as we are dealing with the Bill as a whole. I thank honourable members for their contribution to the second reading debate. I will make a few observations about the contribution particularly from the Opposition and the Opposition's decision to oppose this legislation. In the first instance I must say that, running through the Opposition's contributions, was a lamentable mishmash of confusion and ideological prejudice concerning the intentions of this legislation. Much of the contributions from the Opposition centred around the appropriateness or otherwise of Australia's current macro-economic policy as it affects our trading performance. It should not be necessary for me to point out that the legislation before us is not at all to create for macro-economic policy, but rather to establish an agency to support exporters and to improve the marketing effort of Australia generally and of our individual exporters. I think that is the important point. The important point that we are trying to make in the establishment of this organisation is to bring together all the existing services which have been supported by successive governments, extended from time to time into new areas, to provide those services more efficiently and, most importantly, in a way which is more relevant to the needs of Australian exporters. Frankly I find it beyond comprehension that this legislation could be characterised as part of this Government's onward march of nationalisation, as was done by the Opposition spokesman in this area. The simple point is that we are bringing together some existing agencies. In almost every respect, the powers which exist within the existing legislation, most of which were supported by the previous Government, if not enacted by it, have been carried forward into this legislation. The great difference is that we are centralising those services under one board. That board will be comprised overwhelmingly of private sector representatives. To suggest that people of the character of Kevan Gosper of Shell, Peter Cotterell of Email, Brian Scott, formerly of W. D. Scott and Bill Ferris of Barlow Marine Ltd and the others would be agents for the nationalisation of Australia's trade effort is just simply beyond belief. They have joined the interim board not only because of the great contribution they can make to the establishment of this Commission, but also because they recognise that here is a great improvement that can be effected to improve Australia's trading performance and to extend to Australian exporters a better and more relevant service. I want to take up one point made by the honourable member for the Northern Territory (Mr Everingham) who, in his criticism of this legislation, held up the Swedish Trade Council, which of course was established by the wicked socialist government which has been running Sweden for most of the time since the war. The point that he was making was that the great success of the Swedish Trade Council was that it effectively brought government and the business sector together through one agency and it provided for cost sharing between the public sector and the private sectors in the export promotion effort. That is precisely what we are doing here. The board will ensure that the Government, through its activities, will be able to relate more effectively with the private sector. In the course of establishing this Commission we will provide for some measure of cost recovery or fee for service for the services which are provided by the Commission-a point which apparently the honourable member for the Northern Territory welcomes, although I think there would be very few people in Australia who would think that we ought to go to the point of 50 per cent cost recovery, which is what he appeared to be suggesting. The other point I want to make is in regard to the major arm of the Commonwealth's effort in this area, through the Australian Trade Commissioner Service and through the trade promotion and publicity area. Never before has there been any effective influence by the private sector or exporters generally on how that Service is managed or directed. What we now have is the opportunity through the board of the Commission for the private sector to be involved in the management and the running, and indeed the financing, of those two very important services. Australia has nothing to apologise for. We have one of the best trade commissioner services any- where in the world. In fact ours has been a model for similar services in many other countries. But what we did need to do in the context of our current circumstances was to improve on it by effecting some efficiencies and rationalisations which would ensure that the dollars provided either by the taxpayer or by the exporters purchasing the services provide the greatest possible assistance to our Australian exporters, particularly those medium and smaller exporters who are involved in the export of manufactured goods and services. On the point of whether this move has been opposed by business interests in Australia, there has been very detailed consultation with the organisations representative of export interests, both by me directly and by officers of my Department and indeed by members of the interim board. Almost universally we have found this measure welcomed by those interests. Of course, they have had questions to ask about certain aspects of it. We have involved them in a detailed process of consultation as we have worked through those problems. Practically no opposition has been communicated to me with regard to the establishment of this Commission. To the extent that there have been concerns, they have been related largely to whether or not there should be cost recovery, and I make no apologies for that. Where services are being provided which can command a price, the Government in this area and in other areas has an obligation to seek to recover the cost of the services being provided. Mr CONNOLLY(Bradfield)(12.37) —The Australian Trade Commission Bill was introduced by the Minister for Trade (Mr Dawkins). It is, in his own words, of very great significance. He claims that the Australian Trade Commission is the Government's answer to Australia's deteriorating trade deficit, that it will re-establish our overseas trade service on commercially oriented lines and that it is hoped to improve the service and to seek direction from the private sector. The theory of all that sounds wonderful but he also went on to suggest that by creating a statutory authority it will remove the Trade Commissioner Service further from the scrutiny of Parliament and no doubt he sees some benefit in a hands-off approach by the Minister by virtue of its being a statutory authority. One has to question the veracity of the claims of the Minister on this aspect, particularly with regard to his actions as distinct from his words. He has just emphasised that the Trade Commissioner Service is probably among the best in the world and he noted that it was also the basis for comparison with and a model for other countries. That may be but I strongly suggest that that has in the past been because the personnel made available through the Department of Trade for the service has generally comprised men and women of high quality. Unfortunately, however, in July of this year, the Minister, on his own initiative, decided to appoint to the Trade Commissioner Service Mr David Combe. The Minister's Press release of 17 July stated: Mr Dawkins said that the Trade Commissioner Service needed people with good promotional and representational skills such as Mr Combe possesses. The Government reached the conclusion that Mr Combe's widely recognised talents and experience would be an asset . . . The Committee has a right to know what these widely recognised talents are. Perhaps we should look to the Hope Royal Commission on Intelligence and Security Agencies which was established by the Government following the intense embarrassment caused by Mr Combe's rather strange relationship with a functionary of the Embassy of the Union of Soviet Socialist Republics. The comments on Mr Combe's character in the report of the Royal Commission were as follows: The evidence satisfies me that Mr Ivanov, who had demonstrated that he was an active KGB officer, was cultivating Mr Combe, whom he perceived to be sympathetic to certain aims of the Soviet Union, and who possessed attributes which made him an attractive target for recruitment. Those attributes included access to Ministers and senior levels of government, a desire to make a good deal of money quickly, a hostility to the CIA and, therefore, probably to other secret intelligence services, a willingness to seek and declare friendship with Soviet citizens and a keenness to see an improvement of relations between Australia and the USSR to which he was prepared to actively contribute. So much for the special and widely recognised talents and experience which we are told by the Minister that Mr Combe has had in terms of his ability to serve Australia. The saga of Mr David Combe's appointment, from its inception last July, has been surrounded by nothing short of duplicity. His great mentor, the Minister for Trade, had to obtain the support of key Cabinet colleagues to ensure endorsement of the proposed appointment. He managed to obtain the agreement of the Prime Minister (Mr Hawke), the Minister for Foreign Affairs (Mr Hayden) and, in an attempt to win the support of the New South Wales Right, the Minister for Sport, Recreation and Tourism (Mr John Brown). Senator Richardson, to his credit, saw the potential danger of the right faction being associated with this appointment and the Minister for Sport, Recreation and Tourism found himself somewhat alone in his own State. But this tinpot machiavellian Minister for Trade, on advice from the Department of Foreign Affairs and from his own Department, realised later that Mr Combe's appointment to Vancouver on the basis of the post's existing geographic responsibilities would require the agreement of the United States Government as well as that of the Canadian Government because the Vancouver post has for some years been responsible for the State of Washington. This would have given Combe as Australia's Consul-General as well as Trade Commissioner access to the Boeing plants in Seattle, a major naval base of the United States fleet in the same city and other highly sensitive United States defence facilities in that area. With his background of pro-Soviet sympathies, there was a clear risk for the Government that the United States, if asked to approve his appointment as Consul-General, would have raised questions about that appointment. In the face of this potential embarrassment the Government simply changed the administrative arrangements for the post and gave Washington State to the Consul-General in San Francisco to administer. Despite this, the Minister for Trade has persisted in claiming that David Combe has a clean bill of health and was fully exonerated. I ask: By whom? Was it the Caucus of the Australian Labor Party? This Government has put its responsibilities to Australia second to its alleged duties to its mates. These are issues which are of considerable importance to the Australian people. Whilst there has not been much Press about this appointment, let it go on record that this Opposition will not sit by and permit the Australian Trade Commissioner Service to be used as a political tool of this Government. Any appointments which have been made by this Government, such as Mr Combe's appointment, will no doubt be given the most rigorous investigation in due course. At a time of impending crisis in Australia's trade position, this is not the way to run an efficient trade office and it surely must be detrimental to Australia's trade prospects. With regard to both the Canadian authorities and the United States authorities, whatever their formal position may be vis-a-vis their relationship with the Australian Government, the indisputable fact is that they have been concerned about their appointment; because of that the access which Mr Combe would normally expect from our North American allies may well be limited as a result. In a nation which it is claimed is on its uppers-certainly the policies of this Government have contributed to that-it is clearly necessary that we have representing Australia around the world people of undoubted integrity; people who are not the subject of investigation and great criticism by royal commissions of inquiry into their activities. At the least, we need to have people of sound judgment. Whatever else can be said about David Combe, one could not say on the basis of the record of the famous Iraqi breakfast issue way back in 1975, when Combe at the time of that election was prepared to borrow money from the Iraqi Government of all people to finance the ALP's election campaign, that he has sound judgment. Not satisfied with that we then had the extraordinary relationship between him and the Soviet Union. Progress reported. Sitting suspended from 12.45 to 2 p.m. Mr SINCLAIR —Has the attention of the Minister for Trade been drawn to a report by the Business Council of Australia that the so-called J curve effect on which the Treasurer relies to justify the Government's economic policies may take much longer to operate than previously thought? What areas of export-primary products, minerals or manufacturing products-does the Minister believe will give the lead in fulfilling the J curve prophecy? When does he believe this will occur? Mr DAWKINS —I thank the Leader of the National Party of Australia for his question. I hope that we will have the co-operation of the Opposition as we attempt to improve Australia's export performance. Honourable members interjecting- Mr DAWKINS —There is a conjunction of ideas when one thinks of the Leader of the National Party. It has been very discouraging to notice the way in which the Opposition has set about disparaging Australia's economic performance, talking down the economic performance and the economic prospects for Australia. I think that what is important to counterpoint is the fact that whilst, on the one hand, judgments are being made through a somewhat distorted telescope from far away about the performance of the Australian economy, on the other hand, one has the clear vote of confidence on the part of Australian businesses with their investment plans increasing well in advance of those prospects that we had in mind at the time of the Budget, with private fixed capital investment set to increase by 16 per cent during this year. So, quite clearly, there are those in the business community in Australia who do have utter confidence in the prospects for the Australian economy. As to precisely where our export performance can improve, it is clear that we have to look across a range of commodities, goods and services. We have, of course, taken into account the somewhat poor prospects for agricultural commodities where one would have expected, in the context of a more active world economy generally, the demand for the commodities which Australia has traditionally produced to increase and the price to increase. For a variety of reasons related to the unfair trading practices of the European Economic Community and the unfair and restrictive trading practices of other countries, of course, those prospects have not been entirely realised. I think it ill becomes anyone from the National Party, or indeed the Liberal Party, to talk about Australia's trading prospects because the deterioration has occurred over the last three decades-not the last three years. The deterioration can be identified to those very inappropriate policies pursued by the National Party and its predecessors in particular and also the Liberal Party in terms of the structure of Australian manufacturing industry. What we are intent to do is to ensure that the Australian manufacturing industry is in a better position to compete internationally so that Australia can share in that rapidly growing area of world trade of manufactures and services, an area in which we have done relatively poorly in the past. That is why the accord with the trade union movement, which not only comprehends the question of wages but also comprehends the needs of restructuring of manufacturing industry, is vital in ensuring that Australia can play a more successful part in the whole international economy. Mr CROSS —Is the Minister for Defence aware of Peter Robinson's article in the Australian Financial Review of 25 October which relates to the Minister's then recent announcement concerning new construction at Nurrungar? Is the Minister prepared to comment on the assertions in that article that Australia is being short-changed as far as jointness goes and that the electronic shielding being incorporated into the new building is aimed at reducing Australia's ability to supervise United States of America activities at Nurrungar? Is the Minister also able to advise whether, as indicated in the article, Soviet surveillance satellites may be orbiting over Australia? Mr BEAZLEY —I am grateful that the honourable member has provided me with an opportunity to set straight a couple of matters in regard to that article. I wish particularly to do so because Mr Robinson is a respected journalist and the views he puts, particularly on defence matters, carry some considerable weight in the defence community. Firstly, let me reiterate what I said in my Press release of 21 October 1985. The forthcoming construction at Nurrungar is only to provide better accommodation for both Australian and United States staff working at Nurrungar and for the equipment that is housed there. The construction work does not mean any change in the function of the station. As to the suggestion that we are being short-changed on jointness let me say categorically that the Australian Government has access to all data for the facilities as and when it wishes and this is a situation we keep constantly under review. Furthermore, it is incorrect to suggest that Australia needs to spy on activities at joint defence facilities. We co-operate with the United States in these places because it supports our shared interests. All activities at the facilities have the knowledge and concurrence of the Australian Government. Australians are integrated into the operations of the facilities and we have access to the product. The shielding referred to is in fact electrical interference shielding, a standard feature of buildings housing computer and communication equipment. As to the suggestion that it is intended to reduce our own knowledge of what is taking place at the facility, there are no circumstances under which this Government would ever be party to such action. In relation to the comment in the article about Soviet surveillance satellites, it is very well known that the Soviet Union has such satellites and that they pass over Australia, as they do over the rest of the world. There has not previously been an official Australian government announcement stating that this is the case, probably because that information is so well known that little point might be seen in reiterating it. For example, the United States Department of Defense's annual publication Soviet Military Power regularly notes that Soviet military satellites perform such missions. Surveillance satellites can, of course, be of several different types. Some are for photographic reconnaissance, some are radar satellites to locate shipping, and others are for intercepting communications and monitoring other electronic signals and for the detection of missile launches. Some of these satellites are operated in very high or geostationary orbits and others in low. Satellites other than those in geo- stationary orbits pass over Australia up to six times a day and have done so for many years. Australian defence and intelligence authorities assume that these Soviet satellites are used to provide information about developments in our region generally rather than in Australia specifically. Mr BRAITHWAITE —I refer the Minister for Trade to Senator Button's comment yesterday casting doubt on the ability of the Australian manufacturing sector to respond quickly to the effects of the devaluation. In which area of the manufacturing sector does the Minister expect the import substitution effects of the devaluation to occur, particularly in light of the removal of the investment allowance, the Government's reduction of the export market development grants and the additional cost to industry of the Government's recent tax package? Mr DAWKINS —The fascination that the Opposition has with this question is very welcome. I have been sitting on the front bench for weeks, waiting for the Opposition to respond to some of the points that I have been making about trying to improve Australia's trade performance. The Opposition happens to raise this question on the day on which it decided to vote against the establishment of the new Australian Trade Commission. The Australian Trade Commission is just one part of the Government's strategy to improve Australia's export performance. With the support and encouragement of important and influential sectors of the business community, we propose to establish an organisation which will more successfully deliver a range of services to exporters to assist them in improving their performance overseas. Is the Opposition really asking us to throw more money at the export market development grants scheme, riddled as it was with problems, distortions and inefficiencies? If the Opposition is of that view, why did it not express it at the time the recent changes were made to the scheme? That scheme remains as a very effective support for small and middle-sized exporters. What we have done is ensure that the 5 per cent of companies which make up the largest companies exporting from Australia cease to receive 30 per cent of the benefits available under that scheme. It seems to me that the largest companies that are successfully exporting do not need further subsidies from the taxpayers and the taxpayers' subsidies ought to be directed towards the smaller and middle-sized exporters, particularly manufacturing exporters. We have reorganised the Trade portfolio in a way which is consistent with the requirements of exporters. We are being supported by exporters. The new Trade Commission will be run substantially by people who have been successful exporters and, therefore, can deliver a successful and efficient service. Mr O'KEEFE —Will the Minister for Science advise the House what action is planned for the future development of the national technology strategy? Is the Minister aware of newspaper reports suggesting that the strategy has been abandoned and, if so, are they correct? Mr BARRY JONES —The Minister for Industry, Technology and Commerce and I want to refute the newspaper reports that the Government has abandoned the development of the national technology strategy, which was released as a revised discussion draft in June this year. Such statements show a poor understanding of what is happening. The revised discussion draft does not, of course, represent Government policy because, as honourable members will remember, it came out of the National Technology Conference at which the representatives of the unions and the scientific and industrial community were present. The policy will be determined by Cabinet, but the draft reflects the synthesis of the comments and the ideas of the people who went to the conference in 1983 and responded to the earlier draft strategy, published in April 1984. The revised discussion draft has been referred to the Government's task force on longer term economic growth because of the breadth of the issues involved and the range of portfolio interests covered. The document represents the outcome of lengthy and extensive consultations with many interest groups in the technology field, including business, trade unions, government agencies, researchers and the community generally. That makes it very valuable and we certainly have no intention of shelving it because it will serve as a guide-not a substitution-for policy development across a wide field. Senator Button and I have determined that I will pursue the issues raised in the national technology strategy in tripartite talks with representatives of the unions and industry and discuss the strategy's implications for them. This activity should be seen as part of a continuing community debate about Australia's industrial future so that the opportunities and challenges will be more thoroughly understood by all interests affected. Mr HOWARD —I ask the Treasurer: In view of the total inability of the Minister for Trade to answer questions on the fundamental issue facing our trade account at present, namely the pace of the adjustment to the recent devaluation, has he seen the comments of the Minister for Industry, Technology and Commerce, referred to in the Press this morning, and the report of the Business Council of Australia, which is substantially to the same effect? Does the Treasurer share the views of Senator Button and the Business Council? Mr KEATING —I have not seen Senator Button's remarks and I cannot recall having seen those of the Business Council. However, let me make it clear that what the Leader of the Opposition is asserting by implication in his questions is that his Party, a party dedicated to market prices, a market system and market signals-- Mr Carlton —And a labour market that works. Mr KEATING —There is an interjection. However, his Party will not accept that a 20 per cent price change in the depreciation will change the competitive structure of the economy. In other words, he is asserting that the market does not work. Mr Carlton —It does not work when you have the ACTU-- Mr KEATING —Oh, don't be so damned stupid. Of course it will work. Honourable members opposite are the great free marketeers. They are the people who say that a 20 per cent price change between exports and imports will not change the pattern of production of this country, that it will not work. They said it all this week. We had the inane comment by the honourable member for Mackellar that the J curve would be an L curve; in other words, that it would be flat, that there would be no change. They said that we could have a 20 per cent price change and all the associated changes in market signals and prices, but the economy would not respond to them. If the economy will not respond to market signals, why are honourable members opposite supporting a private enterprise economy? Why are they supporting such a concept and trying to ram it down our necks when they do not believe in it? At least people on this side of the House believe in the market signals. We believe in having a dynamic economy. But the clowns opposite do not even understand the basis of their own theoretical position. Where does that leave them? I will tell honourable members where it leaves them. It leaves them nowhere. Let me make another point for the benefit of the blockheads opposite. If they read the Budget Papers they would find that, on the turnaround, the contribution to growth comes from net exports. Net exports means both export and import replacement. In the Budget forecast for the current account deficit we have no substantial change in exports, but we have a through-the-year change in imports. In other words, there will be a better import replacement performance, but it will occur mainly in the second half of the year. Last year we had 4.9 per cent of gross domestic product as the current account deficit. This year we forecast a deficit of 4.6 per cent, a modest improvement and, as I have been saying, a through the year improvement. Mr Sinclair —You have a deficit blow-out, the dollar has gone down and interest rates are going up-- Mr KEATING —Look, George, you did the best to wreck the primary industries with your high valued dollar; you ought to keep quiet. We are talking about a June quarter on June quarter, through-the-year current account deficit of 4 per cent of GDP; in other words, an improvement on net exports and import penetrations through the year. However, we have never implied a dramatic turnaround in our export performance. We understand that we cannot be as uncompetitive as the previous Government made us for so many years, locking us out of so many markets for so long, and find that in six months we are back in there. Of course we will not be back in there so soon. It will take time. However, the fundamentals are being repaired. In regard to repairing the fundamentals, what Opposition members fail to understand, in the logic and rhetoric of their own argument, is that they are implying that the market signals will not work and that a price change of this enormous dimension- the largest depreciation in memory-will not produce a turnround in our trading performance. Where does that leave them? It leaves them in the same position they are in with respect to interest rates, tax and wages-it leaves them nowhere. Mr SIMMONS —Is the Minister for Defence aware of recent public comments by a prominent member of the New South Wales branch of the Liberal Party about the effect of the Army training facilities project on the Bathurst-Orange region? What is the impact of non-co-operation by some of the potentially affected landholders on the studies being carried out in the area? Mr BEAZLEY —I thank the honourable gentleman for his question. I know he is very concerned about the situation impacting on his constituents. I have seen the remarks attributed to Mrs Evans who, I understand, is a member of the New South Wales Legislative Council and a member of the Liberal Party. She says: There is no doubt in this world that such an institution- she is talking about the suggested infantry and artillery training centre- in your town will make it develop. The money and the development it brought into the town, plus the people, is so imporant, and our country towns must survive. I think her words are a timely reminder in the current situation in which a very small number of landholders in the region are not co-operating with the studies being undertaken about the value of the project-should we proceed with it-to their district. Those people who are not co-operating are being encouraged by the Liberals' coalition partners, the National Party of Australia, for what can only be assumed to be some sort of spurious political advantage. That is very much to the detriment of the landholders in the area. As soon as the studies, which will assess both the military suitability of the area and the social, economic and environmental impact, are completed the sooner a decision can be made one way or the other. I notice in comments in the Press today that I have been accused by the Central Tablelands No-Base Association of having misled it because originally I indicated that we intended to have the draft environmental impact study completed by November this year and recently I indicated that that study would be completed by February. That is true. I did indicate that the draft EIS would be ready by November, but that judgment was based on the belief that there would be co-operation from the people who would be potentially affected. The non-co- operation campaign, organised by the Central Tablelands No-Base Association, is directly responsible for producing the delays in arriving at conclusions on these matters. It is quite hypocritical of that organisation to claim that in some way or another I have misled it. The situation that has occurred has been largely created by it and the National Party. The people who are providing us with advice on the environmental study have been able to get on to a substantial number of properties and arrive at some conclusions from them. However, it would be desirable, in order to complete those studies effectively, if they were able to get on to more properties. I remind the people concerned yet again of what an EIS represents in the decision-making process. Holding an EIS of a certain area certainly indicates the Government's predilection to establish a particular institution in that area, but it does not indicate the Government's final decision. If there are serious environmental or social problems that would result from the Government's proceeding on the course on which it had indicated it would proceed, we would expect that to come out in the environmental impact study. It is a process that protects, as far as it can, the interests of the local people in that area. In not co-operating in the study, the landholders are being very foolish indeed. Their actions are rendered even more foolish because, no matter what, we will complete that study. The present situation creates more uncertainty for the landholders and uncertainty is very undesirable in the economic circumstances in which they find themselves. We wish to complete that study. We believe that if that study indicates to us that it would be a sensible decision to proceed, it will be very much to the advantage of the bulk of the constituents of the honourable member for Calare, including those whose land would be compulsorily acquired, as they would be very generously treated. Mr HOWARD —My question is directed to the Prime Minister. In view of the failure of both the Minister for Trade and the Treasurer to answer the previous questions, does the Prime Minister agree with the observations made by Senator Button yesterday, casting doubt on the ability of the Australian manufacturing sector to respond quickly to the effects of the recent devaluation? Mr HAWKE —There has been no inadequacy on the part of either of my two Ministers today, or for that matter on any other day. The answers they have given have been appropriate and convincing. I was hoping for the possibility of a question from the Leader of the Opposition to enable me to spend a little time disclosing the massive vote of no confidence which has just occurred within the Opposition on the Leader of the Opposition. I make that point in the context that, if we are to talk about the competitiveness of our industries and our capacity to export, a central feature in that capacity will be what happens to wages in Australia. Fortunately, under this Government we have now a wages policy which has produced a level of wage restraint that we have not seen for decades. That will mean, together with the other range of economic policies we are pursuing, that the index of competitiveness of Australian industry will continue to improve as it has done to the point where now the Australian index of competitiveness goes back to what it was at the end of the 1960s. The Leader of the Opposition has chosen to say that it is this question of industrial relations which more than any other will distinguish the Opposition from the Government. It is therefore a matter of interest that this day the chairman of the Opposition committee on employment and industrial relations has resigned. The honourable member for Lyons has resigned, and why has he resigned? He has resigned because he has no confidence in the Leader of the Opposition and the Deputy Leader of the Opposition. He has in fact said-- Mr Burr —I wish to raise a point of order, Mr Speaker. I realise that this may be an inappropriate time and I will expand later. But what the Prime Minister is saying at the moment is a blatant lie and I would ask him to withdraw. Mr SPEAKER —Order! The honourable member for Lyons will withdraw that expression or he will-- Mr Burr —May I rephrase it, Mr Speaker, and say that what the Prime Minister has said is grossly untrue, not backed by any objective evidence and I would ask him to withdraw. Mr SPEAKER —Order! The honourable member for Lyons has been requested to withdraw. I ask him to withdraw. The honourable member for Lyons is to withdraw that expression. The honourable member rephrased it but did not withdraw it. Mr Burr —Mr Speaker, I beg your pardon. I withdraw that phrase. Mr SPEAKER —I call the Prime Minister. There was no point of order. Mr Burr —On a further point of order, Mr Speaker, could I ask the Prime Minister also to withdraw his statement? Mr SPEAKER —Order! The honourable member for Lyons will resume his seat. Mr HAWKE —Mr Speaker, I am prepared to withdraw that and to give the objective evidence. Now here comes the objective evidence. The Australian this morning carried the headline: `Blow to Howard's policy on unions'. What we have here is the proposition that the members of the Opposition are simply saying that neither the Leader of the Opposition nor the Deputy Leader of the Opposition can produce any evidence at all of how their opting-out policy would work. Let us look at the facts on this. The article states: Dismissing rumours at the time at the impracticability of the measure, Mr Howard said: `I've said all along we want to give the people an option to choose to go outside the system . . . there's no way we have backed away from opting-out'. It is absolutely central to what they are about. Here is this Leader of the Opposition, who claims to be a man who puts the position honestly and straightforwardly. I ask the honourable members to listen to what he says. He says of opting out: It's absolutely central to what we are on about. That is a quote from the Leader of the Opposition in the Australian Financial Review of 2 October 1985. The reason why the honourable member for Lyons has resigned is that he knows that that is not true. As the article in today's Australian points out, there is in existence a document which has been around in the Opposition and the Press Gallery for some time and which establishes that that is not the position of the Opposition. I will table the document afterwards. Let us see what the Opposition's central committee on employment and industrial relations had to say about opting out. It is the central committee because the Leader of the Opposition has said that this is the centrally important issue. The committee has said, very simply, that the Leader of the Opposition is not telling the truth. That is what the Opposition's own committee-the committee from which the honourable member for Lyons has resigned-has said about opting out. Remember that the Leader of the Opposition has said: `We have not walked away from opting out. It's absolutely central to what we are on about'. What did the committee of the honourable member for Lyons have to say about it? Mr Sinclair —You have no answer. Mr HAWKE —This is the Opposition's document, which says: At three joint meetings of the Opposition Treasury and Employment Industrial Relations Committees . . . a `second stream' proposal was examined, whereby employers and employees could `opt out'-- the Leader of the Opposition's central point- and engage in a form of collective bargaining. This proposal was further considered by the Employment and Industrial Relations Committee. Then follow 11 points rejecting the centrality of the Leader of the Opposition's position. I will not go to those points because I will table the document, but that is what was said. The committee's document states, firstly: None of the experts-- Mr Burr —Mr Speaker, I raise a point of order. I must object to the Prime Minister using a document which, as I explained earlier, did not originate with me. I can only assume that it is some sort of fraud. Mr SPEAKER —Order! The honourable member for Lyons will have the opportunity to make his personal explanation later. Mr HAWKE —The honourable member for Lyons suggested that it is a fraud. When I have finished referring to the document, I will table it and it will be available for his perusal. It is a three-page document. I will not go through the 11 points in detail, but it is very interesting to see that the 11 points set out in order why the central position of the Leader of the Opposition-that is, opting out-will not work and why it has been rejected. I now table the document. This House must understand that what has been revealed today is that the Leader of the Opposition, in regard to what he has said is the central issue of wages policy, has been repudiated by his own members. They have set out why the Leader of the Opposition's position is not acceptable; they have rejected it. The position now, as the Treasurer has said, is that the Leader of the Opposition has been repudiated on tax policy and on the central issue of wages policy. As far as the trading position of this country is concerned, it is centrally important to have a wages policy that works. The wages policy of this Government is working. It has produced the lowest level of wage increases in more than a decade. Against that we have a Leader of the Opposition who would give us a wages policy which would lead to an explosion of wages and would give us no chance whatsoever of having any competitive position in the international trading place. The great tragedy is that this country now has a Leader of the Opposition who, in respect of every critical area of economic policy, has gone to water. Worse than that, in the central area of importance his own members have said that he is not telling the truth. Ms FATIN —I direct my question to the Minister for Aviation. It relates to the Government's recently announced changes to its international air freight policy. Will the Minister outline the nature of these changes? How will these changes benefit primary producers, particularly those in Western Australia? Mr PETER MORRIS —I thank the honourable member for her question. Because of the importance of having adequate air freight services for primary produce exports and because of the assertion that there was an inadequate capacity available, I decided, after discussions earlier in the year with the Minister for Trade and the Minister for Primary Industry, to commission a review of the then policy. That policy review was carried out by Ted Butcher, a member of the Inter-State Commission, and Jim Scully, a former Secretary to the Department of Trade. The Government's decisions in respect of the report do offer significant new opportunities for primary industry. Our new international air freight charter policy allows for the consolidation of primary produce consignments on outbound flights, together with access to the higher rates of consolidated cargo on inbound flights. Previously, all outbound primary produce charter flights were allowed to carry only one type of produce from one consignor to one consignee and did not have access to consolidated cargo inbound. The new arrangements will also assist exports from Australia's smaller international airports by allowing primary produce exports to be picked up from more than one of the secondary gateway airports, such as Cairns, Darwin, Hobart, Norfolk Island, Port Hedland and Townsville. Livestock flights, as at present, will still allow more than one consignor and one consignee. In addition, outbound livestock flights may also carry a mix of primary produce. The question of access to mixed inbound cargo on these flights is a matter that will be considered later by the Ministers I have mentioned and me. The Government has acted promptly to ensure that adequate air freight capacity is available for primary produce during the current season. As I have said, the new policy offers special opportunities for Western Australian growers and exporters. For example, the report estimated that Western Australia could export an extra 1,500 tonnes of perishables per annum if sufficient space were available. The review was informed that South East Asian markets are increasing by up to 18 per cent per annum and that the producers of Western Australia's south-west could at least double their tonnages to South East Asia over the next three years. I conclude by saying that a problem was identified. We have dealt with it promptly and expeditiously. I commend the members of the review team for the prompt and able manner in which they carried out that review. The opportunity is there now for primary produce exporters, particularly in Western Australia, to take up the chance to develop their trade, to expand their exports and to raise the sales of their produce. Mr SPEAKER —Order! I inform the House that we have present in the gallery the President of the Legislative Council of New South Wales, one of my colleagues in the Commonwealth, the Honourable Johnno Johnson. We give him a warm welcome. Honourable members-Hear, hear! Mr BEALE —I ask the Minister for Housing and Construction whether he agrees with the President of the Real Estate Institute of Australia, Mr Sullivan, who said in Canberra this week: Both Federal and State Governments should realise they must encourage investment in private rental accommodation to reduce the heavy financial burdens they will otherwise incur through the provision of public housing. If so, can he advise the House as to how the Government's high interest rate policies and tax changes, especially the capital gains tax and negative gearing changes, will achieve this goal? Mr WEST —If the honourable member for Deakin cannot do much better than that, we will probably be looking at the third change in 12 months as far as a shadow Minister for Housing and Construction is concerned. In regard to the private rental market in Australia, we have already introduced a depreciation allowance of 4 per cent staight line, across the board, for investors in new construction. That is a far better way of encouraging investment in the private rental market than by doing it through an obvious tax rort like negative gearing, which was run by the previous Government. I have already released tables, computer models; information which shows clearly that, as a result of the combination of measures introduced by the Treasurer and by this Government-that is, the quarantining of negative gearing in rental property, a capital gains tax that is entirely prospective and a 4 per cent across the line depreciation allowance-investment in the private rental market, as long as there is a decent and reasonable equity by the investor and a reasonable rate of property appreciation over a period, will still be highly profitable, with an after tax return of up to 14 per cent in that area. Of course, that is a return that is still not available in some other types of investment. We will monitor the situation and, if any vacuums appear, we can look at the situation again. However, it is far too early to say that anything further is required than what we have already done. Mr SCOTT —Can the Treasurer inform the House whether the Government is giving consideration to removing or increasing the current 13.5 per cent ceiling on bank home loans? Mr KEATING —The Government is not giving any consideration to removing the ceiling. In fact, it will maintain the ceiling. The Government has made that quite clear. What is interesting is, again, the policy chaos on the other side of the Parliament. Yesterday the Leader of the Opposition was asked by Peter Rapp from the AM program: `Do you want the 13.5 per cent ceiling raised?'. The answer from the Leader of the Opposition was: `No, I want policies changed'. I might just contrast that with a question that the Leader of the Opposition asked me on interest rates in Question Time on 13 September 1985, which appears at page 976 of Hansard. He asked me about the ceiling, and I said: Let me just get this right. What the honourable member is saying is that we should lift the housing rate ceiling. Mr Howard said `Yes'. So, on 13 September 1985 he was for lifting the ceiling on housing interest rates, but yesterday he indicated that he is now for maintaining the ceiling on housing interest rates, that he does not want the policies changed. Expediency just understates massively the change of policy stance by the Leader of the Opposition. Is it any wonder that he is being massively attacked now in newspaper editorials across the country and by his own Party for a lack of any conviction on any issue. Never has a major politician caved in or capitulated more quickly to the forces of opportunism and expediency than the Leader of the Opposition on this occasion. I indicate that it is not just on this issue. The Prime Minister mentioned both wages and taxation. What we find on taxation is that the Leader of the Opposition now suggests that he should not, as he promised he would do on the day that the tax statement came down, wait and see what the details of the Government's tax policies are; rather, he, the honourable member for Mackellar and Senator Messner sat down on the weekend to sort out their approach to taxation. What came out of it? They decided that they would not reject the whole package but would take the marginal rate reductions and oppose all of the measures introduced by the Government to fund the rate changes. What sort of policy position is that? The Opposition would take all of the reductions and rates and vote against all of the measures which produced the revenue to lower rates. The day before yesterday the Leader of the Opposition, on the Channel 9 program Today, when asked by Mr Liebmann how he would fund it, said: We would fund them by a broadly indirect tax. We are only talking here of, let's face it, a few hundred million dollars. We are only talking about $1.4 billion from the so-called nasties, and our proposals would relate to $700m or $800m of these. So this argument that in some way we are having it both ways in wanting the tax cuts and opposing the nasties, is a weak argument. He is saying: `It is only $700m or $800m. We do not need to accept the measures of the Government to pay for these massive tax changes. It is only $700m or $800m'. Here is somebody, who never raised $700m or $800m by expenditure cuts in his whole life as Treasurer, now suggesting that we do not have to worry about it as the Opposition will fund that amount in some other way so that it can take the marginal rate changes and reject, in the most opportunist way, the strength of the Government's tax changes. So there are these two major issues: Firstly, the Opposition is imploring us to raise the ceiling on housing interest rates but we found yesterday that that apparently is now abandoned due to total policy confusion on interest rates; secondly on taxation, it has a most opportunistic and lowest heel type of approach possible to major tax changes on behalf of a nation, a total blanket opposition to all of the major changes in policy in respect of tax changes. I might say that that is totally opposed to the stated policy of the Opposition when this Government came to office. Senator Dame Margaret Guilfoyle had this to say about government fiscal measures when the Government took office: . . . a Government is entitled to expect the passage of normal Budget and budget-type legislation and other legislation that is an essential part of its financial program. The Opposition would only act in the Senate to reject or amend such legislation `where it is demonstrated to be capricious and arbitrary or vindictive legislation or where it creates new tax burdens of a retrospective kind'. In other words, that position outlined by Senator Dame Margaret Guilfoyle, when the coalition became the Opposition in 1983, is now to be abandoned. Mr Howard's Opposition will apparently oppose all the tax changes but accept the marginal rate reductions, while at the same time he is imploring the Government to lift the ceiling on interest rates. Then, under pressure of a South Australian election he says no, he does not want the interest rate ceiling lifted. If that is the stance of the Opposition on two important issues such as interest rates and tax policy, is it any wonder that the Sydney Morning Herald, the Melbourne Herald and a whole stack of other newspapers are attacking the credibility of his leadership and suggesting that he would have no credibility whatsoever as an alternative Prime Minister? Mr YOUNG(Port Adelaide-Special Minister of State) —Pursuant to sub-section 67 (2) of the Australian Federal Police Act 1979, I present the Australian Federal Police annual report for 1984-85. Mr BURR(Lyons) —Mr Speaker, I seek leave to make a personal explanation. Mr SPEAKER —Does the honourable member claim to have been misrepresented? Mr BURR —I do, sir. Mr SPEAKER —The honourable member may proceed. Mr BURR —Thank you. I wish to make a personal explanation on two bases: Firstly, the scurrilous and misleading reports that appeared in this morning's edition of the Australian; secondly, the grossly misleading statements that were made during Question Time by the Prime Minister (Mr Hawke). I will address my comments firstly to the misrepresentation made by the Prime Minister. During Question Time the Prime Minister made two accusations. Firstly, he said that there was a difference of opinion between myself and the Leader of the Opposition (Mr Howard) and the Deputy Leader of the Opposition (Mr N. A. Brown). Clearly that is not true. There has been the closest of relationships between myself and the Deputy Leader of the Opposition, as our shadow Minister- Government members interjecting- Mr SPEAKER —Order! I suggest that honourable members on my right have the courtesy to allow the honourable member to make his personal explanation. Mr BURR —As I was saying, there has been the closest of relationships between myself and the Deputy Leader of the Opposition, as our spokesman on industrial relations, and there has also been, and always has been, a close relationship between myself and the Leader of the Opposition. I have always felt free to be able to put my points of view to those two gentlemen at any time, knowing they will be listened to clearly and with sympathy. I completely put down any suggestion that there has been any sort of disunity between myself and the Leader and Deputy Leader of the Opposition. The second accusation made by the Prime Minister (Mr Hawke) during Question Time was that I had circulated a document, consisting, allegedly, of 11 points. He claimed that that was circulated by me as chairman of the Opposition industrial relations committee. That is not true. I have now received a copy of that document which makes reference to events in 1983. The document is unsigned; there is no name attaching to it. I completely disown that document. If there are accusations circulating in this place that that document originated from me, I completely disown them. It is a fabrication. Any suggestion that the document has come from me is totally wrong and false. I will now address my remarks to an article that appeared in this morning's edition of the Australian newspaper. As far as I am concerned, that article is totally wrong and misleading. It is evidence of scurrilous journalism at its worst. In the article reference is made to what I presume is the same 11-point document tabled by the Prime Minister. I say again in relation to the article in the Australian newspaper that I have no knowledge of it. That document did not originate with me. As far as I am concerned, that particular document has never been presented to the Opposition industrial relations committee. I saw the document for the first time after it was tabled by the Prime Minister. It is claimed in the article on page 1 of the Australian newspaper: The chairman of the Industrial Relations Committee, Mr Max Burr, refused to comment on the . . . draft policy or yet another letter, written by him, also obtained by The Australian yesterday. The article continued: Mr Burr's letter, circulating in Canberra, points out that the Opposition considered opting-out or `a second stream' proposal last year. I know of no such letter. If there is such a letter being circulated in Canberra, in the Press Gallery or anywhere else in this place, such a letter did not originate from me. If there is such a document it is fraudulent. I ask the journalist, Mr David O'Reilly, whether he can produce that letter to me so that I might refer it to the Federal Police. Clearly that letter is fraudulent. The article makes reference to a letter. I can only deduce from reference to my files that the comments made in the article in the Australian refer to a letter to the editor of the Age newspaper published on 10 October. That is the only evidence I can find of any letter. Clearly, there is no other letter in circulation. The purpose of this article, I believe, is to try to cause divisions between myself and other members of the Opposition. I re-emphasise the point that there is no such division on this side of the House and that the thrust of this article and the detail claimed in it are totally false and untrue. Mr HAWKE(Wills-Prime Minister) —Mr Speaker, I wish to make a personal explanation. Mr SPEAKER —Does the Prime Minister claim to have been misrepresented? Mr HAWKE —Yes, Mr Speaker. The honourable member for Lyons (Mr Burr) has suggested that I said he circulated the document I put. I did not make a statement that he had circulated it, but I do want to pick up the point now in his reference to the letter in the Age of 10 October- Mr N. A. Brown —Is this a personal explanation? Mr HAWKE —Yes, it is. The honourable member referred to his letter of 10 October to the Age. Mr N. A. Brown —Where is the Prime Minister being misrepresented? Mr HAWKE —If the honourable member would listen instead of chattering away like a silly little boy, I have indicated- Mr N. A. Brown —Here we go again. Every Friday he goes mad. Mr SPEAKER —Order! The Deputy Leader of the Opposition does himself no credit. I warn the Deputy Leader of the Opposition. I accept that the Prime Minister has corrected one misrepresentation. I trust that this second facet is also a misrepresentation. Mr HAWKE —Of course it is, because the honourable member has said that there has been a total fabrication. I just want to establish, quickly out of his own letter, that there is no fabrication, and indeed- Mr Burr —Mr Speaker, I raise a point of order. As I understand it, the Prime Minister is making a personal explanation about how he has been misrepresented. Clearly in the statement I have just made with reference to the letter published in the Age, I made no reference to the Prime Minister in that process. So, clearly, I did not misrepresent the Prime Minister in that reference. Mr SPEAKER —Order! May I just rule on this matter. The honourable member for Lyons has, quite clearly, corrected his matter. However, in the course of his remarks he did attribute certain comments to the Prime Minister. I take it that the gravamen of the second part of the Prime Minister's explanation is the complaint of the honourable member for Lyons about what the Prime Minister said in his answer? Mr HAWKE —Mr Speaker, this can very quickly be disposed of. In the letter of 10 October by the honourable member for Lyons in his then capacity as chairman of the Opposition committee on employment and industrial relations, he refers to the question of opting out and attacks the Age's correspondent, Michelle Grattan. He said that he would like to correct a misrepresentation that she had made. He stated: Ms Grattan said that the Coalition `would establish a two-strand wage fixing system'-- Mr Spender —Mr Speaker, I raise a point of order. The Prime Minister is entitled to make a personal explanation if he claims to have been misrepresented. He is now seeking to debate an issue. This is not a correction and it should not be allowed simply because he is the Prime Minister. Mr SPEAKER —Order! I am listening carefully to the matter. Honourable members interjecting- Mr SPEAKER —Order! There seem to be a number of members here who would like to take this Chair. They seem to have better knowledge of the procedures than I do. I have been listening very carefully to the Prime Minister. He is responding to a point made about him by the honourable member for Lyons. He has indicated that he is bringing it quickly to a conclusion. Mr HAWKE —Mr Speaker, as I was saying, the honourable member for Lyons stated: Ms Grattan said that the Coalition `would establish a two-strand wage fixing system', and that alongside the awards of the Arbitration Commission there would be `the opportunity for workers and employers in small enterprises to opt out and make their own agreements on wages and conditions'. He then said in his letter: That is not true. We then get in this next paragraph the refutation, out of his own letter, that this document is a fabrication, because he uses the exact language. This is what he said: In 1983-84 the Opposition-- Mr Burr —Mr Speaker, I raise a point of order. Clearly I must object to the line taken by the Prime Minister. If there is a form of misrepresentation in the letter published in the Age, that representation would be against the original author of the article, Ms Michelle Grattan. It clearly makes no reference whatever to the Prime Minister. Mr SPEAKER —I think that the honourable member for Lyons in raising this point of order has misunderstood my ruling. During his explanation he stated that the Prime Minister had made certain statements about him based on certain documents or whatever. I take it that the Prime Minister is refuting that? Mr HAWKE —That is absolutely right, Mr Speaker. Mr Burr —Mr Speaker, I wish to speak to that point. You will recall that I made two personal explanations, one relating to comments made by the Prime Minister and the other relating to the article appearing in this morning's Age newspaper. Mr SPEAKER —That is not denied, but it is also possible for the Prime Minister to correct what you said about his statement. Mr HAWKE —It can be very quickly brought to a conclusion. In his letter he said: That is not true. In 1983-84 the Opposition did consider, thoroughly, a ``second stream'' or ``opting out'' proposal, but decided against it for a number of reasons- He then went on to use the exact language of the document which he says is a fabrication and that he has not seen before. He used the exact language of the document. Mr SPEAKER —Order! I do not think the Prime Minister should make a fresh accusation. Mr HAWKE —No, I am responding to the proposition that we have engaged in the use of a fabrication. I am showing that in his own letter he has quoted from the document. How can there be a fabrication if in his letter to the Age he quotes from the document which he says he has never seen before? Mr Shipton —I take a point of order, Mr Speaker. As I understand it, the Prime Minister is making allegations and accusations against the honourable member for Lyons which should be made in a substantive motion under the Standing Orders of this House. Mr SPEAKER —There is an element of that in it. I call the Prime Minister in conclusion. Mr HAWKE —He used the words: principally that it was virtually unattainable, constitutionally, and that a second stream- I ask honourable members to note these words from the letter- would act as a pacesetter for awards, producing a worse wage outcome for the economy. Those are the words exactly from this document which stated: Opting-out therefore raises the prospect of a second stream of wage-fixation acting as a pace-setter for the tribunal . . . Mr Hodgman —Are you prepared to give us your fingerprints? Mr HAWKE —Yes, indeed. The document stated: Opting-out therefore raises the prospect of a second stream of wage-fixation acting as a pace-setter for the tribunal, and therefore a worse wage outcome rather than a better one. That language is exactly the same as in the document which he says is a fabrication and that he has not seen before. The honourable member for Lyons knows that that is untrue. Mr SPEAKER —I suggest that the Prime Minister not proceed on that line. Mr N. A. BROWN(Menzies)(3.03) —Before seeking to make a personal explanation, may I apologise to you, Mr Speaker, and to the Prime Minister (Mr Hawke). I was too hasty in taking my point of order because there was clearly a reference to the Prime Minister and he was entitled to make his personal explanation. I now seek to make a personal explanation. Mr SPEAKER —Does the Deputy Leader of the Opposition claim to have been misrepresented? Mr N. A. BROWN —Yes, Mr Speaker, and not for the first time in my life. Mr SPEAKER —He may proceed. Mr N. A. BROWN —Mr Speaker, I was misrepresented in the Australian newspaper today in an article by Mr David O'Reilly. Although only a small part of the article refers directly to me, it states: Opposition MPs are disturbed that Mr Howard and his deputy and industrial relations spokesman, Mr Neil Brown, remain unable to explain how opting-out would work. There are reports in Canberra that Mr Brown has admitted privately that it cannot. There are only two things that I wish to say about that. The statements attributed to me are incorrect. I have never expressed such views privately or publicly and would not do so because I believe in the substance of the proposal, which I am sure honourable members do not want me to go into on this occasion, but I will if anyone on the Government side will give me the opportunity to do so. Mr SPEAKER —That would have to be by way of leave to make a statement, not by indulgence. Mr N. A. BROWN —Yes. I have every confidence in the proposal, the substance of which is, in appropriate cases, to provide an alternative system to the inflexible, rigid, compulsory arbitration system in Australia. The second thing I wish to say is that, quite apart from the fact that from my own knowledge the entire article is a collection of quite erroneous statements and, if I might say so, a most unprofessional piece of writing, the author of the article did not have the courtesy or the good sense to approach me to ask me about the matter, despite the fact that he was proposing to write that I held certain views. He did not contact my office and ask for an opinion or a contribution; nor did he contact the office of the Leader of the Opposition (Mr Howard) or speak to the Leader of the Opposition about it. For those reasons, the exercise is an entirely unprofessional one and does very little credit to the author of the article. Mr DUFFY(Holt-Minister for Communications) —by leave-The report of the House of Representatives Standing Committee on Expenditure, `Ringing in the Changes: Telecom's Zonal Charging Policies', was tabled in Parliament on 4 October 1984. On 25 March 1985 I made an interim statement in which I indicated that the report was being thoroughly examined by Telecom Australia and that I would inform the House of the Government's attitude regarding the recommendations in the report as soon as possible. I now wish to table Telecom's considered response to the report. The Standing Committee made 23 recommendations which, in the Committee's view, would promote Telecom's charging policies in metropolitan areas which would be equitable, consistent with Telecom's statutory obligations and adequately responsive to community needs. Since my statement of last March, the Committee has entered a second phase of its inquiry, extending its deliberations to rural and remote areas. Telecom's principles for the charging of telephone calls throughout Australia were established in 1960 as part of the community telephone plan. Since that time, significant changes have been made with the introduction of community access calling, in 1980, and countrywide calling, in 1983. Telecom now proposes to make further changes in response to the report, `Ringing in the Changes'. These changes will provide further benefits to Telecom customers throughout Australia, particularly in the rapidly expanding outer urban areas of the capital cities. The new zoning arrangements require a great deal of preparatory work. They will take effect in about two years time and, in my view, they represent a sound, long term approach to meet the needs of the community into the 1990s. In conjunction with the proposed zoning changes, Telecom will be redeveloping its national numbering plan, which has been in operation since 1960, to reflect changes in population growth patterns which have occurred since that time. In doing so, Telecom hopes to introduce a closer relationship between numbering areas, charging district boundaries and telephone directories which will significantly assist in improving customer understanding of Telecom's charging arrangements. Telecom has accepted many of the 23 recommendations made by the Committee. However, it has indicated that the need for financial responsibility and customer equity means that it is not practicable to fully implement all of the recommendations. A separate response to each recommendation is presented within Telecom's formal response to the report. The benefits which will accrue to customers as a result of the changes proposed to Telecom's zonal charging policies can be summarised as: Increased local call access for outer metropolitan and outer urban customers; increased access at community calling rates, in lieu of trunk rates, for metropolitan and outer urban customers; substantial reductions in charges for trunk calls between zones with centres 25 and 50 kilometres apart within expanded capital city charging districts; reduction in tariffs for certain trunk calls from provincial cities and rural areas adjacent to the capital city; reduction in tariffs for certain trunk calls between customers within expanded charging districts and in adjoining charging districts; and improved customer understanding of the call charges through simplification of the charging structure and alignment of numbering areas, charging district boundaries and telephone directories. The principles involved in Telecom's response to phase 1 of the Committee's inquiry, into outer metropolitan areas, are directly related to its phase 2 study on rural and remote areas. The response will undoubtedly provide a useful input to the second stage of the Committee's inquiry. I congratulate the Committee for its efforts and Telecom for its positive response to the overall thrust of the recommendations. I present the following paper: Telecom Australia: Zonal Charging Policies-Ministerial Statement, 15 November 1985. Motion (by Mr Young) proposed: That the House take note of the papers. Mr MOORE(Ryan)(3.10) —In response to the statement which has just been made by the Minister for Communications (Mr Duffy) it is very enlightening to consider the response of Telecom Australia to the House of Representatives Standing Committee on Expenditure. This is an area which I think affects us all and our constituencies in a very remarkable sense. The wonderful throw-away line `Ringing in the Changes' which is the name for-- Mr Leo McLeay —It is a bit creative. You would not understand that. Mr MOORE —No, I am sure that the honourable member would not either. His contribution to this area is well known. We, in opposition, want to address ourselves to the effectiveness of this report. Constant complaints come to my office, on a daily basis, in my capacity as a member of parliament and as previous Opposition spokesman on these matters concerning the Telecom-consumer relationship. The good-will that used to exist in the old Postmaster- General's Department has rapidly fallen away in recent times. These complaints relate to Telecom-consumer relations, not to the overall trunking network or to the service itself. Expectations were built up that the 1960 boundaries of the capital cities in the various areas would be changed, but they have not. People expected to have their areas extended into the 02, 03 or 07 area codes, depending on which major capital city they lived near. Because of the significant suburban sprawl that has occurred in Australia since that time those people expected, and indeed might well have been entitled to have been included, in the major motropolitan networks. That has not occurred. Those honourable members who played a special part in this, particularly the honourable member for Flinders (Mr Reith)-- Government members interjecting- Mr MOORE —The honourable member for Flinders would know as much as the honourable member for Grayndler about these matters. These areas have not been expanded. In my view, the reasons given for it in this report completely miss the point. The point which comes out of this and which we made so much about is that we are going to give away $7m of the income that will flow from this. Mr Chynoweth —Minister Duffy would be pleased to get it. Mr MOORE —Let us turn the honourable member on and give him a digital machine. The projected loss of $7m a year, which is one of high sales points in the Minister's statement, presupposes two things: Firstly, lower prices do not lead to higher use-in other words, price inelasticity which I think is completely beyond any expectations-secondly, if total revenue of $4,765m last year is taken into consideration over a period of two years $7m will be given up. What a great effort that is! It will be made up in additional years, so that is hardly a point. The second point is that it will cost $18m in capital works to being Telecom's proposals into force over two years. What does that mean? We have to weigh $18m against Telecom's total outlay last year of $1,570m. Big deal! The two expenditures add up to $25m, which in the context of the current year's cash outlay of $5.2 billion, adds up to hardly enough to pay for a round of drinks. To justify the work of the parliamentary Committee, Telecom has given up just a small amount and the Minister swallowed it. He made no other response except to say: `Yes, we will go along with that'. So not much is expected of Telecom's coming response to the Committee's inquiry into rural remote areas. I hope that the honourable members who hold seats in those areas, particularly those who sit on this side of the House, will pay close attention to it. If the best response Telecom can come up with in this regard is the allocation of $25m, spread over two years, to implement some changes-this response from Telecom was totally endorsed by the Government-what goes? God help those in the rural sector when Telecom responds to the report on that sector. I hope that the Committee is looking at what may occur in those areas. At the back of Telecom's response is a section on implementation. I refer those honourable members who might be listening to it. It is anticipated that some two years will be required for the preparatory work-this is to save $7m. That will be followed by progressive implementation over five years. So everybody can expect that these great cuts-savings of $7m a year-will be phased in over a seven-year period. Big deal! The Government ought to be shocked and horrified by Telecom's response. All people who live in the areas involved and who have been expecting some reforms as a response to the Committee's report have been totally let down. Debate (on motion by Mr Free) adjourned. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth that whereas: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical locaton 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 Ewen Cameron,Mr Hawker 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; That the presence of the Union Jack on the flag represents not a subvervience to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression; Nonetheless recognises the rights of Australians should they wish as a people to change the design of their flag. Your petitioners humbly pray that no change be made to the Australian flag except with the consent of the people in a referendum. And your petitioners as in duty bound, will ever pray. by Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives assembled: The Petition of the undersigned citizens of Australia respectfully showeth: That whereas the Commonwealth of Australia ratified the UN Convention of the Elimination of All Forms of Discrimination Against Women in 1983, the Goverment of Victoria in passing the Planning (Brothels) Act 1984 is in breach of Article 6 of the Convention which says that ``States Parties shall take all appropriate measures, including legislation, to suppress all forms of traffic in women and exploitation of prostitution of women''. That the Victorian Planning (Brothels) Act 1984 provides legal authority to brothel operators to traffic in and exploit the prostitution of women and to live off the earnings of prostitutes. That whereas the Federal Minister for Health has counselled citizens to shun promiscuity (The Australian 26/1/85) because of the serious and sometimes fatal health hazards, the operations of legalised brothels encourages promiscuity and the spread of diseases, including AIDS. Your petitioners therefore pray: That the Government of Australia having ratified the UN convention on Women remain consistent in its obligations to uphold the Articles of the Convention and request the Victorian Government to immediately repeal the Planning (Brothels) Act 1984. And your petitioners, as in duty bound, will ever pray. by Mr Ewen Cameron,Mr Halverson and Mr Hawke. 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 U.S. Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. And your petitioners as in duty bound will ever pray. by Mr Kent,Mr Scott and Mr Staples. 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 Beale and Mr Ian Cameron. To the Honourable Speaker and members of the House of Representatives. The 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 per cent 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 and Mr Ruddock. To the Honourable the Speaker and members of the House of Representatives assembled in Parliament. The petition of the undersigned respectfully showeth: Introduction of any additional capital gains taxes, wealth taxes or death duties is opposed on the grounds that: they adversely affect the small and medium size businesses in Australia, destroying incentive and discouraging investment in this important area of the economy; the Australian economy, and employment in particular, is heavily reliant on growth in small businesses; any capital gains that might result when owners of small businesses finally sell the business are not ``windfall gains'' but the result of many hard years of work and sacrifice, with very little being taken out of the business by way of salaries so that the maximum amount of money can be ploughed back into the business to create growth and jobs; the owners of small businesses often depend on a capital gain-which are simply deferred salaries-when they eventually sell their business to sustain them in retirement; Your petitioners request that the House of Representatives, in Parliament assembled, will protect the rights of private enterprise and reject any inequitable additional taxes. And your petitioners as in duty bound will ever pray. by Mr Cadman and Mr Ewen Cameron. To the Honourable the Speaker and the honourable members of the House of Representatives in the 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; (c) The large star depicting the advent of Federation. 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 give a speedy passage to the Flags Act Amendment Bill which provides that the Australian National Flag can only be changed by a referendum. by Mr Drummond and Mr Rocher. 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 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 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 Rocher and Mr Ruddock. `For the People's Right to Peace' `For the Rights of Women and Children' `For National Independence, Disarmament and Peace' 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. by Mr Staples and Mr Tickner. 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. by Mr Blunt. To the Honourable the Speaker of the House of Representatives in Parliament assembled. The Petition of concerned people respectfully showeth their desire to have the koala declared an endangered species and given the proper protection of the Commonwealth. Your petitioners therefore humbly pray that your Honourable House declare that the koala may not be exported from this country and that urgent re-vegetation of their habitats be carried out. Your petitioners also humbly pray that Commonwealth Government funds will be made available for research into the disease Chlamydia Psittaci which is killing the koala. And your petitioners, as in duty bound will ever pray. by Mr Robert Brown. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned shows: That the proposed introduction of compulsory identification (ID) cards should be reconsidered and rejected because the system: (a) is not a cost-effective method of reducing tax evasion and social security fraud and, to the contrary, in the form proposed will facilitate such evasion and fraud; (b) will constitute an unwarranted infringement of individual privacy by the aggregation of a wide variety of personal information of a private nature; (c) will cause a further large and costly growth in the bureaucracy and burden on the taxpayer; and (d) cannot be guaranteed against misuse for purposes other than for which their introduction is stated to be intended and in fact provide the opportunity for blackmail and other forms of misuse. And your petitioners humbly pray that the problems which identification cards are intended to reduce should be attacked by other, more effective and less obnoxious methods. And your petitioners, as in duty bound, will ever pray. by Mr Burr. 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 Preschools and 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 Cadman. To the Honourable Speaker and Members of the House of Representatives, the Petition of the undersigned respectfully showeth: That the May expenditure savings which introduced funding cuts to children's services will cause hardship to many low and middle income earners. Families relying on these vital services will suffer, as will workers within the industry. 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 Maher. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of concerned people of Australia respectfully show their desire that your Honourable House (The Government) act immediately to raise the Tertiary Education Assistance allowance to the level of the Unemployment Benefit. And your petitioners, as in duty bound, will ever pray. by Mr Ewen Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of certain citizens of Australia respectfully showeth that the current policies of the Community Arts Board of the Australia Council are disadvantaging rural residents with regard to access to the Arts. Your petitioners, therefore, humbly pray that the Federal Government will allocate sufficient funds to the Australia Council specifically to ensure ongoing funding to State Arts Councils to enable those organisations to maintain access to performing and other arts activities in country areas. And your petitioners, as in duty bound, will ever pray. by Mr Ian Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That the Technical and Further Education Participation and Equity Programme established as the centre-piece for national youth policy, addresses the educational, social and employment needs of twenty-two thousand unemployed Australian youth. The intended 50% funding cuts will directly affect at least ten thousand already disadvantaged young people, denying them access to further education and potential employment. Your petitioners therefore humbly pray: (1) That the decision to cut the Participation and Equity Programme funding be reversed. (2) That the Participation and Equity Programme be guaranteed funding for 1987, and beyond. And your petitioners, as in duty bound, will ever pray. by Mr Drummond. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The humble petition of certain citizens of Australia respectfully showeth: That pensions be adjusted fully to reflect the total increase in Consumer Price Index (CPI); and That the ceiling for pensioners' incomes be increased to provide for an adequate `living standard', before any consideration is given to the introduction of reduced pensions and the fall of benefits. Your petitioners therefore humbly pray that action be taken by the Government to implement these proposals immediately and not November 1986. And your petitioners, as in duty bound, will ever pray. by Mr Halverson. 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 in the light of the Labor Government's failure to act to correct the many anomalies in the Assets Test on pensions brought to its notice, the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners. Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of the Labor Government's iniquitous and unfair Assets Test. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens, teachers, parents and students working in and for the interests of government schools and TAFE colleges showeth that: 1. We oppose the proposed cuts of 75 teaching and 40 ancillary positions in ACT government schools and 28 teaching positions in ACT TAFE colleges. 2. We deplore the cuts to public education and the harm caused to the opportunities of thousands of Canberra's youth. 3. We call on the Commonwealth Government to honour its primary obligation to public education and its commitments to increase participation and equity in education by not implementing staffing cuts in ACT government schools and TAFE colleges. And your petitioners as in duty bound will ever pray. by Mrs Kelly. 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 settlment 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 humble petition of the undersigned electors of the Commonwealth of Australia respectfully showeth that: 1. We are completely satsified with the design of the existing Australian national flag. 2. We are aware it properly reflects the immutable characteristics of Australia, namely: The Union Jack-itself the creation of three Christian crosses-represents the nation's historical origin, and the source of its language and law. The Southern Cross on an azure blue background signifying its place in space. The large star depicting the advent of Federation in 1901. 3. We know the flag has been a source of inspiration to generations of Australians in peace and war. 4. We recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. We are certain that any changes to the flag will produce division in the Australian community. Your petitioners therefore pray that your Honourable House will: Propose and pass a motion that ``the existing Australian national flag remains sacrosanct from change''. And your petitioners, as in duty bound, will ever pray. by Mr Rocher. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia respectfully showeth: That the guidelines for classification of video tapes and discs for sale and hire issued by the Film Censorship Board places no realistic restriction on the sale to adults of explicit hard-core pornography and, coupled with the widespread existence of video playing machines, little or no realistic family control can now be exercised over the likely viewing of explicit hard-core pornography by children and juveniles. Noting that the Parliament refused to disallow regulations permitting these circumstances to occur your petitioners therefore pray that: A Joint Parliamentary Select Committee be established with the following terms of reference: (a) Examine the extent to which video tapes and discs containing pornographic and violent material are available; (b) Examine the extent to which children under the age of 18 years obtain access and are exposed to such material; (c) Investigate the effectiveness of legislative controls upon the dissemination of such material; and (d) Examine the likely effects of exposure to such material upon children and emotionally disturbed persons. 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 humble Petition of the undersigned Citizens of Australia respectfully showeth: 1. That the public at large are greatly concerned at excessive mail delays. 2. That we call on the Government to take immediate steps to rectify the service in the interest of the Australian community. And your petitioners as in duty bound will ever pray. by Mr Shipton. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble Petition of the undersigned respectfully showeth: 1. That the Flags Amendment Bill, 1984, as presented to the Senate and passed, which ensures that the Australian Flag cannot be changed except by referenda, be brought before the House of Representatives. Your petitioners humbly pray that the members of the House of Representatives in Parliament assembled. Will ensure that the Flag Amendment Bill, 1984, will be presented to the House of Representatives at the earliest possible time and your petitioners, as in duty bound will ever pray. by Mr Smith. To the Honourable Speaker and members of the House of Representatives in Parliament assembled the Petition of the undersigned citizens respectfully showeth: That the only migrant centre in Tasmania, Mount St Canice Centre, be retained for the following reasons: 1. It does not make sense to close this centre and to build 2 others similar to it at a great cost to the taxpayers. 2. The closure of this centre will have devastating effects on the existing networks of migrant services which have taken years of effort and dedication to establish. 3. To close this centre is to say that Tasmania will have no role to play in the immigration programs of this country. Tasmania will be the only state left without such a facility. 4. The closure of the centre can not be justified on a cost basis: the Government locked in an agreement to pay the owner 3 year's rent for the centre. It would therefore be a waste of taxpayer's money. This decision was made by the Minister for Immigration, Mr Hurford, without consultation, discussion with any groups or individuals who have been involved with the centre. by Mr Smith. To the Speaker and Honourable Members of the House of Representatives in Parliament assembled: The Petition of the undersigned citizens of Australia showeth: That whereas the Government has abolished the one hundred per cent tax deductability status previously applicable in respect of costs incurred by businesses in entertainment expenses, the actions of the Government in this regard will have a significant and negative impact on business and employment in the restaurant industry. Your petitioners therefore pray that the Government will not proceed with the taxation measures announced on September, 19th, 1985 affecting the tax deductability status of these entertainment expenses. And your petitioners, as in duty bound, will ever pray. by Mr Smith. 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 indentity cards. 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. 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) Fully support the United Nations World Disarmament Campaign by allocating the equivalent of at least 10% of the defence budget 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; (6) Implement National Recycling Programs to reuse water and to compost all presently wasted sewage-sludge and organic garbage into hygienic humus, a natural fertiliser, for use in rehabilitating 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 Tickner. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of concerned Australian citizens respectfully points out: That, for our survival, an effective Worldpeace Initative 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 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 Staples. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: The proposed capital gains tax penalises small business, discourages long-long-term investment, hinders capital formation and will freeze existing investment patterns and limits the investors' ability to adjust to changed market conditions. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Immediately abandon its ill considered capital gains tax proposal. And your petitioners as in duty bound will ever pray. by Mr Blunt and Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: Whereas the present Government of the Commonwealth of Australia has announced its intention to present the Title Deeds to Ayers Rock in Central Australia, currently the joint property of the people of the Commonwealth to an Aboriginal Land Council on 26 October 1985. Whereas opinion polls and statements of representative groups, Members of Parliament and respected individuals show clearly that the Commonwealth Government has no mandate from the citizens of the Commonwealth to act in this manner. Whereas the present Government claims to be totally opposed to apartheid (separate development) in South Africa but is handing over Ayers Rock to an Aboriginal Council in support of a policy of apartheid (separate development) which has been shown to be detrimental to the Aboriginal people of Australia. Whereas it is pursuing this policy making it a crime for most white and many Aboriginals to enter, without permit, large areas of the Commonwealth designated apartheid (ie, set aside for separate development), contrary to our democratic traditions and experience of freedom of movement for citizens of all racial origins within Australia. Whereas Australians citizens have no present means available to them to prevent this violation of their natural rights to unfettered common ownership of, and access to, a treasured natural asset. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Seek means available for the protection of the people's interests to prevent this outrage and preserve the democratic traditions of Australia. And your petitioners as in duty bound will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of 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 the undersigned citizens of Fisher respectfully showeth: That we deplore the discriminatory tax proposals as outlined in the Government's `White Paper' and the Government's preferred option on proposed new and widened tax proposals as so outlined, namely: Capital gains tax Hidden death tax described as `capital gains tax after death' Gift tax Increased company tax Employer taxes on employees' employment benefits. All such taxes will discriminate against and inhibit progress, growth and employment throughout the nation. They will attack hardworking people who have built up their assets; they will discourage thrift; they will inhibit development; they will treat unfairly all who plan for the future; they will cause trouble and expense in arriving at the value of their assets; they will discourage industry and punish achievement. We ask that the tax proposals be rejected. 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 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 can 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 the undersigned ex-service persons in the electorate of Bass in Tasmania respectfully showeth that: (i) The welfare of Australian veterans and their dependants should be kept out of bureaucratic costing exercises. (ii) The Veterans' Entitlements Bill 1985 does not represent the actual needs of ex-service persons, especially the abolition of dependants' pensions, the alteration to the assessment of rates of disability pensions and the alteration to Section 47-the onus of proof. (iii) As ex service persons who served their country in time of need, and now apparently forgotten by governments, we are deeply concerned that our organisations were not consulted before the amendments were made. Your petitioners therefore pray that: 1. The controversial parts of the Veterans' Entitlements Bill 1985 be repealed. 2. That ex-service organisations be given the chance of a ``Summit'' type meeting, as accorded management and trade unions, at which to express their opinions. And your petitioners as in duty bound will ever pray. by Mr Smith. To the Honourable The Speaker and Members of the House of Representatives of the Commonwealth of Australia in Parliament assembled. The humble Petition of the undersigned Bernard Dominic Brassil, Solicitor, of Aboriginal Legal Service Ltd, Cnr. Cleveland &Abercrombie Streets, Chippendale, in the State of New South Wales, hereinafter referred to as `the said State'. Respectively showeth: 1. Your Petitioner is a Solicitor acting on behalf of certain persons of Australian Aboriginal ancestry who are Plaintiffs in separate actions for common law damages commenced in the Supreme Court of New South Wales, hereinafter referred to as `the said proceedings'. 2. Your Petitioner's clients are claiming damages for asbestos related injury and disease arising from their employment by and/or residence near an asbestos mine at Baryulgil on the north coast of the said State. 3. The said proceedings name the following corporate and statutory persons as defendants (i) Marlew Mining Proprietary Limited, formerly known as Asbestos Mines Proprietary Limited. (ii) James Hardie Industries Limited. (iii) James Hardie &Company Proprietary Limited. (iv) Seltsan Limited, formerly Wunderlich Limited. (v) Nominal Defendant T. W. Haines, appointed pursuant to the Claims against the Government and Crown Suits Act 1912 as representative of the Health Commission, the Department of Industrial Relations and the Government of the said State. 4. The House of Representatives Standing Committee on Aboriginal Affairs, hereinafter referred to as `the Committee', at the request of the Minister for Aboriginal Affairs, the Honourable A. C. Holding M.P., enquired into the effects of asbestos mining on the Baryulgil community. The Committee had the following terms of reference: 1. the effect of asbestos mining on the Aboriginal people who lived and/or worked at Baryulgil with particular reference to: (a) the conditions under which Aboriginals worked in the asbestos mine and processing plant; and (b) factors which contributed to any health risks associated with the mine and crushing plant, and the nature, adequacy and enforcement of safety measures to minimise such risks. 2. measures to protect and promote the health and welfare of the Aboriginal people who may have been affected by the Baryulgil mining operations. 3. provisions currently available to secure just compensation for individuals who have been adversely affected by the mining and processing activities at Baryulgil, and measures necessary to overcome any inadequacies in those provisions. 5. In October 1984 the Chairman of the Committee the Honourable Mr G. L. Hand, M.P., tabled the Report of the Committee in the House of Representatives. 6. The Report of the Committee was published by the Australian Government Publishing Service and made available in bound form. On page 127 of that Report, in paragraph numbered 10.22 beneath the heading `Recommendations. Individual Compensation' the Committee recommended as follows: `The Committee does not believe it appropriate to recommend any scheme to make individual payments of compensation. It believes that, subject to some technical difficulties, there are adequate avenues of compensation available to members of the Baryulgil community who contract, or have contracted, an asbestos-related disease.' 7. During the hearings the Committee received certain evidence from Aboriginal Legal Service Ltd and other persons. Among the evidence received were various photographs, letters, plans and a number of documents from Mr Gerald Francis Burke referred to in Mr Burke's testimony to the Committee reported on page 7 of the Report. There are some 5 kg of additional documents received from Mr Burke referred to on page 7 of the report. 8. In order to properly and adequately conduct the hearings of the claims by each of the litigants, whether actual or prospective, it will be necessary to adduce evidence tending to show matters such as the knowledge of the Defendants of the existence of the hazard, the knowledge of the Defendants of the nature and extent of the hazard and the knowledge of the Defendants of the appropriate steps which could be taken to alleviate or remove the hazard. Evidence relating to these matters is to be found in the tendered photographs, letters, plans and also in the documents tendered or presented by Mr Burke. 9. The conduct of the said proceedings would be assisted and expedited if the Plaintiffs could call on the evidence which has been tendered to the Committee. 10. Your Petitioner has obtained the consent of Mr G. F. Burke for the documents tendered by him to be released in accordance with this Petition. The Statutory Declaration of Mr G. F. Burke to this effect is appended hereto. 11. Your Petitioner requests that the photographs, letters, plans and documents be released not subject to any condition that they be returned after any lapse of time. The second and third named Defendants by their Counsel have indicated that they will not be consenting to the disposal of the major issues of liability by means of a `test case' procedure. Accordingly, it is anticipated that it will be necessary to re-present the evidence as each matter is dealt with by the Supreme Court or the District Court of the said State. 12. Your Petitioner desires to inform the house that there has not yet been in the Courts of this Commonwealth a single successful case leading to an order for damages to be paid to a person who is suffering the disease Asbestosis. There are no Australian precedents or authorities other than the Report of the Committee. 13. Your Petitioner therefore humbly prays that this Honourable House will grant leave: (a) To your Petitioner to take possession of the photographs, letters and plans tendered by Aboriginal Legal Service Ltd. (b) To your Petitioner to take possession of the documents tendered or presented by Mr G. F, Burke as aforesaid. (c) To all persons seeking compensation for their injuries and damages arising from their employment in and/or residence near the asbestos mine at Baryulgil to refer to the Report of the House of Representatives Standing Committee on Aboriginal Affairs titled `The Effects of Asbestos Mining on the Baryulgil Community' in those Court proceedings. (d) To an appropriate Officer or Officers of the House to attend in Court as and when necessary to produce the official Report of the House of Representatives Standing Committee on Aboriginal Affairs titled `The Effects of the Asbestos Mining on the Baryulgil Community' and to give evidence in relation to the conduct of the inquiry which led to that report, providing that such Officer or Officers should not be required to attend at any time which would prevent the performance of his, her or their duties in the Parliament. Dated the 8th day of November 1985. Bernard Dominic Brassil Solicitor of the Supreme Court of New South Wales And your petitioner as in duty bound will ever pray. by Mr Blanchard. Petitions received. Madam DEPUTY SPEAKER(Mrs Child) —Mr Speaker has 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 deteriorating state of the economy due to the Government's high interest rate policies. 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)(3.25) —I do not believe it would be an exaggeration to say that middle Australia faces a living standards and economic crisis, the like of which it has not faced for many years. The essential reason why it faces that crisis is that for the last 2 1/2 years this country, and more particularly the leaders of the Hawke Government, have lived a lie about the effectiveness of the economic policies that this Government has followed. For 2 1/2 years the Hawke Government has been able to get away with the proposition that the policies it has had in place since being elected to office in 1983 have been good ones-policies which have made Australia competitive, have enabled Australia to earn her way in terms of world trade and have made this country competitive in the international arena. However, over the past few months a crisis of confidence has developed amongst other countries and within the world finance markets regarding the effectiveness of the policies that the Hawke Government has followed. The inability of the Hawke Government to respond effectively to that changed economic climate flows from the failure of many people in the Government to understand the real implications of the decision that they took-and let me say that it was a decision that was courageously taken by the Hawke Government-in December 1983 to float the exchange rate. I, for one, will never criticise the Government for having taken the decision to float the exchange rate. It was the right decision and the present troubles the Government has are not a result of having made that decision. Rather, they are the result of the failure to understand the implications of what it was doing when it floated the exchange rate. I yield to no one in my view that the problem the Government now has is that it has embraced a deregulated financial environment and that is now hitting hard against a rigid domestic wage structure. It leaves the Government unable to respond flexibly to changes in the exchange rate. The reason why the rest of the world is writing down our dollar, the reason why the rest of the world does not believe the Treasurer (Mr Keating), the reason why the Treasurer failed in his mission to New York and London a couple of weeks ago is that the rest of the world does not believe that this Government and this economy have effectively responded to the changes brought about by the devaluation of the dollar that occurred earlier this year. Because of that, the Government is left floundering with no policy instrument other than the rather brutal one of driving up interest rates to the highest levels that Australia has experienced for more than 50 years. Members of the Government can guffaw and carry on at Question Time and they can go around the corridors of this building pretending that in some way they have weathered the crisis that our broken dollar has produced, but out there in middle Australia there is hurt being felt by people as a result of the Government's policy, the like of which they have not experienced in many years. If the Government imagines that this is a political or economic crisis that it can brush aside, that this is a crisis that will be around for only a couple of weeks, that it can laugh and clown its way through it and reel off all the rhetoric and all the slogans, then it is sadly mistaken. People remember what this Government has promised. I have just come back from Adelaide-what an appropriate place to be in today. That reminds all of us of a speech that the Prime Minister (Mr Hawke) made in Adelaide almost a year ago-on 20 November 1984-when he was addressing a business lunch during the election campaign, a bare 10 days before the last Federal election. This is what the Prime Minister said: Australia and Australians will during 1985 reap the interest rate rewards that are flowing from the successful policies of the last 20 months. We have ploughed the fields and sown the seeds and in the very near future we will harvest the crop. Those were his words on 20 November 1984. That was the Prime Minister living out the lie for all he was worth 10 days before an election. That promise, that expectation which people bought, has been revealed as broken and as irrelevant as that infamous promise he made in 1983 in terms that even the Opposition could understand that under him there would be no capital gains tax. Having promised those interest rate reductions in November 1984, the Prime Minister went on to renew that promise in March and April of this year. So indeed did the Treasurer. Both of them, as late as March and April this year, were telling us that interest rates were going to fall. The poor old Minister for Housing and Construction (Mr West) has been so left out of the changed game plan of the Government that he was promising lower interest rates up to two or three weeks ago. Mr Hunt —And so was the Minister for Primary Industry. Mr HOWARD —Yes, so was the Minister for Primary Industry (Mr Kerin). He was promising interest rate reductions a couple of weeks after the last Budget. But we all know that, far from reaping the harvest of lower interest rates, this Prime Minister and this Treasurer have given us the highest interest rates we have experienced in 50 years since the years of the Great Depression. All the guffawing under the sun will not alter that basic reality. I can say to all those smug, complacent marginal seat holders in the Government that if they imagine they are out of the political woods on interest rates, if they imagine that they can smugly repair to their electorates with some half truths and propaganda handed to them by the Prime Minister and Treasurer as to the reality of the situation, they are sadly mistaken. The people they will go home to will say: `What about Bob's promise? He promised us lower interest rates'. In the last year the prime rate has gone up by 5 1/2 per cent and the small business rate by 4 per cent, the Bankcard rate is now 21 per cent, and the home savings loan rate has gone up by two per cent. People are paying $75 a month extra, and the middle Australian who wants to get a loan for the first time has to pay rates of up to 17 and 18 per cent. That is the harvest Mr Hawke has given us. That is the Keating-Hawke scoreboard. That is what the world's greatest Treasurer has given us. He has given us the world's worst interest rates, the world's weakest dollar, the biggest spending of any peacetime Australian Government, the highest tax levels and, despite the promise of the Prime Minister in 1983, he has also given us a new capital gains tax. That is the scoreboard of Hawke and Keating. I say to members of the Government that if they imagine that this is just a passing phase, that somehow or other with a floating exchange rate if one closes one's eyes and hangs on long enough all the problems will go away, they are sadly mistaken. All those problems will not go away. I would like to know what the honourable member for Chisholm (Ms Mayer) will say to the home buyers and small business people of Chisholm, who come along today and say: `What about the Prime Minister's promise on interest rates?'. I wonder what the honourable member for Barton (Mr Punch) will say. I know Barton like the back of my hand, and I can tell the House that mortgagees in Barton will not be very happy with their member of parliament. I reckon that if another poll were taken in Gallipoli Street, South Hurstville-where a poll is always taken before election day-it would be found that all the mortgagees there would be extremely worried. Therefore, it would be wrong for members of the Government to think they are out of the crisis on interest rates, or that somehow or other they can ride out that storm. It will be around for month after month, and month after month they will have to explain why the Government has not taken on its power brokers in the Australian Council of Trade Unions and said to them: `Look, the renegotiated accord was too generous. We have had to force up interest rates beyond reasonable limits'. Instead, what has the Government decided to do? The Government has played middle Australia for a mug and said: `We do not care how high your interest rates get. We are not willing to renegotiate the accord. The last thing we will do is to take on the ACTU'. The reason the Treasurer had no option but to let interest rates go up further is that he is unwilling to do anything about the wages policy of the Government, because this country is locked into an inflexible wage fixation system which is totally incompatible with the floating exchange rate and a deregulated financial system. I know that the Prime Minister and the Treasurer stubbornly respond and say that a centralised wage fixation system is the only thing that will operate in Australia, but one cannot live in an environment where financial deregulation and a floating exchange rate rule the roost and one has a rigid centralised wage fixation system. If Government members doubt my words on that, I ask them to look at what has happened to the Australian dollar over the past 12 months. We had a massive devaluation at the beginning of the year and the trade-weighted index is at its lowest level ever. Our currency has fallen massively against the currencies of all our major trading partners. Measured in competitive terms, our position against our major trading partners is weaker than it has ever been. If that does not say something for the incompatability of a floating exchange rate and a centralised rigid wage fixation system, nothing does. The Government can pretend and put its head in the sand or like King Canute, hold its hand against the tide, but it cannot deny the reality of the judgments that have been made about it. In Question Time today, when we asked how long the effect of the J curve would take-in other words, how long we will have to wait for the effects of devaluation to work-the Prime Minister, the Treasurer and the Minister for Trade (Mr Dawkins) could not answer. The fact is that the devaluation will not necessarily turn around our competitive position. It will not have quite the boost to local manufacturers and exports that the Government would hope. The reason for that is that we have not effectively utilised the benefits of the devaluation that occurred earlier this year. When that devaluation occurred the Treasurer quite correctly said, and I agreed with him, that it gave to Australian industry a great opportunity to grab hold of its restored competitiveness and to improve its competitive position, but there was one condition to that. It was that there should be an effective discounting of wages for the full effects of the devaluation. Anybody who has studied what has happened knows quite well that that discounting simply did not take place. That was the first question the Opposition asked the Government in this House after the 1984 election. The Prime Minister commenced to back and fill then and he has gone on backing and filling about it for the last nine months. The reason our dollar is in such a parlous condition at the moment is that the rest of the world simply is not convinced. The Treasurer went to New York to talk up the dollar and to reassure everybody. He made a speech and as soon as he had made the speech the dollar fell by another 5 per cent. Not content with that, he went on to London and, like the mug he was, he made the same speech again; so the dollar fell by another 4 or 5 per cent. The great Keating legacy, the great Keating endowment, from that overseas trip was a devalued dollar the like of which we have not seen before. Of course, the Labor Party can bask in its imagination that somehow or other a falling dollar and all the esoteric ins and outs of a floating exchange rate do not really mean anything in the Australian community. Maybe it does not, but the implications of not responding effectively to a floating exchange rate are absolutely lethal in political and economic terms for middle Australia. I say to the Government that unless it is prepared to get its act together in properly responding to our floating exchange rate and puts in place a wages policy that enables this country to be competititve and pays people for productivity, profitability and output-not according to some outdated notion that everybody has to be paid the same whether they are performing or not-it will find over the coming months, to its cost, that the burden of high interest rates will drive its marginal seat holders out of office as surely as the fall in the dollar has driven up interest rates to levels that are now hurting literally hundreds of thousands of middle class families throughout Australia. I say to the Government, in all of its smugness of the past few days, that it should remember that out there middle Australia does not like it one bit. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(3.39) —All the once great Liberal Party of Australia can do is shout out silly rhetoric like that we have just heard from the Leader of the Opposition (Mr Howard). What a bankrupt Opposition this is, led by a Leader-- Mr Shipton —I raise a point of order, Madam Deputy Speaker. When the Treasurer is under attack in this way should he not be in the House to respond? Madam DEPUTY SPEAKER(Mrs Child) —The honourable member for Higgins will resume his seat. I point out to honourable members on my left that I will not take any more frivolous points of order. The Leader of the Opposition was heard with courtesy and so will the Minister for Immigration and Ethnic Affairs be heard. Mr HURFORD —The Leader of the Opposition's effort was pathetic. It is pathetic to see honourable members over there trying to give some support to a floundering leader who has no policies. All he does is seek to exaggerate in a way that has to be seen or heard to be believed. Opposition members can raise only two matters of public importance at this time. They have repeated today the one they raised on Monday. The other one concerns the prices and incomes accord. They shuffle them around between the new Leader, the new Deputy Leader of the Opposition (Mr N. A. Brown) and the Shadow Treasurer. They shuffle them around like one would shuffle the deck chairs on the Titanic. The proposition before the House cannot be substantiated. The first phrase in the proposition states: The deteriorating state of the economy . . . Instead of indulging in rhetorical exaggeration such as that which we just heard from the Leader of the Opposition, let us have a look at the facts about the Australian economy as it is right now. We on this side of the House are proud of our economic record and we will not be indulging in any exaggerations or untruths. We are prepared to rest on the facts, on what is happening now. There is no substitution for these facts. Since we have come to office we have turned the economy around from being one of deep recession-a situation for which the Leader of the Opposition, who was the previous Treasurer, cannot escape responsibility. This is the third year of 5 per cent growth that we have entered into. Unemployment is down from 10 per cent to 7.8 per cent. Employment is up. Is there anything else that the Australian people want more than an increase in the number of jobs? I say that there is not. At last count we have created 460,000 new jobs, and we will march on to our target of 500,000 jobs well before the end of the three-year period, which is not up until next March. But that is not all. Look at inflation. We inherited 11 per cent inflation from this former Treasurer, now the Leader of the Opposition, who constantly fulminates in the way he did today. We are now down to 5 per cent inflation. Certainly we have problems with the discounting of our currency, and that will feed through our economy and our inflation rate will increase from that 5 per cent. But is anybody suggesting that it will return to the former Treasurer's figure of 11 per cent? No responsible commentator has even indicated that that might be so. Real unit labour costs have returned to the level of the late 1960s. As we heard again at Question Time today, demand in our economy is running more strongly now than it did at the time of the Budget. Profits are up, investment is strengthening, and the economic outlook is stronger than it has been for years. We do not need this crisis talk from the Leader of the Opposition who is trying to talk down the economy. All we need to do on this side of the House is point out to the Australian people the facts concerning the economy. (Quorum formed) Debate interrupted. Mr SPEAKER —Order! It being past 3.45 p.m., I propose the question: That the House do now adjourn. Mr Hurford-I require that the question be put forthwith without debate. Question resolved in the negative. Debate resumed. Mr HURFORD —It is quite unprecedented for the Opposition Whip to call a quorum at this time on a Friday in a matter of public importance that the Opposition has brought forward. The reason the quorum was called was that I had been going through a list of the facts about the Australian economy-not a litany of exaggerations such as we just heard from the Leader of the Opposition. The contrast between the truth and those exaggerations was just so strong that honourable members opposite could not bear to hear it. What a contrast there is between our list of truths about the economy as it is today and what it was under their stewardship. I just remind the House that when the previous Government was thrown out of office the Australian economy was one of the worst in the world. The Leader of the Opposition, when he was Treasurer, managed the unique double of double digit unemployment and double digit inflation. In the middle of the worst recession in 30 years, in 1982, the Opposition had the Australian savings bond interest rate at 14.75 per cent and average weekly earnings growing at a massive 15.3 per cent a year. What a cheek it is for the person who was responsible for those infamous statistics to waste the time of the House today with the sort of exaggerations we have heard. The Opposition had a tight monetary policy when it was in government and it failed in its attempt to kill off inflation at a time of high and rising unemployment. Mr Hand-Where is he? Mr HURFORD —As the honourable member for Melbourne asks, where is he? He has not even had the courtesy to stay and hear the facts in response to the sort of exaggerations we heard from him. This Government will continue to get the fundamentals right; it will continue to be able to tell a good story to the Australian people about what is happening to those fundamentals. Employment is up strongly, business investment is strengthening, and average weekly earnings statistics indicate the success of our wages policy. Let us look more deeply at the fundamentals of the Australian economy because it is a record of which we are proud, which we will continue to remember, and of which we will continue to remind the Australian people. It is a record that makes the Opposition squirm, and that is why we find that the Leader of the Opposition has scurried out of the House and hurried away. I will go through the list because it bears repeating. Government members interjecting- Mr SPEAKER —Order! I remind honourable members on my right that it is one of their colleagues who is addressing the House. Mr HURFORD —I am getting a lot of very good help from them and I appreciate it very much. I want to go into detail on some of the statistics that I have briefly outlined. Real domestic product is growing strongly. A growth of 4.5 per cent is expected in 1985-86 after a 5 per cent growth in the previous two years. Non-farm domestic product is expected to rise by 5 per cent in the second half of 1984-85. There has been a particularly strong period of growth in the labour market since April 1983. We have mentioned a figure of 460,000 jobs which is expected to rise to 500,000. We have almost reached that half a million figure, but we are not going to stop there. We have a target of 150,000 for this financial year. Honourable members will understand that I am particularly interested in talking about housing results. We have a very good Minister for Housing and Construction at the present time and, if I may so with my usual modesty, we had a reasonable one previously as well. The buoyant state of the housing sector reflects very well on this Government. A continuing strong supply of finance, the Government's housing policies, including the first home owners scheme, and the improvement in general economic conditions are all benefiting the housing market generally. I would like to point out the statistics for housing finance. We are hearing a lot about the increase in interest rates. It is so that in order to dampen down some of the overheating that is going on at the moment there are problems with interest rates. That is not the only reason. Another factor is that we do not live on an island as far as the economy of the rest of the world is concerned. Australia may be an island as far as its land mass is concerned, but, as far as the world economy is concerned, we cannnot isolate ourselves from it. As I know so well from representing this country and the Government at the recent meetings in Seoul of the International Monetary Fund and the World Bank, what has been happening to interest rates here is very much a reflection of the world level of interest rates. It is a problem that the world generally is addressing and it is not something that is isolated to this country. It is time some of the honourable members opposite educated themselves by reading, for instance, the Economist and realised what has happened to the real rate of interest not only in the United States of America but also in the United Kingdom and other countries of Europe. I repeat: We cannot isolate ourselves from the rest of the world and the high levels of interest are very much to do with the levels elsewhere. That has not in any way adversely affected the level of housing finance. We have only to look at how it collapsed under the previous coalition. In 1979-80, $7,018m was spent on housing finance. In 1980-81 it went up to $7,471m. In 1981-82 came the drop to $6,506m, and in 1982-83 it went back up to $7,171m. We are now getting to the sorts of figures that have been made available by the Hawke Labor Government. In 1983-84 the sum of $10,369m was spent. What a contrast that was. In 1984-85 the sum of $12,900m was spent, and we are confidently expecting a high rate of housing finance in the present financial year. Unfortunately my time has been curtailed by the irresponsible actions of the Whip on the other side, but before I finish I want to say that it was irresponsible of the Leader of the Opposition to bring this proposition to this House as a matter of public importance. We have shown that in no way is there a deteriorating state in our economy. In no way is there any chance that there will not be continuing growth in our economy. In no way are the policies that are in place now not going to mean that the fundamentals of our economy will continue to be good. Mr SPEAKER —Order! The Minister's time has expired. The discussion is concluded. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(3.55) —I move: That the Bill be now read a second time. With the introduction of this Bill the Government is taking another important step towards achieving our critical reform program for repairing the Australian tax system. The Bill continues our attack on the tax shelters, evasion and avoidance practices and sectional preferences that have caused our system to become distrusted by honest citizens. It contains measures to put in place four of the reform proposals announced in the statement of 19 September 1985 on reform of the Australian taxation system. One of these is to deny income tax deductions for entertainment expenses incurred after that date. Another will require specific substantiation of claims made for the deduction of employment-related expenses by employees and of car and travel expenses of employees and self-employed persons. A third reform measure removes the tax bias in favour of the use of public unit trusts as a vehicle for the participation in trading and business ventures by tax-exempt investors. The fourth measure will give effect to the decision to replace, with write-off over five years, the immediate income tax deductibility of capital expenditure by primary producers on conserving and conveying water. Some measures in the Bill are unrelated to the tax reform package. One of those is the proposal, announced on 22 August 1985, to counter tax avoidance arrangements involving the commutation of immediate annuities. Another is to extend to taxable bonuses and similar amounts received under life assurance policies issued by certain State government insurance offices the rebate of tax in respect of such amounts received under policies issued by taxable insurance companies. At the same time a technical deficiency in the rebate provisions will be corrected. Those changes were announced on 9 October 1985. The Bill will ensure that the new carer's pension introduced from 1 November 1985 is taxed on a similar basis to the spouse carer's pension it replaced. Finally, it contains a number of purely technical amendments consequent on recent changes to social security and repatriation laws. I turn now in more detail to the various measures. Entertainment Expenses The Bill will give effect to the decision announced in the 19 September statement to deny deductions for entertainment expenses. As noted in that statement, the Government cannot stand by and allow the general body of taxpayers to subsidise through deductions for entertainment expenses the frequently social activities of a group of usually well-off people. The Government recognises that this measure will mean that in some cases deductions will be denied for genuine business expenses. Nevertheless, the fact remains that certain sections of the community have abused the availability of deductions for entertainment expenses. That abuse has been possible because of the inherent difficulties in distinguishing between genuine and non-genuine entertainment-difficulties that have proved intractable despite suggestions that have been offered to us. The extent of that abuse and the lack of a viable alternative to restrict deductions to genuine business entertainment have confirmed that the Government has no option but to act across-the-board in disallowing entertainment expenses. There are also equity considerations. The vast majority of taxpayers do not benefit from the current law which is available only to a limited class of persons. The fact that lunches are deductible for the business person eating with clients or colleagues in an expensive restaurant, but not for the ordinary worker, has added to the public's perception of the unfairness of the current taxation system. There has been much public comment on the impact of the measures on the restaurant industry. While that industry will be affected by the Government's decision, it would be wrong to justify a continuation of the present system on that ground when it is clear that the present level of activity has been achieved through the utilisation of an unintended subsidy, financed by the general body of taxpayers. In assessing the extent of that impact it should also be remembered that the restaurant industry will be one of the beneficiaries of the increased community spending power that will result from the reduced rates of tax that are to be introduced as part of the overall reform package. The amendments proposed by the Bill will deny deductions for entertainment expenses incurred after 19 September 1985. Typical kinds of entertainment that will no longer attract deductions include business lunches and drinks, dinners, cocktail parties and staff social functions. Deductions will also be denied for expenses incurred in providing entertainment, such as tickets or boxes for sporting or theatrical events, and sightseeing. Hostess allowances paid by employers to spouses or other relatives of senior executives to offset the cost of attending or hosting company-sponsored functions will also no longer be deductible. The entertainment deduction prohibition will not, or course, apply to expenses incurred in operating a business for the provision of entertainment. As a general rule, expenditure on entertainment for promotional or advertising purposes will also continue to be deductible provided it is made available to the public generally and not confined to selected guests. The cost of overtime meals of an employee governed by requirements of an industrial award will also be unaffected by the proposed amendments, as will the cost of a person's meals while travelling on business away from home. Special rules will apply to ensure that the costs associated with in-house dining and recreational facilities for employees will be unaffected by the amendments. However, expenditure incurred after today in entertaining non-employees in an in-house dining facility will, broadly speaking, no longer be deductible. The Bill will also ensure that the cost of meals that are reasonably incidental to a person's attendance at a seminar will continue to be deductible, although the cost of any associated recreational activities will come within the scope of the disallowance provisions. The Bill also contains a number of safeguarding provisions to ensure the intended operation of the measures. In this regard I note that there are already indications of moves to substitute entertainment allowances presently paid to senior executives with what are said to be overtime meal allowances payable on the basis that it is normal for these executives to work long hours. The specific exception in relation to overtime meals I referred to earlier is to apply only to the cost of overtime meals provided pursuant to an indistrial award, with the result that the disallowance measures being introduced by this Bill will apply in relation to privately negotiated meal allowances. Substantiation Rules A further measure announced in the 19 September statement which is being introduced by this Bill is the requirement for the substantiation of employment-related expenses of employees and car and travel expenses of employees and self-employed persons. These measures will correct a deficiency in the existing law which, while specifying the type of expenses which qualify for deduction, fails to specify what proof is required to substantiate those claims. Subject to the exemptions outlined below, the proposed amendments will make it a requirement for deduction that appropriate documentary evidence be maintained. For this purpose, the general rule will be that an expense will be regarded as substantiated only where a taxpayer is able to produce a receipt, invoice or other documentary evidence that evidences the amount, date and essential character of the expense. More detailed substantiation requirements will apply in relation to car and travel expenses. In addition to the basic substantiation rules which will apply to verify actual expenditure, taxpayers seeking to deduct the whole or any part of car expenses are, subject to alternatives I shall outline, to be required to maintain daily log books or similar records in which details of business trips are recorded. For travel expenses, taxpayers will be required to substantiate the business purpose of overseas travel and extended domestic travel by maintaining a diary of the business activities conducted during the trip. A further measure will ensure that deductions are not allowable for the travelling expenses of a spouse or other relative who accompanies an employee or self-employed person on a business trip. The substantiation requirements applicable to employees will be subject to two exclusions. Under the first of these, the general substantiation requirements will not apply to claims within the limits of reasonable domestic travel or overtime meal allowances. The second exclusion will apply generally to exempt from the substantiation requirements claims which in aggregate do not exceed $300 in the particular income year. Concurrent with the introduction of substantiation requirements for car expenses, the Bill will authorise alternative arbitrary bases of deduction depending on whether or not business use during a year of income can be expected to exceed 5,000 kilometres. Where business use exceeds 5,000 kilometres a taxpayer is to be entitled to claim a deduction equal to one-third of the vehicle costs or, alternatively, a deduction equal to 12 per cent of the purchase price of a motor vehicle. Where the vehicle is acquired under a lease agreement, the 12 per cent deduction will be based on the market value of the vehicle at the time the lease was entered into. The value on which the 12 per cent deduction is to be based will be subject to the limit under the existing law on the cost price of cars for depreciation purposes. For cars with an estimated annual business use of less than 5,000 kilometres, a taxpayer will be entitled to a deduction based on applying standard rates per kilometre. Public Unit Trusts The draft White Paper on the reform of the taxation system drew attention to the marked erosion of the company tax base over recent years, caused partly by the use of both public and private trusts in substitution for companies as a mechanism for conducting business activities. (Quorum formed) A further study of the matter was undertaken in the context of possible changes to the company tax system which were also being considered by the Government. The problem was that, although the very significant changes to company tax arrangements ultimately decided on by the Government will reduce the incentive to use trust, considerable advantages in using the trust form would still have remained for tax-exempt bodies investing in large business undertakings. Given the very favourable treatment already given to such bodies that would have been an unacceptable situation. The Government therefore decided, as announced in the tax reform statement of 19 September, that company tax arrangements should be extended to public unit trusts that operate a trade or business. In announcing that decision, it was also indicated that private trusts and public unit trusts of the more traditional kind that do no more than invest in property, equities or securities would not be affected. Measures contained in this Bill to give effect to those decisions in many respects mirror the present corporate unit trust provisions. Subject to transitional arrangements, they will apply to a unit trust which, at any time during a year of income, is a trading trust that is also a public unit trust. For these purposes, a trust will be a trading trust if its business activities go beyond investing in land for rental, or investing or trading in shares, units, loans and other securities. Following the basic rules already in the income tax law for taxing corporate unit trusts as companies, a trust will be treated as a public unit trust if its units are listed on a stock exchange, if they are held by 50 or more persons or are available for investment by the public. A trust will also be a public unit trust if units entitling the holder or holders to 20 per cent or more of the beneficial interests in the income or property of the trust are held by persons or bodies, including a government authority, that are exempt from income tax. I point out that this test, which reflects the Government's underlying concern over the use of trusts as an investment vehicle by tax-exempt investors, will result in a unit trust being treated as a public unit trust where that would not otherwise be the case, for example, where units in the trust are not available for investment by the public, or are held by less than 50 unit holders. Provisions in the Bill, like those in the present income tax law relating to corporate unit trusts, will ensure that distributions made by public trading trusts are treated for all practical purposes in the same way as dividends paid by a company. Thus, a distribution received by a company or other affected trust from a public trading trust will qualify for a rebate of tax in the same way as a public company now qualifies for a rebate on dividends it receives from other companies. Similarly, where the income or a public trading trust includes dividends from companies, corporate unit trusts or other public trading trusts, a rebate of tax will be available on a comparable basis. Distributions made by a public trading trust to a resident individual will be included in assessable income in the same way as company dividends. Where such distributions are made to non-residents they will be subject to dividend withholding tax. The new basis for taxing public trading trusts and their unitholders will apply to income of the 1985-86 year of income for relevant trusts that are established after 19 September 1985. For trusts that were established on or before that date, the new measures will first apply to income of the 1988-89 income year. This will allow reasonable time for parties to such arrangements to review and change them as may be appropriate. For the purpose of this transitional provision, it will not be necessary for a unit trust to have actually progressed to the point of being a public unit trust or to have commenced trading activities on or before 19 September 1985. It will be enough if the trust was then in existence and it can be demonstrated that it was in course of meeting those criteria by that date. Consequential amendments are being made to the Income Tax (Rates) Act 1982 and the Income Tax (Individuals) Act 1985 to exclude from their operation the trustee of a public trading trust falling within this measure. A complementary amendment will be made by an accompanying Bill to the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Act 1985 to declare and impose tax on income of affected trusts. Other consequential amendments are proposed to the Income Tax (International Agreements) Act 1953. These measures will curb the trend that has been developing in the erosion of the company tax base through such creations and which would have had more serious revenue consequences in the absence of this corrective action. On that view, I foreshadow that, should evidence emerge of arrangements designed to circumvent these measures, the Government will propose remedial legislation to the Parliament to apply with effect after today. Water Conservation or Conveyance Expenditure and Soil Conservation Expenditure Under the present income tax law, capital expenditure incurred on plant or structural improvements for the purpose of conserving or conveying water for use in a business of primary production is fully deductible in the year in which the expenditure is incurred. The ability to fully deduct such capital expenditure reduces the after-tax cost of improvements of this kind relative to other investments in property and can therefore encourage expenditure for tax sheltering purposes. As announced in the tax reform statement, that immedite deductibility is, where the expenditure is incurred under a contract entered into after 19 September 1985, to be replaced by deductibility in equal instalments over five years. A deduction of 20 per cent of the expenditure is to be allowed in the year in which the expenditure is incurred and in each of the subsequent four years. Such a write-off period is consistent with the general treatment of assets of primary producers and other businesses. Increased funding under the Federal water resources assistance program, which includes assistance for rural water conservation, is evidence of the fact that this reform measure does not represent reduced Government priority for water conservation. That funding is to be increased by $4.6m in 1985-86. As announced in the 19 September 1985 statement, the Government has decided against changing the immediate deduction available for capital expenditure on soil conservation after taking account of concerns over land degradation problems. In recognition of those problems the capacity to write-off expenditure on arresting or preventing soil erosion or soil salinity is, by the Bill, to be extended to expenditure on arresting land degradation generally. Capital expenditure incurred after 19 September 1985 in overcoming land degradation in the form of soil infertility and structure decline, to give but two examples, will thus be subject to immediate write-off. Commutations of Immediate Annuities The Bill will give effect to the proposal announced on 22 August 1985 to counter exploitation of the eligible termination payment provisions of the income tax law through arrangements for the commutation of immediate annuities purchased with moneys other than retirement or employment termination moneys. Under one such arrangement, an immediate annuity is purchased with a substantial sum of money that has no source in retirement or termination payments. The moneys could be borrowed solely for the purpose. Although the annuity is expressed to be payable over a number of years, it is commuted to a lump sum after, say, one year and the greater part of the earnings are received on commutation. By this process moneys that, if invested elsewhere, would give rise to earnings taxable at full marginal rates are used to generate amounts that, when paid out on commutation, are eligible termination payments for income tax purposes. Such amounts are subject to tax at a maximum rate of 30 per cent. The rate would be 15 per cent on the first $55,000 if the recipient were aged 55 or more. When this proposal was announced, the Government was unable to specify comprehensively what form the necessary remedial legislation would take. Being mindful that the provisions being exploited are designed to provide concessional tax treatment for retirement payouts where appropriate, the Government wished to ensure that the remedial legislation would not adversely affect genuine cases. Consistent with the assurance given when announcing the proposal, the amendments contained in this Bill will not apply where immediate annuities are purchased wholly with lump sum retirement or termination payments. Nor will they apply in respect of earnings on a commuted immediate annuity that are attributable to annuity principal funded by retirement or termination payments. The amendments will apply only in respect of such earnings attributable to principal funded by non-retirement moneys. The commutation of an immediate annuity purchased prior to 1 July 1983, being the date from which the eligible termination payment provisions of the income tax law first applied, will not be within the scope of the amendments. However, where an immediate annuity purchased after 30 June 1983 is commuted after 22 August 1985, or its residual capital value becomes payable after that date, the accrued earnings referable to that part of the purchase moneys not attributable to retirement or termination payments will not qualify for the concessional treatment otherwise available. Such earnings will be subject to tax at full marginal rates. The ability to roll over such earnings into, for example, an approved deposit fund and thus defer any liability to tax will also be removed. I also take this opportunity to reiterate the Government's warning that, should the need arise to introduce additional legislation to counter any further artificial tax avoidance arrangements designed to exploit the eligible termination payment provisions of the taxation law, that legislation will also be made effective from 22 August 1985. Short Term Life Assurance Policies This Bill gives effect to the Government's decision-announced on 9 October 1985-to extend to recipients of taxable bonuses and similar amounts paid under life assurance policies issued by certain State government insurance offices eligibility for the rebate of tax presently available to recipients of such amounts paid under policies issued by taxable insurance companies. Under the existing law, bonuses on life assurance policies and other amounts in the name of bonuses that are received either during the first four years or during the first 10 years of the policy, depending on its date of commencement, are subject to tax. To broadly compensate for the tax paid by the policy issuer, a rebate equal to 30 per cent of the taxable bonus is allowed to the recipient. However, as State government insurance offices are exempt from government tax, no rebate is available in relation to policies they issue. The State government insurance offices that presently offer short term life assurance policies, for instance, those in New South Wales, Queensland and South Australia, each pay to their respective State treasuries an amount equal to the Commonwealth income tax that would be payable if they were not tax exempt. The Government therefore recognises that the non-availability of the rebate could affect the competitive position between those offices and taxable insurance companies in relation to the issue of life policies. This Bill will remedy that situation by allowing a rebate of 30 per cent in respect of amounts paid by the insurance offices in question that are subject to tax in the hands of the recipients. In return, the relevant State governments have agreed to reimburse the Commonwealth for the revenue forgone. By another amendment, a technical deficiency in the relevant rebate provisions of the law is being rectified. It will extend the rebate to the trustees of taxable superannuation funds and ineligible-that is, taxable-approved deposit funds in receipt of taxable bonuses. Both these amendments will generally be effective from the date that the rebate provisions were first applicable-that is, 27 August 1982. Carer's Pension Effect is being given by the Bill to the income implications of the Budget announcement to subsume, from 1 November 1985, the former spouse carer's pension into a new carer's pension. (Quorum formed) The previous pension was payable to a man not receiving a pension in his own right who was providing constant care and attention for his aged, service or invalid pensioner wife for an extended or indefinite period. The new pension is available to people who provide constant care and attention to a severely handicapped, aged or invalid pensioner spouse or near relative on a long term basis in the private home. Measures contained in this Bill will extend to the new carer's pension the same basic tax rules that applied to the former one; that is, the carer's pension will be exempt from tax except where either the carer or his or her handicapped relative is of pensionable age. Where the new carer's pension is payable under repatriation legislation it will also be exempt from tax if the relevant handicapped relative is in receipt of a service pension equivalent to a social security invalid pension, and neither the carer nor the relative is over age pension age. In other circumstances the carer's service pension will be taxable. This Bill also proposes several purely technical amendments of the Income Tax Assessment Act consequent on recent amendments of social security and repatriation laws. Finally, it will make other formal amendments of the Assessment Act, made necessary by proposals contained in the Veterans' Entitlements Bill 1985, to rationalise and simplify various repatriation statutes into a consolidated Act. A comprehensive memorandum explaining in detail the measures that I have outlined is being circulated to honourable members. I draw attention to the schedule at page 4 of the memorandum which sets out the financial impact of the various measures proposed by the Bill. I commend the Bill to the House. Debate (on motion by Mr Moore) adjourned. Bill presented by Mr Hurford, and read a first time. Mr HURFORD(Adelaide-Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer)(4.24) —I move: That the Bill be now read a second time. In line with the measures contained in the Taxation Laws Amendment Bill (No. 4) 1985 about which I have just spoken, this Bill will amend the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Act 1985 to declare and formally impose income tax at a rate of 46 per cent on the net income of a public trading trust that is to be subject to company tax arrangements. The provisions of the Bill will have effect only in relation to income of the 1985-86 financial year, the first year in respect of which any tax will be payable under the new arrangements by a trustee of an affected trust. I commend the Bill to the House. Debate (on motion by Mr Moore) adjourned. Ms MAYER(Chisholm)(4.25) —On behalf of the Joint Committee of Public Accounts I present the 241st report of the Committee relating to reports of the Auditor-General 1983-84 and September 1984. I ask for leave of the House to make a short statement in connection with the report. Leave granted. Ms MAYER —This report analyses the responses by departments and authorities to the Public Accounts Committee, explaining the criticisms raised by the Auditor-General in his reports for the year ended 30 June 1984 and for September 1984. The Committee took public evidence on three items-the property directorate, the financial statements outstanding and the industrial wages payroll system, all of which are now administered by the Department of Local Government and Administrative Services. The Committee, following its examination of information supplied by the Department of Local Government and Administrative Services, concluded that many questions continued to remain unanswered concerning the effectiveness of the Commonwealth's management of its extensive property holdings. The Committee is particularly concerned that despite the creation of the property directorate, many of the problems identified in earlier reviews and audits still exist. For this reason, the Committee has decided to examine further, outside the context of this report, the wider issue of management of the Commonwealth's property holdings. The Committee is extremely concerned by the frequency with which deficiencies in the administration of student assistance programs by the Department of Education and Youth Affairs have been raised in the Auditor-General's reports. The Committee has previously recommended that departments operating major programs, that is, those with a budget of at least $10m and an expected life of at least five years, should ensure that specific legislation is drafted for these programs. Such legislation should be supported by regulations which describe, in detail, administrative arrangements. The magnitude of benefits paid, especially under the tertiary education assistance scheme-$222m in 1983-demands a high standard of accountability. The Committee is of the view that while the Department of Education and Youth Affairs has made many improvements, the situation remains unsatisfactory. State offices are not in receipt of sufficient or timely information to ensure that all applicants are treated consistently-hence equitably-and promptly. The Committee is very concerned at the number of serious problems identified in the administration of the diesel fuel rebate scheme. It notes the Department of Industry, Technology and Commerce's comment that many of these resulted from the short time provided for its implementation. In view of the changes to the scheme announced in the recent 1985-86 Budget, whereby currently eligible primary producers will receive a full rebate of the excise on diesel fuel from 1 November 1985, the Committee has sought assurances from the Minister for Industry, Technology and Commerce (Senator Button) that adequate resources will be available to ensure the scheme operates effectively and with proper accountability. The Committee is extremely concerned at the poor performance of the Department of Local Government and Administrative Services in the preparation of the financial statements for which it is responsible. The Committee expects the Department to improve the timeliness and accuracy of its financial statements. The Committee reviewed internal audit sections in three departments. While the Committee noted planned improvements, there are still problems with insufficient staff resources and, in the Department of Health, differences of philosophy with the Australian Audit Office. The frequency with which internal audit within departments attracts critical comment from the Auditor-General is unsatisfactory. The Committee has maintained a long-standing interest in this matter and believes that development of efficient internal audit arrangements is a critical component of efficient public administration and accountability. For this reason, the Committee has decided to conduct a comprehensive review of departmental internal audit practices. There are many other issues covered in this report which I have not raised here. I commend this report to honourable members. Motion (by Mr Hurford) proposed: That the House do now adjourn. Mr MOUNTFORD(Banks)(4.29) —I would like to head my topic for the adjournment debate today `Australian traveller-travellers beware'. I wish to raise in this Parliament circumstances which constitute perhaps the greatest travesty of justice ever to befall an Australian citizen travelling abroad. It is clear that the Australian Government must take all possible steps to defend and assist this citizen whose life and health have been shattered in circumstances which have astonished not only me but also an eminent judge and member of the United States judiciary. The facts may be briefly summarised as follows: In January 1980 Mr Les Blackstone of Kiora Street, Panania, an Australian citizen, was holidaying in Las Vegas with his wife. Mr Blackstone was hit by a car driven by a 76-year-old American while walking across a pedestrian crossing. He suffered shocking injuries including head injuries, internal injuries and broken limbs. I am led to believe that the American concerned, a Mr Abraham Jaramillo, is a wealthy and influential local resident of Las Vegas-- Mr SPEAKER —Order! It being 4.30 p.m., the debate is interrupted. Question resolved in the affirmative. House adjourned at 4.30 p.m. The following paper was deemed to have been presented on 15 November 1985: Public Service Act-Parliamentary Presiding Officers' Determination-1985-No. 5.