Wednesday, 7 May 1986 Madam Speaker (Hon. Joan Child) took the chair at 9 a.m., and read prayers. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industry)(9.01) —I move: That the Bill be now read a second time. The purpose of this Bill and five other related Bills is to enhance the capacity of the Australian dairy industry to market its produce. Measures are proposed to make the industry more market responsive. Government regulation of marketing is to be reduced. Assistance is to be provided in a less distortionary way, as recommended by the Industries Assistance Commission. Also provided for is reform of the Australian Dairy Corporation. One year ago I introduced Bills into this House to reform dairy marketing arrangements. This House gave passage to those Bills; the Senate did not. Following the failure of the 1985 Bills to pass the Senate, the Australian Dairy Industry Conference sought Commonwealth Government support for its own plan which, while incorporating most of the features of the arrangements proposed in the 1985 Bills, also incorporated a production restraint device. The Government agreed to assist the implementation of this plan if it were shown to have broad industry and State Government support. Subsequently the Chairman of the Conference reported to me that there was insufficient support in the industry for this so called `ADIC plan' to proceed. Last year I outlined the genesis and dimension of the problems facing the Australian dairy industry. I also demonstrated that the current assistance and marketing arrangements were inequitable and insufficient. These arrangements stimulate overproduction while discouraging domestic consumption; distort returns to individual manufacturers so that the Australian product mix is not the best; provide greatest assistance to exports to the least profitable markets, encourage imports and constrain industry unnecessarily by regulation. The passage of one year has not changed the nature or dimension of the problem nor the Government's concern to see the end to a system that is, demonstrably, serving the industry badly. Some reform has been able to be achieved within the framework of existing legislation, in particular the discontinuance of `allowances' on 1 July 1985. However, the need for thorough reform remains. The Government's basic objective is the development of a more efficient and profitable dairy industry, able to respond as quickly as possible to changing market conditions and technology. Only through such industry development can we hope to maintain the largest Australian dairy industry that is viable at an acceptable level of industry assistance. The strategy to achieve this objective is directed both to the domestic market and the export market. In respect of the domestic market, the need is a system that encourages the local industry to improve its competitiveness so that it can maintain its dominance of this market. In regard to the export market, the strategy is to encourage the exploitation of the more profitable export markets, and in particular to discourage production for export that returns a net loss to Australia. This strategy is to be given effect by the following measures: First, the cessation of export pooling arrangements so that exporters become more market responsive. A criticism that has oft been levelled at the current arrangements is that people are encouraged to play the system rather than to work the market. Second, the replacement of current stabilisation arrangements, which provide an encouragement to the production and export of some dairy products more than others by arrangements designed to provide a more uniform level of assistance to all products. This change should, over time, encourage a more profitable mix of production. Third, the market support arrangements which are to replace the current stabilisation arrangements will be financed in the least distortionary way, by a levy on all milk production. Fourth, the progressive reduction in domestic price support to a level no higher than the price level at which New Zealand dairy products could be sold in Australia on a fair trade basis. Our industry must, over time, put itself in the position where it can defend its position in the Australian market on the basis of its competitiveness. Fifth, the local industry will continue to be protected against unfair import competition. The industry has been able to achieve redress by invoking anti-dumping and countervailing measures where unfair competition has been shown to damage or to threaten damage to the industry. If, in the future, these measures should prove to be inadequate, other measures will be considered by the Government. Sixth, the Australian Dairy Corporation is to be reformed to enhance its effectiveness, and to upgrade the accountability of the Corporation to the dairy industry. Seventh, assistance is being made available for specific purposes-for adjustment, for marketing innovation, for research, and for dairy underwriting. Last year I announced that the Commonwealth would be prepared to participate with the States, on a one to one basis, in a joint $40m adjustment program for the dairy industry. Subsequently, the Commonwealth decided that, where a dairy specific program was undertaken within the rural adjustment scheme, the Commonwealth would contribute according to the general provisions of the rural adjustment scheme. This means that, for rural adjustment scheme special dairy assistance, the States are now required to match the Commonwealth dairy adjustment contribution only in respect of `carry-on' assistance. Arrangements covering dairy adjustment have now been finalised with most of the States. On 15 April last, I announced the establishment of a $25m special fund for new marketing initiatives. The dairy industry is one industry that I would expect to take advantage of this fund. The dairy industry has advised the Government that the operative rate of research levy should be increased. Recently, Parliament increased the maximum rate specified by legislation, thus enabling an increase in the operative rate. The increased industry contribution on research will be matched by a similar increase in Commonwealth assistance for research. I will speak about underwriting later. Let me now turn to the particulars of the Dairy Produce Bill 1986. This Bill provides the necessary elements of the arrangements to assist the marketing of dairy products. The Bill includes provisions to reform the Australian Dairy Corporation, to control the export of Australian dairy products, to enable the collection of levies for various purposes, to enable the making of market support payments, and to reform the Dairying Industry Stabilisation Fund. Reform of the Australian Dairy Corporation The Bill provides for significant reforms in relation to the Australian Dairy Corporation. These reforms stem principally from the Government's general program for reform of Commonwealth primary industry statutory marketing authorities and from the role the Corporation is to have in administration of the proposed new market support system. The reforms to the Australian Dairy Corporation proposed in this Bill have been decided on by the Government only after extensive consultation with industry representatives. Objectives and Functions The most basic plank of our policy on the reform of statutory marketing authorities is that the functions and objectives of each authority are to be clarified and clearly stated in its en- abling legislation. This Bill details the functions of the Australian Dairy Corporation, all of which involve an aspect of the marketing of Australian dairy produce. The objective to be given to the Corporation is that it should discharge these functions efficiently so as to enhance the profitable production and marketing of Australian dairy produce. In a number of important areas the Corporation is to have significant discretion as to how it discharges its functions. These areas include, for example, the range of dairy produce to be assisted, the basis on which particular dairy products are to be assisted, and the availability of stock-holding finance from the Corporation. The proposed legislation requires the Corporation to make decisions in these matters having regard to its objective, and in some cases requires the Corporation to set down the criteria to be used to test whether a course of action would further the objective of the Corporation. Accountability As with other primary industry statutory marketing authorities, the Australian Dairy Corporation has dual accountability. One line is to the Parliament. The other line is to the dairy industry. The Commonwealth Government recognises the Australian Dairy Industry Conference as the industry organisation best able to speak for the Australian dairy industry as a whole, and the Council of that body as the appropriate organisation that should be consulted by the Corporation on the Corporation's activities generally. The Council of the Conference consists of representatives of dairy farmer organisations and representatives of dairy product manufacturing and trading organisations. The Conference has agreed to expand this membership to include a representative of the market milk sector and a representative of employees in the industry. The proposed legislation will require the Council to be consulted by the Corporation when the Corporation is planning its strategy for the years ahead and when the Corporation is planning its operations for the forthcoming year. The Corporation will also need the approval of the Council if it wishes to undertake certain activities. A significant degree of accountability to the industry will be achieved through the required interaction of the Corporation and the Council. To complement this, the annual report of the Corporation is to be presented to a meeting of the Conference at large and the Chairperson of the Corporation will report on the activities of the Corporation and answer questions arising. It may also be appropriate for the Chairman of the Council to report to the meeting of the Council's dealings with the Corporation, but that is a matter for the Council. It would be desirable for this meeting to be open to all persons involved in the Australian dairy industry. The proposed legislation provides for accountability to the Parliament in the normal way through the tabling of an annual report. It should be noted that the legislation is to be tightened to require that the activities of any subsidiary companies that the Corporation may be permitted to form must fall within the functions given to the Corporation by the Parliament. In regard to Asia Dairy Industries, an already existing subsidiary of the Corporation, the Corporation will be required to ensure that the company undertakes only activities that are specifically allowed for by the legislation. It is also proposed that the Minister may in exceptional circumstances give directions to the Corporation. Where this is done, the directions are to be tabled in the Parliament within 15 sitting days unless there is a commercial or national interest reason why the direction should not be disclosed. Powers Subject to certain restrictions the Corporation is to be empowered to do all things that are necessary or convenient to be done in connection with the performance of its functions. In general, the Corporation will be subject to less ministerial control in operational matters than it is under current legislation. However this reduction is to be matched by new corporate and annual operational plan requirements and by the greater legislated interface between the Corporation and the Council of the Conference. I say legislated interface because much of what is in the proposed legislation is in fact occurring now without it being a legislative requirement. There are to be two restrictions imposed on the power of the Corporation to deal in dairy produce. The first, which is in line with past practice, is that the Corporation's trading activities-in the broad-are to be approved by the Council of the Conference. The second is that council and ministerial approval is to be required where the Corporation wishes to engage in transactions that it anticipates will result in a loss. Loss-making sales involve a cross-subsidy from other dairy industry activities, and hence have the potential to thwart the objectives of the new marketing arrangements. Loss-making sales should not be absolutely ruled out because they may be necessary in exceptional circumstances. However they need to be controlled, and for this reason industry and ministerial approval is needed. The Corporation will retain the power to make loans to assist manufacturers hold stocks of their dairy produce. Such loans have become a part of the dairy industry, allowing the farmer to be paid for his milk soon after its delivery. The requirement for all loans to be secured will continue. The Government has been advised by the Corporation that one factor to influence the Corporation's decision on the rate at which loans can be made is the ability of the Corporation to meet any losses arising from a borrower's default should the security, on realisation, fail to cover the debt. As the reserves of the Corporation are relatively low the Government has decided to advise the Corporation that it should, until otherwise advised, determine loan rates on the basis that the Commonwealth would, if needed, be prepared to supplement the Corporation's reserves by up to $10m. There is no provision covering this in the Bills-an appropriation will be needed if ever this `guarantee' has to be called upon. Corporate and Annual Operational Plans The Corporation will be required to prepare and update each year a corporate plan covering three to five years ahead. The Corporation will also be required to prepare operational plans annually that are consistent with the corporate plan. The Council of the Conference is to be consulted during these processes. Both plans will require ministerial agreement. Membership of the Corporation The Government's policy is that statutory marketing authorities should be constituted on corporate lines and objective selection procedures used to seek out high calibre persons for appointment. The reasons for taking this approach, rather than an approach that constitutes statutory marketing authorities on the basis of industry sector representation, are given in the policy paper on Reform of Commonwealth Primary Industry Statutory Marketing Authorities that I tabled in this House recently. Consistent with this policy, the Bill proposes that the Australian Dairy Corporation should be restructured to include a Chairperson, a Government member, the Managing Director and eight other appointed members. Members in the last category are to be chosen by a selection committee that comprises a chairman who is selected by the Minister and four other members nominated by the Council of the Australian Dairy Industry Conference. The selection committee is given the task of selecting a board that collectively possesses a range of specified skills or experience. Export Control The Bill provides for kinds of dairy produce to be prescribed by regulation as controlled dairy exports. Export of controlled dairy produce will be permitted only by the Corporation or by licensed exporters. The regulations may prescribe conditions to be complied with in relation to the export from Australia of controlled dairy exports. Compliance with General Agreement on Tariffs and Trade-International Dairy Arrangement minimum prices will be made a condition of export. Under current arrangements export licences are issued by the Minister. This Bill provides for their issue by the Corporation. Criteria are provided for their issue, suspension or cancellation, and decisions are appealable. The Bill provides that the Corporation may require licensees to consult the Corporation about their export intentions and performance. This provision will assist the Corporation in the discharge of its functions generally and may allow the Corporation to co-ordinate the activities of exporters to their individual and collective gain. It will also facilitate co-operation between the Australian and New Zealand dairy industries in third markets as provided for in the memorandum of understanding between the two industries pursuant to the Australian New Zealand Closer Economic Relations Trade Agreement. I am aware of a concern expressed by some exporters that they may be commercially disadvantaged by being required to disclose to the Corporation their intentions in regard to specific market opportunities. To deal with this concern the legislation will require the Corporation to consider, in its planning process, the circumstances, if any, in which licensees will be required, in consultations with the Corporation, to disclosure details of intentions in relation to specific possible future export sales. Since this consideration will be part of the planning process the industry, through the Council of the Australian Dairy Industry Conference, will have to be consulted. The Bill also provides for the Corporation to give directions to licensees in relation to matters specified in the Act or specified by regulation. However, the Corporation may not issue directions unless all licensees have been given 14 days notice and the Council of the Conference has agreed to the directions being given. Directions will need to be given by the Corporation if certain business, now exclusively handled by the Corporation with the agreement of the Conference, is to remain so. Collection of Levies This Bill provides for the collection of levies which are needed to finance the operations of the Corporation, including the market support and promotion arrangements, and to provide an industry contribution for research purposes. The proposed legislation follows existing legislation for the collection of research and promotion levies and stabilisation levies. Provision has been made to allow the delayed collection of the market support levy. Delayed collection is possible because export of dairy produce will occur some time after the delivery of milk used in its production. Delayed collection may be desirable at the commencement of the market support arrangements in order to assist industry cash flow. Financial Provisions Part VII of the Bill deals with financial aspects of the ADC activities and updates current provisions having regard to the increase in autonomy that is to be accorded to the Corporation. A number of matters warrant brief mention. The means by which the Corporation can raise money are to be extended to include a wider range of contemporary financial instruments. A specific provision is made to enable the Corporation to engage in futures trading within appropriate guidelines. Investment in the short term money market of money which is temporarily surplus is provided for. To assist the better management of its moneys, the Corporation is to be empowered to make short term loans from one fund that it administers to another fund that it administers. Such loans may be made only to meet a temporary deficit in the receiving fund. A provision is included which requires the Corporation to credit any surplus and debit, any deficit, stemming from sales it makes in its own right, to the market support fund. The legislation provides for the appointment of a commercial auditor in lieu of the Auditor-General. The appointment of a commercial auditor will require the agreement of the Joint Parliamentary Committee of Public Accounts. Part VII of the Bill also establishes four funds under which significant areas of Corporation activity are controlled and accounted. These funds are the Dairy Industry Fund, the Promotion Fund, the Market Support Fund and the Supplementary Market Support Fund. The Industry Fund The Industry Fund is to be established as the successor to the Dairy Industry Stabilisation Fund. The Dairying Industry Stabilisation Fund, or DISF as it is commonly known, is a long-standing fund administered by the Corporation. At 30 June 1985 the accumulated funds of the DISF amounted to about $5.5m of which $1.9m comprises the value of investments in various companies and $3.6m is in liquid assets. Government policy has been that the moneys of the DISF are to be used for the benefit of the dairy industry at large. Accordingly the practice has evolved whereby, before any Ministerial approval is given to expenditure from the Fund, the Australian Dairy Industry Conference is consulted. The net effect of transforming the Dairying Industry Stabilisation Fund into the Dairy Industry Fund is to specify in legislation the purposes for which the fund may be used and to replace the requirement for ministerial approval with a requirement that expenditures from the Industry Fund be approved by the Council of the Australian Dairy Industry Conference. The Conference supports the approach that is being taken. The Promotion Fund The provisions in this Bill are essentially similar to those of current legislation The Market Support Fund and the Supplementary Market Support Fund The market support arrangements provided for in this Bill are proposed to apply to production on or after 1 July 1986. Central to the proposed new marketing arrangements are market support payments and supplementary market support payments. These are payments to be made by the Australian Dairy Corporation on export of all dairy produce. The making of such payments will improve the return on export and mean that a domestic sale would have to be made at a higher price than would otherwise be the case for the domestic sale to be as profitable as an export sale. In this way the system will provide support for the domestic price structure. The funds for the making of market support payments and supplementary market support payments will, apart from any Commonwealth contribution by way of underwriting, come from the industry. The Market Support Fund The Market Support Fund can be regarded as the continuing element of the new market support arrangements. Key transactions are the payment into the Fund of a market support levy, which is a levy raised on all milk produced, and the expenditure of Fund moneys as market support payments. Products eligible for market support payments are to be milk, cream, and dairy products declared for the purposes of the Act to be dairy produce by the Australian Dairy Corporation in the Commonwealth of Australia Gazette. The intention is that, subject to practical considerations, all products made from or containing milk or a constituent part of milk should be eligible for market support payments. The criteria adopted by the Corporation in deciding how far to go in declaring products to be dairy produce is to be stated in its corporate plan. For each product that has been declared to be dairy produce the Australian Dairy Corporation will publish rates of market support payments and supplementary market support payment. Payment will then be made by the Corporation at these rates to the manufacturer of the dairy produce on presentation of proof that export has occurred. However, special rates will apply in certain circumstances and I will mention these shortly. The rate at which market support payments will be made will be the rate ruling at the time of export unless another rate has been guaranteed by the Corporation. In this regard, the Bill provides that the Corporation may determine, on application by a person prior to export, that the market support rate for a particular export will be the rate ruling at the time of application rather than the time of export. This facility should assist exporters in making sales by providing them with a firmer basis on which to make an offer to a potential buyer than would otherwise be the case. Any decision of the Corporation not to guarantee a rate for a particular export will be reviewable under standard Administrative Appeals Tribunal procedures. The Bill provides for the standard rate of market support payment to be determined in one of two ways depending whether the product is prescribed or not. For prescribed dairy produce, the rate will be determined as a percentage of the estimated average export price for the kind of dairy produce concerned. For other dairy produce, rates will be determined by the Corporation having regard to the rates established for prescribed dairy produce. The Bill provides for the Corporation to decide which kinds of dairy products should be prescribed dairy produce. The criteria adopted by the Corporation in this decision is to be stated in its corporate plan. Hence, industry will be consulted. Initially, it is expected that prescribed products will include those products which are now prescribed for stabilisation and export pooling purposes. For each kind of prescribed dairy produce the market support rate is to be 30 per cent of the estimated average export price, unless a different percentage is determined by the Corporation. This level of assistance has been accepted by the Government as a reasonable medium-term support level having regard to industry assistance considerations and the objective and strategy for the Australian dairy industry that I have already talked about. It should be noted that the 30 per cent has been established in relation to estimates of average export prices under the export pooling system that has operated for many years. These estimates relate to a concept described as the `bulk ex-factory value', a concept that is designed to reflect the value added in the process of producing the dairy product but exclude the value added in packaging, transport, et cetera. It is anticipated that the Corporation will, initially at least, compile estimated average export prices under the new arrangements on this basis also. Should the Corporation consider that there is good reason to change radically the basis on which estimates of average export prices are to be compiled, the appropriate percentage to be applied in calculating market support rates would need to be considered by government. The Corporation will be required to reduce the percentage rate should it judge that a 30 per cent rate will not be able to be sustained, having regard to the funds likely to be available for market support purposes. The Corporation may reduce the rate for other reasons also provided that the Council of the Australian Dairy Industry Conference agrees with the reasons for wanting to do so. Let me now briefly mention special rates of market support payment. These may be paid in certain circumstances. These circumstances include where a foreign country has imposed quantitative restrictions on exports from Australia and where necessary to conform with international trade commitments. Special rates may also apply to exports under agreements entered into before 25 February 1986 where the products concerned are sourced from production on or after 1 July 1986. The last mentioned provision is necessary so that agreements entered into before the announcement of the new arrangements are not disadvantaged. Special rates of market support payment may also apply for underwritten products. Underwritten products will be the products that have been traditionally underwritten-that is, butter, cheese, whole milk powder, skim milk powder and casein. The market support arrangements for these products will work on a `pot holing' principle. When the export price falls below a specified figure the amount of market support payment will be increased above the level that would be calculated using the 30 per cent rule. More specifically, `pot holing' will apply when the estimated average export price for any of the underwritten products is below 85 per cent of what would be expected if export prices for the product concerned were on their longer term trend line. Where this `pot holing' is to apply, the market support rate will equal the difference between 110 per cent of the longer term trend value and the estimated average export price. Funds for `pot holing' will be drawn from the market support fund. Supplementary Market Support Payments The legislation provides for supplementary market support payments to assist the transition from current arrangements. Supplementary market support payments will be made whenever a market support payment is made. As with market support payments, supplementary market supports payments for prescribed dairy produce will normally be determined as a percentage of the estimated average export price of the product concerned, with the percentage being the same for all products. Special rates of supplementary market support may also apply in certain circumstances. Supplementary market support rates will decline over time as the product levies which provide their funding are reduced. Initial rates of product levy and supplementary market support payment will be determined in line with a recommendation from the Australian Dairy Corporation that the theoretical domestic price support values under the new arrangements on 1 July 1986 should slightly exceed the theoretical domestic price support values, referred to as the DVLP-the domestic value for levy purposes-under current arrangements. The recommended increases are 5 per cent in the case of butter and 8 per cent in the case of cheese. The Government has accepted this recommendation in order to assist a smooth transition from current to new arrangements. Underwriting The Commonwealth will continue to underwrite average export returns for the traditionally underwritten products-butter, cheddar-type cheese, skim milk powder, whole milk powder and casein. Currently, underwriting applies in relation to the average export price received in respect of a year's production. The underwritten price is 90 per cent of the estimated average export price received for production of the most recent three years including the year in question. A somewhat different basis for underwriting will apply in the future. The average export price received in respect of a year's sales will be underwritten. The underwritten price will be 85 per cent of the value that the Bureau of Agricultural Economics estimates would have been obtained for the year in question if export prices were on their longer term trend line. The change in the basis for underwriting has been made for a number of reasons. The new method will align better with the proposed new market support system, in particular with its orientation towards sales rather than production, and with its `pot holding' element. It also remedies a difficulty with the 90 per cent three-year-moving-average' approach; namely, that underwriting can be triggered when prices are declining but still relatively good in absolute terms, but may not be triggered during a progressive decline into a price trough. The new basis also makes sense against the current outlook for international trade prices of an extended downturn before restoration of more normal price levels. The change in the basis of underwriting is expected to work to the benefit of the Australian dairy industry. Financial Impact The impact of these Bills on net Government expenditure is expected to be minimal. The Australian Dairy Corporation will reimburse the Commonwealth the cost of collecting the new market support levies. The cost of collecting all other levies will be met by the Commonwealth as it is under current arrangements. Appropriation of moneys for underwriting purposes is not provided for in these Bills. Other Matters There are two other aspects that I would draw to the House's attention. The first is the `sunset' clause providing for cessation of the market support arrangements after six years. Further legislation would thus be required for the arrangements to continue beyond June 1992. One other aspect is a new provision concerning the liability of the Corporation for Asia Dairy Industries or any prescribed subsidiary companies. This provision makes the Corporation liable to meet any liabilities of ADI and any prescribed subsidiary that cannot be met from the subsidiary's assets in the event that the subsidiary is wound up. Should the Corporation ever be in this position, the cost of meeting the subsidiary's undischarged liabilities would become a charge against the moneys of the Corporation and could be expected to require a higher rate of Corporation levy than would otherwise be the case. The Australian Dairy Industry Conference has accepted this as a reasonable proposition in relation to Asia Dairy Industries. No prescription of any other existing company in which the Corporation has a shareholding is proposed. Future Development and Review I have already noted that the Australian Dairy Corporation is to have considerable discretion in the management of the market support system. This will allow the system to develop further in the light of the experience gained in its operation. The planning process will ensure that industry is consulted and ultimate Government control will be maintained. The Government will monitor the development of the system carefully and proposes to undertake, with the Corporation and the industry, major reviews in 1988-89 and 1991-92. I commend the Bill to honourable members. I present the explanatory memorandum to this Bill. Debate (on motion by Mr Blunt) adjourned. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industry)(10.29) —I move: That the Bill be now read a second time. The purpose of this Bill and the complementary Dairy Produce Levy (No. 2) Bill is to impose various levies. These levies are required to finance the operations of the Australian Dairy Corporation including its activities in promoting dairy produce, to finance new market support arrangements and to raise moneys from the dairy industry for dairy research. The Bill imposes two types of levies-levies on milk fat produced on or after 1 July 1986 and levies on certain types of dairy products produced on or after 1 July 1986. Levies on Milk Fat There are four milk fat levies-the Corporation levy, the promotion levy, the research levy and the market support levy. The Corporation levy, the promotion levy and the research levy are to replace levies for similar purposes which are currently imposed on milk and butterfat under the Dairying Industry Research and Promotion Levy Act 1972. Under the new levy arrangements, the amount of levy payable by a producer will depend on the amount of milk fat contained in his milk. Under current arrangements where a producer delivers whole milk to a processor, the levy is calculated at a rate per litre regardless of fat content; only where the producer delivers cream is the levy based on fat content. The change to a standard milk fat basis arises from a decision to base the market support levy on milk fat and the desirability of having a standard base for all levies on milk. The Bill provides a clause to cover the situation where it has not been possible to ascertain the milk fat content. This clause should only have to be resorted to for a small proportion of Australian production since most milk payment systems require the recording of milk fat content. The Bill specifies maximum rates for all milk fat levies with the operative rates to be set by regulation. For market support levy the maximum rate of levy is to be 45c per kilogram of milk fat, which is equivalent to 2c per litre for milk of average fat content. In the case of the research levy, the maximum rate specified corresponds to the maximum rate of 2.5c recently set in the Dairying Industry Research and Promotion Levy Amendment Act 1986. The maximum rates for the promotion and corporation levies are respectively 5.5c per kilogram fat and 2.5c per kilogram fat. In prescribing operative rates of levy, regard will be had to any recommendations by the Executive Council of the Australian Dairy Industry Conference. The market support levy is to be imposed in order to provide funds for the making of market support payments. These payments have the effect of supporting the domestic price structure for exportable dairy products at a level higher than would otherwise prevail. As a consequence, manufacturers of exportable dairy produce are able to pay a higher price for their milk than would otherwise be the case. This tends to establish a base price for milk with premiums above this price being established in particular uses. As market support payments thus underpin the entire structure of milk prices, it is equitable that the market support levy apply across all milk production. However, a particular concern of some States is the possible impact of the market support levy on market milk producers if it were being imposed at a time of significant disruption or change in that sector. To address this and other concerns about the impact of the market support levy, the legislation provides for the possibility of a suspension of the levy and hence market support payments. Any State Minister with portfolio responsibility for the dairy industry may notify the Commonwealth Minister for Primary Industry that the levy should be suspended. In the event of such notification, urgent advice will be sought on this matter from the Council of the Australian Dairy Industry Conference. This advice is to be received by the Australian Agricultural Council, considered, and a decision taken within 60 days of the notification being received by the Commonwealth Minister. At the expiration of the 60 days, unless the Australian Agricultural Council, by majority decision, has resolved that the levy should not be suspended, the levy is to be suspended as soon as practicable. The market support levy is to be imposed on milk fat. This is, in part, because overseas experience shows that levy avoidance through `de-watering' of milk could be a significant problem if the levy were cast in per litre terms. It also makes sense in that the rate of payment to the producer for his milk generally varies in direct proportion to the milk fat content. The operative rate of market support levy will need to be a rate sufficient to finance the operation of the market support payments system. In prescribing a rate, regard will be had to any recommendation from the Australian Dairy Corporation. Dairy Products Levy Levies on certain dairy products are required to finance supplementary market support payments. Effectively, this levy will be imposed only on domestic sales of the product concerned. Levies will not be imposed on other than those products which are currently subject to stabilisation levies, and within this group only for products where a levy is considered necessary at the start of the new arrangements to support the domestic price for the product concerned. On current estimates of likely export returns, a levy will be required only for butter, butteroil and cheddar-type cheese. For butter, the levy required is likely to be of the order of $600 to $700 per tonne, for cheese $250 to $300 per tonne. The levies imposed on dairy products are to be reduced over time. Levies imposed on 1 July 1986 will be maintained at their initial value throughout 1986-87 and then reduced in six- monthly steps. The first reduction will occur on 1 July 1987. The intention is that all levies other than on butter and butteroil should be eliminated by 1 July 1989, and that the rate of levy for butter and butteroil should be halved by then. The future of the levies on butter and butteroil is to be reviewed in 1988-89. Levies will be set by regulation. Levies on dairy products imposed by this Bill will apply to production on or after 1 July 1986. Stabilisation levies will not apply to production after 30 June 1986. I commend the Bill to honourable members. I present the explanatory memorandum to this Bill. Debate (on motion by Mr Cadman) adjourned. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industry)(9.36) —I move: That the Bill be now read a second time. The purpose of this Bill is to complement the Dairy Produce Levy (No. 1) Bill by imposing certain levies on the import of dairy produce that has been exported from Australia and subsequently imported back into Australia. The Bill is necessary to close off an opportunity to exploit the market support arrangements that would otherwise be possible through an export/re-import procedure. Two levies are imposed. The levy on exempted dairy products is designed to re-impose a levy in respect of which an exemption was given on export of the product. The levy on supported dairy product is designed to avoid re-imports of Australian dairy products from obtaining the benefit of the market support payments made on export as well as the supported domestic price. Levy is payable by the importer. I commend the Bill to honourable members, and present the explanatory memorandum. Debate (on motion by Mr Cadman) adjourned. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industry)(9.37) —I move: That the Bill be now read a second time. Dairy Industry Legislation The Dairying Industry Research and Promotion Levy Act 1972 imposes levies on whole milk or butterfat produced in Australia and sold by the producer of the whole milk. These levies are used to fund the general expenses and the promotional activities of the Australian Dairy Corporation and to assist dairy research. The Dairy Produce Levy (No. 1) Bill provides for new levies to raise the funds for these purposes. These new levies will apply to milk fat produced on or after 1 July 1986. The purpose of this Bill is to limit the imposition of the old levies to production occuring before 1 July 1986. I commend the Bill to honourable members, and present the explanatory memorandum. Debate (on motion by Mr Cadman) adjourned. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industry)(9.38) —I move: That the Bill now be read a second time. Stabilisation levy is imposed on the production of prescribed dairy products. It is proposed that stabilisation arrangements should cease to apply at the end of the current production season on 30 June 1986. The purpose of this Bill is to limit the imposition of stabilisation levy to production occurring on or before 30 June 1986. I commend the Bill to honourable members, and present the explanatory memorandum. Debate (on motion by Mr Cadman) adjourned. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industry)(9.40) —I move: That the Bill be now read a second time. This Bill is one of six Bills, whose purpose is to establish new market support arrangements for the Australian dairy industry. Apart from clause 10, all provisions of the Bill are in the nature of transitional or amending provisions consequent upon the enactment of the proposed Dairy Produce Act 1986 and the other related legislation. Clause 10 is necessary to correct a typographical error in the Dairy Produce Act 1924 that came about when amendments were made to the Act in 1978. This error has been detected only recently and the Act has been administered over the years as it was intended to operate. The effect of the error is to make nonsense of the sub-section of the Act that enables advance payments to be made from the dairy produce export pools. Honourable members will note that the Bill provides that the amendment shall be deemed to have taken effect on 1 July 1978. The Bill provides for the repeal of the Dairy Produce Act 1924, as amended, and the Dairy Produce Sales Promotion Act 1958, as amended. These Acts govern the operation of the Australian Dairy Corporation whose future operation is to be governed by the proposed Dairy Produce Act 1986. The Dairy Produce Act 1924 also provides for export pooling, which it is proposed should be terminated at the end of the current production season on 30 June 1986. The Bill provides for the continuation of those provisions necessary to allow the finalisation of current export pools in the normal way. The Bill provides for the repeal of the Dairy Industry Assistance Act 1977 and the Dairy Industry Levy Act 1977. These Acts, which deal essentially with market milk, have never been operative. The proposed Dairy Produce Act 1986 will provide for the membership of the Australian Dairy Corporation to be reconstituted. It will not be possible for this to be done on 1 July 1986. Consequently this Bill allows for the members of the Corporation who hold office on 30 June 1986 to continue in office until the membership of the Corporation is reconstituted. This is likely to occur on 1 October 1986. The Bill also provides for current export licences, which are due to expire on 30 June 1986, to continue in force until 30 September 1986. The Australian Dairy Corporation will issue an advice on how licences may be renewed or a new licence issued well before 30 September 1986. The Bill provides a number of other transitional or consequential measures that should be self-explanatory. I commend the Bill to honourable members. I present the explanatory memorandum to this Bill. Debate (on motion by Mr Cadman) adjourned. Motion (by Mr Young) agreed to: That standing order 48a, adjournment of the House, as amended by sessional order, be suspended for the remaining sittings this week. Motion (by Mr Young) proposed: In relation to the proceedings of the following Bills, so much of the standing and sessional orders be suspended as would prevent the Leader of the House making one declaration of urgency and moving one motion for the allotment of time in respect of all the following Bills: Taxation Laws Amendment Bill 1986; Taxation (Interest on Underpayments) Bill 1986; Fringe Benefits Tax Assessment Bill 1986; Fringe Benefits Tax Bill 1986; Fringe Benefits (Application to the Commonwealth) Bill 1986, and Fringe Benefits Tax (Miscellaneous Provisions) Bill 1986. Mr SINCLAIR(New England-Manager of Opposition Business)(9.44) —The Opposition has had concerns about the extent to which the guillotine will be applied in this matter. We are most worried about the way in which the tax changes have been delayed. Every Australian knows that the measures are to take effect as from 20 September 1985. The debate today, covering essentially the negative gearing aspect, and the debate tomorrow, which covers the fringe benefit aspect with all its repercussions, are fundamental at this time of rather uncertain profitability in so many sectors of the Australian economy. We are very concerned that a guillotine will preclude certainly a proper analysis in this House of the Bills in Committee. On other occasions a device has been used enabling committees of this House to sit and deliberate on the more controversial aspects of Bills outside this plenary session of the House. It could well be that such a device would have been more suited to the debate today. However, not only do we now face a guillotine that will ensure that all members of this expanded Parliament are to be denied a proper time and opportunity to speak on the legislation but it is almost certain there will be negligible debate, if any, in Committee. The Opposition has at least one amendment it wishes to propose. It is likely that it will not even be canvassed, unless we are given leave. The result is that this House loses its capability to debate matters of this consequence and inevitably it will be the Senate that will take a great deal of time examining the issues, it is in the Senate that this Committee debate will take place and where probably a committee will be constituted to examine these matters further. We know that this is not the package that the Treasurer (Mr Keating) wanted. We know that prior to the National Taxation Summit he roundly castigated elements of the package. We know that he has expressed concern about the consequences for the economy in some elements of the package. Yet we are told that this House will not be given sufficient opportunity to debate the legislation adequately or to consider the detail of the clauses in Committee. The House is dealing with not just one Bill but an aggregation of Bills. The Bills are extremely important to continued investment opportunities in the community, and for that reason the Opposition feels that there should be adequate debate. I know that the Leader of the House (Mr Young) has commenced proceedings this morning an hour earlier and that he intends to do so tomorrow. He believes that he has tried to accommodate members' interests. To a degree that may be so, but there is an expanded Parliament, the numbers in this place have been increased and the opportunities for members participating in debate have been reduced. Indeed, on the Government's side there is already an automatic requirement that no member in a second reading debate shall speak for more than 10 minutes. I do not know that it is necessarily a good thing for democracy that there are arbitrary time limits on debates. We have accepted it in this place as a convenience to give all members a roughly equivalent opportunity. But this guillotine and the nature of the consequence of this legislation and that which we shall debate tomorrow are such that I put to the Government that what is happening is an acceleration of the reduction of the significance of the House of Representatives. Yet the Australian Labor Party in its policy still suggests that there should be only a House of Representatives. If there were to be a House of Representatives alone and no Senate, inevitably the result would be to transfer even more power to the Executive. If we look at the guillotine motion and the consequences of the debate today, we are seeing that Labor in government seeks not to preserve government by the elected representatives of the people but by those who are the elected representatives of Caucus. This measure is part of a subtle and sinister transfer of power from the people of Australia and those elected on their behalf to those who for the time being are the Government. While the Labor Party is in office one needs to be apprehensive at the way that applies in motions of such genuine concern to every man, woman and child in this country. On that basis we believe the guillotine to be inappropriate. Its consequence will be to deny proper debating opportunity on matters of major moment. Therefore, we shall oppose the motion. Question put: That the motion (Mr Young's) be agreed to. The House divided. (Mr Deputy Speaker-Mr P. C. Millar.) Ayes . . . . . . . . . . . 71 Noes . . . . . . . . . . . 54 —— Majority . . . . . . . . . 17 —— Baldwin, P. J. Jenkins, H. A. Beddall, D. P. Jones, BarryBilney, G. N. Kent, L. Blanchard, C. A. Keogh, L. J. Blewett, N. Kerin, J. C. Bowen, Lionel Klugman, R. E. Brown, John Lamb, A. H. Brown, Robert, Langmore, J. V. Brumby, J. M. Lee, M. Campbell, G. Lindsay, E. J. Charles, D. E. McHugh, J. Charlesworth, R. I. Maher, M. J. Chynoweth, R. L. Martin, S. P. Cleeland, P. R. Mayer, H. Cohen, B. 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. Edwards, Ronald O'Neil, L. R. T. Fatin, W. F. Price, L. R. S. Fitzgibbon, E. J. Punch, G. F. Free, R. V. Saunderson, J. Gayler J. Scholes, G. G. D. Gear, G. Scott, J. L. Gorman, R. N. J. Simmons, D. W. Grace, E. L. Snow, J. H. Griffiths, A. G. Theophanous, A. C. Hand, G. L. Tickner, R. E. Holding, A. C. Uren, T. Hollis, C. West, S. J. Howe, B. L. Willis, R. Humphreys, B. C. (Teller) Wright, K. W. Jacobi, R. Young, M. J. Jakobsen, C. A. Adermann, A. E. Jull, D. F. Aldred, K. J. Katter, R. C. Andrew, J. N. (Teller) Lloyd, B. Beale, J. H. McArthur, F. S. Blunt, C. W. McGauran, P. J. Cadman, A. G. MacKellar, M. J. R. Cameron, Donald McVeigh, D. T. Cameron, Ewen Macphee, I. M. Cameron, Ian Miles, C. G. Carlton, J. J. Moore, J. C. Cobb, M. R. Peacock, A. S. Coleman, W. P. Porter, J. R. Connolly, D. M. Reith, P. K. Conquest, B. J. Robinson, IanDobie, J. D. M. Rocher, A. C. Downer, A. J. G. Ruddock, P. M. Drummond, P. H. Shack, P. D. Edwards, Harry Sharp, J. Fife, W. C. Sinclair, I. McC. Fischer, Tim Smith, W. Fisher, Peter Spender, J. M. Goodluck, B. J. Sullivan, K. J. Hall, Steele Tuckey, C. W. Halverson, R. G. Watson, DavidHicks, N. J. (Teller) Webster, A. P. Hodges, J. C. White, P. N. D. Hodgman, W. M. Wilson, I. B. C. Hurford, C. J. Nehl, G. B. Staples, P. R. Hawker, D. P. M. Beazley, K. C. Burr, M. A. Darling, E. E. Braithwaite, R. A. Question resolved in the affirmative Declaration of Urgency Mr YOUNG(Port Adelaide-Leader of the House)(9.56) —I declare that the following Bills are urgent Bills: Taxation Laws Amendment Bill 1986 Taxation (Interest on Underpayments) Bill 1986 Fringe Benefits Tax Assessment Bill 1986 Fringe Benefits Tax Bill 1986 Fringe Benefits Tax (Application to the Commonwealth) Bill 1986 Fringe Benefits Tax (Miscellaneous Provisions) Bill 1986 Mr DEPUTY SPEAKER(Mr Millar) —The question is: `That the Bills be considered urgent Bills'. Question resolved in the affirmative. Allotment of Time Mr YOUNG(Port Adelaide-Leader of the House)(9.57) —I move: That the time allotted in connection with the Bills be as follows: (1) Taxation Laws Amendment Bill 1986- (a) For the second reading, until 6.00 p.m. this day. (b) For the committee stage, until 7.15 p.m. this day. (c) For the remaining stages, until 7.20 p.m. this day. (2) Taxation (Interest on Underpayments) Bill 1986- For the remaining stages, until 7.50 p.m. this day. (3) Fringe Benefits Tax Assessment Bill 1986- (a) For the second reading, until 9.00 p.m. on Thursday, 8 May. (b) For the committee stage, until 10.15 p.m. on Thursday, 8 May. (c) For the remaining stages, until 10.25 p.m. on Thursday, 8 May. (4) Fringe Benefits Tax Bill 1986- For the remaining stages, until 10.30 p.m. on Thursday, 8 May. (5) Fringe Benefits Tax (Application to the Commonwealth) Bill 1986- For the remaining stages, until 10.40 p.m. on Thursday, 8 May. (6) Fringe Benefits Tax (Miscellaneous Provisions) Bill 1986- For the remaining stages, until 10.50 p.m. on Thursday, 8 May. I point out to the Opposition-I think it is about time because I understand that there are honourable members on the other side of the House who are disturbed about what has occurred in the Senate-that the Senate has told us that it will not deal with any legislation that comes before it after 30 May. Honourable members opposite had better go to their party room and sort that problem out, because all that does is threaten their right to debate matters in here. We will make sure that all the business the Government wants to get through this House is in the Senate by 30 May. That is a condition which the Opposition has laid down and which will restrict its right in the House of Representatives to have time to debate these matters. Mr SINCLAIR(New England-Manager of Opposition Business)(10.01) —I think the Leader of the House (Mr Young) needs to understand that neither the Senate nor the Opposition are here to make the Government have an easy ride on matters that are against the public interest. The fact that the Leader of the House suggests that we have two days in which to debate matters which are of fundamental importance, and which are now nine months late is absolutely no excuse for there being a guillotine at all. If the Government were pursuing its responsibilities in a correct fashion, these measures would have been introduced last October. Notice was given last September that these measures, none of which have been made known to the community of Australia, were to commence from 20 September last. For the Government to have the hide to introduce them last week and to expect them to be debated in this chamber entirely in the course of two days is grossly unsatisfactory. No matter how much the Leader of the House might carry on, the reality is that it is not the dictates of the Senate that are applying the discipline as far as the passage of this Bill and the guillotine are concerned; it is purely and simply the inadequacies of the Government and the bungling and ineptness of a group of people who are unable to get their act together. The Government has provided significant changes in these proposals which are matters of concern, and from our point of view they should never have been introduced. We oppose in their entirety these suggestions of the time restraints now to be imposed. We put it to the Leader of the House that, if he cannot get his act in order, we will do the best we can to ensure that the people of Australia know why. Question resolved in the affirmative. Debate resumed from 17 April, on motion by Mr Hurford: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Millar) —I understand that it is the wish of the House to debate this Bill concurrently with the Taxation (Interest on Underpayments) Bill. There being no objection, the Chair will allow that course to be followed. Mr CARLTON(Mackellar)(10.03) —We are considering today the Taxation Laws Amendment Bill 1986 and the Taxation (Interest on Underpayments) Bill 1986. The first Bill contains two major elements from the tax package of last year which were announced on 17 July in advance of the main statement of the Treasurer (Mr Keating) on 19 September. I refer to the negative gearing of rental property investments and a provision for depreciation on residential income-producing buildings. There is one other major item in the main Bill, and that is a system of self-assessment of taxation. There is one lesser, but still very important, item-the deductibility of donations to the Sports Aid Foundation-and there are three other relatively minor items with which the Opposition will have no quarrel. These include an amendment to overcome a decision of the Federal Court of Australia that sanctioned arrangements under which future income rights could be disposed of for a non-taxable capital sum. They also introduce grouping provisions into the Australian Capital Territory payroll tax law to close a loophole which enables employers, by payroll tax splitting, to make multiple use of the exemptions available for small payrolls. The Opposition will not oppose that. There is also a provision to give the force of law in Australia to an airline profits agreement with the People's Republic of China. I shall deal with those three items. We are not opposing them. The second Bill, the Taxation (Interest on Underpayments) Bill, formally imposes interest charges which are referred to in the first Bill, in order to meet the requirements of the Constitution. I shall summarise the attitude of the Opposition to these Bills. Firstly, with regard to the Taxation Laws Amendment Bill 1986, the Opposition will be opposing negative gearing provisions. The Opposition will support the depreciation allowance of 4 per cent per annum on residential income-producing buildings. We support the taxing assignments of rights to future income and the grouping provisions for Australian Capital Territory payroll tax laws. We have grave concerns about the self-assessment provisions. We will not move amendments to the self-assessment provisions within the House of Representatives, but, in the Senate, we will move to refer the Bill to a committee so that the full implications of the self-assessment provisions can be examined in the necessary depth. In the course of my speech, I will give an indication as to why we believe that should be done. We support the provisions regarding the airline agreement with China. With regard to the question of gifts to the Australian Sports Aid Foundation being made tax deductible, we will not oppose that measure, but my colleague the honourable member for McPherson (Mr White), who is shadow Minister for Sport, Recreation and Tourism, will indicate to the House some serious reservations we have about the operation of that proposal. My colleague will also move an amendment to the relevant clause of the Bill during the Committee stage of the debate. This morning, in the Bulletin, it was indicated that a poll taken recently showed that the Government was now lagging behind the Opposition in the opinion of the Australian electors. According to the Bulletin poll, if an election were held now this Government would be thrown out of office. That is what the news was this morning. It is not surprising because, quite clearly, over the course of this year we have had the imposition of the highest rates in Australia's history since the Great Depression. That has had a very severe impact on families, farms, and businesses. People do not like it and they are indicating in the polls that they do not like it. We have had ministerial scandals, with the Minister for Trade (Mr Dawkins) and the Minister for Sport, Recreation and Tourism (Mr John Brown) being involved in the most extraordinary shenanigans. People have noticed that and they do not like it. Currently-this is after those polls were taken-we are in a state of total chaos and confusion because of the Government's failure to handle its constitutional responsibilities with regard to the Mr Justice Murphy affair. It is little wonder that the polls are showing that this Government would lose an election if it were held now. If the Government thinks that that is a good poll or that it is not too bad a poll, it is not taking into account the present state of confusion. With regard to what will be the subject of debate in this House today and tomorrow-that is, taxation-the major issue of taxation is yet to bite. Indeed, the biggest bite is ahead in the case of the major issue of interest rates. Therefore, if the Government thinks that today's poll is not too bad, that poll will look like a school picnic compared with what will happen in succeeding weeks and months. This Government is now running into a very serious stage of disintegration in public support and in its decision-making processes. Nearly eight months after the statement made last September by the Treasurer (Mr Keating) and nearly 10 months after the Treasurer's July statement relating to negative gearing these Bills are finally before the House for discussion. Over the whole of that period of 10 months in the case of negative gearing and of eight months in the case of all the other major provisions proposed in the 19 September statement, we have had confusion and uncertainty. The ordinary taxpayers and investors have been unable to decide what their true tax liability is. The incalculable effect on business confidence and on personal investor confidence cannot be underestimated. The Government simply does not understand what it is doing to the fabric of the economy through its taxation measures. When the Government sends out its booklet on fringe benefits tax, which was published the other day to every business in Australia there will be a storm of protest and concern at the extent of that single measure alone. We have been told that because the Opposition has objected to some of these proposals quite properly on behalf of the Australian people, the Government may not introduce the income tax cuts that were mentioned in the statement of 19 September. I make it absolutely clear that the Opposition will not be bullied on this matter. There is no way in which we will fail to oppose bad measures just because the Prime Minister (Mr Hawke) and the Treasurer wish to indulge in a certain amount of blackmail. The attitude of the Government is like that of a drug addict asking a bystander to help him rob the chemist shop. That is precisely what we are being asked to do. We are being asked to vote for thoroughly bad and damaging measures in order to assist the Government to meet taxation promises which possibly it should not have made in the first place. We simply will not be involved in that exercise; we are not prepared to help the Government rob the chemist shop; we will certainly examine each piece of this legislation to see what damaging effect it has on the Australian people; we will not be bullied. These taxation measures go quite against one of the principal criteria suggested at the Taxation Summit by the Prime Minister-that is, that the proposals should be simple and clearly understood. That was one of the nine great principles which the Prime Minister declared in this chamber during the Taxation Summit. That principle has been breached absolutely. It is another broken promise by the Hawke Government. Before all these tax measures were introduced the Income Tax Assessment Act comprised about 1,100 pages. One may well say that that is far too many. The Opposition would agree with that. Since then the Taxation Laws Amendment (No. 2) Act 1985 has added 56 extra pages, Taxation Laws Amendment (No. 3) Act 1985 has added 53, Taxation Laws Amendment (No. 4) Act 1985-the notorious entertainment provisions-has added 55, the negative gearing provisions in this Bill add another 47 pages and the fringe benefits tax legislation which will come before the House tomorrow consists of 139 pages. That gives some indication of the deadly effect that that little booklet will have when it goes to every business house in Australia in the next three or four weeks. That means an increase of 350 pages in the Income Tax Assessment Act since we began this exercise. There will be an increase from 1,100 pages to 1,450 pages-a 32 per cent increase in the size and complexity of that Act. So much for the Prime Minister's criterion of simplicity and so much for his promise that we would have genuine tax reform. I must also draw to the attention of honour- able members another example of the sheer contempt and arrogance that the Government shows to the House of Representatives and the Senate and therefore to the Australian people. I refer initially to the requests by my colleague the shadow Minister for taxation and finance, Senator Messner, to the Treasurer, Mr Keating, for a briefing on the Bill that we are discussing today. I do not know whether honourable members or members of the public understand this, but it is a fairly normal practice for departmental officers to be made available to the Opposition or to private members wishing to exercise their proper responsibility on behalf of the Australian people. It is quite a normal procedure to ask the relevant Minister for a briefing by officials. It is up to the Minister to indicate the extent of that briefing. The Minister can circumscribe the briefing, but it is virtually unknown for Ministers consistently to refuse briefings on matters of public importance before the Parliament in the form of legislation to members of parliament who are elected by the people. My colleague Senator Messner made a request to the Treasurer's office for a briefing on this Bill and he was refused. He wrote to the Treasurer on 29 April saying this: I write to express my astonishment and deepest concern at being refused by your office a briefing by your departmental advisers on the Taxation Laws Amendment Bill 1985. It is not only my concern that the bill contains very complex provisions in respect of negative gearing but also introduces very extensive changes to the power of the Taxation Commissioner in connection with the new system of self-assessment of taxpayers. These are not inconsiderable issues which require detailed examination of legislation with your officers. That is perfectly sensible. He goes on to say: I have never been refused a briefing by any of your colleagues before. Furthermore, I have never known my colleagues in government to refuse your Party in Opposition a briefing on our legislation. I have checked with the Leader of the Opposition (Mr Howard) to see whether he, as the Treasurer in the previous Government, had refused briefings to the then Opposition on tax Bills or any other matter and he tells me that he did not. Senator Messner continued: I view refusal of my request as gross negligence on your part to fully inform me, as shadow Minister for Finance and Taxation, with responsibility for the passage of this legislation through the Senate on behalf of the Opposition, of the full ramifications for the Australian taxpayer. Senator Messner received a letter back from the Treasurer which stated: I refer to your letter of 29 April- and so on- I have also received a request for briefings from Mr Aldred- who, incidentally, is the honourable member for Bruce and Chairman of the Opposition Treasury Committee- and enclose a copy of my response to him. As you will observe, there has been no `gross negligence' on my part to provide information-the offer to you to answer any question in writing stands. It is not for you to dictate the means in which such information is provided. What did the Treasurer say to the honourable member for Bruce? He said: The request by Senator Messner referred to in your letter was made to my office last week and referred to the negative gearing measure in particular. My office advised Senator Messner that any question on any tax measure introduced by the Government would be received and answered in writing. I reaffirm that if any Member or Senator has a question on tax matters before the Parliament, a prompt written response will be provided. As far as briefings are concerned, I mention that my officers have not previously provided briefings to Opposition members on legislation. That is nonsense; not since he has been Treasurer, of course. He continued: In considering this matter, I must take into account the extraordinary work pressure now placed on Tax and Treasury officers who have a huge workload of Tax Reform work. I must also take into account the extremely irresponsible policy of outright opposition to tax reform measures announced by the Opposition, and hence the priority to be given to diverting the work undertaken by public servants in meeting their statutory functions to the needs of your political Party. This consideration is made all the more important now that you confirm that one briefing is not enough-you seek them for your Committee as well, and further demand could arise from other Parties. Finally, I draw attention to the decision of your Party to refuse to attend the National Tax Summit and broadly to be non-cooperative in the whole Tax Reform exercise. I therefore must confirm that I am unable to release public servants for the various `briefing sessions' you may seek on the tax reform measures. He then goes on to say that they might be available for other purposes. Quite honestly, this is almost a matter of parliamentary privilege. If the Treasurer were not a member of this Parliament, he would be up before the Parliament on a matter of privilege. He is just not saying that the Opposition cannot do this; he is talking about any private member. I wonder whether the Australian Democrats would get the same response from the Treasurer? Mr Cadman —Did the Caucus have a briefing? Mr CARLTON —My colleague, the honourable member for Mitchell, asks whether the Caucus had a briefing. All I can say is that this kind of arrogance will have its own reward as people realise what these measures are like. The first of those measures to which I wish to refer is negative gearing. The Government has a history of attacking home owners and home renters. One of the main promises that the Government made in its 1983 election policy speech was that it would give a high priority to home ownership. Unfortunately, the Government has gone in the opposite direction. It has a deliberate high interest rate policy under which interest rates rose during 1985, contrary to the promises made in the 1984 election. This high interest rate policy has resulted in an appalling cost on home purchasers, existing home owners and renters in the private market. As I said, interest rates rose substantially during 1985. In November last year, because of a further fall in the value of the dollar, the Government, as a deliberate act of policy, jacked up interest rates to their highest levels since the recession of the early 1930s. The average cost of cocktail or building society loans went up to over 15 per cent, which is an enormous rate of interest for a home owner to have to pay. There was also a drying up of finance from savings banks and a severe downturn in the building industry. Of course, there was real pressure on low income earners who find it harder to meet the necessary requirements for a loan; they are the ones who find it harder to pay the increased interest charges. If there was a problem in getting low income earners into their own accommodation, clearly there was extra pressure on private rental accommodation and State housing commissions. Much of the rental accommodation has to be provided by the private sector, and that is proper. On top of this incredible squeeze on the housing industry and on top of the squeeze that has already been put on the rental industry because of the incapacity of people to buy their own homes, we suffered two further major blows which, again, were deliberate acts of public policy. The first of these was the announcement on 17 July of the negative gearing proposals which are the subject of this legislation. The second deadly blow was the capital gains tax announced on 19 September last year which was, of course, quite contrary to a firm promise that was given by the Prime Minister in the 1983 election campaign when he committed the Australian Labor Party not to introduce a capital gains tax. I do not believe that the Government understands yet the combined effect of its high interest rate policies, its capital gains tax and its negative gearing proposals on the housing industry and particularly on the poorest families who rely on that industry to provide accommodation, either through home purchase or through rental. The combination of the capital gains tax and the removal of the negative gearing provisions is resulting in a drying up of new rental accommodation and it has forced up rents. Private sector approvals for new residential buildings have declined by 23.2 per cent since July 1985. Approvals since February have been at their lowest level since July 1983, which is still towards the end of the recession. Private sector approvals for home units, which make up the bulk of new private rental accommodation, were down 37.7 per cent. The removal of the negative gearing provisions and the imposition of the capital gains tax has reduced the effect on investment properties, forcing owners to push rents up. Of course, a lot of people will not go into this area in the first place. The New South Wales Premier added to the confusion by threatening to control rents, resulting in a further exit from this market. These provisions, in simple terms, say that if one's interest costs on a rental property exceed the net rental income that one receives from the property exceed the net rental income that one receives from the property, insofar as those interest costs exceed the net rental income, they will no longer be deductible in the hands of the taxpayer. I will not go into the complexities of this, but that is the simple proposition. The opposition opposes this measure. It will be voting against this measure at the Committee stage; it will be voting against it in the Senate. Let me go on to the other major area of concern in this legislation. I must say that it really is an outrage for debate on this legislation to be gagged and limited to a relatively short period. Of course, a number of measures have been put into this single package and I have only half an hour in which to deal with quite complex legislation. Because I am restricted in what I can say, I will be relying on my colleagues to make various other remarks. The present rules on amendment of assessment of taxation are as follows: Firstly, if a taxpayer has not made a full and true disclosure of all material facts necessary to make an assessment and any tax has been avoided and the Commissioner considers the avoidance to be due to fraud or evasion, he may amend the assessment at any time by making such alterations or additions as he considers necessary to correct an error in calculation or a mistake of fact or to prevent the avoidance of tax. Even where there has been an avoidance of tax due to fraud or evasion, the Commissioner's power to amend, although unlimited in time, is limited in extent. It is not a general power of amendment. He could not, for example, amend an assessment to reflect a changed interpretation of the law, but is limited to corrections or errors of calculation and mistakes of fact and prevention of the loss of revenue through tax avoidance. Second, when there has been avoidance of tax not due to fraud or evasion, an amended assessment increasing liability can be validly made to correct an error of calculation or mistake of fact or to prevent the tax being avoided at any time within six years from the due date of the payment of tax under the assessment, the subject of amendment. However, as in the case of avoidance through fraud or evasion, no amendment increasing liability can be made unless at the time of its making there has not been full and true disclosure of all the material facts necessary for the taxpayer's proper assessment. Thirdly, where a full and true disclosure of all the material facts necessary for his assessment has been made by the taxpayer at any time before an assessment, original or amended, is issued to him, any subsequent amended assessment increasing his liability is competent only if it is made to correct an error in calculation or mistake of fact or issues within three years from the due date for payment of tax under the original or previous amended assessment. Fourthly, ordinarily an amendment reducing liability may be made only within three years of the due date for payment of the tax under the assessment being amended. Moreover, only an amendment by way of correction of an error in calculation or mistake of fact is permitted. In addition, the taxpayer may make application for an amendment in his assessment. Such an application would have to be made within three years from the due date for payment of the tax due under the assessment and any information necessary for deciding the application must be supplied to the Commissioner within that time. If these conditions are satisfied the Commissioner may amend the assessment at any time. The Commissioner's power to amend an assessment to reduce liability and, particularly, his power to amend on the taxpayer's application, is discretionary, not mandatory. There is no power to amend reducing liability to correct a mistake of law as such. The proposed changes basically are that within the time frames I have already mentioned, the Commissioner is to have the power to amend an assessment for any reason, including the correction of an error of law. Therefore, under this new proposal taxpayers are asked to make their own assessments. The return goes to the Taxation Office where it is not given the full scrutiny it is currently given. The return is given an assessment which has some binding significance for the taxpayer but this matter could float on for some time until, under the new auditing procedures of the Taxation Office, there might be a change in the situation for the taxpayer. We have had discussions with leading tax practitioners around Australia and with representatives of taxpayer bodies. Considerable disquiet has been expressed at the extension of powers of the Commissioner. Most of this criticism concerns the lack of certainty that will result from not knowing, even if a full and true disclosure has been made in the return, the taxpayer's final tax liability. A fundamental aspect of our assessment procedure has been that if a full and true disclosure has been made no amendment to increase the tax liability can be made to reflect a changed interpretation of the law; it can be done only to create an error of calculation or mistake of fact. It appears that the changes could empower the Commissioner to amend assessments to increase a tax liability due to a change in interpretation of the law. In other words, we really will not know where we stand. A number of other comments were made which I have not time to go into. However, I will summarise the four concerns which emerge from the introduction of this self-assessment system along the lines being proposed. First, I refer to the favoured position of the Taxation Commissioner in respect of interest for overpayment or underpayment of tax. In other words, in this situation if a person receives interest paid by the Commissioner because the Commissioner owes him money he pays tax on that interest. However, if the person has to pay interest on money which he owes the Taxation Commissioner he cannot deduct it. It is the usual thing of `heads I win, tails you lose' as far as the Commissioner of Taxation is concerned. The second concerns the exclusion of an option for taxpayers to opt out of the self-assessment procedure in favour of scrutiny by the Commissioner where the taxpayer is uncertain about his assessment. In other words, there is no option for a taxpayer who would prefer to have a definite situation. He could float on for ages waiting for an audit. The third concern is the power of the Commissioner to reopen assessments following changes in the law. Fourth, while the Commissioner has power to reopen a case to increase tax liability the reopening of a case at the taxpayer's request to decrease the liability is at the Commissioner's discretion. The Commissioner already has very considerable powers and the provision of additional powers should be very seriously questioned. I thought that to give some indication of the flavour of the reception to this taxation proposal out in the market place I would quote from a letter by Mr Robin Speed in the Australian Financial Review a couple of days ago. The letter is headed: `Justice needed on tax returns'. It gives an indication of the flavour of the concern out in the community of this and other measures. He said: Sir, 300 years ago Daniel Defoe wrote that there was nothing as certain as death and taxes. Today, there is nothing as uncertain as taxes. Never before have the tax laws been so complex or uncertain of application. I venture to suggest that there is no-one in or outside the Tax Department who understands the present Income Tax Act. With the proposed introduction of capital gains tax, fringe benefits tax and imputation tax a gaggle of experts will be needed to answer a tax question. It is therefore ironic for the Government at this time to introduce a self-assessment system which places the responsibility on taxpayers to know the tax laws. The system will first operate for the 1985-86 year. It involves prima face acceptance by the Tax Department of a taxpayer's return of income. By and large it will rely on the honesty of taxpayers and random checks and investigations by the department to catch the dishonest taxpayer. The tax laws are not black and white. What they mean today may not be what they mean tomorrow. On many points QCs, Supreme, Federal and High Court judges disagree among themselves. If they have grave difficulty in working out the meaning of the tax laws, 99 per cent of Australians have no chance. For self-assessment to be just to individual taxpayers and fair to taxpayers as a whole, certain safeguards and provisions must exist. These include: A presumption that a taxpayer is innocent until the contrary is proved, an impartial review of all decisions by the department, and encouragement to make a full disclosure. Removal of the suspicion of male fides- that is bad faith- and the temptation for blackmail or corruption inherent in the existing powers to impose 200 per cent penalties or remit penalties which could bankrupt a business or a family. The department issuing simple explanations of tax laws that bind the department, issuing promptly binding rulings on matters that concern taxpayers, and having the capacity and direction to promptly and competently deal with questions and correspondence with taxpayers and their agents. Prompt recourse to an independent third party for resolution of any disputes with the department for any exercise by the department of a discretion. I do not agree with the next point which states: The availability of free competent legal and accounting advice . . . The letter continues: Removal of the retrospective application of decisions by the Department, courts and Parliament, and removal of assessments issued by the department arbitrarily or capriciously. I have not got time to quote from the whole letter but it is well worth anybody's referring to it because it reflects the experience of honourable members in the ordinary course of business in their electorate offices. I do not know what the problems are in the Taxation Office; they may be ones of management or personnel. However, increasingly capricious decisions are being made which are having very serious consequences on families and businesses. It is damn near impossible to get them sorted out. The problems that come to us must represent the tip of the iceberg. I am certainly involved in a number of such issues at the moment. This Bill relating to self-assessment will not help in the slightest because, although on the surface it appears to make the position better, it really leaves people in a state of considerable uncertainty. Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member's time has expired. Mr ROBERT BROWN(Charlton)(10.34) —I think we should make it perfectly clear that the Taxation Laws Amendment Bill and the Taxation (Interest on Underpayments) Bill which we are in the process of considering now are part of a continuing determination on the part of the Government to pursue those aspects of taxation reform-taxation amendment-for which the Government was given a very clear mandate on at least two occasions. There was a clearly expressed determination, as far as the Australian Labor Party and this Government were concerned, that given the opportunity the Government would take any necessary measures to ensure that the rorts and the ramps which became inherent and endemic to the taxation system under successive conservative Governments in the past would finally be excised. That program will continue with absolute determination to ensure that the taxation system is turned into one that achieves the objectives that it sets. There is a determination to ensure not only that it achieves the objectives set in terms of revenue but also achieves the objectives which should be set in terms of introducing a greater degree of equity in the Australian community. In the White Paper entitled `Reform of the Australian Tax System' these considerations were referred to in the following terms: The Government's primary objectives are to make the tax system fairer overall and more conducive to economic growth. In terms of those basic objectives, the previous chapters have emphasised the need to: significantly reduce marginal personal tax rates; improve the equity of the tax system, not least by increasing the tax burden on those engaged in avoidance and evasion; The Australian people rejoiced at that indication of determination on the part of this Government. They rejoiced because they had known that, for decades prior to this Government coming to office, the opportunities for people to drive trucks through the Income Tax Assessment Act had increased substantially, to the point where, to a very large extent, the ordinary pay as you earn taxpayers-those people who cannot reasonably escape their taxation responsibilities-were increasingly being called on to bear an unfair burden of that total taxation responsibility. I have indicated on previous occasions that, despite the denials and posturing of those people who sit on the Opposition benches, during their stewardship the total amount involved in tax evasion and tax avoidance in Australia had reached $7,000m every year. By contrast, as a result of this Government's stewardship, that has now been reduced to a current estimate of about $4,500m. This indicates that we still have a long way to go, and we propose to go on in that way. That $7 billion, by the way-with all of the rorts and ramps in the system that were encouraged, allowed, permitted and overlooked by the previous Government-represented about $30 every week for every household in Australia, in order to make up the difference, because someone had to meet those Commonwealth revenue commitments. Someone had to make sure that the funds that were necessary for Commonwealth expenditure were available. Who made sure that those funds were available? The five million pay as you earn taxpayers in Australia. Mr Cadman —You won't become a Minister like this, Bob. Mr ROBERT BROWN —The honourable member for Mitchell has been busy interjecting. Had he spent his time better when his Party was in government, those gross inequities within the taxation system would not have been allowed to develop. Of course, the honourable member for Mitchell, like all of his colleagues, was not concerned and is not concerned about the pay as you earn taxpayers in Australia. The Opposition is concerned only about the rip-off merchants. We have seen abundant evidence of this and we have proclaimed it around the traps. The Australian people know that everything that we have said was motivated not only by our concern and our honesty, but also by an absolute determination on the part of this Government and on the part of the Australian Labor Party to do something about it. The Bills that we are now considering give expression to only part of the total approach which has been taken by this Government on the question of taxation reform. For too long the issue of tax reform had been left in the too-hard basket by successive Australian governments. In 1985 this Government ended those years of neglect, which had seen the Australian taxation system undermined by rampant avoidance and evasion. This Government then made the decisions that were necessary to give ordinary Australians genuine and lasting income tax cuts. Of course, one of the most important elements in the procedures leading up to the present situation was the magnificent Taxation Summit that was held in July 1985, when the Government invited debate and listened carefully to what the people said. Of course, after weighing up those views, on 17 September 1985 the Treasurer (Mr Keating), on behalf of the Government, announced fundamental and far-reaching reforms to the taxation system. Let me say this: Despite the fact that there may be elements of concern within the community-some of them quite legitimate-about various aspects of the total taxation package, there is a recognition and an understanding that action was necessary on the part of the Government. Some very significant changes have been introduced. There has been a restructuring of the taxation thresholds and the taxation rates, which represents very substantial improvement. These proposals are part of that total package which includes, among other things, necessary and overdue amendments to things such as fringe benefit concessions within the taxation system, entertainment expenses, capital gains tax provisions, foreign tax credits, and the imputation of company tax. Of course, one of the specific provisions of the legislation is the question of negative gearing and its relationship to rented accommodation. The two aspects of the legislation that I want to concentrate on relate to, first, the general area of rental residential properties and the provisions of the legislation in connection with that and, second, the question of self-assessment which represents a very substantial variation in the whole nature of the management, treatment and processing of income tax returns in Australia. In regard to the rental and residential property considerations, the first one, of course, is the elimination of negative gearing. I know there have been screams on the part of the Opposition. We would expect them to scream because the situation at present means, for example, that in 1986-87 the revenue benefit of this legislation will amount to $55m. That means that in the absence of this legislation the ordinary taxpayers in Australia would have, in effect, subsidised the property purchases of real estate investors in Australia to the extent of $55m. But it does not finish there. In the following year the revenue gain will amount to $100m and in 1990-91 and subsequent years will rise to almost $200m. So it is not just a one-off situation. It means that forever into the future, in the absence of this legislation, the ordinary Australian taxpayers would have been subsidising the real estate purchases of real estate investors to the extent of about $200m every year. If the pay as you earn taxpayers were to be hoodwinked and fooled-I am sure they will not-by these quite spurious and offensive claims made by members of the Opposition, they would need to to keep this in mind: In the absence of this legislation, when they give their Christmas presents to their families each year, they might as well write out a cheque for $40 and send it to general real estate investors in Australia, because that amounts to what they were doing. Five million households-five million pay as you earn taxpayers in Australia-would divide between them a responsibility to meet about $200m each year. That represents $40 for each of them. Do they want to transfer that amount to real estate investors? That is a decision for them to make if they want to support the position that has been adopted by the Opposition. But they should understand very clearly what are the implications. In order to compensate in part for the sort of impact that that may have on the rental property market, we are, of course, introducing as well a 4 per cent a year depreciation provision. Mr Cadman —It is not working, is it? Mr ROBERT BROWN —Of course it is working. The honourable member does not understand. He does not have his ear to the ground with regard to wage and salary earners. He does not even have his ear to the ground with regard to these considerations. He should not be absurd. Every time he opens his mouth he looks ridiculous because what he is saying is absolutely absurd. If he takes the trouble to investigate this matter, he will understand that he is absurd. We are providing that 4 per cent per annum depreciation provision, which means that over a 25-year period anyone investing in new rental property will be able to write off the total by way of depreciation. That should encourage it and will encourage it. I said that I would make brief reference to self-assessment. All I want to say in connection with that, in view of the time constraints on this debate, is that this is an extremely important innovation which has been encouraged by the Australian Taxation Office itself in light of its experience and understanding of the very serious deficiencies that have existed within the procedures for treating income tax returns up until the present time. That has now been given legislative effect because of the recognition on the part of this Government that changes of this kind are necessary. Those people who think that self-assessment means that people will be able to write their own tax return had better think again because it means that there will be greater opportunity for auditing, much more comprehensive, detailed auditing, and the penalties for those people who deliberately mis-state their taxation circumstances will be increased substantially. It is important legislation and I am pleased to indicate my support for it. Mr BEALE(Deakin)(10.46) —We have heard the usual rant from the honourable member for Charlton (Mr Robert Brown). He referred to the 4 per cent depreciation, and I will come back to that in a minute. I hope that he will stay in the chamber so that he can get the numbers right in his head and understand what is going on at the grass roots level. The Taxation Laws Amendment Bill covers a further range of punitive taxation measures imposed on the business sector by this Government. In particular, I want to refer to that portion of the Bill that deals with the so-called quarantining of negative gearing. This portion of the Bill covers more than 25 pages of further Government intrusion into our lives and will have very serious implications for the future of the private rental sector. The first question we need to ask is: Why is the Government implementing this taxation measure? It is claimed that the quarantining of negative gearing is based on equity and that it will assist property investment opportunities by virtue of the fact that the depreciation allowance has been increased from 2 per cent to 4 per cent. However, it is now clear that the Government is not implementing this measure for reasons of equity. If it were, why has it changed its mind on the quarantining of farm losses that can be written off against non-farm income? The Government initially decided that it would disallow such deductions, but has now changed its mind and will allow them. Is the Government introducing the measure to assist property investment? It claims that the increase in the depreciation allowance will offset the deductions for interest on money borrowed to finance rental property investments. This is clearly not the case, as can be demonstrated by a study of the second reading speech of the Minister Assisting the Treasurer (Mr Hurford). In that speech he says that the limitation on interest deductions will result in a revenue gain of $55m in 1986-87-I ask the honourable member for Charlton not to leave-rising to $195m in 1990-91. In establishing the costs associated with the increased depreciation, the Minister stated that this measure would cost $2m, compared with $55m for negative gearing, in 1986-87 and $7m in 1987-88. It is clear that the argument that the depreciation would be an offsetting measure for the limitations on interest deductions is a complete sham. Stripped of the rhetoric, it is abundantly clear that the Government is making a grab for dollars and that any other explanation is false. In fact, coupled with the proposed capital gains tax, which will also seriously affect investment in private rental housing, the Government is indulging itself in a double grab for business dollars. We must ask ourselves why the Government is so desperately seeking these funds. The answer lies in the fact that the Government's economic policies are failing. Inflation is now 9.2 per cent, unemployment still remains at 8 per cent, and interest rates are at high levels. Our overseas current account is haemorrhaging at a billion dollars a month and before too many more months pass our overseas debt will have crept up to a completely unacceptable $100 billion. Government economic policies have concentrated on tight monetary policy over the last year or so in order to protect the value of the Australian dollar. But, belatedly, the Government is recognising that it must transfer some emphasis from monetary policy to wages and fiscal policies. Accordingly, the Government must make an attempt to curtail the growth of its expenditure. This explains the need for this legislation, which is simply the Government's mechanism for getting more dollars into its system. Now that we see this legislation for what it is, we must ask ourselves what result it will have as far as investment in property is concerned. It is abundantly clear that investment in that area will be reduced. The return on investment in private rental property is already lower than returns that would be achieved on government bonds. Accordingly, occupancy rates will rise, vacancy rates will fall and because of the laws of supply and demand-something the Government will soon have to understand-rents will increase. I quote from the Australian Journal of Social Issues, Volume 21, No. 1, 1986, an article by Watson and Coleman entitled `Housing, Demographic Change and the Private Rental Sector', which states: Because access to both the owner-occupied and public rental sectors is restricted, the private rental sector plays a crucial role in providing accommodation for a range of households. These include households where there are no children or where the income of the household head is low or where groups of people have chosen to live together as a household. To set the stage further to demonstrate what a disaster this legislation will be, let me quote from the study into homelessness prepared for the Department of Housing and Construction: Paradoxically, rents are too high to be affordable by low income earners and too low to attract an adequate supply. Furthermore, the timing of this legislation is unbelievably bad. It is already acknowledged that there is a housing rental crisis in the community, yet the Government is now introducing this complex legislation with all the distortions that will arise from it. Australia is now going through a disastrous decline in the housing industry. Last year the number of new housing starts was 153,000 units, but a month ago the Prime Minister (Mr Hawke) admitted to the nation that, if the Government continued to pursue its then economic policies, starts would decline to less than 100,000 units next year. The housing industry is continuing to turn down sharply and it remains to be seen whether the Government's so-called housing package will have any significant effect on this downturn. In particular, building societies report no significant increase in lending over the past month. A few statistics from the May 1986 Building Prospects Bulletin by the Master Builders Federation of Australia demonstrate the extent to which the housing industry has turned down in recent months. Employment fell 6 per cent in the March quarter; employment of sub-contractors fell 7.2 per cent on the previous quarter; employment of supervisors also fell 7 per cent; employment of skilled tradespersons fell 6.9 per cent; and there was an expected total fall of a further 5.3 per cent in the June quarter. There is an emerging squeeze on the vacancy rates for rental housing. Referring again to the Watson and Coleman article, they state: . . . that the rental property vacancy rate recommended by the Real Estate Institute of Australia is three to four per cent. However, the current vacancy rate for rental property in Sydney-these details from Government monthly statistics-is 0.9 per cent, down from 1.4 per cent 15 months ago; in Melbourne, 1.6 per cent, down from 2.3 per cent 15 months ago; and, in Perth, only 0.5 per cent, down from 2.4 per cent 15 months ago. It is clear that we have a major difficulty on our hands. As a result of the Government's previously announced punitive taxation measures, of which this Bill forms part, private investment in Australia is falling. Two recent reports in the Australian Financial Review underscore this assertion. On 1 May that newspaper reported: . . . with the quarantining of negative gearing the highly geared speculative investors who fuelled the 1980-81 boom are unlikely to return to the market in the foreseeable future according to Bis-Shrapnel. The 23% decline in activity in Victoria and a static vacancy rate have been attributed to investor caution following tax changes, high interest rates and possible changes to the Tenancy Act. This Government's fellow socialist governments in New South Wales and Victoria are not assisting the situation of private rental investment with their proposed tenancy legislation and veiled threats of rent control. I quote from a socialist Swedish economist, who recently said: Rent control is the most efficient technique presently known to destroy a city, except for bombing. In this situation it is no wonder that rents are rising. For example, in Sydney the rental price for a three-bedroom house has increased from $137 a week to $163 a week in the nine months to the end of last year, that is, at an incredible annual rate of 25 per cent. The Minister for Housing and Construction was wildly astray when in this House on 10 October 1985 he said: I take the opportunity to refute some claims made publicly by a minority section of the real estate market that the Government's action in quarantining negative gearing and in the introduction of a prospective capital gains tax could have adverse effects on rents and current investments in the private rental market or perhaps on the level of future investment in the private residential market. I do not believe that those claims are correct. Events have demonstrated that those claims are correct and that the Minister has little understanding of the way in which private investment goes about its business. This Bill is a product of the ignorance of the Government; this Bill is a product of the envy that the socialists feel toward private investors; and this Bill is part of the desperate measures the Government is employing in its vain attempts to get its fiscal policy under control. The Opposition totally rejects those clauses of the Bill that deal with negative gearing and will vote against them. Mr MOUNTFORD(Banks)(10.56) —I rise to support the Taxation Laws Amendment Bill 1986. This legislation is part of the greatest single move towards tax reform that this nation has ever seen. This Bill, the fringe benefits tax Bills and the capital gains tax are the product of much discussion and debate within the community. It has been a matter of great concern to most Australians that the tax burden has moved increasingly away from the well-to-do and towards the marginal taxpayers. It was this concern which emerged strongly from the Tax Summit in July of last year-the need to redress the growing imbalance. Our opponents seem not to understand this and continue to attack the Government over its approach to tax reform. This is only because they fail to recognise the value of co-operation over conflict and the importance of consensus as against coercion. As a result, the tax reform legislation we propose has the support of most Australians, even if some groups find certain parts objectionable, because this Government is prepared to make the hard decisions for the general good, even if it means upsetting some people along the way. The very hallmark of these Bills is their appeal to equity. In each instance the problem addressed is one of the just redistribution of wealth. It has become the fashion, especially under the stewardship of our predecessors, for the rich to consider it their God-given right to stay rich even at the expense of other income earners. If one could get away with paying less tax, well and good-that was considered to be any citizen's right. The days of the more obvious scandals, such as the bottom of the harbour schemes are now thankfully over. But more surreptitious, and for that reason more dangerous, are other legitimate schemes which lead the wealthy to believe they are entitled to more benefits than the average person. Under this category I include negative gearing, the trick which allows the rich to gain capital yielding property largely at the expense of the taxpayer. The Taxation Laws Amendment Bill 1986 deals with negative gearing. Negative gearing occurs when interest on borrowings used to finance the purchase of property let out for rent is exceeded by net rental income, after all relevant deductions are made. At present the excess amount may be offset against the taxpayer's other income. It allows the taxpayer to claim deductions for unlimited interest expenses against all forms of taxable income, including income completely unrelated to the property investment. It applies even where the income from the investment is less than the interest payable. Effectively what this means is that the taxpayer is getting ownership of a capital producing investment and is subsidised by other taxpayers for that privilege. The legislation before us now aims to stop this, so that the aggregate interest incurred in a year on rental property finally will be deductible only from the aggregate net rental income from investments, less all the allowable deductions and any depreciation allowance. Where the allowable deductions exceed gross rental income, the excess will remain deductible from other sources. However, where the interest exceeds the net rental income in a particular year, the excess may be carried forward and deducted in the following year. There shall be no limit to the number of years the taxpayer may carry forward the loss. The argument has been raised by our opponents that such legislation, combined with a capital gains tax, would have adverse effects on housing available for the private rental market. Such moves, it is claimed, will make rental housing less attractive to investors who will then put their money elsewhere, leading to a decline in rental accommodation. The charges are serious indeed, as the position of the private housing rental market is of obvious concern to the Government. Over 20 per cent of Australian families come into this market, most of whom are low income earners. Approximately 400,000 pensioners receive assistance from the Government to stay in the rental market. Any moves which have bearing on these people must be carefully considered. At the same time we must also consider the need for overall tax reform. It is the approach of this Government to tackle the problems which reform may bring, rather than abandon reform altogether. As far as negative gearing is concerned, two arguments should be kept in mind. Firstly, should one actually look at a concrete example one will find the investor still gets quite a good return for his or her money. Studies of the effects of the abolition of negative gearing have been done for the Department of Housing and Construction which show in fact that some investors in certain circumstances earn a higher rate of return under the post-reform package than they would at present. Thus, at a mortgage interest rate of 15 per cent and a property appreciation rate of 2 per cent, an investor with 50 per cent equity will make a return of 12.2 per cent at present, but 12.6 per cent on a new dwelling following the passage of these Bills. The drop in return that will inevitably be faced by some investors is not so great as to warrant the fear expressed by our prophets of doom opposite that there will be a mass exodus of capital from the private rental market. The difference in approach to questions of incentive between the Government and Opposition is clearly demonstrated by our policies on this very issue. To encourage building for residential rental purposes, our opponents recommend providing a tax shelter. We on the other hand intend to extend to investors a legitimate incentive to invest. As a result, the same legislation which abolishes negative gearing also introduces a depreciation allowance of 4 per cent for investment in rental accommodation. This measure will stimulate new and improved building for rental housing purposes and it will do it by justifiable incentive, not by an appeal to greed. The deduction for depreciation allowance will be provided on the same basis as that which applies at present on non-residential income producing buildings. A fixed annual deduction of 4 per cent of the construction cost will be allowed over 25 years. The entitlement to deduct will pass with the building ownership in most circumstances, so that later buyers may also benefit. The benefit will not apply to display or exhibition homes, nor to any accommodation used by the taxpayer himself, or certain persons associated with the taxpayer. By such means, private rental accommodation will continue to offer good returns to investors, and ensure the maintenance of the market. It is estimated that the cost to revenue of this measure will be $2m in 1986-87, and $7m in 1987-88 and subsequent years. The second argument to favour the abolition of negative gearing is similar to the arguments in favour of getting rid of the business lunch. When the Government eliminated that time-honoured tax lurk, the business lunch, last year, we were bombarded with claims concerning the irreparable damage we were doing to the entertainment industry. Businessmen unable to get their free lunch would, for the most part, abandon the hospitality industry, or so we were told. The reality we see now is of a hospitality industry where employment has actually grown by 19,000 since the introduction of the tax. When the Opposition predicts that an industry will collapse when a tax rort is eliminated, it is superimposing on the investors its own values, and not the values of the Australian community. Seen in perspective then, the possible detrimental effects of the abolition of negative gearing are far outweighed by the restoration of equity which the scheme will allow. For too long this tax shelter has been available and, by its very nature, it is a loophole available only to higher income earners. It is estimated that the new arrangements will yield $55m in 1986-87, $100m in 1987-88, rising to $195m in following years. This is all revenue which in the past had to be made up, and in most cases made up by those worse off. Other provisions in the Taxation Laws Amendment Bill 1986 are equally in keeping with the spirit of Labor tax reform. The transfer of rights to receive income from property where the property itself is not also transferred will become a taxable asset under the Bill. The provisions on the assignments of rights to future income will thus clear up any confusion which may exist following the decision of the Federal Court in Federal Commissioner of Taxation v. Myer Emporium Ltd. In that case, the unrelated assignee finance company received rights to future interest under certain agreements for full consideration. The Federal Court has held that the amount could be converted to a non-taxable capital sum by assigning the future income for consideration. An appeal against the decision has been granted by the High Court but, rather than wait for that decision, the Government is legislating to make it absolutely clear that rights to future income will be taxable. The legislation is in no way intended to act retrospectively, and will apply only to post 10 October 1985 arrangements, the time when the Government decision was announced. The Government's tax reforms as a whole will help restore community faith in the ability of the taxation system to fairly and evenly exact taxes from income earners. I would now like to address myself to another measure in the Bill before us which will also help instil confidence in the more basic aspects of tax administration. I refer to the provisions in the Bill concerning the move towards self assessment. The Treasurer announced the initiative in his Budget speech last year. The object of self assessment is to re-allocate work within the Taxation Office so that more time is spent in selective post assessment checks on a wider range of returns, rather than on more routine tasks of initial assessment. In doing so, the taxpayer will have more responsibility in preparing his or her return and in making assessment. Such moves should lower the number of objections raised to adjustments made by the Taxation Office itself, thus lowering the number of disputed assessments. Clause 19 inserts a new section 169a into the principal Act, which states that the Commissioner of Taxation may issue an assessment solely in reliance on the information provided in the taxpayer's return of income. Thus, at first instance, the taxpayer's calculations will provide for the assessment, except where obvious errors are made. If self assessment is to work, of course, there must be absolute and honest disclosure on the part of the taxpayer. To ensure that this is done, clauses 20 and 21 allow for wider ranging powers of amendments following assessment, and the provision for the payment of interest where the assessment is amended. Coupled with the greater range of post assessment checks now possible, taxpayers should prepare their returns more carefully. The change will also allow the tax office to get through the large annual backlog of appeals, as there will be no appeals available until the audits are complete. Where taxpayers prepare much of their own assessment, there can be little dispute about the fairness of the application of the taxation rules. From an administrative point, the new rules will allow the taxation office more time to pursue tax evasion through increasing post assessment checks. In conclusion, let me say that the Bill before us is part of an important initiative by the Labor Government to reform our taxation system, a system badly in need of reform. The changes are wide ranging and today we deal with only a small, albeit vital, part of that reform. Tomorrow we shall move on to the fringe benefits taxation Bills. The wide ranging nature of our reforms only goes to show how negligent our opponents were when they were in Government. Their continued opposition shows yet again that they are opposed to the claims of equity and fairness in the distribution of the tax burden. Despite their opposition, this legislation is designed to restore not only real justice into the tax system but to give back to taxpayers the confidence that they are paying no more than their fair share of the burdens of administration of a modern economy. These taxation measures will redistribute taxation revenue so that greater equity can be given back to taxpayers. In the 1986-87 financial year approximately $2 billion will be returned to taxpayers in the form of tax cuts. The average income earner will receive a tax cut of $9 per week. In the 1987-88 financial year approximately $4.5 billion will be returned to taxpayers, meaning that the average income earner will receive a tax cut of $15.20 per week. These Bills are all about tax equity, which has been long overdue in our community. Mr McGAURAN(Gippsland)(11.06) —My colleagues have touched upon, and later in the debate will further expand on, the whole sorry saga of the tax debate in this country-the delays, the uncertainty, the confusion and the contradiction as well as the inability of many taxpayers to plan their financial arrangements because of the utter incompetence of the Government. However, I wish to direct my remarks towards a very disturbing trend under this Government, that is, the conferring of unfettered discretions upon the Commissioner of Taxation and, moreover, the exercise of that discretion in a whole number of cases. We have seen under the Treasurer (Mr Keating) a range of legislation which confers broad powers on the Commissioner of Taxation. I was interested to read recently the case of Henry Comber v. the Federal Commissioner of Taxation, a 1985 case in which Justice David Hunt of the New South Wales Court said that he could not review as a matter of law the discretion conferred upon the Commissioner, even though the judge believed that that discretion was incorrectly exercised. The judge said that his hands were tied. In that case it was a discretion of the Commissioner of Taxation to judge whether a payment of a retiring allowance to an employee was too high. The board of review, bearing in mind that these boards are chaired by a Deputy Commissioner of Taxation, concluded in favour of the Commissioner of Taxation. Justice Hunt said that in law there was nothing that he could do. I have also been interested to note the comments of Justice Wilcox in the Federal Court in at least two recent decisions where he has slated-there is no other word for it-the Commissioner of Taxation for the exercise of his discretion. Now, what is the relevance of that to the legislation before the House? The relevance is that, under both the negative gearing and self- assessment provisions of this legislation, further unfettered discretions are conferred upon the Commissioner of Taxation. I for one am sick and tired of this abrogation of a responsibility of the Treasurer over to the Commissioner of Taxation. I suggest that the Treasurer, members of the Government and Treasury officials get out into the real world. I can bring before the Treasurer any number of accountants, tax agents and tax lawyers who can list a great many cases where the Commissioner of Taxation has irresponsibly and ruthlessly exercised his discretion. One professional person whom I know of was approached recently by the Commissioner of Taxation. As members know, professional people are assessed on receipts, that is, fees in hand; whereas small businesses are assessed on the accruals basis such as invoices sent out. The client, on legal advice that he has obtained, obviously falls within the receipts category. The Commissioner of Taxation audited the client, and he has some $50,000 in debts. The Commissioner of Taxation has said that the client must bring in those debts and he can choose in which year they fall so that he is best advantaged. That is simply a device to blackmail the taxpayer. After all, the Commissioner of Taxation said that, if he did not reach that agreement, the Commissioner would hit him for those debts in the worst possible year and there would be a 40 per cent penalty and legal costs in fighting the case. The Commissioner said that he would treat him on an accrual basis rather than a receipts basis. His tax lawyer has told him to advise the Taxation Commissioner to take a flying leap. It is a pity that that advice was not given to more people whose position the Taxation Commissioner is assessing. I am very concerned at a number of aspects of the behaviour of the Taxation Commissioner in recent years. The only effect that this complex and detailed legislation will have is a further boost to the cash economy. The Government is delving into the realms of the ridiculous if it does not think that under self-assessment there will be a huge increase in the cash economy. The fact is that a great many people will put money where the auditors will not find it or will make sure that the auditors do not have anything to look at. In America, where the self-assessment system works, it is admitted by the Internal Revenue Commissioner that some 80 per cent of taxpayers do not fill out their returns properly. In Australia that figure is admitted to be some 70 per cent, so we can bet our bottom dollar that there will be a significant increase, at least 10 per cent, in the number of taxpayers not properly filling out their returns; this will mean a loss to revenue. We have to face realities. I do not argue against a self-assessment system. I argue against the powers given to the Commissioner under the enabling legislation to exercise the discretion. Let me explain. Firstly, the self-assessment system will not apply to all taxpayers. It will apply only to B returns, that is, business returns-small businesses, companies and partnerships will all be examined. S and A returns, that is salary and investment returns, will operate under the old system. Salary and wage earners, trusts and superannuation funds, which, after all, contribute the bulk of tax revenue, will operate under the old system. Those who operate under the old system will be entitled to the full and true disclosure protection, but those under self-assessment will not be. They will lose the full and true disclosure protection; that is, the honest mistake made will no longer be a proper defence. That is the first problem with this measure. Self-assessment will not apply to all taxpayers. In fact, it is expected that only some 2 per cent of taxpayers will be audited each year. Let me give an example of the Taxation Commissioner's discretion. It is proposed in clause 20 to amend section 170 of the Income Tax Assessment Act to permit the Commissioner to amend a return within three years for any reason. The difficulty created is this: Let us suppose a tax agent is preparing a return for his client who is a transport operator. The honourable member for O'Connor (Mr Tuckey), with his great interest in this field, not to mention the honourable member for Murray (Mr Lloyd), will appreciate the difficulties in such an example. During the year the taxpayer purchases a second-hand truck. After six months the engine blows up and it has to be replaced. The tax agent for the transport operator is of the opinion that the expense is a repair and is properly deductible and, accordingly, lodges the return claiming the deduction. However, he is aware that the Commissioner might argue that it is an initial repair and accordingly should be capitalised. In the past an agent was able to explain the facts in the return. If the return was accepted the matter was closed; the taxpayer had made a full and true disclosure and, accordingly, was protected. Now, under this legislation that circumstance is irrelevant. The taxpayer must wait for three years to pass to see whether he will be audited and the matter disputed. If the return is adjusted the taxpayer will be liable, under proposed new section 170aa, for additional tax in the form of non-deductible interest and perhaps a penalty under section 223. As a matter of practice, the Commissioner imposes a penalty and then gives up claiming the penalty, provided the taxpayer does not object. The taxpayer has no protection whatsoever. This renders the taxpayer more or less subject to the discretion of the tax gatherer. The tax agent in my example should be able to elect to have the assessment assessed to have the difficulty resolved. If this course were open a taxpayer could enjoy the protection of having made a full and true disclosure and having had the matter considered. Alternatively, the tax agent should be able to seek a binding ruling from the Commissioner with respect to these facts. The taxpayer would make application for a ruling and the Commissioner would be bound to give a ruling within one year of the taxpayer having given all the facts to the Commissioner. If the Commissioner does not answer the request within a year the taxpayer should enjoy the protection of having made a full and true disclosure. As always, the Government has limited the time for discussion of these very important matters. There is a number of technical provisions to which I wish to draw the attention of the Parliament. However, time will prevent me from doing so. I have outlined a problem which will arise under self-assessment. Let me now look at negative gearing and the discretion conferred on the Commissioner, improperly in my view, in these provisions. The object of clause 11 of the Bill before the House is to eliminate the taxation advantages of negatively gearing rent producing property. As part of the proposal the Government intends to prevent the negative gearing of shares purchased where the company in which the shares are purchased is a rental property company for the purposes of the provision. Proposed new section 82kzc (6) of the Income Tax Assessment Act defines a rental property company, trust or partnership. That section is intended to define a rental property company, partnership or trust by reference to the proportion that the net rental value of the rental property bears to the net worth of the company, partnership or trust. Where the value is more than 75 per cent of the total net value, the company, partnership or trust is caught by the provision. The difficulty arises in applying the provision in determining the net rental value and the net value. I realise that these are complex provisions which honourable members who have not studied the Income Tax Assessment Act may have difficulty in grasping. Let me explain the relevance. The Commissioner is now empowered to determine the net rental value of a particular property. This is utterly unsatisfactory. Parliament should be able to design an appropriate formula for the guidance of taxpayers rather than allowing the Commissioner to adopt his own values. The net worth of a company is not readily identifiable. In many cases the net worth determined according to book values may be nominal. The difficulty in this area cannot be overemphasised. Enactment of the legislation before the House will create significant difficulties for taxpayers in assessing the viability of borrowed funds to invest in a company, partnership or trust where the tax deductibility of the interest is a relevant consideration. My concern is obvious. It is that the Commissioner will be able to judge for himself what is the net rental value. There will be no appeal to a court of law in that regard. The Government stands condemned for not only bringing the legislation into the House in the form in which it has but also guillotining debate and preventing a proper examination of complex, technical and far-reaching, not to mention overwhelmingly important, legislation. To summarise, a great many taxpayers, lawyers, accountants and tax agents are wholly dissatisfied with the grabbing of power by the Taxation Commissioner and the exercise of that power. It is no exaggeration to say that amongst business circles-that includes small business, primary producers and, of course, big business-there is something of a revolution going on. The frustration of dealing with the Taxation Commissioner is beginning to boil over. It has even been suggested by a group of tax agents that they are quite prepared to more or less go on strike. I realise that at this time such a threat is premature, but we should not underestimate for a moment the dissatisfaction with the workings of the Australian Taxation Office at present. I therefore call upon the Government to examine not just this legislation but any past legislation and certainly any future legislation in regard to the conferring of discretions on the Commissioner. When judges in both the Supreme and Federal courts are expressing in the most explicit terms their concerns regarding the behaviour of the Taxation Office, I think it is time that this Government looked past the Taxation Commissioner for advice on the framing of legislation. Mr RONALD EDWARDS(Stirling)(11.25) —I am pleased to join my colleagues the honourable member for Charlton (Mr Robert Brown) and the honourable member for Banks (Mr Mountford) in this debate on the Taxation Laws Amendment Bill and the Taxation (Interest on Underpayments) Bill. I shall address broadly the issues before the House. The setting for taxation reform in this country needs to be understood in the context of the debate. When this Government came into office it had before it a number of issues that it had to address. One was the general setting of the economy and how it was performing. That matter was taken up in the National Economic Summit Conference in 1983. Another issue was the question of financial regulation and deregulation. That has been taken up serially by the Government, such that we have now gone a long way towards deregulating the operations of the financial system. I believe that that has been successful largely because we now have a more sophisticated financial system and an economy that is operating more effectively. The third issue I refer to, which was a matter of great concern to many people in the community, is the question of taxation reform. Honourable members on both sides of the House will be aware that there has been substantial debate on that subject in this country. In fact, it could be said that much of last year was taken up with the debate on taxation matters. The National Taxation Summit was held, a variety of viewpoints were taken and the Government, as a consequence came down with a series of amendments to the taxation system. This was necessary because, fundamentally, the tax system in this country had been allowed by government to get out of date. Very clearly, the question of avoidance and evasion was a major issue that was troubling the minds of the people in the community prior to the 1983 election. The Commissioner of Taxation had pointed out many times to the previous Government that some matters involving taxation evasion and avoidance had not been properly addressed in this country, so much so that there had been a substantial loss to revenue. When this Government set about bringing about a reform of the tax system, it did so on a number of grounds. One of those grounds was the equity arrangement. A second one was the ease of operation and simplicity of the system, and the third was the need to maximise in an effective way the gathering of tax. One of the undertakings that this Government has given is to bring about the reduction of marginal rates with respect to income tax. That proposal is to come into effect on a two-phased basis. Another undertaking was to amend other areas of taxation, and this debate is about those areas. In talking specifically on some of the issues in this debate, I wish to address the question of negative gearing that other members have spoken about. Coextensive with that is the question of the depreciation allowance on residential property. I also wish to talk about the Australian Sports Aid Foundation. Honourable members will be aware that in this legislation quite a significant change has been allowed with regard to the Foundation. Negative gearing is covered under proposed new sub-division G in proposed new sections 82kzc, 82kzh and 82kzj. In a sense, this legislation sets out to abolish negative gearing. Negative gearing applies in particular where interest on borrowings used to finance rental property investments exceeds net rental income from those investments. Under previous arrangements, a taxpayer was able to set off that excess against income from other sources and thereby shelter that income from tax. In effect, taxpayers were subsidising that negative gearing arrangement or that tax shelter. This legislation seeks to do away with that. I should point out that there has been some concern in the community about the level of construction activity arising from changes in the negative gearing arrangement, consistent also with higher interest rates. That has been a concern of this Government. This, therefore, leads me to the next point, which is the question of the depreciation allowance. This legislation allows for a depreciation allowance of 4 per cent on new residential investment. It seems to me that we ought to be looking seriously at increasing that depreciation allowance to 8 per cent to give further stimulus to private sector rental accommodation construction. I believe that we ought to be addressing that issue. Clearly, what we cannot be about in this place is allowing tax shelters to be the structure for economic activity. That was the arrangement under the previous Government; tax shelters existed, and the previous Government was not addressing that problem. This Government has addressed the question of the tax shelter, but we should also be mindful that it is important that we look at the economic impact of the proposal. At this stage, the summary of the Master Builders Federation of Australia for May of 1986 says that the level of construction and cottage activity is quite satisfactory. Commercial and private sector activity is quite satisfactory in this country. Perhaps we ought to have an ongoing review of the level of the depreciation allowance, because I think that is a matter of concern. With the abolition of the free lunches, if you like, much was made at the time of how that move would destroy the hospitality industry. People came to Canberra to tell us what a terrible thing that was. In fact, the Opposition took up this concern about free lunches. I was almost moved by its anxiety that its rights and those of others to a free lunch should be preserved. We have done away with that. Interestingly, employment in the hospitality industry has grown by some 19,000. So all the gloom and doom really did not come to fruition. That industry has performed very effectively. At that time what we were saying and what the Treasurer (Mr Keating) was saying very strongly was that an industry cannot be allowed to operate permanently on the basis of a tax shelter. We were saying: `Let us get the industry operating on a proper economic basis. Let us look at the proper level of demand, the generation of investment and the proper conduct of that industry'. That has happened in the hospitality industry. We have seen the elimination of a tax shelter and a growth in employment. I suspect that the same principle could apply to the issue that we are addressing in this legislation. At this point let me move to the question of cottage construction. It is a concern of mine that we ought to be looking at restoring the value of the first home owners scheme if we want improvements in the housing industry. Honourable members will be aware that the lump sum was reduced last year from $7,000 to $6,000. I believe it should be restored to $7,000 and that the income limits on the first home owners scheme should again be indexed so that it will be restored to its previous effective level and performance. That would help offset any declines that have occurred in activity in private cottage construction. The Government should look seriously at this time at restoring the first home owners scheme lump sum grant to $7,000 and at reindexing the income limits. That is an important issue for us to address in order to maintain adequate economic activity. I turn to the proposed amendment to section 78 of the principal Act, which relates to the Australian Sports Aid Foundation. I congratulate the Minister for Sport, Recreation and Tourism (Mr John Brown) on his persistence and determination in getting this proposal in as part of the taxation arrangements in this country. It means that contributions or gifts to sporting bodies in this country will now be eligible for tax deductibility. That is very important, because it will bring about the proper funding of the infrastructure of sport in this country. It is my very strong view that sport is a major part of the conduct of this society. In the past, people in the private sector have shown significant generosity, particularly in Western Australia, where there has been great support from the private sector for sporting activities. In future, these sporting contributions to the Sports Aid Found- ation will be tax deductible. That is a significant and very important change. We now have to put in place in the sports area the proper arrangements with regard to tax averaging for professional sports men and women. With the Sports Aid Foundation providing tax deductibility for contributions to sporting bodies and with tax averaging being allowed for the participants in sport, I believe that we will then have laid in place the foundations for a very effective sporting industry in this country. That is something that many people in the community are interested in, be they participants or spectators. This Government is showing its determination in this regard. I commend the Minister for Sport, Recreation and Tourism and the Treasurer for being sensible enough to introduce in an amendment to section 78 this arrangement for the Sports Aid Foundation. I turn to another matter, and that is the question of sales tax levying. It is a concern of mine, and it has been raised with me by some small business people, that under the current arrangements of taxation those people have difficulties when someone comes to purchase parts from them. Let us take as an example the business called Small Motors and Agencies, which operates in the suburb of Morley in Perth. The proprietor has told me that he has some difficulty with the current arrangements. If someone comes in and claims that he is employed in the building industry, a certain level of sales tax will be levied on the parts that are sold to that person. If he claims that his activity is in the primary sector, no sales tax is levied. The difficulty that this business person faces is that, if the customer turns out not to be employed in either of those industries, he, the retailer of that commodity, becomes liable for the full amount of sales tax and any penalties. That arrangement puts enormous pressure on the small businessman and leaves him exposed to what may be a fraudulent declaration by the person purchasing the parts. That seems to me to be an issue that we must address in this place-that is, the liability of the proprietor who may find himself liable to pay tax when the Taxation Commissioner does not seek to collect that tax from the person who made the fraudulent declaration by claiming that he was employed either in the building industry or in primary production where there are lower levels of tax. My concern is that in this case the proprietor of Small Motors, Mr Farrelly, has the difficulty of not knowing whether a declaration is being made accurately. It is time for me to sum up my remarks on this legislation. As I said at the outset, this Government is very clearly about major tax reform. The important thing is that this Government has committed itself to tax reform and is achieving it. Opposition members who may bemoan the state of affairs would do well to recognise that this Government has been able to put in place tax reform which they were not able to put in place when they were in government. There are many possible reasons for that but fundamentally the reason is that they could not do it. This Government is about introducing tax reform and that tax reform is far reaching. This is a very important point because it will result in a far healthier and more competitive economy and a more effective tax system. People who participate in this debate should recognise that we are repairing a system which over time has been allowed to get substantially out of date and ineffective. The previous Government recognised that fact only at the last and when it was far too late to introduce that reform. I am pleased to participate in the debate and I commend the Bill to the House. Dr WATSON(Forde)(11.38) —In rising to debate the Taxation Laws Amendment Bill 1986, I begin by referring to the fact that the Government has decided to guillotine this legislation and thus limit the time available for speakers. There is no way that any honourable member can discuss in detail the aspects of the Bill that interest him or her. Like the honourable member for Gippsland (Mr McGauran), I would have liked to speak in depth on the extension of powers to the Commissioner of Taxation. However, I will limit my remarks to the area of investment and particularly the negative gearing proposal. The honourable member for Stirling (Mr Ronald Edwards) and earlier the honourable member for Charlton (Mr Robert Brown) intimated that essentially this Bill was to correct some area of taxation evasion or avoidance. The fact is that people arrange their affairs and invest in various businesses. In some areas in which they invest now the interest will be fully tax deductible and in some other areas, particularly in rental property, the interest on their investment will no longer necessarily be fully tax deductible. This introduces a bias within the capital market system. This Bill is not about clearing up some area of tax evasion; in fact it introduces a further distortion in capital resource allocation within our economy. Investment in business and in our economy is a serious problem which faces this country. In the Australian of Monday, 5 May, David Potts started his article by saying: When Simon Crean complains business is not investing, it is time to start worrying. When the entire economics profession agrees with him, then heaven help Australia. The problem facing Australia is one of lack of investment. This is shown in numerous figures, particularly in the Australia and New Zealand Banking Group Ltd business indicators for September 1985, the latest ones I have, which show a continuing fall in private business investment in Australia. Just a few years ago-in the last full year of the last Liberal Government-business investment in Australia was something like 13 per cent of our gross domestic product. In 1984-85 it was down to about 8.8 per cent, a fall of some 4 per cent of gross domestic product or something like a 33 1/3 per cent fall in business investment. The Business Council of Australia has similar figures which show that the rate of growth in net capital accumulation in Australia has fallen as far as industries are concerned, and for manufacturing it is not that the rate of growth has fallen but that the absolute growth has fallen. Perhaps this is nowhere better indicated than in the Government's own publication, the Economic Planning Advisory Council Statement No. 10, which highlights the importance of investment and the factors which affect investment in any particular economy. Investment, by its very nature, is about long term production commitments by business. They are influenced by a variety of events. I wish to quote the EPAC statement. It is a lengthy quote but I think it is worth reading it into the record. It says on page 9: In broad terms business decisions to invest are influenced by comparisons between the expected rate of return on capital and the opportunity costs of the funds used. For an investment in new capital to proceed, the expected return should exceed the yield that can be obtained on low risk financial assets by a margin sufficient to cover depreciation and risk. This is important for the debate. It goes on to say: The taxation considerations must also be taken into account in the calculation. Factors influencing the expected rate of return include the level of existing capacity utilisation, together with the anticipated strength in demand and the outlook for unit costs, particularly for labour, and international competitiveness. Factors affecting the opportunity costs of such investment include the level of interest rates and risk associated with uncertainty about future prospects. If the expected rate of return is high in relation to these costs the investment outlook will be more optimistic. In a sense the expected rate of return on capital is compared to a hurdle that must be exceeded if expanding the existing size of the capital stock is to appear an attractive option. That is what we are discussing in this Bill and associated taxation Bills today, tomorrow and during the next few weeks when I presume further Bills will be introduced by the Treasurer (Mr Keating). The central concern is the question of the attractiveness of investment in Australia. The EPAC statement identifies a number of factors, including interest rates. We already know that interest rates in Australia are at record levels compared with our overseas competitors. It identifies labour, and of course in the rental area, the negative gearing area, we are looking at labour for maintenance and things like that. Compared with our competitors overseas we look fairly poorly in terms of the rate of increase in unit labour costs. It also identifies taxation. This is important in investment because when people look to investments they look to after-tax returns. The negative gearing and, I am sure, the capital gains tax, when it comes in, will effectively reduce the after-tax returns to the investor. The effects are already showing of both the high interest rates and the proposed capital gains tax and negative gearing. The honourable member for Deakin (Mr Beale) earlier drew the House's attention to the fall in the number of housing starts throughout Australia. He also drew attention to the fall in home interest loans by savings banks and permanent building societies and to the large rise in rents in metropolitan areas of Australia. I can identify particularly the large rise that has taken place in rentals in Brisbane, where they have gone up by 13 per cent in the past year. In Sydney, of course, they have gone up some 25 per cent. These rates are even significantly higher than our rate of inflation. Of course, the Treasurer would argue, and some of his colleagues have agreed, that this legislation has been introduced to provide the foundation for future tax relief and to assist appropriate investment in Australia. I have already partly addressed that issue but I will now refer to it in a little more detail. First of all, there is no way that negative gearing is necessary for tax reform purposes. Professor Michael Porter and some of his colleagues at the Centre of Policy Studies at Monash University have already indicated that in 1987-88 when the new 24c, 29c, 40c and 49c rate scale is fully operational, about half of all taxpayers will face marginal rates of 40 per cent or more and that, unless further action is taken, the number will increase thereafter by around 4 per cent of taxpayers annually. So whether or not we go ahead with this tax reform, some further tax reform will be needed later on in the 1980s. In actual fact, of course, most of the reduction in marginal rates in the tax reform announced by the Treasurer will be paid for by fiscal drag. The Australian Family Association has indicated to the Government that the average family will be worse off under these reforms. The financial impact statement in the second reading speech of the Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer (Mr Hurford) indicates that the negative gearing proposal will provide something like only $55m in 1986-87, rising to $100m in 1987-88 when, of course, the full tax reform is supposed to take effect. Those figures are not changed very much even if one takes off the very minor amounts for depreciation of some $2m and $7m. Even if one takes into account the rather significant amounts involved when one combines these savings with expected revenue gain from the imposition of fringe benefits, which will amount to some $330m in 1986-87 and $540m in 1987-88-given the magnitude of the tax cuts that the Treasurer has said we are going to get, by dropping to 55c and 49c at the top marginal rate, the argument that this revenue is required for taxation relief is simply not sustainable. Mr Cobb —It is a fraud. Dr WATSON —Of course it is a fraud. In actual fact the tax relief is being paid for by fiscal drag. Secondly, the Treasurer will argue that this legislation has been introduced supposedly to help encourage appropriate kinds of investment. For somebody who sometimes gets up and derides the Opposition for not believing in markets, it is extremely interesting to learn that here we have the Treasurer interfering with the efficiency of the capital market in a very direct way. I have mentioned this earlier. In actual fact altering the ability of investors fully to take into account the interest they pay on their investments in this area biases investment away from rental property into other areas. The effect of this will be one of two things. Effectively, rental rates will simply have to rise if investors come into this area. Therefore, the people who will end up bearing the cost of negative gearing will be exactly the people whom the Labor Party supposedly represents. It will be the people, who for various reasons cannot afford to get into their own houses, who will have to rent. Mr Cowan —It affects their own people. Dr WATSON —It affects their own people. This is, as some of my colleagues said earlier, essentially a fraud on the Australian public. In actual fact, of course, the Treasurer is prepared to introduce capital market inefficiency through the taxation system simply for some ideological purpose. As I said earlier, I would like to address a number of other issues contained in the legis- lation. However, because the amount of time given to us for debate is subject to the guillotine I will have to make way for my colleagues. In summary, I think it should be said that the arguments the Treasurer has been using in this place to justify this tax reform simply do not stand up to any detailed analysis. Neither do the arguments previously given by the honourable member for Charlton and the honour- able member for Stirling. I am sure that the arguments of their colleagues, who will repeat the same kind of trash in the future, will not stand up either. Mr DUBOIS(St George)(11.51) —I support the Government's Taxation Laws Amendment Bill 1986 and the Taxation (Interest on Underpayments) Bill 1986 which are a further step in the tax reform measures introduced to repair a system on the brink of collapse. This Government came to office with a mandate from the Australian people to build a better and fairer society. This meant putting an end to the in- equalities and injustices that flourished under the previous Government. It meant that tax cheats were not to prosper and that all citizens should meet their tax obligations. It seems that those who swindled the public purse for so long are the ones squealing the loudest today. The majority of Australians welcome this Government's tax reform measures because it means that they will no longer be subsidising the tax bludgers-those who are able to manipulate their financial affairs in such a way as to pay minimal, if any, tax. The former Liberal- National Party Government that presided over the disintegration of the tax system was consigned to the scrap heap for its neglect. Fairness and equity are all about everyone paying their fair share and receiving their fair share. The Government's high priority was to restore prosperity. To this end it established the framework for economic recovery. Economic growth has seen a dramatic increase in jobs with people leaving the dole queues and getting back to work. This growth will also give us the means to increase assistance to the needy. At the same time, our commitment to fairness and equity demanded major reforms of the tax system. The two Bills before the House today are part of the greatest tax reform this country has ever seen. One area in which reform was long overdue was income tax rates. The tax burden fell disproportionately on lower and middle income earners. Those who should have been paying the highest rate at 60c in the dollar came to the conclusion that the tax rate was punitive. They just decided to walk away from paying taxes and many ways were available to allow them to do this. The wage slaves, who were locked into the pay as you earn system, were footing the tax bill. Those avenues to avoid and evade tax, those shelters and those sharp schemes had to be closed. The so-called negative gearing arrangements that allowed high income earners to offload their tax liabilities on to others had to be curtailed. These schemes had contributed to increased prices for homes to the detriment of ordinary home buyers. This legislation will put an end to those negatively geared investments that did so much to distort the real estate market. The legislation also provides for a depreciation allowance of 4 per cent per annum for new buildings for rental accommodation. This measure will help to stimulate the building industry and will lead to an increase in new rental accommodation. Another blatant rort this Government has stopped is the abuse of entertainment expenses. If ever there was a dodge, this was it. So-called business lunches for the expense account set invariably took place for the benefit and enjoyment of the individual, his family and friends. Why waste a lunch or dinner on a genuine business client when one could have it with a few friends who would in turn reciprocate one's hospitality? For those on expense accounts it was cheaper to eat at the most expensive restaurant in town than it was to have baked beans on toast at home. I must say that I was amazed at the number of executives who took their daughters to lunch. I presume they were their daughters because these men were certainly old enough to be their fathers. Their companies paid the bill and got a subsidy from the Commission of Taxation. Needless to say, the average worker did not get a share of this lurk. He had to be satisfied with his brown bag lunch and his taxes were used to fund it all. I commend the Treasurer (Mr Keating) for this particular reform because it has resulted in restaurant prices coming down. Despite the gloomy future predicted by some, those restaurants serving decent food at a reasonable price are today still in business. Now their customers have to pay for their food and are demanding value. Gone are the days when prices on the menu meant nothing. No wonder the notion of the free lunch among the born to rule people was so rife. Other features of these Bills such as the system of self-assessment and the assignment of rights to future income have been adequately covered by other speakers. I want just to mention another area of tax avoidance or, to use a more polite term, tax minimisation. Lurks which this Government will stop include various schemes whereby some employees facing the dreaded 60c in the dollar tax rate would acquire cars. Interest free loans for fixed amounts were given to employees to purchase cars. These loans were repayable by monthly instalments over a certain period, usually four years. The employee was able to claim depreciation on the car and was paid this amount by the employer. The depreciation allowance was exactly the same amount as the loan repayment instalment. Therefore, the loan was repaid at no cost to the employee, but again with a little help from the Taxation Commissioner. At the end of the loan period the bill of sale was cleared and title to the car passed to the employee. Another loan was then given for the employee to buy a new car. If the old car was traded in or sold it realised a tax free gain to the employee. If the loan was greater than the changeover price then the balance would be given to the employee as a non-taxable benefit. The higher the employee was up the corporate ladder, the higher the income and the higher the loan amount; so instead of just a Falcon or a Commodore the employee could get into an LTD, a Volvo or a BMW to drive from home to his undercover parking spot at the office. No public transport for these people! Meanwhile, the stamp duty, annual registration, insurance, and running costs were all reimbursed in full. These were typical of the tax avoidance schemes that flourished under the previous Government. This Government is committed to reforming the tax system. We have taken it out of the too hard basket and put it high on our agenda. Our fundamental objectives are to reduce marginal tax rates, stop tax avoidance and evasion and restore fairness to the system. Those who have not been a party to these sharp practices will see that the tax burden will be spread more evenly in future. We do not shrink from our responsibilities. The tough decisions have to be made for our future benefit. All Australians will benefit from the tax reforms that are part of this Government's responsible economic management. I hope that the Australian Democrats will keep their promise to pass the Government's tax reforms so that tax cuts can be implemented as planned. I commend the Bills to the House and I commend the Treasurer for introducing them. Mr WHITE(McPherson)(11.58) —I ask whether it is any wonder, when one hears the attitudes expressed in regard to business by the last speaker, the honourable member for St George (Mr Dubois), and some honourable members from that side of the House who spoke preceding him, that Mr Kelty complains that there has been a strike of capital in this country. The reason that there is a strike of capital is that honourable members opposite are hounding people out of business with their stupid attitudes that will gain them nothing and which will run down the economy of this country. That is just a passing swipe, I must say. However, I wish in particular to address my remarks to clause 10 of the Taxation Laws Amendment Bill which relates to the establishment of the Australian Sports Aid Foundation. In just three lines clause 10 will amend section 78 of the Income Tax Assessment Act to allow donations to be made to the Sports Aid Foundation, which was established under the Australian Sports Commission legislation in May last year. All that the clause does in its simple amendment to the principal Act is to add the Sports Aid Foundation to a long list of other organisations included in section 78 of the Act. In fact, the Sports Aid Foundation becomes No. 84 in this long list of organisations able to receive tax deductible donations. I am sure that when one looks at this long list one will see that most of the organisations are justifiably included. There is no doubt in my mind that the addition of the Sports Aid Foundation to that list is certainly justified. Some of the other organisations on the list include the Queen Elizabeth the Second Coronation Gift Fund, the Australian Administrative Staff College, the Sydney Opera House Appeal Fund, the Industrial Design Council of Australia, the Productivity Promotion Council of Australia, the Australian Institute of International Affairs, the Herbert Vere Evatt Memorial Foundation Incorporated-I am not quite sure what that is all about-and the residents of the Falkland Islands. There are more, but in particular I refer to the Australian Elizabethan Theatre Trust to which the operations of the Sports Aid Foundation can be compared once it is up and running. While there are differences of opinion as to the value of the operations of the Sports Aid Foundation I think that, on balance, when it is operating most people in the sporting world-certainly this is my view-will feel that the Foundation is worth a try providing that some guarantees are given by the Government as to how it operates. Certainly the idea of a sports aid foundation has been proposed by members on this side of the House from time to time over recent years. However, I want to give a warning that the establishment of the Foundation is not a panacea for the problems that all sporting organisations have in terms of lack of capital. We do not know how much will come through this organisation. It is a warning to national sporting organisations that they must continue in their independent role of raising money for themselves. However, while there is not a great deal of argument about the Sports Aid Foundation as an institution there is quite a deal of argument about how it will operate. One of the first things about which I want to take the Government to task, and, in particular, the Minister for Sport, Recreation and Tourism (Mr John Brown), is the establishment of yet another board under his jurisdiction. He is a great man for establishing boards. It gives him a sense of patronage and power to pat someone on the back and say: `Come and join me and sit on this board'. I do not know who is on the board of the Australian Sports Aid Foundation-the membership has not been made public. Certainly I am not in any way critical of the people who will be on it. We have to ask why we have a continual proliferation of boards in the sporting world when the Australian Sports Commission was set up last year with a board of some 20 people quite capable of running the Sports Aid Foundation, under whose jurisdiction the proposed sports aid foundation will reside anyway. There was no need to establish yet another board to run another organisation. As I have briefly explained, the Minister is slowly but surely extending government patronage in the sporting area-places in which government patronage is not required. I warn national sporting organisations of what is happening, if they are not already aware of it. I warn them of the number of boards which have been established to influence sporting organisations which should take great pride in their independence. I hope that such organisations take heed of this warning and do not succumb to this insidious influence and that they do not become totally dependent on government handouts. While we support the Sports Aid Foundation we do want from the Government certain guarantees regarding its operation. We will be moving an amendment to clause 10 of the Bill in the Committee debate. I will read that amendment now in case the Committee stage of the debate is curtailed, which is possible under the rules governing this debate. The amendment states: Clause 10, page 3, omit proposed sub-paragraph 78 (1) (a) (lxxxiv), substitute the following sub-paragraph: ``; (lxxxiv) the Australian Sports Aid Foundation, when made for the purposes of the Foundation or for the purposes of a nominated sporting organisation carried on otherwise than for the purposes of profit or gain to the individual members of that organisation to which the Foundation provides the money or the property,''. In addition to moving that amendment in the Committee stage, we also seek other guarantees from the Government because we simply do not trust the Government to carry out what the Minister and others have told me they intend to do. There has been too much weaving and dodging on this issue. If the response from the Government is not satisfactory, we reserve our right, when this Bill reaches the Senate, to take another look at it and, if necessary, oppose this clause. The guarantees we are seeking are these: Firstly, that all donations to the Foundation will go to those sporting clubs and organisations which the donor nominates, provided they are bona fide organisations. There is to be no arbitrary decision making by the Foundation when a donor nominates where the donation will go. Secondly, there will be no deductions from donations for handling charges as the money passes through the Sports Aid Foundation. Thirdly, there will be no interference with the existing system of direct sponsorships between sponsors and sporting organisations, that is those donations and sponsorships which do not involve the Foundation. We do not want to see the present system interfered with. The present system is that sponsors give their money directly to an organisation which they choose. We do not want to see any enforcement of this sporting money being channelled through the Sports Aid Foundation if the donors do not wish that to be done. The fourth guarantee we seek is that the money donated to the Foundation, which has no specified recipient at the time it is given, will be used to benefit sports which at present receive little or no support. The purpose of seeking that guarantee is to make sure that the rich sporting organisations do not simply get richer because we have established a Sports Aid Foundation. I am very pleased to see that the Chairman of the Australian Sports Commission and Chairman of the Sports Aid Foundation, has already said that he is very much aware of this problem and that money will be used to benefit those sports which are struggling. I think it is a disgrace that I will have to move that amendment in the Committee stage and seek those guarantees now. I do so because there is no guarantee that we will have a Committee stage debate on this Bill. That leads me to the point of delays. This Bill, or parts of it, has been delayed for some nine months. The establishment of tax deductions for the Sports Aid Foundation was first proposed in April 1985. One of the newspapers that ran the announcement by the Minister at that time was the Sydney Daily Telegraph on 27 April last year, which quoted the Minister as saying: Next month-- presumably he meant May 1985- the legislation will go through . . . Twelve months ago the legislation for the Sports Aid Foundation was promised. Twelve months later we get the amendment to the tax Act and we still do not have any guidelines as to how the Sports Aid Foundation will operate. Is it any wonder that I seek during this debate to have some Government guarantees put in place so that we know how it will operate? It is entirely unsatsifactory that we must take this Government on trust as to how the Foundation will operate, when it was announced 12 months ago that the legislation would go through. I do not know what the problem is. I do not know why it takes 12 months to put through the legislation. I do not know why we still do not have in place any guidelines. But, if the Government is asking the sporting world and us to take it on trust, I say that we will not do so. That is why we seek those guarantees. One of the big concerns regarding the Sports Aid Foundation is that it will interfere with the existing system of sponsorships. I want the Government to guarantee and specify quite clearly that this will not happen, either now or further down the track. We want to make sure that the Treasurer (Mr Keating) does not bear down on people who now make their sponsorships direct to a sporting organisation-in return they receive some advertising rights-by saying: `We will look very carefully at the tax deductibility of your advertising for marketing purposes unless it goes through the Sports Aid Foundation'. That is very much a concern in the sporting world, which now gets direct sponsorship, and rightly so. We do not want to see any interference with that system. We want the Sports Aid Foundation to be set up in addition to the existing system. That is a real concern on our part. It is a concern not only because it might direct money away from existing recipients, but also, if that were to happen, and this money started to be directed through the Sports Aid Foundation, there will be an increasing amount of government control and government direction in the sporting world. It would, to some degree, control the purse strings. That is not something that we on this side of the House want to see. In the interest of brevity, I will postpone some of the other remarks that I intended to make about this very important Foundation until the Committee stage in the hope that we have a Committee stage debate. Let me reiterate that the purpose and objectives of the Sports Aid Foundation are something that we support, in an attempt to get more private money into the sporting world. That objective is good. It is the operation of the Sports Aid Foundation that concerns us. We want those guarantees from the Government or we will take another good, hard look at that part of the legislation when it reaches the other place. Mr MARTIN(Macarthur)(12.12) —The Taxation Laws Amendment Bill 1986 and the Taxation (Interest on Underpayments) Bill 1986 provide a number of important changes to the tax system to which this Government was committed, following our successful re-election in 1984. The Taxation Laws Amendment Bill deals with the so-called negative gearing provisions that have operated for a number of years in respect of rental property investments. It also provides for a depreciation allowance of 4 per cent per annum in respect of residential income-producing buildings. These measures are complementary in a number of ways. The Bill also contains a number of amendments, particularly in respect of the last item to which the honourable member for McPherson (Mr White) referred, that is, the authorising of deductions for gifts made to the Australian Sports Aid Foundation. I would like, in the time allotted to me, to look at those matters in a bit more detail because, after all, they are in essence what the Bill is about. Some comment was made and criticism was directed at the Government that we are anti-business, that we have got ourselves into some philosophical bind regarding these Bills and the measures contained in them. I totally reject that criticism because, quite clearly, this Government is concerned with efficiency and effectiveness in the business community and also, of course, protecting average citizens from the tax rorts and ramps that have been imposed on them by a series of governments, largely those composed of parties on the other side of the House. Negative gearing demonstrates typically how those ramps and rorts in the system have operated. The Government has taken the view that the general taxpaying community should not be obliged effectively to subsidise the acquisition of investments by a particular group of taxpayers in this way. How has it operated in the past? Simply, those people with the capacity to pay, those people who have been able to acquire income-doctors, lawyers and so on-were able to invest in property and to claim as depreciation, for taxation purposes, the amount of outgoings that have flowed from that. Quite clearly, this disadvantages other people in the community. Again, it is a classic tax rort. People have walked around the system, as the Treasurer (Mr Keating) has said on a number of occasions. This particular Bill endeavours to get away from that. But what it does not seek to do, by the supplementary implementation of a 4 per cent depreciation, is to say that we should stifle residential property market development. In particular we are talking about residential property for those people who wish to rent. To take examples from my own electorate, I cannot recall a period in the history of Wollongong where rental property development has boomed as much as it has in the last two years. That has come immediately following one of the worst recessions and periods in Illawarra's history in living memory. Mr Saunderson —Caused by them. Mr MARTIN —As my colleague the honourable member for Aston remarks, it was in fact caused largely by policies of the former Government. To return to this point, it has been quoted and stated that these tax reforms, particularly this matter of negative gearing, are going to cause a downturn in rental accommodation, investment and so on. That is patent nonsense. It is nonsense because legitimate investors will continue to invest in those areas in which they get a return for their money. This Government is not against that. This Government totally rejects that as a criticism. One can refer to statistics that are available. I seek leave to incorporate in Hansard a table. Leave granted. The table reads as follows- QUARTERLY PRIVATE RENTAL MARKET VACANCY RATES (%) (average of quarter) Sydney Melbourne Brisbane Adelaide Perth Canberra 1981 March... 2.4 1.2 1.6 1.8 3.3 1.6 June... 2.5 1.2 1.0 1.6 3.6 1.5 September... 2.3 1.2 0.8 1.8 3.3 2.4 December... 1.7 1.1 1.0 1.0 2.3 4.2 1982 March... 1.7 1.0 0.9 1.0 2.6 1.9 June... 2.0 1.0 0.5 0.9 2.7 1.7 September... 3.2 1.4 0.8 1.3 4.3 2.1 December... 3.5 1.3 1.1 1.1 4.4 1.3 1983 March... 2.6 1.3 2.0 1.4 2.9 0.4 June... 3.2 1.4 2.8 1.5 3.4 0.8 September... 2.7 1.3 3.6 1.6 2.8 0.4 December... 2.8 1.4 3.8 1.8 2.4 0.3 1984 March... 2.4 1.6 4.0 1.4 1.8 0.3 June... 2.0 2.0 5.2 2.3 1.9 0.9 September... 1.8 2.0 4.4 2.2 2.8 0.6 December... 1.4 2.3 4.9 2.3 2.3 0.6 1985 March... 1.1 1.9 3.5 2.1 2.0 0.5 June... 1.1 1.9 3.7 2.9 2.5 1.6 September... 1.4 2.0 3.1 3.0 1.8 2.0 December... 1.1 2.2 4.2 3.2 1.5 2.0 1986 March... 0.9 1.8 4.0 2.9 0.8 2.3 Mr MARTIN —The table shows quarterly private rental market vacancy rates as a percentage averaged over a quarter. It indicates that there has been some downturn in Sydney and, in fact, in Perth, but generally there has been a constant rate of development in that private rental market vacancy rate. That totally refutes the claims by honourable members opposite that there is a massive decline in investment in these rental properties. It is just patent nonsense. Again, I quickly refer to examples from the Wollongong area. Places such as the Smiths Hill area and Thirroul are experiencing redevelopment at the moment and it is not private accommodation; it is rental accommodation. There is some from the public sector but the large percentage of it in fact comes from the private market because there are advantages there. As circumstances change and economic conditions vary, such as the uplifting again of the steel industry on the south coast and the fact that the electrification of the rail link between Sydney and Wollongong has been completed, those areas of the south coast become attractive for people to live in. Therefore, they create a demand for accommodation. It is not all for private, single family dwellings; rather it is for rental accommodation. That demand is there at the moment and has been reflected in an upsurge in investment and development of rental accommodation. The 4 per cent depreciation which this Government proposes in this Bill gives that legitimate incentive to legitimate investors. The Government is not anti-business. It is endeavouring to provide these incentives for those people genuinely interested in investment, not those who want to walk around the tax system and perpetuate all of the various rorts put in here by honourable members opposite and condoned by honourable members opposite and by certain sections of the market-place. So, quite clearly, the tax shelters and the avoidance and evasion are to be stamped out and this Bill goes part of the way to so doing. It is interesting that we should be talking about the taxation system today and about various ways in which people over the years have tried to get out of their fair share. We on this side are vitally concerned with equity and seeing that everybody pays his fair share and that the tax system is not rorted in any way. I was interested to see a double page spread in today's Sydney Morning Herald entitled `Learn how to make your money grow this weekend'. I have no problems with that whatsoever. I see that the Honourable J. J. Carlton, the honourable member for Mackellar, who is shown here as the shadow Federal Treasurer, has been asked to come along and kick off this personal investment money show at Centrepoint in Sydney over the weekend of 9, 10 and 11 May. If one looks at the sorts of topics canvassed by these groups, once again one sees clearly the perpetuation of the belief that there have to be ways away from and around legitimate tax revenue gathering mechanisms open to a government. One sees, for example, that on Friday David R. Bleakley and Associates will present something entitled `How to use annuities and ADFs to cut tax'. One sees that there is going to be a series of seminars on property, how capital gains tax affects property-that is great, and I hope that it is clearly demonstrated how it works-and the pros and cons of being a landlord. I hope this legislation will be taken into consideration and these groups will clearly explain the benefits through the 4 per cent depreciation for genuine investors. One sees that there is something to be dealt with on share trusts under the new tax package. Then one sees under the heading `You and your tax' that on Sunday, 11 May, there will be a series of speakers talking about tax planning and the wages package. That is great, tremendous, but then here we get it, `What tax shelters are still available', and, `What the new tax legislation means to you'. Once again, we see these people whom those opposite defend wanting to look at how to walk around the tax system and get away from it. I see that they will probably go away from negative gearing and think of some other great ways of rorting the system so that they do not pay their fair share and the poor bunnies on the pay as you earn system will be the ones who will be lumbered with it again. I reiterate what I said at the outset: This Government is not anti-business. It encourages legitimate investments and does so in a variety of ways, as I have clearly demonstrated here. We have also gone on to stamp out the negative aspects of the taxation system through the implementation of the various parts of the Bills before us today. Tomorrow we will go on to debate another section of the tax system-that is, the fringe benefits tax-which is again clearly aimed at stamping out this disreputable practice of trying to get away from paying one's fair share and contributing to the growth of this country. I did wish to make some comments in response to the honourable member for McPherson (Mr White) in relation to the Australian Sports Aid Foundation. Suffice it to say that I share with the Government the belief that it is about time something was implemented whereby deductions for legitimate investments in sport and doing something about improving the sporting prowess of our great country are recognised. This Bill goes some of the way down that line to including such recognition. I commend the Bills to the House. Mr COWAN(Lyne)(12.24) —I would like to say a word or so in comment on the matters raised by the honourable member for Macarthur (Mr Martin). I can see his point. He always makes a reasonable speech. I have great respect for the honourable member for Macarthur. He raised a few matters that deserve comment. First, from the viewpoint of investment by members of the general public in the building industry today, I can appreciate that they will continue to do this because the observation that I have made within the community today is that people are very wary to invest their money, even on high interest rates, because they feel that there may be a drop within the economy, so they still come back to real estate. They will continue to do that, but I will proceed to observe throughout my speech the fact that I think that there must be a dropping off in this area. I appreciate that there will be seminars in Sydney and elsewhere around Australia because, once the Parliament passes the law, the people of Australia have to abide by that particular law. Therefore, they will seek advice as to what they ought to do so far as investment is concerned. I hope that more of these will be held. People will look for tax shelters-I will; honourable members will and everybody in the community will. No government is ever going to do away with tax avoidance. We have to appreciate that. In fact, if we were realistic we would all agree that we need a new, more reasonable and acceptable system of taxation. We have to look at indirect taxation which covers every person within the community because the more the Government starts to play around with different facets of the taxation system-I am sure the honourable member for Macarthur will agree with me-the more anomalies there will be somewhere along the line. I am not an expert on taxation. Many of us in the chamber are from different fields of life and from different occupations. I am only an ordinary person, but I have a strong gut feeling that there is something wrong with the economy of Australia and with our taxation system today. We should not have such a confusing system; we should have a fair system that the ordinary Australian will understand. The system that we have before us today, even with all the amendments before the House, still leads to confusion for the general public. Accountants in my electorate have been saying to me for months: `Bruce, what are we going to do? We know there are going to be amendments to the fringe benefits, negative gearing and other features of taxation, but we know only what the Treasurer has said'. We all agree that the legislation that comes before the Parliament can be amended in the Senate. What advice are chartered accountants, lawyers and tax agents going to give to their clients who want to attend to their planning over a period? I think it has been most unfair of the Treasurer (Mr Keating) and the Government not to have brought the legislation in before, because most of it dates back to a certain period. Negative gearing, which we are talking about today, dates back to 17 July 1985. Why has the legislation not come into the Parliament before this? Why have people not known exactly how they can plan their future with respect to their investments, assets and the finance that they may have? In looking at tax today, our minds have to go back, as the honourable member for Mackellar (Mr Carlton) said earlier today, to the Tax Summit held by the Government. I thought the Treasurer put up some reasonable suggestions on taxation. We know that they were thwarted by the Prime Minister (Mr Hawke) and the Australian Council of Trade Unions. That is why bits and pieces have been selected from the various suggested reforms and put in the legislation before the House. We know that the Government is committed over the years ahead to certain expenditure, particularly with respect to our social welfare system. I am not going to say that the Government should not spend it there, always provided it is spent in the proper direction; but it has a policy, under pressure from the Left, that will direct it on certain payments under the welfare system over a period. Thus, taxation has to be raised. Whether it is by direct taxation or indirect taxation, it has to be raised from within the community. This is all being done-I think even the honourable member for Lowe (Mr Maher) will agree with me on this matter-and it must be done in the face of an Australian economy that does not look very promising. Honourable members should look at the balance of payments within Australia; at the national debt, which is growing each day; at the high Budget deficit of the Government; and at interest rates and unemployment and inflation. Has this country the ability to come back? This is the important factor. Australia is in a bad situation compared with the rest of the world. It is in an uncompetitive situation. This country can come back only with the initiative of down to earth Australians. We have to provide people with that initiative and leave the road open to them so that they can use their personal initiative to go into business and other fields that will employ people, create work and be productive within the community. High taxation will knock the individual and will always take away his incentive. I agree entirely with the Treasurer that personal taxation, particularly to the payee, has to be reduced. I am sure that he will do that if the economy permits it. If that sort of taxation is to be reduced, the money has to come from somewhere else. The Taxation Laws Amendment Bill, before the Parliament today, explains very clearly where that money will come from. We must never forget that if ever this country had an opportunity to go ahead-we had it when the dollar was low-it could compete and sell throughout the markets of the world. Manufacturing industry has shown us that it has not taken advantage of that opportunity. I am concerned, as the honourable member for Gippsland (Mr McGauran) mentioned this morning, about the actual discretion that will be placed upon the Commissioner of Taxation. Within the legislation before the House today, I believe, there will be a lot of ifs and buts. We do not want ifs and buts in our system when people are earning money and having to pay taxation. Once again, where will our accountants and tax agents stand on these matters? They have to advise their clients. It will be up to the Deputy Commissioner of Taxation to decide how he interprets the legislation before the House. Mr McGauran —We want certainty and predictability. Mr COWAN —I think we want certainty and predictability, as the honourable member for Gippsland says. People will always cheat the system because they will be out to cheat the system. I do not blame them in the complex system we have today. I do not believe in taxation evasion in any way. I hope I have never done it myself. I think the average Australian does not try to do that. I will conclude by saying something about one of the pertinent points of the legislation before the House today; that is, the negative gearing aspect. I know that people have been sheltering behind the Act. I know that people have taken advantage of that. I know that they have been able to write losses off against other income. But we have to look at this from a practical point of view. One can never take away from any Australian the initiative I spoke about earlier, even though there might be a slight doubt in the tax system at the time. Let us look at the effect of that on the average Australian whom this Government purports to represent and who wants to rent a home. Rentals in my area have gone up tremendously. I live on the north coast of New South Wales where many people are coming to buy and build homes. There are other parts of Australia, including the metropolitan areas that the Government represents, where it should be encouraging the investor to build accommodation. I can tell honourable members that in New South Wales, Housing Commission lists are growing, as they are, I suggest, in every State in Australia. Governments can never supply housing. I trust that the attitude of the Government is that it has not got to do this. Housing is provided at a reasonable cost by the private investor-not the big man, but the little man. The little fellow who works for the local council and the fettler on the railway who may have a few dollars to spare invest that money in a couple of units in their home towns or the suburbs where they live and people are able to rent them. They compete in a competitive world. This is the important thing. If one is competitive in the market-place, one's rates will be reasonable. We must encourage every Australian who has a will to do something to provide facilities for his fellow man and give him the opportunity to do that. I believe that the legislation before the House, bridled with a capital gains tax of which nobody knows the effect, will have a result directly opposed to that which the Government hopes it will have. I appeal to the Government to consider the true reality of the market, the true reality of our young Australians who are marrying and want to rent a home and finally build a home at the interest rates that we have. Can anyone in this chamber or anyone in Australia find anywhere in the policies of this Government or in the initiatives of this legislation anything that encourages Australia's initiative or young people to be able to buy a home and to live the way that they would like to live. So I believe that the Government's philosophy in the things that it is expounding by way of this Bill before Parliament today is not in the interests of Australia, and I am sure that the time will come when that will be very clear to all people. Mr MAHER(Lowe) 12.36)-For many years the honourable member for Lyne (Mr Cowan) and I have been good friends. We served together in another parliament. However, I must say that I was disappointed with some of his remarks, particularly the basic statement that what he wanted in this legislation was certainty. What this legislation is all about is creating certainty for the investor, because one of the problems that bedevilled investors in the housing market was the decision by the Victorian Deputy Commissioner of Taxation to disallow negative gearing. It threw the investment market in New South Wales and in the rest of Australia into sheer panic when the Victorian Deputy Commissioner of Taxation decided on his own that in Victoria no allowance would be made for negative gearing during the year ended 30 June 1983. I had constituents coming to see me who were advised by their accountants and channelled into negative gearing. These people were in pandemonium and, in fact, one man broke down in my office because his whole scheme was in tatters and his savings threatened. He did not know what to do. Fortunately, I and I am sure many members of the Opposition and other members of the Government made representations. For a time there was uniformity and now there is certainty. The Government has announced what it is doing in relation to negative gearing. As the Treasurer (Mr Keating) said in his speech introducing this Bill, negative gearing is only hurting the ordinary families that the honourable member for Lyne was talking about, the families who want a home of their own. Those people who were overcapitalising were also out in the market place competing for the loans that are available from banks and building societies. The honourable member for Lyne made a number of other points that I should just touch on. Unfortunately, the honourable member for Lyne neglected to mention the trilogy, the commitment by the Prime Minister (Mr Hawke) at the time of the last election not to increase the percentage of taxes on the community. As inflation goes up, taxation goes up. However, there was a commitment that the Government would help the poor and there was a commitment that we would not do it by hitting the taxpayer for more taxes. It is not just the left wing, the centre left or anyone else: It is the Australian Labor Party which is committed to helping the poor. I look forward to more schemes to improve the lot of ordinary families, the ordinary working man or woman out in the community. The honourable member for Lyne unfortunately made what I thought were a few sad comments about our ability to come back as a nation. Australia has the ability to come back. If ever there was any country that is the lucky country, that is blessed with enormous potential, enormous resources and with people of great skill and capacity, it is Australia. The honourable member for Lyne talked about our bad situation compared to the rest of the world. The Americans and the Europeans might be subsidising their farmers and their producers, but we have a society, we have farmers, who can produce wheat, who can produce wool and who can produce all the crops that are there for export without relying on any subsidies. We do not have to be in there spoon feeding our farmers. We have the most potentially productive wheat crops and wheat growing areas in the world. They can produce first quality wheat and they can sell it on the market. All we have to overcome is the unfair subsidies being given out by the European Community and now recently by the United States. Our industries are not subsidised, they are not socialised or nationalised; they are private industries. The rural industry is a private organisation which competes on world markets, and I am sure that it will continue to do so. The whole of this exercise and the whole of the legislation before the House today, to outlaw negative gearing, is part of the tax package that all the other speakers in the debate have mentioned here today. The exercise is not revenue producing; it is a revenue neutral packet. Negative gearing restrictions will save, as other speakers have said, $55m in the 1986-87 financial year and $100m in the 1987-88 financial year. The whole exercise however is not revenue producing; it is revenue neutral. The whole tax package is revenue neutral and it will allow the Government to cut taxes, as promised. It will cut personal income tax and cut company tax on the timetables that have been set out and undertaken by the Government. The honourable member for Lyne talked about the need to build accommodation. There is an enormous need in Sydney and throughout Australia for public housing, but in Sydney the price of housing is very high because of many factors. Sydney housing is a very complex area. Why is housing dearer in Sydney than in Adelaide? Why is the cost of a house in Adelaide two-thirds more than it is in Sydney? There are a lot of factors; it is not just something to do with Sydney. It is mainly because Sydney is such a desirable place to live. The immigrants who come to our nation want to live in Sydney and the businessmen who come to Australia all want to live in Sydney. Sydney is a very fortunate place indeed. I was disappointed in the honourable member for Lyne's comment in that regard, when he talked about capital gains tax and its impact on families, because the proposed capital gains tax does not apply to the family home. It has been an undertaking of this Government that the capital gains tax will not apply to the matrimonial home. The honourable member for Lyne talked about families. This Government has created an economic climate in which half a million jobs have been created. I was very disappointed with some of the honourable member for Lyne's comments. Getting back to the legislation, the Bill also provides for self-assessment, which is a new concept but a very positive concept. In the 1984-85 annual report of the Commissioner of Taxation, the point is made that a working party was set up within the Taxation Office. That working party reported in April 1985 and made a number of very significant suggestions in relation to self-assessment. One suggestion is that the existing assessing methods within the Commissioner of Taxation's office in each of the States were not cost effective for certain categories of taxpayers. Indeed, 69 per cent of taxpayers who lodge returns do so through tax agents, and the number of tax agents is increasing all the time. Taxpayers pay a fee for having their returns prepared by tax agents or accountants. These taxpayers and the vast majority of Australians, as other speakers have said, are honest and trustworthy and are not trying to deceive or rob the Commissioner of Taxation. The other points made in the working party's report which recommended self-assessment were that assessing was perceived to have little deterrent effect in terms of tax avoidance and evasion for many classes of taxpayer. Another point which I thought was of some significance was that the majority of assessing staff get little job satisfaction under the present system. I agree with that entirely. It is a very dreary and monotonous job for assessors in the Taxation Office. They are given a quota and under the existing system they have to go through that quota. That is very dull, boring and repetitive work. The new system will rely essentially on audit, as happens in the United States of America and in other countries. A percentage of returns will be audited. That is a more positive way of getting through the work and ensuring honesty. The returns of most taxpayers, when they are lodged, show immediately what the situation is, whether they owe money or whether the Department owes them money. Instead of taxpayers having to approach their local Federal member to obtain their refund, complaining that they sent in their return six or eight months ago and have not had a refund, under the new system the refunds should be posted out far more promptly in the future. A solicitor who is well known to me in Sydney, Mr Robin Speed, wrote an interesting letter in the Australian Financial Review of the past few days in relation to this whole issue of self-assessment. I respect Mr Speed; he is a very brilliant lawyer. I have noted the comments he made, but most of them relate to the law as it exists at present, anyway. He feels that there is a possibility that the Commissioner could abuse the powers being given to him by Parliament in relation to self-assessment. I feel that it would then be for the individual taxpayer to approach his or her member of Parliament and, if the Commissioner did not have the sense to do the right thing-which I believe he would-it would be a matter for the normal processes of parliamentary democracy. If the law is being abused, honourable members must raise the issues in the House because, under the present law, all of us have many complaints about the existing system. Those are the matters I wanted to touch on. I commend the Treasurer for introducing the restraint upon negative gearing legislation which will limit the amount of interest which can be claimed on the purchase of a property and stop a form of tax avoidance for certain people in the community. At the same time, so as not to allow any run-down of the rental market, the Government is allowing a 4 per cent depreciation allowance on new housing, alterations or renovations. Mr DEPUTY SPEAKER(Mr Mountford) —Order! It being 12.45 p.m., the debate is interrupted in accordance with sessional order 101a. The debate may be resumed at a later hour. Sitting suspended from 12.46 to 2 p.m. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —by leave-I wish to advise the House that the Government intends to place before the House a Bill to establish a parliamentary commission of inquiry into various matters relating to the alleged conduct of Mr Justice Murphy. The inquiry, which would be conducted by three judges and be provided with the necessary powers for the conduct of the inquiry, would report to the Parliament so that proper consideration may be given by the Parliament to the questions of possible misbehaviour under section 72 of the Constitution. In reaching this decision the Government has had full regard to the necessity of the standing and integrity of the High Court to be properly protected. The Government will proceed with this matter as expeditiously as the constraints of legislative drafting and parliamentary process allow. Mr HOWARD(Bennelong-Leader of the Opposition) —by leave-Subject to seeing the terms of reference proposed by the Government and, naturally, based on that constraint, let me say that the Opposition welcomes the fact that at long last the Government has summoned the courage to do what it should have done days ago. If the Attorney-General (Mr Lionel Bowen) and the Prime Minister (Mr Hawke) had had the courage to confront those in their Party who have prevented them until now from doing the duty that, quite clearly, was cast upon them by their office, we might have been spared the high farce of the last few days. We might have been spared the spectacle of a Prime Minister who has a craven lack of courage to do his duty, when faced with a choice between doing his constitutional duty and hoping, Micawber-like, that something would turn up and that something would come along to rescue him, being prepared to allow the High Court and, potentially, other institutions to be involved in this matter. I can only say again to the House, as I have said on other occasions, that throughout the whole of this matter the Opposition has sought to behave in a manner that protects the reputation and the dignity of the High Court. If the Prime Minister and the Attorney-General had taken the advice that was tendered to them last Monday by the Opposition, the damage that has been done over the last couple of days might have been avoided because what, in substance, the Attorney-General has now announced to the House is the total capitulation of the position that he has maintained over the past few days. The Attorney-General has been revealed as a negligent bungler throughout the whole of this matter. The Attorney-General has recognised that the only way that this matter can be resolved is by having a judicial inquiry, and at long last the commonsense of that proposal has been recognised by the Government. We will look at the Bill, and our attitude to the details of it will be determined by whether the terms of reference are adequate and whether that inquiry will be able to run where it may and whether it will be able to run to touch those whom it might. Mr PEACOCK —I refer the Prime Minister to his speech of 19 June 1983 at the East-West Centre in Hawaii, where he stated, among other things: The recognition of the fundamental and over-riding importance of constructive relations with the neighbouring giant Indonesia goes back to the days when the Chifley Labor Government was Indonesia's first significant supporter of her independence. I ask the Prime Minister how he reconciles both this statement and his comments at the dinner President Suharto gave for him in Jakarta on 4 June 1983, when he underlined `the primacy the Government and the people of Australia place upon our relations with Indonesia', with his comments of last weekend that our relationship with Indonesia has been `exaggerated'. If it has been exaggerated, by whom has it been exaggerated? Mr HAWKE —What was said on those two occasions was correct. It was appropriate to be said at that time, and the position that has been adopted by the Government at this time is appropriate at this time. It will be recalled that when we came to office there was, for a variety of reasons, a considerable degree of tension between Indonesia and Australia. Let me say quite frankly that there was, I believe, some apprehension on the part of Indonesia as to what the position of the incoming government might be with regard to the relationship. It was a matter of fundamental importance that the Government and the authorities of Indonesia should be given to understand quite clearly that the incoming Labor government of Australia did attach very significant importance to the relationship and that it would be the intention of the incoming government to try to nurture a constructive and fruitful relationship between the two countries. The speeches that I made, both in Hawaii and in Jakarta, reflected that eminently sensible position. That was in 1983. We have moved to 1986. There have been developments. As I have said before, as distinct from the Leader of the National Party of Australia, who would seek to declare war tomorrow, and the Leader of the Opposition, who would seek to be unbelievably craven in this matter, this Government has responded properly to the developments that have taken place. The position that I put before this House is manifestly one which I believe, by its obvious good sense, recommends itself to the overwhelming majority of the people of this country. Mr BALDWIN —Has the attention of the Minister for Communications been drawn to a petition signed by 185 workers at the Rushcutters Bay mail centre protesting at the inadequacy of action by the administration of Australia Post in dealing with allegations that an acting senior postal officer at the centre had engaged in racial abuse and physical assault on members of staff? Is the Minister aware that those allegations have been supported by a number of statutory declarations by staff members and that the Australia Post district manager for the central Sydney region had advised in a staff information bulletin dated 20 December 1985 that no action would be taken against those responsible? Does the Minister consider that to be an adequate response? If not, what measures does he intend to take to ensure that justice is done? Mr DUFFY —I have noted that a number of petitions were lodged for presentation on 5 May. As a result of inquiries, Australia Post has advised me that it did receive two statutory declarations and one written complaint about the action of an acting senior postal officer. Those documents alleged racial abuse, but no allegations of physical abuse have been made. I am aware of the decision of Australia Post to take no action against all the individuals involved. For the information of the honourable member, the incident referred to occurred in late September last year when the mail officer upon whom the allegations are centred shouted abuse at a number of Vietnamese staff. By way of background, around that time a number of mail officers, including the officer referred to, became the target of abuse, being referred to as scabs, et cetera, when they accepted a proposal to work overtime on an as required rather than an all-on basis. This was contrary to a resolution passed by day shift union representatives at Rushcutters Bay. One evening prior to the incident referred to, when the officer concerned was working overtime with four others, a number of mail officers returned to the Rushcutters Bay mail centre, entered the building without authority and behaved offensively towards staff working overtime. The police were called to ensure the safe escort from the building of the staff involved. It will be recalled that at that time the industrial situation in the centre and in other mail centres was extremely volatile. The matter escalated and thereafter staff went on strike for most of October 1985. The incident was taken seriously by Australia Post's management, the officer concerned was counselled and it is worth noting that no charges were laid against the five staff members who entered the mail centre without authority. In the circumstances, further dis- ciplinary action was considered to be counterproductive. Mr DOWNER —My question is directed to the Prime Minister. Is he aware that the Washington Post recently described President Suharto as `a murderous right winger' and as being as corrupt as Ferdinand Marcos? Is he also aware of a report in last Thursday's New York Times which described much of the Suharto regime's rule as `cruel and ugly'? Does the decision of the Indonesian Government to ignore these stories-in stark contrast to its response to the recent Sydney Morning Herald article-only underline the fact that Indonesian disenchantment with Australia has more to do with its view of the Australian Government's foreign policy than with a newspaper story? Mr HAWKE —If the assumptions underlying the question put by the honourable member for Mayo are a fair indication of the level of the Opposition's understanding and perception of international relations, woe betide anything sensible coming from the other side of the House. Madam Speaker, you have heard the honourable member refer to the fact that these things have been written in publications in the United States. I refer the honourable member to observations that have been made in a number of articles, comparing Indonesia's reaction to the articles in American publications with its reaction to that in the Sydney Morning Herald and to the explanations that are given for this difference. The explanation given for the difference in a number of publications is that it is not a question of an assessment of our international relations policies, but rather a perception on the part of Indonesia that the United States is much larger, wealthier and able to do more for Indonesia. The conduct of foreign policy of this Government on behalf of the people of Australia will never be related to our perception of whether we stand at the apex of the capacity to give to another country. We will not make our decisions on international relationships and on the proper conduct of relations with other countries in terms of our perception of their reaction to our economic capacity to do this or that. We will make our decisions on the basis of what we believe is in the best interests of the people of this country and that I believe is what the people of Australia would want us to do. Mr O'NEIL —My question is directed to the very capable Minister for Transport. Can the Minister advise the House whether the commercial viability of Australian National has improved under his administration? Is the Minister confident that Australian National has a sound future in the longer term? Mr PETER MORRIS —I thank the very effective and hardworking member for Grey for his questions. The short answer to both is yes and yes. I will elaborate that so that the Opposition will understand the background to those answers. The Australian National has made considerable progress under this Government's administration. Its service reliability has improved, journey times have been shortened, and there has been an increase in productivity and a considerable improvement in efficiency. Those improvements have not been easy to achieve but they have been achieved through a process of co-operation and consultation between the management of the Commission, the union leaderships involved and, most of all, the AN employees themselves. We facilitated that to an extent with the introduction of an early retirement plan. Arising out of those changes, we have seen in recent times an improvement in passenger services to Mount Gambier, the inaugural passenger service to Whyalla and the Iron Triangle-a major improvement for residents of that region and long overdue-and we have seen an upgrading of freight services. Of all the rail systems, Australian National is leading in the handling of trailer loads and containers through the use of the most modern loading equipment, the piggy packer, which picks up trailers and places them on the new flat top wagon rolling stock. Overall there has been considerable improvement. That service has improved its operations, particularly to Alice Springs, with the reduction of journey times and the ability of the Commission to compete with other forms of transport. Port Augusta is the major centre in the operations of Australian National. It will remain so. The performance of AN depends very much upon the dedication and contribution of employees who reside at Port Augusta and the contribution that members of the Commission who live there make to the Commission's operations. As a result of those efforts and the positive approach to public enterprises pursued by this Government, we have seen in recent years a 40 per cent reduction in real terms of the amount of deficit necessary to be paid to Australian National. Overall the answer to both the honourable member's questions is yes. I thank him for the job that he has been doing in this respect. Madam SPEAKER —Order! I inform honourable members that we have in the gallery this afternoon the Hon. Clyde Cameron, a former member of this House, a former Minister and a distinguished orator. On behalf of the House, I bid him welcome. Honourable members-Hear, hear! Mr COBB —My question is to the Attorney-General and concerns the Australian Bill of Rights and in particular the right to own property. As the International Covenant on Civil and Political Rights, as enacted in such overseas countries as Russia, specifically excludes the right to own property for obvious reasons, is it true that the reason the Attorney-General gives as to why we cannot have the right to own property included in our own Bill of Rights is that Australia is a signatory to the International Covenant and therefore, for constitutional reasons, we must follow reasonably closely the terms of that Covenant when implementing it by means of the Bill of Rights in Australia? If that is his stated reason, why must we so slavishly follow the International Covenant to the extent that it overrides our own Constitution instead of using it as a guideline? Finally, can the Attorney-General see a way around this constitutional difficulty so that we can have included in our own Bill of Rights something that is dear to the hearts of all Australians, namely, the right to own property? Mr LIONEL BOWEN —That is an interesting question. I have been wondering why so many meetings have been held throughout the country areas about claims that property will be confiscated under the Bill of Rights. Nothing could be more ridiculous from the legal point of view because, as the honourable member knows, in strict legal terms the proposed Bill of Rights in no way overrides the Constitution. That is the first point. Secondly, the Constitution itself entrenches the view that any acquisition of property must be done on just terms and therefore would have to run the gauntlet of judicial supervision. Thirdly, and most importantly, the International Covenant on Civil and Political Rights spoke of the rights of people as against governments. In that sense there would be the obligation to have those rights protected and they are in the Constitution. The Government itself did not address some issues that the honourable member might think it should have-that is, that there should be some protection against the acquisition of property by government-because it did not need to; it recognised that that was not really the issue that arose in terms of the ICCPR. The rights contained in the International Covenant are rights against the actions of governments vis a vis the liberty of the subject, the life of the subject, the right of association, the right to universal suffrage and matters of that nature. In no way do those matters relate to property. In fact that matter is covered by other protective devices such as those that we have here in the Constitution. For that reason it is quite erroneous to suggest that because the Bill of Rights does not contain everything-and it cannot do so, because in strict terms it must cover the International Covenant-it is deemed to place in jeopardy matters such as those mentioned by the honourable member. I hope that when he next goes to a meeting in country areas he is able to allay the concerns of people in regard to this fallacious issue that property rights are affected by telling them that that is not the position at all. It is much more important to address the issue of whether or not all of them would want to have rights against a government which would not allow them the freedom of association, the right to live, the right to a trial and the right to have universal suffrage. In fairness to what the honourable member said, a number of countries have adopted the International Covenant but do not practice the rights listed in it. I will accept that. Eighty nations have endorsed the International Covenant on the basis of protecting the individual as against governments. I would be surprised if anybody opposite thought that there should not be some protection for the individual. For example, the question of rights is entrenched in the Constitution of the United States of America. We have not gone to that extent. At this stage we are talking about legislating and applying the International Covenant only to Commonwealth laws, although we have indicated that we would love to apply the Bill of Rights to what can be called State laws from the point of view of electoral justice. For example, it is quite wrong in the terms of the International Covenant to have a gerrymander in Queensland under which there is a tolerance of four or five to one in terms of electoral justice. That is the point. The same thing applies in the upper House in Western Australia where there are imbalances. Although that system professes to give everyone equal rights, if one lives in a certain part of Western Australia one has voting rights five or six times greater than one's neighbour in Perth. Those things are very fundamental. I am amazed to think that the Opposition cannot even agree with this principle. I know that the honourable gentleman has some persuasion with what is called the National Party. Perhaps he can use his good influence there to get the Premier of Queensland to do something about correcting the injustices in his electoral laws. Mr CHARLES —I direct my question to the Minister for Arts, Heritage and Environment. Is there any basis for the recent reports that taxation incentives for the Australian film industry are about to be axed by the Government? Further, could he relate to the Parliament the present position of the Australian film industry in terms of its success or otherwise? Mr COHEN —I am aware that once again rumour abounds concerning the Government's intentions regarding continued support for the Australian film industry. I wish to lay this rumour to rest and reaffirm the Government's commitment to the film industry. With the Treasurer's agreement, I can say now that the current level of taxation incentives for investment in films will not be changed in the forthcoming Budget. It has not, is not and will not be considered. Australians have every right to be proud of their film industry. This year, seven films-an unprecedented number-have been selected for the competitive and non-competitive sections of the Cannes Film Festival. This is the world's most prestigious film event. Bruce Beresford's film The Fringe Dwellers is entered in the official competition. I am particularly pleased by the international recognition achieved by Jane Campion, a recent graduate from the Australian Film and Television School, who has four films showing at Cannes. I know that many members of the House attended and enjoyed the recent parliamentary screening of Crocodile Dundee starring Paul Hogan and John Mellion. The House may like to know that that film has broken every box office record in Australia with ticket sales of $3.69m in its first 10 days. Mr Bilney —Is it true that Wilson Tuckey played the Crocodile? Mr COHEN —I thought he was Crocodile Dundee. Up to 700,000 people have already seen the movie. This has been a better opening than that of Rocky IV and the film is being shown on 58 separate screens throughout Australia. This year's selection for Cannes and the box office success of Crocodile Dundee firmly answer the many critics who have bemoaned the demise of the Australian film industry. Dr WATSON —My question is addressed to the Treasurer. I refer the Treasurer to the Economic Planning Advisory Council Paper No. 10 and, in particular, to the following quotation: Efficiency in capital markets and neutrality in the taxation system are important underlying factors for ensuring that profitable investment opportunities are exploited. I ask the Treasurer to inform the House, firstly, whether or not he agrees with that EPAC statement. I presume he does, but I would like him to give an answer. Secondly, is the Government's proposal on interest borrowed for rental property investments consistent with neutrality in the taxation system with respect to investments? Thirdly, does the Treasurer believe that the current tax treatment of investments in qualifying Australian feature films, mini-series, telemovies and documentaries is consistent with the EPAC statement enumerated earlier? Fourthly, does the Treasurer believe that these two investment opportunities should be treated similarly for taxation purposes? If not, what are the critical differences between these two types of investments which justify a non-neutral taxation system? Mr KEATING —It seems that the underlying premise of the question is that whatever EPAC says should set principles upon which all government policy, including past taxation policies, should devolve. I would think that that is a pretty untenable proposition, regardless of the merits of EPAC's particular views. As general principles, of course, they are laudable enough-particularly in respect of the equity markets and the taxation system. The Government has made the point over and over again that the difference between negative gearing in regard to property and negative gearing in regard to other items is that the timing of the deductions and the timing of the income were vastly different and that the deductions were set against other income perhaps years-even perhaps a decade-before a taxable income was ever to be produced. Of course, before a taxable income was ever produced, the purchaser or the asset holder sold the asset and did the same thing again. So while one grants the cost of interest as an outlay spent in the pursuit of income-that was the basis upon which the Commissioner of Taxation formally recognised negative gearing in taxation claims-the fact of the matter is that the system was being dramatically abused and there was no intention on the part of many owners to produce assessable income at any stage. When the rents equated with the outgoings they sold the property and geared again. That is why, as in any other area of the tax system that is abused, it is incumbent upon all governments to try to remedy the area of abuse. As far as section 10ba and the film industry are concerned, it was the view of the former Government-the party to which the honour- able member belongs-that there needed to be support for the Australian film industry by way of a tax expenditure. On that basis that arrangement was established. This Government has reduced the generosity of that arrangement on two occasions because we thought, in hindsight, it was unduly generous and was worked too hard by people other than film makers. We have since shifted the focus of section 10ba to something which, as my colleague the Minister for Arts, Heritage and Environment said earlier, is working now to enable the film industry to produce decent films, not films which are being produced simply for tax deduction purposes. So while, as a general proposition, I would support the views of EPAC in this respect, I do not think one can draw from that that the Government's actions in respect of negative gearing or films run counter to the general purity, if you like, of those principles. Mr CLEELAND —Has the attention of the Minister for Transport been drawn to concern being expressed by local government in Victoria about the distribution of Federal local road funding in that State? If so, can the Minister inform the House of any action being taken to address these concerns? Mr PETER MORRIS —My attention has been drawn to the matter raised by the honourable member for McEwen. I thank him for his question. There have been numerous representations from local government bodies in Victoria on the question of the future allocation of Federal road moneys for local government. I can understand their concern. We have responded to that concern. The honourable member has played a principal part in that to ensure that through our consultative processes there is a clear understanding of our objective to ensure that Federal money made available for local roads right across Australia, including Victoria, goes specifically to the local government bodies for which it was intended. In the case of Victoria the issue is more complicated because of the large number of road classifications which do not necessarily coincide with the Federal classification or the other State classifications. That is a problem that successive governments have had to deal with. We have instituted a process which we hope will help to ease that problem. The distribution of money for local roads in Victoria this year under the land transport program has been on the same basis as that under the Australian bicentennial road development program. I want to emphasise that this year a record amount of money is being provided by this Government to local government bodies in Victoria. A sum of $52m is being provided which is a 60 per cent increase on that provided under the last full year of our predecessor in 1981-82. I advise the honourable member that I have now received from the Victorian Minister for Transport a proposed set of principles for the distribution of money for local roads from this Government for the year 1986-87. These funds will be available under the Australian land transport program. We will be looking urgently at the proposal put forward by the Victorian Government to ensure that there are consultations with all those parties concerned and that the new arrangements will be in place for distribution of our money to local government bodies in Victoria in the ensuing financial year. Mr GOODLUCK —I ask the Minister representing the Minister for Resources and Energy whether the prices of all petroleum products scrutinised by the Prices Surveillance Authority have been reduced as a result of the dramatic drop in world oil prices. If so, has the Government monitored-I think it is only fair it should for the sake of the consumers of Australia-a flow-on reduction in the cost of goods and services, in other words, air fares, freight, groceries, et cetera? If not, will the Government do so? Has the Government monitored a price reduction of home heating oil for the colder parts of Australia, which is not included in the surveillance of the Authority? Mr BARRY JONES —As I continue to remind the House every time I get up to talk about this, we still have in Australia the second or third lowest petrol price of countries in the Organisation for Economic Co-operation and Development. Mr Goodluck —Madam Speaker, I raise a point of order. I do not mean to be rude, but I am not interested in that. Madam SPEAKER —Order! The honourable member has no point of order. I call the Minister. Mr BARRY JONES —In our free market economy-we have a freer market economy under this Government than we ever had under its predecessor-it is a fact that the prices of a number of services and goods provided have fallen very dramatically. It is recognised that there are special regional problems in areas that are extremely cold. There are also significant problems in the extreme north where air-conditioning has to be provided throughout. That should be kept constantly under review by the Government. At this stage there is no special proposal before the Government to examine the matter. If the honourable member has specific suggestions they will be looked at. Of course, they will have to be looked at in an overall Budget context. One of the great tragedies in the past was that Budget policies were put together as a matter of shreds and patches in response to special interest groups. For the first time we are looking at budgetary policy, as the Treasurer might see it, as a seamless garment. In this Budget context we avoid massive anomalies but try to deal with policy as a total and comprehensive package. Dr CHARLESWORTH —Is the Minister for Health aware of a ruling by the Australian Broadcasting Tribunal which has prevented the viewing in Western Australia of an anti-smoking advertisement featuring the late actor Yul Brynner? It appears that the advertisement contravenes the foreign content limit for paid commercials. Does the Minister believe that the merits of this case should have allowed for some flexibility as clearly Mr Brynner was not acting when he made this commercial and nor was he usurping a role to which an Australian actor would aspire? Finally, can anything be done to reverse this regrettable inflexibility? Dr BLEWETT —I thank the honourable member for Perth for his question. The Western Australian Health Minister, Ian Taylor, has informed me of the problems encountered with the showing of this anti-cigarette advertisement and the difficulties of having it screened on commercial television. The 90-second commercial was to have been screened on Monday night as part of the Western Australian 1986 Quit Campaign. This advertisement incorporates a 30-second clip made last year by the American Anti-cancer Society at Yul Brynner's request. He makes a very powerful appeal indeed which relates to his own death from lung cancer. The Australian Broadcasting Tribunal has ruled that it cannot go to air as a paid television commercial because under Australian regulations commercials cannot include more than 20 per cent of foreign-made footage. This particular item has some 30 per cent of overseas material featuring Yul Brynner. The Tribunal said that the advertisement of course could be shown as a community service. However, the Western Australian Minister had wanted to pay for it because he could then show it at peak air time. I must say that I regard the ABT decision as unfortunate. That regulation limiting overseas content of advertisements to 20 per cent primarily was designed to protect the jobs of Australian actors. That is an admirable principle. However, I think it is hardly relevant in this case. The editorial in the West Australian put it much more succinctly and more clearly than I can: Though the advertisement exceeds the 20 per cent foreign-content limit for paid commercials, the late Mr Brynner could hardly be accused of putting Australian actors out of work: He wasn't exactly `acting' when he made the advertisement; nor was he playing a role that other actors would want to emulate. The ABT's decision has disrupted the Western Australian Quit Campaign for a great deal of back-up material has been prepared. I think this is a very special case dealing with a vital public health issue. I think there could be few better examples of where an exception might be made. Therefore, today I approached the Minister for Communications and asked him to make representations to the ABT on my behalf to see whether we can have the decision reviewed. Madam SPEAKER —I call the honourable member for Fisher. Government members-Oooh! Mr SLIPPER —Keep quiet; you might learn something. My question is directed to the Prime Minister. Government members interjecting- Mr SLIPPER —They are looking forward to this, Madam Speaker! Did the Prime Minister recently attempt-and, if so, why-to suppress a paper submitted to the Economic Planning Advisory Council, EPAC, by Mr Charlie Fitzgibbon, a former leader of the Waterside Workers Federation and Senior Vice-President of the Australian Council of Trade Unions, in which he said, in effect, though not in these words, that the rigid accord between the Australian Labor Party and the ACTU is totally defective as an instrument of economic policy in our increasingly flexible and increasingly competitive world? Would he agree that Mr Fitzgibbon's honest and forthright statement is both an effective endorsement of the National and Liberal parties' attitude to the accord and, at the same time, an utter condemnation of Labor's approach? Mr HAWKE —The answer to the first part of the honourable member's question is no. There was a decision made by EPAC that a very interesting paper that had been prepared by Mr Fitzgibbon-- Mr Howard —It certainly was. Mr HAWKE —I think it was a very interesting paper and it warranted further consideration and discussion, and I believe members of EPAC will do that. As to the second part of the honourable member's question, I am fascinated because he tried to draw a conclusion that Mr Fitzgibbon, by the issuance of his paper, has indicated, directly or indirectly, support for that thing which is like Halley's comet-we are going to see it some time-the Opposition's industrial policy. I suggest to the honourable member for Fisher that he ought to read the newspaper report-I think it was in the Sydney Morning Herald-a few days after the event in which Mr Fitzgibbon explicitly and in very tough language repudiated the policy of the Opposition, indicated that in no way would he have a bar of it and that his paper was not, and was not to be seen as, any measure of support for the mishmash of observations which passes for a policy from the other side of this place. Mr MOUNTFORD —Can the Minister for Employment and Industrial Relations advise the House whether the Mudginberri industrial dispute provides the basis for improved industrial relations in other areas of employment? Mr WILLIS —I am pleased to have a chance to answer this question because I am aware, of course, that the Opposition has claimed that the Mudginberri example can be emulated in other areas of employment. Indeed, it would appear from reports of its policy, which has been hawked around the gallery as part of the famous industrial relations policy marketing process, that it is part of that policy. There are a number of reasons why it is quite false to suggest that the Mudginberri principle can be easily translated into other situations. Let me go through a number of those reasons: Firstly, in the decision of the Australian Conciliation and Arbitration Commission in relation to Mudginberri, the Commission made it clear that what was being produced was not an example of an award being changed to allow an employer to reach agreement with his employee without the union being involved; rather, it was introducing an award on first award principles. It was not changing an award; rather, it was introducing an award where no award had previously existed. A point which seems to have totally escaped the Opposition is that the agreement between the employees and the employer about the contract system predated the award, and had applied in the Northern Territory in a number of abattoirs for several years. All the Commission did, in exercising the first award principles which were well established in previous cases, was to allow to apply what had previously existed, when it came to establish an award which was desired by both the employers in the Northern Territory and the union. Also, it should be noted that this was in no way an example of opting out. What was happening was that the Mudginberri company was being brought into the award structure, not being taken out of the award structure in any way. Secondly, it should also be noted that the Commission explicitly stated in its decision that the decision had no implications for employment elsewhere. It made it quite clear that what it was doing had no implications for the meat industry outside the Northern Territory. That point was reiterated in the decision given by the Commission in March this year. Thirdly, the award required that contract rates had to give remuneration at a level which was at least 20 per cent above the wage under the normal tally system. In other words, the decision of the Commission was that if one were to work under a contract system, one had to receive a much higher rate of pay than one would get under the tally system. So there is in no sense any downward flexibility coming from the Mudginberri system. Fourthly, the intensity of union opposition to the Mudginberri decision, of course, led to a very expensive flurry of legal actions which have still not been resolved. It would appear that if we are to have a thousand Mudginberris, as the Leader of the Opposition would like, we will have some very clogged court lists in the future. Also, it should be noted in that respect that use of the Trade Practices Act and common law actions which have occurred in respect of Mudginberri did not resolve the Mudginberri dispute. It was resolved in the end by action in the Arbitration Commission and a decision of the Commission which has since been implemented. So we have had resolution within the industrial system and not by use of the Trade Practices Act or common law. It should be noted that for the Mudginberri owners to survive in the context of this dispute, multi-million dollar support had to be organised through grants-largely guarantees-from the Northern Territory Government, the Queensland Government, the National Farmers Federation and the Westpac Banking Corporation. If we were to have a thousand Mudginberris, it would seem that we would have a billion dollar exercise in the future if that kind of support had to be organised. So we have a whole stack of reasons why it is not feasible to believe that we can let a thousand Mudginberris bloom. We have in this regard no new industrial relations era. Mudginberri is clearly an exceptional case. If the Opposition came into government-which, of course, is a highly remote possibility-and if it were to try to implement a policy of promoting Mudginberris, it would be quite clearly an exercise in absolute industrial relations chaos in this country. Mr HOWARD —I ask the Prime Minister: Did he, or anyone on his behalf or to his knowledge, ask the Governor-General to communicate with Justice Lionel Murphy and discuss any matters relating to Justice Lionel Murphy's current position and/or any future course of action which Justice Lionel Murphy may take regarding his position on the High Court Bench? Mr HAWKE —I want to make it clear that there is no inference to be drawn from the answer which I obviously must give to this question; that is, the discussions that take place between the Governor-General and his Prime Minister are a matter of confidentiality. I will not breach that. I do not think the Leader of the Opposition would expect me to. Mr MILTON —I direct my question to the Minister for Communications. Can he indicate his view on the various reports which have appeared in newspapers that the Australian Broadcasting Tribunal has decided not to allow the Yul Brynner anti-smoking advertisement to be shown on television? Mr DUFFY —I think the honourable member is probably referring to a report in the Age of 6 May concerning the anti-smoking message of Yul Brynner. That probably provoked the question from him. In relation to that matter, the Australian Broadcasting Tribunal has advised the following details: The Australian Broadcasting Tribunal has not banned this television commercial. The announcement failed to meet the longstanding and well-publicised Australian content requirements. The Tribunal has indicated to both the Western Australian Government and the Perth commercial station that the announcement can be shown as a community service announcement without breaching the Australian content standard. The Tribunal advised that at no stage, as was reported in some Press reports, was the telecast approved as a commercial. It appears that at the time the article was written, the television stations concerned decided not to show the announcement as a community service. The Tribunal is informed, however, that the other television stations in Western Australia-that is, regional stations-have arranged to show the announcement as a community service. The article does indicate that it is the Tribunal that has prevented the transmission of this particular message. This is not so. It is within the authority of the television stations concerned to transmit the message as a community service without affecting their allowable commercial content. Mr DAWKINS(Fremantle-Minister for Trade) —For the information of the House, I present the text of a statement by the Minister for Education (Senator Ryan) on education resource agreements for 1986. Motion (by Mr Young) proposed: That the House take note of the paper. Mr SINCLAIR(New England-Manager of Opposition Business)(2.51) —Before moving that the debate be adjourned, I point out that yet again we have a statement which has been introduced into the Senate and which has not been repeated in this place. We object to a procedure that sees the tabling of a statement and we believe that it would be more appropriate, if statements are to be made, that they be made in this place so that they can be responded to in the normal way. On that basis, I move: That the debate be adjourned. Question resolved in the affirmative. Mr BARRY JONES(Lalor-Minister for Science) —Pursuant to section 6 of the National Water Resources (Financial Assistance) Act 1978, I present documents relating to the provision of financial assistance to Victoria, Queensland and Tasmania under the Federal water assistance program. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable Speaker and Members of the House of Representatives in Parliament Assembled. The petition of the undersigned shows: That the Hawke Government should; pass on the full benefit of lower international oil prices on 1 March 1986; not increase or extend fuel taxes; and maintain its tax cut commitments. Your petitioners humbly pray that the Hawke Government honour its commitment to the Import Parity Pricing policy. And your petitioners, as in duty bound, will ever pray. by Mr Braithwaite,Mr Fife and Mr Spender. To the Honourable Speaker and Members of the House of Representatives in Parliament Assembled. The humble petition of the undersigned citizens of Australia showeth that whereas: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack, itself the creation of three Christian Crosses, represents the Nation's historical origin and the source of its language and law; (b) The Southern Cross on an azure blue background signifying its geographical location on this planet Earth; (c) The large star depicting the advent of Federation in 1901. 3. They know the Flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to the Flag will produce division in the Australian community. Your petitioners therefore pray that your honourable House will: Propose and pass a motion that ``the existing Australian National Flag be changed only with the approval of the Nation as expressed in a Referendum''. Your petitioners, as in duty bound, will ever pray. by Mr Ewen Cameron,Dr Harry Edwards and Mr Hawker. To the Honourable, The Speaker and the Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that your petitioners are gravely concerned at the failure of the government to honour its election promises to pensioners. In particular those promises relate to the following commitments: 1. That within three years of its election to office, a Hawke Labor Government would raise the level of the standard pension to 25% of Average Weekly Earnings; 2. That the lag time between the announcement of the Consumer Price Index figures and the subsequent adjustment of pensions would be reduced to one month, and 3. That the disproportionate tax burden borne by low income earners would be lifted. None of these promises has been honoured to date. Your petitioners are extremely angry at the failure of the Government to live up to its commitments and as in duty bound will ever pray that these serious omissions will be given the attention they deserve. by Mr Hawker and Dr Klugman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The Petition of the undersigned showeth that there is widespread public concern about the provisions of the Bill of Rights, and especially the dangerous powers to be vested in the Human Rights and Equal Opportunities Commission, and the failure to protect vital rights such as the right to own private property. Your petitioners therefore humbly pray: (i) that the Hawke Labor Government not proceed with the Bills enacting the Bill of Rights and the Human Rights and Equal Opportunities Commission; and (ii) that we the people be given the opportunity to express our opinion on the Bill of Rights in a referendum. And your petitioners, as in duty bound, will ever Pray. by Mr Donald 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 in the light of the Labor Government's failure to act to correct the many anomalies in the Assets Test on pensions brought to its notice, the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners. Your Petitioners therefore humbly pray that the House of Representatives in Parliament assembled should immediately seek the repeal of the Labor Government's iniquitous and unfair Assets Test. And your petitioners, as in duty bound, will ever pray. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of certain citizens of Australia respectfully showeth: that the Bill of Rights is a dangerous piece of legislation which gives us no new legally enforceable rights that the Bill of Rights leaves out vital rights such as the right not to belong to a trade union, the right to own private property, the right to a private education that the Bill of Rights gives dangerous new powers to a Federal Government Commission to investigate in private, without legal representation and with criminal penalties for refusing to co-operate that the Bill of Rights deals with our rights; therefore we, the people, should say whether we want it by a referendum. Your petitioners therefore pray that you will oppose the Bill of Rights, support Liberal amendments to improve it in case it is passed, and pledge to repeal it should it become law. And your petitioners as in duty bound will ever pray. by Mr Hawker. 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 is 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. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth: We most strongly oppose the process of Food Irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. And your petitioners as in duty bound will ever pray. by Mr Scott. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of the undersigned citizens of Australia respectfully showeth: That the humble petitioners respectfully believe that the representatives in Australia of the African National Congress of South Africa (ANC) and of the South West African People's Organisation of Namibia (SWAPO) should not have to suffer unending financial problems related to the cost of rent, food and clothing, and the maintenance of two small offices run on the most austere basis. Your petitioners therefore pray and urge Australian Government provision of: 1. Official recognition of the ANC and SWAPO as the legitimate representatives of the people of South Africa and Namibia; 2. Financial support to the offices and representatives of the ANC and SWAPO to promote the anti-Apartheid cause in Australia; 3. Additional financial support for the official representatives of the ANC and SWAPO to assist the humanitarian needs of Namibian and South African refugees who are victims of Apartheid; 4. Scholarships for South African and Namibian refugees. These to be provided through the ANC and SWAPO education departments. And your petitioners, as in duty bound, will ever pray. by Mr Scott. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned, are deeply concerned that Australia's important horticultural industry is being severely disadvantaged by unnecessarily rising production costs. Many Federal and State Government regulations, excessive taxes and charges are damaging the ability of horticultural growers to maintain supplies of food and plant products to Australian families at a realistic cost. Widespread unemployment will result if horticultural producers are further depressed. The undersigned humbly petition the Parliaments of Australia, its States and Territories, to take all measures within their powers to reduce the burden of imposed costs and regulation, allowing Australian horticultural growers to develop production potential so the nation, as a whole, can share the benefits of the resulting growth and prosperity. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth: That in the light of the Labor Government's proposal to bring about a reduction in the amount payable under the present Family Allowance Scheme, that the House of Representatives assembled oppose such a move, on the evidence of its impact upon the family unit. Your petitioners most humbly pray that the House of Representatives in Parliament assembled should immediately seek to restore payments to the former level. And your petitioners, as in duty bound, will ever pray. by Mr Slipper. To the Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That they oppose the construction of any additional nuclear reactor at the Australian atomic energy establishment at Lucas Heights in N.S.W., or any site within Australia. Your petitioners therefore pray that the government of Australia will not construct an additional nuclear reactor at Lucas Heights or within Australia. 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. And, to the Australian Government. This petition of concerned citizens respectfully points out that a comprehensive ban on all nuclear weapon tests in all environments for all time would be a vital first step towards: inhibiting the addition of more and more sophisticated and destabilizing nuclear weapons to the world's arsenals; arresting the extension of the arms race to out space; upholding the provisions of existing treaties and agreements. Your petitioners humbly pray that: 1. The Australian Government-(a) take new initiatives to encourage all member states of the United Nations-especially the governments of nuclear weapon states-to conclude at an early stage a treaty banning all nuclear weapon tests in all environments for all time, (b) call on all nuclear weapon states to declare an immediate moratorium on all nuclear weapon tests pending conclusion of a CTB. 2. All federal members of Parliament and senators make strong representations to the Australian Government to act towards these goals. 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 humble petition of the undersigned citizens of Australia respectfully showeth. Our alarm with the continued spiralling cost of commodities brought about we believe, by the monopolisation of retail outlets by multi and transnational consortiums. We would ask the government to legislate, effective price control and anti monopoly measures to prevent further erosion of the living standards of the Australian community. Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled, seek your most urgent action to rectify this deep concern to the community. And your petitioners, as in duty bound, will ever pray. by Mr Tickner. To the Right Honourable the Speaker and Members of the House of Representatives of the Commonwealth in Parliament assembled. The humble petition of the undersigned citizens of New South Wales respectfully showeth: That they strongly support the establishment of the Western Sydney State University as recommended in the Parry report and call upon the House to establish the Western Sydney State University in conjunction with the New South Wales Government. And your petitioners, as in duty bound, will ever pray. by Mr Free. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of certain citizens of Victoria respectfully showeth: that all legitimate business expenses incurred in earning or producing assessable income should be allowable deductions. that the proposed Capital Gains Tax is an unwarranted burden on the rural sector, which will severely affect its long-term viability. that the delay by the Government in introducing the legislation into Parliament is causing confusion and hindering farmers in the organisation of their affairs. Your petitioners humbly pray that the Government introduces the Capital Gains Tax legislation without delay and that the Australian Democrats join with the Opposition to defeat the proposed legislation. by Mr Hawker. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Page electorate respectfully showeth that: The Hawke Labor Government's Bill of Rights seeks to make changes in the constitutional balance in Australia by intruding into the affairs of individuals and of State and Local Governments. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Repeal the Bill of Rights legislation and not restrict the individual freedoms of Australians and its present justice system, nor in any underhand way centralise power in our three tier system of Government. And your petitioners, as in duty bound, will ever pray. by Mr Ian Robinson. 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 current policy pursued by the Hawke Government is causing an intolerable increase in home loan interest rates beyond the capacity of families to pay. That consequently this policy is causing grave hardship throughout Australia and is contributing to social problems and the breakup of the family unit. That unless the Government act urgently the Australian dream of home ownership is fast becoming shattered for many of our citizens. Your petitioners therefore humbly pray: That the Government make home loan interest rates tax deductible therefore alleviating the present crippling burden of current high interest rates on home owners and home buyers. 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 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 divisions 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. The humble petition of certain citizens of Queensland, Australia, respectfully showeth that we are totally opposed to any change in the Australian National Flag as declared in the Flags Act (1953). Your petitioners humbly pray that Parliament in its wisdom will take no action to change the Australian National Flag. And your petitioners, as in duty bound, will ever pray. by Dr Watson. Petitions received. Madam SPEAKER —I have received a letter from the honourable member for Tangney (Mr Shack) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The adverse effect of the Government's economic and other policies on young Australians. 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 SHACK(Tangney)(2.56) —The backdrop to this matter of public importance debate is that in Australia currently there are 299,700 young Australians looking for jobs or, in other words, just under 300,000 15- to 24-year-olds are unemployed and would work if only there were jobs for them to fill. To put it in another light, in every Australian State almost one out of every two unemployed persons is aged between 15 and 24 years. Almost half our total unemployment pool is made up of young people without work, with decreasing prospects of getting work and without much hope left for any effective action from this Government to turn around their prospects. To put it in yet another light, almost 30 per cent of the unemployed youth have been out of work for six months or more. One in five unemployed young people have been looking for a job for over a year. We introduced this debate today, as we tried to do yesterday, because we want to know exactly what this Government is going to do about it-a government which has been in office for three years and a government under which prospects for young Australians are getting worse and not better. In August last year the Priority One circus began-slick, glossy and cleverly organised. The Prime Minister (Mr Hawke) was the product, young people were the market target. The Government, through Priority One, embarked on one of the most nauseating, cynical, hypocritical and contemptible con jobs ever perpetrated in Australian political history. Blatantly latching on to the problems of young Australians for the purpose of self-promotion is sick and corrupt beyond belief. We in the Opposition warned at the time that young people should examine the Government's actions carefully in relation to its extravagant publicity claims. Eight months down the track Priority One has been well and truly exposed for what it really is-a huge exercise in personal hype by the Prime Minister and a grossly extravagant and excessive bit of public relations by a government which really has nothing to boast about when it comes to the position of young Australians. Let us examine exactly what the Prime Minister said in his statement of 20 August last year: Unless the Government adopts a positive strategy to alter the situation for young people, unacceptably large numbers of them will continue to be unemployed or will be unable to take up opportunities to continue their education or to acquire productive skills. What are the Government's policies yielding today after the adoption of its so-called positive strategy-rising youth unemployment; shrinking tertiary education opportunities relative to the number of young people who want education and training; a badly implemented youth-oriented labour market program; the Australian traineeship system, which is a farce; an incompletely rationalised system of income support for young people which still means that tertiary students face a much tougher eligibility condition for the tertiary education assistance scheme than do those applying for unemployment benefit; absolutely no reduction in those other problems faced by young Australians, problems not just in terms of jobs, education or income support but in relation to personal finances with high interest rates eating into the budgets of those with Bankcard and other credit cards and high interest rates affecting those with car loans; and, lastly, the heavy tax bite inflicted upon young people who are lucky enough to have jobs but who are working their guts out to save for their future, for a home and a family. I will quote again from the Prime Minister's August statement: Young people have made their concerns clear. We agreed with the Prime Minister in August last year that this was the case, that the concerns of young people were clear. Any thinking person attuned and sensitive to what is going on in the wider community would have had a very good intuitive feel for the concerns of young people. But what followed the Prime Minister's statement that young people's concerns were clear to him, to his Government, to his Ministers and everyone else? I will tell honourable members what followed-the spending of over $1m on the Priority One phone-in, ostensibly to discover the concerns of young people. Who was kidding whom? How can $1m-plus be spent allegedly on finding out the concerns of young people immediately after the Prime Minister said he knew and understood those concerns? The Prime Minister and the Government tried to sucker the Parliament and sucker young people on this matter. The cowardly and pathetic way in which the Prime Minister's talk-back radio appearances were arranged said it all. Was he confident enough simply to sit within the radio station and stay by the telephone and answer questions which may have come at random from young people? No. He had to have his questions prearranged. He had to have all telephone calls filtered through the organisation running the show, Camco Systems. He had to have his minders vet and edit young people's questions and topics for discussion. He did not even have the guts simply to talk to them when they rang in at random to talk about their lives, problems and concerns. It was all prearranged so that he would not have to field those questions they were asking, questions such as: `Why is it, Mr Hawke, after three years of your Government nearly 300,000 of us are still without jobs? Why is it, Mr Hawke, that after three years of your Government so many qualified amongst us still cannot get into tertiary institutions, universities or colleges? Why is it that even after all your planned changes to the income support system young people will still get more on the dole than they do if they are in educational institutions? Why is it that after three years of your Government we are still paying higher rates on our Bankcard and we are still paying higher rates on our car purchases?' I now wish to return again to the matter of youth unemployment. I seek leave to have incorporated in Hansard two dramatic tables which state the position. Leave granted. The tables read as follows- Table 1 UNEMPLOYED 15-24 YEAR OLDS LOOKING FOR FULL-TIME EMPLOYMENT: NUMBER AND PROPORTION OF TOTAL UNEMPLOYED BY STATE, MARCH 1986 N.S.W. Vic. Qld S.A. W.A. Tas. Australia* No. 15-24 year olds... 84,000 44,600 44,500 23,500 24,200 8,600 234,800 % of total unemployed... 43.5 45.8 47.5 50.1 49.0 50.6 46.3 * Includes N.T. & A.C.T. Source: Derived from ABS, The Labour Force, Australia, March 1986, Table 19. Table 2 UNEMPLOYED 15-24 YEAR OLDS: NUMBER AND PROPORTION OF TOTAL UNEMPLOYED BY STATE, MARCH 1986 N.S.W. Vic. Qld S.A. W.A. Tas. Australia* No. 15-24 year olds... 102,400 67,600 54,000 27,900 28,900 9,700 299,700 % of total unemployed... 44.1 48.1 46.6 49.0 47.6 48.7 46.8 * Includes N.T. & A.C.T. Source: Derived from ABS, The Labour Force, Australia, March 1986, Table 19. Mr SHACK —I thank the House. I hope that the Minister for Trade and Minister Assisting the Prime Minister for Youth Affairs (Mr Dawkins) and the Government will examine these tables very closely. Table 1 shows the number of unemployed 15-year-olds to 24-year-olds looking for full time work in each State, as well as nationally. Table 2 shows the number of 15- to 24-year-olds looking for full time or part time work by State as well as nationally. For each State there is a national total. Young people in these tables are shown as a proportion of the number of unemployed as a percentage. The figures are stark and are shocking. If honourable members look at table 2 they will see that the smallest percentage of youth as the proportion of total unemployment is to be found in the State of New South Wales where 44.1 per cent of unemployed persons are aged between 15 and 24. The figures range across the country up to a high in South Australia where 49 per cent of unemployed persons are young people. The national average is 46.8 per cent. It is worth reflecting on these figures for a moment. They reveal, as I said at the beginning of my remarks, that between the ages of 15 and 24, if we so define young people, nearly one out of every two unemployed Australians are young people. They show that almost half of Australia's unemployment pool is made up of young people. Just how can this Government, after three years in office and after nearly nine months of its Priority One program and scheme being in place, escape the awful truth that it has been profoundly ineffectual in tackling youth unemployment, that its beleaguered traineeship scheme looks like having Buckley's chance of making any dent in the problem and that a genuinely effective program of action, as opposed to a program of hype and propaganda, has yet to be devised by this Government? The sooner the Government discards the Priority One hype and the self-congratulations and starts putting together some solid policy to solve these problems the better. For a start, the Government could support the call made by the Confederation of Australian Industry for an Australian Conciliation and Arbitration Commission inquiry into youth unemployment and the factors which are causing it to remain at unprecedentedly high levels. That is not too much to ask, particularly in light of the Government's failure to make any significant inroads into the problems after three years in office. It is not going to be good enough for the Minister to stand up in this debate and say: `It is all your fault. We can find the causes when you were in office'. The Government has been sitting in office for three years and all of those young people up there in the gallery will want to know why, after three years, the Government has failed and failed miserably. Secondly, there is a clear need for more flexible youth wage fixing arrangements. The concept of a training wage, a concept which the Government has not promoted and which has sunk the traineeship schemes, needs to be promoted with both employers and unions. The training wage needs to be set at a level which reflects young people's embryonic skills, their lack of experience and, in their first job at least, their lower productivity. Training wages, with proper safeguards against exploitation in place-let us not have the charge that we are talking about slashing youth wages-should encourage employers to hire many more young people in positions incorporating real and considerable on-the-job training. Thirdly, the tertiary education system must be opened up to new and different sorts of training and higher education arrangements. We must break down the barriers put in place by the Commonwealth which discourage innovative ways of teaching being developed and which block employers and educators from getting together to work out more convenient and productive ways of training from being organised. More importantly, fundamental and lasting solutions must be found to end the crisis of capacity presently being experienced by the tertiary education sector where up to 30,000 young Australians, qualified and eligible, are being shut out from higher education and training. The students who are presently being locked out of universities, colleges of advanced education and technical and further education colleges despite that ability must be given the chance they deserve to fulfil their individual potential. Basic literacy, numeracy and reasoning skills must be strengthened through joint Federal and State government measures. No student should have his chance of gaining employment jeopardised or his future prospects for career advancement limited by a poor grasp of these fundamentals. The Government's efforts to this end have been very token to date. A useful first step which we advocate in this task would be the construction of a national framework for determining present standards in these basic skills, a national framework which will enable us to measure changes in those skills over time. Such a framework would enable educators to target those young people in greatest need of assistance in order to lift their basic skill competencies well before their exit from the school system. Finally, and importantly, there is clearly expressed support amongst young people evident in all of the surveys, including the Government's own Priority One survey, deficient as it was, for the idea that young Australians should be allowed the opportunity to perform some community service in exchange for the receipt of the unemployment benefit. This idea has considerable merit. It would provide unemployed young people with some work experience which may be of value to them in the wider labour market. It would be a great pity if the Government rejected this possible initiative out of hand, particularly in the light of the widespread community support for the idea amongst young people themselves. We briefly summarise: After three years this Government has considerable failure on the record in respect of the problems facing young people. Priority One has been a public relations hype. It has been the Prime Minister's vehicle for self-promotion in respect of the youth vote in Australia. In response, we offer positive solutions that should be adopted. Mr DEPUTY SPEAKER(Mr Mountford) —Order! The honourable member's time has expired. Mr DAWKINS(Fremantle-Minister for Trade and Minister Assisting the Prime Minister for Youth Affairs)(3.13) —This debate is interesting in a couple of respects: Firstly, there are three members of this House who are or used to be members for Tangney. Those three members will be participating in this debate: Myself, the honourable member for Canning (Mr Gear) and the current honourable member for Tangney (Mr Shack). This debate will reveal why two of those three members are on this side of the House and the other member is on the other side of the House. The other reason why this debate is interesting is that it gives proof positive that the current member for Tangney is still alive and well. We have been waiting to hear from him for a very long time, ever since he got the sack from the new Leader of the Opposition (Mr Howard) when the member for Tangney was removed from his position as spokesman for employment and industrial relations. The debate is also interesting because it raises a very important issue and one that I thought members of the Opposition would have been too shamefaced to raise at all. In trying to anticipate some of the points that I might make in this debate, the honourable member for Tangney was perfectly correct in anticipating that I would refer to the abysmal record of his colleagues when they were in office. It was during the years leading up to the period 1983-84 that there was a major collapse in the opportunities for young people not only in the labour market but also within the education system. When talking about youth unemployment and opportunities for young people we cannot simply talk about the unemployment rate; we must also look at the opportunities that exist for young people within the education system. How many of them are out of work is not only a function of how many of them are in work; it is also a function of how many of them are within the education system. What we saw during the dreadful years of the Fraser Government was not only a collapse in employment opportunities for young people but also a flight from education as young people left in droves our schools and universities around the country. Therefore, one of our important tasks was to try to encourage young people to remain within the education system so as to increase their opportunities of getting a job and, more importantly, keeping a job. It does not help the debate much at all for the honourable member for Tangney to come in here and tell us what proportion of the total unemployed happened to be within the age group 18 years to 24 years. All that demonstrates is something that we already know and something that the Opposition already knows: That young people are the most disadvantaged of all the unemployed in terms of trying to get into the labour force and remain within it. It is a problem and it continues to be a problem. All I can say is that it is not as much of a problem as it was when we took office. If we look at the number of people between the ages of 15 years and 19 years who were looking for full time work in 1982-83, we see the figure was 23.6 per cent; it then rose to nearly 26 per cent in 1983-84, at the height of the Fraser induced recession; and under us it has fallen to 22 per cent. So we have in fact overcome the problem which was created during the last fateful couple of years of the Fraser Government and its disastrous economic policies. We have never attempted to pat ourselves on the back and say that the problem has been defeated. Of course, it still remains a very serious problem with unemployment among young people being two to three times higher than it is for the population as a whole. I might say that we were the first government ever to bring in and put together a coherent policy to address the problems of young people. It is a central element of our policy to ensure that the disadvantage that young people confront in trying to enter and remain within the work force is overcome. It is all very well to have these glib suggestions from the Opposition, bereft of a policy in this area at all. We had to wait until the dying moments of the speech of the honourable member for Tangney to hear any positive contribution whatsoever in terms of what the Opposition would do about it. What do we come back to? We come back to two essential elements: The first being that there ought to be a cut in youth wages. Of course, the honourable member for Tangney has learnt that that is not a very popular proposition, so he has now qualified it by saying: `Only in circumstances where exploitation would be prevented'. Of course, exploitation cannot be prevented if some kind of wholesale slashing of youth wages is allowed which, of course, is the Opposition's real intention. If the honourable member for Tangney will not say it, one has only to go to a couple of the Liberal Party State campaigns to realise what the Opposition really means when it talks about the question of youth wages and by how much they should be slashed. The honourable member for Tangney might be coy about saying what he means, but Mr Hassell, Mr Kennett and Mr Olsen were not too coy in saying what they meant about slashing youth wages in terms of trying in their fantastic view to have some effect on increasing opportunities for young people. We know that that will not work. In fact, recent history tells us that, when there was a relative decline in the rate of youth wages compared with all wages, we found that youth unemployment did not go down, it went up. When relative wages of women went up, we found that their employment went up in line with the increase in economic activity. So there is no statistical foundation for this fanciful claim made by the Opposition on this occasion. Then there is the other plank to the Oppos- ition's yet to be revealed policy. We have been waiting on the edges of our seats to hear anything at all. As yet we just hear the same two planks: The first is slashing youth wages and the second, of course, is some kind of civil conscription which says that one can only receive any payment from the Government as long as one is involved in the education system or as long as one is prepared to undertake some kind of community work. That is not the kind of approach that is going to be welcomed by young people or indeed will go anywhere close to solving their particular problems. What we have embarked upon is not only a serious attempt-an attempt which I might say with very great pride is working-to encourage more young people to remain within the education system but also to try to provide a whole new array of training opportunities for young people, particularly those who leave school early. It is very easy for the honourable member for Tangney and the other members of the Opposition to sneer at the Australian traineeship system and to say that it is a failure. It is a very ambitious program designed to provide 75,000 traineeships a year, which is nearly twice the number of apprenticeships which are currently provided, and additional to those apprenticeships in the established trades. What we recognise is that where jobs are opening up for young people they are in the areas where there is very little or no formal training. Therefore, consistent with the report of the Kirby Committee we have set ourselves a target of establishing this whole new additional system of training opportunities for young people. It is true that we are not going to meet the target that we established for ourselves by the middle of this year, but it is also true that there are 2,000 traineeships currently on offer, and that 800 traineeships have actually been filled. That is a very substantial contribution and I think, if the Opposition were serious about this matter, it would welcome the fact that we have broken the ice as far as this whole new area is concerned. As the honourable member for Tangney quite rightly pointed out, if we are going to move in this area, we cannot do it just as a Commonwealth government; we have to do it in conjunction with employers and in conjunction with unions. Not only that, we have to do it in conjunction with the training authorities and educational institutions over which we have little or no control. But, through the patience of my colleague the Minister for Employment and Industrial Relations (Mr Willis), we have made substantial progress. We have not made as much progress as we would have liked, but we have made progress. I think that now these principles have been established successfully in the retail area, an important part of the work force targeted by us, they can be applied elsewhere within the work force. I think the young people of Australia recognise this as a serious exercise on behalf of the Government to provide them with new opportunities. It is not enough just to get them into the work force on the basis of some trumped up policy of cutting youth wages. It is essential that once young people are in the work force they have the chance to stay there, and they will stay there only if they are worth employing once they become eligible for adult rates of pay. The Opposition's policy-- Mr Gear —What is it? Mr DAWKINS —To the extent we know about it, it is an absolute prescription for young people being taken on at bargain basement, fire sale prices for a couple of years and junked again when the wages go up. We are interested in ensuring that during those first crucial years of employment they have the opportunity for real training which will establish them permanently in the work force in decent jobs. The other area on which I want to touch is that of income support. It was a matter of great disappointment to the honourable member for Tangney that we successfully addressed the worst aspects of the mish-mash of income support arrangements which we inherited. He and I both know that the former arrangements, under which there were some 37 separate benefits, none of them related to the other, all pursuing different and sometimes contradictory purposes, represented a complete confusion for young people and a barrier to providing new opportunities for them. He is astonished that we were actually able to tackle that program and to make the first important steps towards introducing commonality as far as allowances are concerned. He has made the trite observation that the qualifications criteria for the unemployed are different from those for people in the education system. I wonder whether the honourable member is really suggesting that education allowances, at whatever rate, ought to be universally available to all young people regardless of their family circumstances. If that is what he is saying, it is entirely contrary to everything else he has been saying on this issue and to everything the Opposition generally has been saying. We cannot have universally un-means tested payments going to students because that would be a very in- equitable way to spend the scarce funds that we have available. No; what he is really talking about is the fact that he wants to means test the application of unemployment benefits. He ought to recognise what an administrative nightmare that would be, how little the savings would be if we did go over that route and, more importantly, how unfair that would be to so many young people who, after all, face the most miserable circumstances of anyone within the community in terms of the prospect and, indeed, the reality of unemployment. The Opposition has no right to make marginal points about our very great and historic achievements in terms of cleaning up the income support arrangements. The reforms in that area are still continuing and will continue over the next few years until such time as we can remove, to the extent possible, the disincentives in relation to education as opposed to life on the unemployment benefit. I want to relate finally to the precious comments the honourable member has made about Priority One. I am delighted with the success of that program. Young people also are delighted with its success, because they know that this is the first government for a very long time that has been serious about their concerns. We have given them a voice and, more importantly, an ear to listen to their problems, concerns and hopes for the future. What the Opposition is so alarmed about is that we do talk to young people, listen to them and, in a perfectly open way, reveal to the whole of Australia what they have to say, and the Opposition finds very little joy in what young people have to say in terms of its own bereft policies and approaches. I will defend-I have absolutely no qualms in doing so-the phone-in program. Under that program, as an integral part of International Youth Year, we were able to provide the opportunity for 26,000 young people to put their views, concerns, aspirations and ideas directly to the Commonwealth Government; to have them recorded and published and to have them not only taken notice of but also put into effect. Over this year and subsequent years we will be working to implement those ideas that young people have expressed to us. Mr DEPUTY SPEAKER(Mr Mountford) —Order! The Minister's time has expired. Mr McGAURAN(Gippsland)(3.25) —The irony of a failed Minister trying to defend the Government's failed youth employment strategy should not be lost on anybody. The irony continues: A failed member of parliament and a failed candidate for the seat of Scullin, the former honourable member for Casey, is in charge of it. Is it any wonder that Priority One is a total failure? These two people constitute the biggest comedy duo since Abbott and Costello. It is a ridiculous farce with the most serious impli- cations for a whole sector of disadvantaged people in our society. The Minister for Trade and Minister Assisting the Prime Minister for Youth Affairs (Mr Dawkins) is a crippled, spent force. He has little standing in his own Party, he has even less in the community and he has no standing among the young people of Australia. If this is the rebirth of the Minister for Trade, if this is his first major contribution to this Parliament since the utter disgrace that he suffered two weeks ago, heaven help the Govern- ment's unemployment strategy. If he had laid the problems of Priority One and other aspects of the Government's youth policy on the table and attempted to defend it in a rational manner, we could have accepted it. But he has come in here with utter overkill saying that he is delighted with Priority One. Eight hundred traineeships have been filled nine months after the strategy was announced! It falls a long way short of the 10,000 promised by the end of June. It has only 9,200 to go! How many weeks have we left in which to achieve that target? That target is important. The Government is telling us that the target is not important because of all the complexities involved. I will tell honourable members opposite why it is important. It is important because Government members raised expectations. They told young people that they had the panacea for all the problems of youth employment. Does the Government think young people are naive? Does it think they are gull- ible? It has tried to play them on a break, but let me tell the Minister for Trade and any other member of this Government who would seek to defend the most cynical and, to use the word of the honourable member for Tangney (Mr Shack), corrupt scheme put in this place for many a long year that it will rebound in their faces. A whole welter of information crosses the desks of all honourable members, but there are some figures that should be indelibly printed on the mind of every member of this Parliament. Some 21.8 per cent of young people between the ages of 15 and 19 years are unemployed. That amounts to over 140,000 individuals. If we broaden the criteria for young people between the ages of 15 and 24 years we find that over 300,000 remain unemployed. It is impossible to overstate the importance of the Government putting in place a realistic, achievable strategy to reduce those shocking figures. Behind the bland figures that are so easily touted lie the suffering-there is no other word for it-and all the problems that flow from a period of unemployment. We know that the average period of unemployment for 15-year-olds to 19-year-olds is six months, some 26 weeks. What is the Government's response? The Government's response is to tell us how delighted it is with its achievements. That is utterly dishonest and it is stretching the truth to such an extent that the Minister who problems it has no credibility-assuming he had any when he first walked in here this afternoon. The Government has to make hard decisions. It has to look at a number of aspects of its policy. Let us look at youth wages. I ask the Minister to refer to a transcript of the Carleton-Walsh Report of 10 December 1985 and to an answer which his colleague the Minister for Employment and Industrial Relations (Mr Willis) gave in reply to the following question from Richard Carleton: Is it crazy to insist on 16-year-old brickies' labourers being paid $400 a week? The Minister replied: I think there's a case for a junior rate in all awards, yes. That is the first crack in the rigid ideological stand that the Government has been maintaining ever since obtaining office. Just how much convincing does the Government need before it will in some way introduce flexibility into youth wages? Let us look at a recent report by the Organisation for Economic Co-operation and Development, issued in autumn 1985, which discussed youth unemployment. It found that there were two major causes of unemployment, the first being the entry of women into the labour market force and, secondly, statutory minimum wages. Since the entry of adult women into the labour market force they now constitute almost half of the Australian work force and that is an irreversible trend, even if it were desirable. The Government must examine and respond to the undeniable link between youth wages and the level of youth unemployment. The OECD report states: In the United States, where the biggest growth in the youth labour force has combined with rapid growth of the adult female labour force, relative wages of youths have fallen . . . This decline appears to have been sufficient to prevent any rise in the unemployment rate of youths relative to other groups. The report goes on to compare the United States with Canada, where the level of youth unemployment has risen, and which has statutory minimum youth wages. It is obvious that the Government has to introduce flexibility into youth wages if we are going to assist the young unemployed. But there are several other aspects of policy that the Government ought to be reversing. Let us look at superannuation. Around 11 per cent of working youths between the ages of 15 and 19 have superannuation coverage. Under the Australian Council of Trade Unions Government deal for a 3 per cent productivity superannuation increase from 1 July, that figure will jump to almost 70 per cent. Almost 70 per cent of the youth between the ages of 15 and 19 will receive superannuation without having to make any contribution, as will be the case with all other employees, under this deal. That will make them less competitive. It will eat away at the competitive edge which is the best selling point for young people. I wonder just how serious this Government is with regard to young unemployed. The Bureau of Labour Market Research, in its 1983 youth wages report and in its 1985 youth employment patterns report, concluded that more work needed to be done on researching the problems of young unemployed people. For instance, it specifically recommended that a survey be made of all awards so as to determine which awards provide for some youth allowances and which do not. The Government does not even know how many awards allow for youth wages. It has not even undertaken the research that the Bureau of Labour Market Research asked it to do. It is in a position of ignorance. Just how serious is the Government? I also refer the Government to the report on youth wages by Mr Paul Miller of the Department of Economics at the Australian National University. It is a long, detailed thesis on youth wages and the link with young unemployed. I simply quote the conclusion in the report: The available . . . evidence confirms the predictions of economic theory: increases in wage rates for a category of labour reduce employment of that group and are also associated with an increase in unemployment. Nobody in the Opposition pretends that the issue of youth wages is the only aspect of a government's strategy to bring about youth employment, but it is a major aspect which this Government, because it is beholden to the trade union movement, will not even consider. Priority One, like the drugs offensive, seeks only to promote the Government, particularly the Prime Minister (Mr Hawke). Following the appearance of the Prime Minister on A Country Practice, one can envisage all types of things for producing and packaging the Prime Minister to foist him upon an unsuspecting public. In Question Time today, we heard about the anti-smoking campaign of Yul Brynner. I am worried that it may have given the Prime Minister some ideas. He may start an anti-smoking campaign as another means of promoting himself. We may see the same glossy, slick and dishonest publications that categorise Priority One and the drugs offensive. He will probably want to take Paul Hogan's position and promote tourism or that of Molly Meldrum in promoting bicycle safety, because that is about all that Priority One and the drugs offensive will achieve. The Government has put all of its eggs in one basket. If Priority One fails the Government will not have a youth employment strategy. There are many other issues that affect young people, including the state of the family, education and homelessness. With regard to all those issues the Government does not have a coherent, identifiable strategy. The Minister thinks only in terms of the promotion of his Government. He has a defensive attitude, and so he ought, given that anything he touches in whatever field, let alone in the field of youth unemployment, crumbles before our very eyes. Mr GEAR(Canning)(3.36) —Firstly, I congratulate the honourable member for Tangney (Mr Shack) for proposing this matter of public importance. Like the Minister for Trade and Minister Assisting the Prime Minister for Youth Affairs (Mr Dawkins), I am rather amazed that the honourable member had the hide to stick his head up on this issue. During his tenure as shadow Minister for education and youth affairs, he has not asked one question in the House related to youth policy. Of course, as the Minister has pointed out, he has no policy at all. The honourable member for Gippsland (Mr McGauran), in his contribution to debate on the matter of public importance before the House, went on with a bit of personal abuse of the Minister and the former member for Casey. Members of the House should know that the honourable member for Gippsland was not above requesting the former member for Casey to go to his electorate to help him out with regard to Priority One. From all accounts, he got an excellent response. So much for that! The honourable member did nothing but offer abuse in his opening remarks. Later he started to get into some other areas. He mentioned a brickies' labourer being paid $400 a week. That just shows what he knows about the building industry. I can tell the honourable member that any junior brickies' labourer in Australia who is working for $400 a week is earning it. The fact is that on the building sites people are paid for what they do. The honourable member for Gippsland also talked about the editing of the phone-in. It was not edited because the calls were coming in from all around the country and the Prime Minister (Mr Hawke) took all calls as they were put through to him. They were not channelled in any way. So the Prime Minister was answering the questions that were put to him. The matter of public importance before us today refers to the adverse effect of the Government's economic policies. What cheek the Opposition has even to mention economic policy, given that we can look back on its policy! I wish to remind the House of some of the results of the economic policies that we have seen in the first three years of this Government. With regard to jobs, 630,000 jobs have been created, bringing the unemployment rate down from 10.4 per cent to 8 per cent. Under the former Administration, of which the honourable member for Tangney was a member but of which the honourable member for Gippsland was not, unemployment rocketed, with an increase of 260,000 in the unemployed in one year. Not one job was created but 260,000 were lost. Yet members of the Opposition have the hide to come in here and talk about our economic policies. Inflation is currently running at 9.2 per cent-we know it is at that level because we floated the dollar-but it is falling. The former conservative Government had seven years to combat inflation. When it was kicked out, inflation was still at 11.5 per cent. Honourable members will remember that that Government brought on a constitutional crisis and said afterwards that the main thrust of its efforts would be to reduce inflation. In its stated intentions, it was a miserable failure. Let me remind the House of that Government's miserable record. The unemployment rate for teenagers looking for full time work is now 6.1 percentage points below its peak of 27.9 per cent in July 1983. Teenage employment increased by 34,900 in the year to February 1986. So this Government is about putting people back to work and not putting them on the dole, as was the former Government. The honourable member for Tangney made great play of the fact that this Government has been in power for three years. I remind the House that the Opposition parties were in power for 30 years. If we look at the way in which policies which influence the economy work, we find that it takes a little more than three years to get them working. I remind the House that 30 years ago this country was selling wool, wheat and unprocessed rocks overseas. When we took over from the previous Government in 1983, we were selling the same things. I wish to compare the policies adopted by conservative governments over 30 years with those adopted by countries such as Japan and Sweden which took a very much more progressive view and updated their technology instead of protecting their industries. In fact the Minister for Science (Mr Barry Jones) put it very succinctly when he said that if one wanted to see a working museum one only had to come to Australia. When that was coupled with the overvalued dollar that the conservative parties maintained, the imminent collapse in 1982 of our manufacturing industry put all those young people out of work and destroyed any chance that they ever had of getting a job in this country. Yet the Opposition comes here and says to us: `You have been in power for three years; what are you going to do about these problems?' We have done a lot. The steel industry plan and the car plan are two examples I could point to immediately and there are others including incentives for research and development in this country, which was never a feature of the Opposition's tenure of office. I turn to the tables that the honourable member for Tangney incorporated in Hansard earlier. The reason we have such high unemployment among young people-and the honourable member would recognise this-is that they do not have any skills. As we move away from high unemployment and put people back to work, those who will find jobs first are those who have experience and skills. Unfortunately young people do not come into that category. If the percentage of young people out of work is increasing, it is because of that fact. It is recognised that young people do not have skills that enable them to compete in the job market. The Minister for Trade, who is at the table, pointed out quite rightly that when young people leave school there are only two or three options open to them at present. They can go into full time tertiary education, they can go into a trade, as I did, or they can take some other form of training. However there are a large number of people who have no training and that is the whole focus of the youth traineeship scheme. When this Government was first elected one of the first things we did was to commission two reports-one from a group from the Organisation for Economic Co-operation and Development and another headed by Mr Peter Kirby, the Director of Technical and Further Education in Victoria. Both those reports looked at the same issue, that is, youth policy within Australia. We recognised that there was a reason for the large number of young people out of work and we wanted to do something about it. When those two groups reported back to the Government a compilation of the recommendations in both reports went into forming the traineeship aspect of Priority One: Young Australia. We really must restructure our economy so that we are not sending wool, wheat and unprocessed rocks overseas in the way that conservative governments did for 30 years. Let us look at our balance of payments. The problem here is directly attributable to the fact that those commodities are no longer in demand as they once were. We are now a country with a high standard of living and a fairly well educated work force but with very little tertiary industry on which we can build. Let me look at the record of the previous Government once again. When we talk about compassion for youth and the way in which we treat young people we must recognise that in most cases-well over 95 per cent, if not 99 per cent-those who do not have jobs do not have them through any fault of their own. Therefore, the government of the day has a duty in some way to make sure that there is provision for those young people. Unemployment benefits fall into that category. Under the former Government the maximum rate of unemployment benefit for 16-year-olds to 17-year-olds was frozen for seven years. Seven years-what compassion! What compassion did members of the previous Government have for those young unemployed people? The same criticism that they are levelling at us today could be levelled back at them. But at least, as the Minister has pointed out, this Government has recognised that young people need income support in many cases and has rationalised all that mish-mash of income youth support schemes which not only included unemployment benefits and TEAS, but many other benefits as well. This was the first government that had ever done that and I believe the Minister at the table should be congratulated for the significant part he played in that. As an example of the cynicism of the former Government I point out that unemployed 16-year-olds and 17-year-olds never got a rise until November 1982. Those of us who can stretch our memories back to that time will remember that that was part of the big family Budget. It was John Howard's Budget to enable Malcolm Fraser to launch himself into an early election. For seven years the Government neglected the unemployment benefit for 16- and 17-year-olds and then in a last ditch attempt it threw some money at them in the 1982 Budget because it knew that it was going for an election. The Opposition was thrown out of government because it was incompetent at everything. It had no wages policy, no economic strategy and no youth policy-and it still has not. It is recognised as the worst Opposition in this country and its performance today will ensure that it stays there. Mr DEPUTY SPEAKER(Mr Mountford) —Order! The debate is concluded. Mr MILLAR(Wide Bay)(3.45) —On behalf of the Parliamentary Standing Committee on Public Works, I present the second report of 1986 of the Committee relating to the improvement of international terminal facilities at Sydney (Kingsford-Smith) Airport. I seek leave to make a short statement in connection with the report. Leave granted. Mr MILLAR —The recommendations and conclusions of the Committee's report are as follows: First, improvements are required to passenger processing and baggage facilities and public areas in the international terminal at Sydney (Kingsford-Smith) Airport to cater for increased passenger numbers during daily peak periods. Secondly, the Committee believes that the proposed work will not alleviate congestion to a significant extent and at the end of the three- year construction period the problems now being experienced will be even more acute. Thirdly, the Committee does not believe that the proposed work at an estimated cost of $20m will be the most effective use of the money to be expended. Fourthly, the Committee concludes that it is not expedient for the proposed work to proceed. Fifthly, planning for the provision of a new or substantially expanded international terminal building should commence immediately. At the public hearing into this proposal at Sydney Airport last February representatives of airlines, staff associations and unions canvassed a diversity of matters ranging from the overall concept of the extensions, relocation and configuration to specific matters relating to the various components of the proposal. The reactions to the proposed work from the airlines and staff associations were less than enthusiastic. In short, they were lukewarm. It was argued that the proposed work would not alleviate congestion to a significant extent and, more importantly, that at the completion of the proposed works in three years' time the forecast congestion would be even worse than that presently experienced. It was felt that disruptions to terminal operations caused by building activity would compound capacity problems even further despite assurances that were given by the representatives of the Department of Housing and Construction that every effort would be made to minimise disruption. The Committee believes that at least two measures should be implemented immediately to overcome bottlenecks in the processing of inward and outbound passengers. It is apparent that one of the underlying reasons for congestion in key departure and arrival areas stems from the number of staff on duty during daily or weekly peak periods to process the increasing volume of passengers. No amount of physical work can be expected to improve processing times if insufficient staff are available. The Committee believes that the impact on terminal operations resulting from the `bunching' of arrivals after the morning curfew ceases to operate could be reduced if the curfew were lifted an hour earlier than at present and aircraft landed from the direction of Botany Bay. The Committee believes that these actions would be far from a total solution to the problem but could assist significantly whilst the proposal for a new or substantially expanded terminal is addressed. The following Bills were returned from the Senate without amendment or requests: Oil Companies (Stock Loss Reimbursement) Bill 1986 Wool Industry Amendment Bill 1986 Excise Tariff Amendment Bill 1986 Bill returned from the Senate with amendments. Ordered that the amendments be taken into consideration in Committee of the Whole House at the next sitting. Debate resumed. Mr MAHER(Lowe)(3.50) —I had not quite finished the comments that I was making before the suspension of the sitting for lunch on the Taxation Laws Amendment Bill 1986. As I was saying, this legislation is part of the Government's taxation package. Today we are debating provisions to restrict and limit the amount of interest that can be deducted under negative gearing and to allow a depreciation allowance of 4 per cent. I was pointing out the importance of this quite epoch-making legislation. It is legislation which will close tax deduction loopholes to people on high incomes. These loopholes, which exist only in this country, were plugged years ago in every other nation. This legislation will rank among the greatest reforms ever brought into this Parliament. The Australian people and Australian families will be able to see that our taxation system henceforth is as fair and as honest as is possible. The Australian people know that other governments have tried to reform the tax system. The Whitlam Government proposed to do so but it got caught in the economic collapse and was overcome by events. However, the beneficiaries of this tax scheme will be ordinary, average Australian families. Average weekly earnings in New South Wales for adult males are nearly $500-about $465. This very high income is resulting in pay as you earn taxpayers coming into the high income tax brackets. The Government has committed itself to closing the loopholes, to bring in the revenue that is being avoided and to cut the level of taxes paid by ordinary Australian working families. I commend this legislation. The Opposition has talked about income splitting. As the Treasurer (Mr Keating) mentioned yesterday, such a move would cost $2.5 billion. Such a scheme would essentially benefit high income earners such as members of Parliament. I would like to split my income with my spouse. However, such a scheme would not help the ordinary Australian family. I congratulate the Treasurer on what he is doing with this legislation. This whole package will help to reform our taxation system. It will make it a fair system of which we can all be proud. Mr DONALD CAMERON(Moreton)(3.53) —Two members from the Government side spoke in the debate before the suspension of the sitting for lunch. The honourable member for Macarthur (Mr Martin) spewed hate and accused everyone who was in a negatively geared situation as being a cheat, a thief and a robber. The honourable member for Lowe (Mr Maher) bled his little heart out about a poor constituent who came to him with a matter concerning the experimental approach that the Victorian Deputy Commissioner of Taxation was taking on whether or not negative gearing was a legitimate tax deduction. I wonder whether the honourable member for Lowe had the courage to describe his constituent as a cheat, a thief or a robber? Before the suspension of the sitting the honourable member was pouring out his compassionate heart about a poor constituent of his. He patted him on the head and said: `It will be all right. I will go and make representations to the Treasurer'. Honourable members opposite have double standards. They all design their speeches according to the vote they received at the last election. The honourable member for Lowe has a marginal seat. The honourable member for Macarthur has a good strong Labor seat in the Wollongong area. He is able to come in here and call everyone who has ever owned a second property a cheat and a thief. However, the honourable member for Lowe comes in here and says that his poor little constituent just did not know what was going to happen to him. The whole history of negative gearing probably lies in the fact that Australian governments-I am not just saying the Hawke Government but I am talking about the Fraser Government and the Whitlam Government; it went back to about that stage-have well and truly been into the pockets of the Australian taxpayer. Twenty years ago one had to be earning seven times average weekly earnings before one went into the 60c in the dollar income tax bracket. In today's values, that amount would be seven times $20,000. That means that a person who 20 years ago was earning the equivalent of $140,000 was actually paying 60c in the dollar. No sooner was the Hawke Government in power than, in May 1983, it dropped the threshold level to 60c tax in the dollar to commence at $35,000. The Government has created a system under which many thousands of people have been pushed into the 46c in the dollar tax bracket, the 48c in the dollar tax bracket which cuts in, I think, at about $28,000, or the 60c in the dollar tax bracket, which now cuts in at $35,000. There has been an increase in the level of avoidance because many people have been endeavouring to shelter from the taxation levels which now exist in this country. One cannot blame them. It is not just a matter of avoiding tax. The honourable member for Lowe might have the courage to acknowledge the truth of what I am saying if he lifts his head up. However, it suits him to ignore my remarks. Mr Maher —It is all rubbish. Mr DONALD CAMERON —It is absolutely true. There has been growth in this area and the honourable member's Government has done very little, if anything, to alleviate the problem. According to the second reading speech of the Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer (Mr Hurford), the Government claims that the saving will be $100m in 1987-88. Yet, the Government is saying that the saving in 1990-91 will be $195m. The reason for such a saving is that taxpayers are going to be pushed further and further into the high tax brackets to feed the furnaces of the biggest spending government this country has ever known. It suits honourable members opposite to rip off everybody, to push them further and further and deeper and deeper into high brackets of taxation because by doing so the Government can collect more and more money to fuel the furnaces of social engineering in which it is involved. Mr Maher —That is not true. It is revenue neutral. Mr DONALD CAMERON —That is not true! Even the Minister in his second reading speech talks about the social engineering that is going on insomuch as he says that the price of houses has grown so high that the people who buy houses for letting purposes have to be taken out of the market so that the price can fall. Of course the Government is indulging in a game of social engineering. The honourable member should not sit shaking his head like one of those dummies in sideshow alley into whose throat one drops ping pong balls. Mr Webster —The Minister does not agree with him. Mr DONALD CAMERON —The Minister does not agree with him. We have been given very little information about what has actually happened in the area of negative gearing. All we have been told is that in the full year 1987-88 it will save $100m. But we are not told precisely where this money is coming from. Personally speaking, I do not believe it is morally right that somebody who borrows 100 per cent of the amount required to buy a property should be able to write losses off against income. I am not talking about business. I am talking about the people with high incomes who have been singled out today. I am talking about professionals who might be on $100,000 or $150,000 a year. While I well understand their desire to flee from the tax levels, I do not believe it is morally right for them to borrow the lot and say: `If I get 6 per cent return on my investment, the losses will be written off against my income'. The Government has taken a sledgehammer to crack a few nuts. It has said no to the entire system. I can tell the honourable member for Lowe that the people who are going to end up suffering as a result of this measure will be the renters, the 30 per cent of the population who have never owned their own home, who could never afford to own their own home and who are totally dependent on renting to place a roof over their heads. It is a realism that this system has in the past to some extent subsidised rents in Australia. It has allowed many landlords to purchase a home which is then used for rental purposes. The honourable member for Lowe fails to understand that if one takes a rental property which in Sydney is valued at $80,000-Mr Maher, I do not know whether one could buy an average home in Sydney for $80,000, could one? Mr Maher —Not in my electorate. Mr DEPUTY SPEAKER(Mr Blanchard) —The honourable member for Moreton will address his remarks through the Chair. Mr DONALD CAMERON —Mr Deputy Speaker, what about your electorate? What about the value of homes in your electorate? I ask honourable members to consider the fact that the return on a home valued at $80,000 in modern values in order to be equivalent to 15 per cent interest would really need to be about $12,000. If that money were invested in a bank it could earn 15 per cent interest in a flash at the moment. That $12,000 return represents about $250 a week in rent. As the system has existed in the past people have said: `We cannot charge people $250 a week rent. We will charge, say, $150 a week. There will be a capital gain at the end of it and all our losses will be written off, so we are happy with that'. However, we have now wiped out capital gains with the introduction of the capital gains tax. The Government is now resorting to the abolition of negative gearing and calling everyone who has ever done that a thief, a cheat and a robber. What will happen is that, firstly, there will be a cessation in people putting forward money to buy homes for rental. We will have a drying up of that market. I remind the honourable member for Lowe that when the rental market dries up the end result will be this-I ask the honourable member not to walk out in the middle of my speech-- Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member will address the Chair. Mr DONALD CAMERON —And don't you go either, sir. Mr DEPUTY SPEAKER —Order! I ask the honourable member for Moreton to withdraw that comment. Mr DONALD CAMERON —Mr Deputy Speaker, I withdraw it if you find it offensive. I would not wish to offend you. Mr DEPUTY SPEAKER —It is reflecting on the Chair; not on myself. Mr DONALD CAMERON —I did not realise that. That is the last thing I intend. Mr DEPUTY SPEAKER —You know now. Mr DONALD CAMERON —Yes, I do, Mr Deputy Speaker. May I continue with my speech? Mr DEPUTY SPEAKER —You may. Mr DONALD CAMERON —Thank you, Mr Deputy Speaker. I was endeavouring to make the point that if the Government causes a drying up in the rental market that will cause the little battler who could never get enough money together-- Mr Peacock —That is happening already. Mr DONALD CAMERON —I know. Real estate in Queensland has ground to a halt since the Government made the announcements, firstly on 17 July last year and secondly in October last year, I think it was, in relation to fringe benefits. People have been frightened for almost a year to do anything. Mrs Sullivan —Then there is capital gains tax. Mr DONALD CAMERON —The capital gains hammer was brought in. Every bit of legislation the Government brings in it justifies by saying that it is out to suppress and eradicate the tax cheats in the country. Mr Lee —Hear, hear! Mr DONALD CAMERON —Honourable members opposite are just starting to run out of excuses. The little people will be the ones who pay for this in the long run. I said earlier that the Government is not providing any figures to back up its claims. The estimates given to me suggest that in terms of rental accommodation some 70 per cent of the $100m the Government will save relates to ordinary housing. About $30m of that relates to normal, ethical business practices. As I have said before, the Government has taken a big hammer to smash the nut. The Government really will crush the kernel at the same time. People will walk away from making this sort of investment. I am repeating myself a little bit now, but, as I said, it will be the little people who will suffer. I conclude by saying that had the Government wanted to eliminate those people who made a 100 per cent borrowing and then, to an extent, did get into the coffers the Government could have brought in a rule which said: `Okay, one third of the value of the purchase price of a property shall be the business of the purchaser'. That would have left about two-thirds untouched. That two-thirds of the purchase price would have had every chance of being covered by the amount received from rental. As I said earlier, the return on property is only about 6 to 7 per cent-if any investor is lucky. This is part of the claim which I make to the Government. We will see a drying up of the availability of rental property; we will see the poor in this nation suffer; we will have an escalation in the number of people clamouring and calling for more taxpayers' money to be diverted to public housing to try to overcome the shortages that will arise as a result of this short-sighted legislation. I make a plea to honourable members opposite, in particular the honourable member for Calwell (Dr Theophanous) who, in terms of economics, has already made criticisms of the Hawke Government for its short-sightedness. I ask him to use his influence, even in the dying moments of the debate on this legislation, to bring about these changes. I assure him and all other honourable members on the Government side that their postulations on this subject will mean that the little people will suffer in the end. Dr THEOPHANOUS(Calwell)(4.05) —I will disappoint the honourable member for Moreton (Mr Donald Cameron) if he believed that I would support his claims in regard to negative gearing. I ask him to reflect on this matter: If we look at the whole of the tax package we realise that under no circumstances could we describe it as an anti-business or anti-private investment package. Mr MacKellar —Of course it is. Dr THEOPHANOUS —I ask the honourable member to look at an article, which I wrote last year and which was published in the Age, entitled `Can Labor ever satisfy big business demands?' If he looks at that article he will see that I refer to a number of areas in which the tax package will actually be of substantial benefit to big business interests and to those in the higher income brackets. Therefore, anyone who thinks that the Taxation Laws Amendment Bill and the Taxation (Interest on Underpayments) Bill will do everything for the poor and nothing for big capital has not looked in detail at the whole package. I refer in particular to one of the most important aspects of the package concerning the tax imputation system for companies. The enormous implications have not yet even been understood by the Opposition, but they have been understood by big business. If honourable members opposite do not think that the business sector appreciates and understands that the tax package is fair to them in a number of very important ways I ask them to have a look at what is happening to the share markets at present; they are reaching record levels. This is because the tax package and other measures of the Government have certainly been very satisfactory to business interests. Indeed, one may argue that they have been excessively satisfactory. Mr Peacock —It has absolutely nothing to do with what has happened in the market recently. Dr THEOPHANOUS —I put it to the honourable member for Kooyong that the imputation system in relation to taxation has a lot to do with it. That ended the so-called double taxation on dividends. In fact, it has resulted in a situation which makes it significantly much more profitable for people to invest in the share market than for many years in Australia's history. Anyone who says that the imputation system has nothing to do with increasing investment in this area, especially in regard to increasing speculative investments in the share markets, is, I suggest with the greatest respect, quite mistaken. I turn now to negative gearing which is one of the many areas covered by the somewhat comprehensive Taxation Laws Amendment Bill. The negative gearing aspect has been attacked on the basis that in fact it will result in some reduction in the available stock for the private rental market. However, the point is of course that as the Treasurer (Mr Keating) has made clear on a number of occasions-indeed he made clear from the very beginning when he first announced the package-it is not just a matter of getting rid of negative gearing as a tax avoidance measure. Also involved in this is the fact that a lot of taxpayers claimed negative gearing benefits, but when they were supposed to spend money on repairing their property they did not have that income generated from the property because they had written it off. Prior to their actual earning the income, they sold the property. So the timing was such that they claimed the tax benefit-supposedly for the purpose of generating income through the property-and prior to the actual income being generated so that it could be taxed in other ways, they sold the property and then started using the negative gearing provisions on another property. There was a racket in which people were using the negative gearing provisions in relation to some properties. They were fixing up some properties, supposedly to be used for income purposes. Before the income purposes could be fully realised, they were selling the property, buying another property and so on. This racket was being used for tax avoidance purposes. It became perfectly clear that the Government had to block that kind of approach and the tax avoidance that was a consequence of it. While I am on the topic of negative gearing, I want to make it perfectly clear that in my view the Government has not gone far enough on this issue, especially in view of the fact that we are introducing the imputation system which will mean that many companies, and individuals investing in companies, will benefit. We still have not introduced any form of negative gearing in relation to companies. I think this is a serious matter, having regard to all of the speculative and takeover activities that are occuring in relation to companies in this country. Mr Deputy Speaker, you would be aware-everyone would be aware-of the massive rorts that are being used at present in takeover activities by companies. We are finding that companies are not investing in new enterprises, or taking advantage of the devaluation of the Australian dollar and the lower cost structure for Australian enterprises that has occurred as a consequence of that. This has certainly occurred, notwithstanding the comments yesterday by the honourable member for Mayo (Mr Downer) who I noticed made a claim that costs have increased; in fact, costs have been reduced. What we are finding is insufficient investment in productive enterprises, especially in manufacturing industry. That is occurring because people are finding it profitable to invest in takeover activities and other speculative activities in relation to companies. These people, rather than establishing new companies, creating jobs and investing in new productive enterprises, are involved in takeover activity because at present it is possible to write off the interest on the borrowings in relation to that takeover activity. I know the Government is involved in a review of this matter. Such a review should look especially at the consequences for our foreign debt when those borrowings are made, not from Australia, but from overseas. When people are able to make such a tax write off, there is a distortion in the capital market in this country and a distortion in the investment patterns. This Government has already bent over backwards to effect an increase in capital accumulation. There is no question about that. Anybody who looks objectively at the situation would recognise that that is the case. I refer, for example, to the imputation package and the fact that a large number of the tax cuts will apply to those in higher income tax brackets. Let us face it: This is an extraordinary concession to those people. I find it incredible that people are objecting to the fringe benefits tax and to the extremely moderate capital gains tax that has been introduced. It is probably the most moderate capital gains tax in the world. It is totally prospective. Mr Downer —It is one of the highest in the world-49 per cent. Dr THEOPHANOUS —The honourable member has not even studied the matter. If he compares what we are doing with what the Americans are doing, he might realise how extremely generous and moderate this tax is. The fact is that it does not even apply to any property which anybody owned at the time that the tax was introduced. It applies only to new properties and shares. Honourable members opposite should tell me of any other capital gains tax in the world that is applied in that way. There is none. The fact is that it is the most moderate capital gains tax that man has ever conceived. But it is opposed by the Opposition. Some sections of business are making noises against the very moderate capital gains tax. But they are saying absolutely nothing about the huge concession regarding the imputation system. The fact is that, if the negative gearing proposal has any impact on investment property, it is being countermanded by the depreciation allowance that is being introduced. So the genuine landlords and people who want to use property for rental purposes are able to write off part of their investment by way of a generous depreciation allowance. What could be fairer than that? But we had to block the negative gearing loophole because it was being used by a number of people for tax evasion purposes. Finally, I refer to the overall tax package. I have tried to point out, in the few minutes available to me in this debate, that its provisions are balanced across the spectrum of Australian society. It is certainly generous to business. It is certainly not an anti-business package, as has been suggested. Indeed, it could be claimed that it is an excessively pro-business package. Some people might make that claim. But it is certainly extremely generous to the business sector. Some honourable members look only at elements such as the fringe benefits tax which might bite a certain sector of the community. It is dishonest to look only at that aspect without looking at the enormous impact that the tax cuts will have. As I mentioned, they are extremely generous for those in the highest sector who will benefit from a reduction from 60c to 49c in the dollar. Furthermore, one can get an imputation. That means, basically, that one can invest in shares and, once the company has paid the taxation on the dividends, one can receive the dividends without paying any tax. That is an extremely generous concession and one that ought to be looked at in terms of the total package. So let us not hear any more of this nonsense from the Opposition that the taxation changes are anti-business, that they will result in some reduction in capital accumulation. On the contrary, capital accumulation in the share markets will increase. But it is sad that we have not yet seen the full impact in terms of investment in productive enterprise. That is because certain loopholes still remain that need to be plugged, such as the loopholes which allow speculative takeover activity and investment in a number of speculative areas, rather than making sure that all of the capital that has been accumulated is directed towards positive investment, which generates jobs and growth in the economy. Mr DOWNER(Mayo)(4.20) —This legislation, which is part of the Government's tax package, has at last brought to light some of the details of what the Government is all about. The tax package is slowly appearing out of the mist like some sort of King Kong, devouring all economic growth before it. The measures in this legislation to which the honourable member for Calwell (Dr Theophanous) barely referred are bad measures, as are other taxation measures which are soon to be introduced through the fringe benefits tax which will be debated tomor- row. These are bad measures because they are anti-business, and the proof of their being anti-business is the overwhelming opposition to them from the business community all around Australia. They are against the interests of the wealth creating capacity of the Australian economy and, incredibly, they are measures which militate against the disadvantaged in our society and in no way do anything to alleviate the great problems those people have. Today, unlike the honourable member for Calwell, I am going to concentrate on the legislation before the House, in particular, the negative gearing provisions that the Government has introduced in the Taxation Laws Amendment Bill. Apparently, according to the Treasurer (Mr Keating), negative gearing is some kind of rort. According to the Treasurer, any tax deduction claimed by those groups in the community which he thinks may be unsympathetic to the Australian Labor Party is a rort. Tax deductions, however, which may be to the advantage of others in the community, such as those who may wish to invest in and promote the film industry and those who may wish to support the development of high technology, are apparently not rorts, so there is an internal contradiction in the Government's policies which leaves its taxation policies not just as damaging policies but as policies that make very little intellectual sense. This negative gearing provision is anti-low income groups and it militates against the welfare of those people because it forces up rents and exacerbates housing shortages in our community. I will come back to that later. Indeed, it is a measure which really compounds the problems created by the capital gains tax because, like the negative gearing initiative, the capital gains tax has taken a considerable amount of investment out of the Australian property market. The negative gearing changes of the Government impose a deduction limit equal to the net rental received from a particular property. So, if the interest received is greater than the net rental income, no deduction is any longer available. This is contrary to the usual principles of taxation in this country and, indeed, in other parts of the world because one of the basic principles of taxation is that a company can deduct the costs of earning income against its total tax liability. Companies, after all, pay tax on all the profit they earn, so why cannot they deduct the losses that they may make, unfortunately, in the course of their business? It seems a quite extraordinary decision by the Government to abandon that principle in respect of investment in property which is subsequently rented out, yet it still applies to a whole lot of other areas of business activity. This Government has allowed group losses by companies; in other words, a loss in one subsidiary can be offset against a profit in another subsidiary for taxation purposes. I support that measure, but this negative gearing decision completely contradicts that whole principle. If one is interested in a neutral tax system, this is not a neutral tax measure. It is a contradictory measure, as I have explained, and it is an incoherent measure based on an apparent emotive opposition on the part of the Government to those people in the community who choose to invest in property. The Government claims that this measure is somehow offset by the new building depreciation provisions of 4 per cent, but that is indeed negligible compensation, as anybody in the real estate industry will be able to tell one, because it applies only to new buildings, not to all buildings. To call it negligible compensation, I might say, is being fairly generous. Most people do not buy new houses to rent out-most people buy older houses to rent out-and so this depreciation provision will not apply to them. The real lesson of this particular tax measure lies in the consequences of it for all sections of the Australian community. Already there are signs of very great shortages of rental housing in Australia. There has been a significant reduction too in investment in housing since the Government's tax package was announced. All this has happened at a very critical time when Australia's interest rates have risen to record levels and when lower income home buyers, as a result of those high interest rates, are no longer able to get into the home owner market, as they may have been when we lived in an era of lower interest rates under the previous Government. So those low income people who cannot afford the high interest rates have had to fall back on the rental market and have had to look for rental accommodation. They have found there that, because of the negative gearing provisions of the Government, rents have been increasing substantially due to housing shortages-due to the shortages, in other words, of rental accommodation. To take the March 1986 rental figures, one will see that in the city of Sydney the vacancy rate was 0.9 per cent, in Melbourne it was 1.6 per cent and in Perth it was also less than one per cent. The real estate industry will tell us that a vacancy rate of around 2 per cent is regarded as a reasonable balance. Anything less than that represents a critical shortage, and the effect of shortages, in case honourable members on the other side of the House are not aware of this, is inevitably to force up the price. The price of rental accommodation has gone up significantly under this Government. One has only to look at the latest quite astounding consumer price index figures for the March quarter. They show that the consumer price index went up by 9.2 per cent-a bad enough figure in itself-but that rentals went up by some 10 per cent, considerably more than the CPI. If we look back to the September quarter of 1985, we see that rents were going up at that time by about 7.8 per cent. Why has the increase in the price of rents accelerated since then? The clear answer to that is that it is the result of the Government's tax package and, in particular, these provisions on negative gearing. The consequence of that is that low income people-not high income people, not the super rich whom the Government consistently derides-are the people who are left in a desperate housing trap. Those people are often people who have to resort to what is sometimes known as welfare housing. This measure also affects those kinds of people. It has led to an enormous increase in demand for welfare housing because they cannot afford to rent accommodation and because they cannot afford to buy accommodation because of the high level of interest rates. To take the figures of my own State of South Australia, one can see that in the last year demand for what is called Housing Trust accommodation, that is, welfare housing, has increased by an incredible 8.4 per cent. Why has that happened? Honourable members do not need me to give them the answer-they can find someone from the Labor Party to do that, namely, Mr Terry Hemmings who, for those who do not know, is the South Australian Minister for Housing. He said the other day to the Adelaide Advertiser: Most of those on the Trust's waiting list are experiencing financial and social hardship and facing problems coping with the high rents in the private sector. So there is the evidence that we want-not from me but from Terry Hemmings, a friend apparently of the Labor Party. In other words, Mr Hemmings is saying that this negative gearing provision is hitting, above all, the low income people, the people who can least afford to cope with the housing problems that we now have in Australia. The general effect across the housing industry is also clear to see. If one looks at the figures that came out just today of the latest building approvals, the consequences of the negative gearing provision, the consequences of the capital gains tax and the consequences of the exorbitantly high interest rate policies of this Government are clear for all to see. In March this year building approvals fell by some 7.6 per cent. For four of the last five months, building approvals have actually fallen. Indeed, since August last year building approvals in Australia have fallen by an incredible 26 per cent. The fall has been the greatest in the private sector. Australia is hurtling down into a housing crisis generated by government policies, including those policies outlined in this legislation today on negative gearing. It is a very bad piece of legislation because it is legislation which militates against low income people, which militates against those least able to look after themselves in the community. It strikes me as quite incredible that the rhetoric of the Labor Party is a rhetoric about compassion and yet so often, when one sits down and analyses the consequences of its policies, one can see that the policies themselves are not in the slightest compassionate-they are harsh policies. They are harsh on economic development, harsh on the business community and so often they are harsh on low income people, those least able to cope with the consequences of Labor's policies. Mr SAUNDERSON(Aston)(4.30) —I support the Government's proposals on the tax package. In doing so I would like to refute a few things that the previous speaker, the honourable member for Mayo (Mr Downer), said. First of all, he talked about the problems of rental which have been caused by the negative gearing and capital gains tax. If he looks at the situation in rental accommodation, particularly in the private sector, he will see that the reality is that since we have been in office there has been a gradual improvement in that area, other than in Sydney. The reality is that the problems of housing starts have nothing to do with negative gearing, high rentals or high interest rates; it is simply that the private banks went on strike and refused to loan money. They refused to loan it to people who wanted to borrow. That is the reality of the situation. It has nothing to do with negative gearing. The fact that the honourable member even used that argument shows how little he understands the whole aspect of the tax benefits that we have brought forward. I am not going to speak for very long because I think most people in the community fully understand all the benefits available from this tax package. They cannot wait to see the tax cuts that will be coming in later. I am sure that, when members of the Opposition realise the massive backlash that will come to them if they attempt to prevent these tax benefits coming in by putting at risk the tax package that we put forward at the moment, they will be passed in the Senate. The proposals before the House have been put in place to attack the rorts in the system. Once they come into being, we will be able to pass on the tax benefits at a later time. We have attacked the benefits and the rorts that people have been getting out of the system and that have not been available to the general pay as you earn taxpayer who has borne the brunt of the tax evasion industry. People in a position to get a car from the company and swan around in it from home to work, park it in the indoor garage, not use it for any other purpose and then claim it as a business cost will no longer be able to do that. Fees for children at private schools claimed as a legitimate cost will also be taken away. The entertainment tax has probably grown to be the biggest rort around the place. People were taking their families out for dinner and then claiming it as a tax cost against their business. We are attacking those rorts and eliminating them, quite justifiably, because they were simply rorts that people were exploiting and rorts that were costing the general taxpayer a fortune in additional tax. The enormous benefits that flow from these tax changes are really important. These tax changes are the most significant to have occurred in Australia in our lifetime and will probably remain so. To hear some of the arguments put by people, one would think that we have not taken note of some of the concerns that have been expressed. Let us look at the use of private vehicles for business purposes. One would think that we have not been generous in allowing the legitimate claims; we have. From the cries of the Opposition one would think that we are not allowing any claims at all. The cries from some of the people in the car industry about the terrible impact it will have just cannot be justified in view of the generosity of the package we have put before them. There are two options for the legitimate claimer of costs for the private use of motor cars. He can keep a fully comprehensive record and use that to justify his claims before the Australian Taxation Office, or he can simply accept the percentage allowed under the scale. Someone who travels 30,000 kilometres would have an implied private use of some 10,300 kilometres. That is an allowance of some 65 per cent. That is a very generous allowance. If the individual wants to keep his own comprehensive records he can do that and then claim his real costs. I turn now to negative gearing and the approach taken. We have attacked a rort and stopped it. We have heard bleats from members of the Opposition saying that we should bring it back in because its absence is having a disastrous effect on the housing industry. That is not the case, as I explained earlier. There is no justification. If the private rental market can survive only on a tax rort, it should not survive. But that is not the case; in fact it can survive. The investment in the private rental market is continuing and is not being affected. There has been much publicity recently of the tax on private motor cars and the impact this will have on the car industry. People have said that there will be an expected downturn in the purchase of motorcars this year. They fail to point out that the car industry was at an all-time high last year and that some of the downturn, particularly in foreign imported cars, is because of the effect of devaluation. A lot of the benefits will still be there and the loss in manufacturing should not affect the overall car industry. The transfer from a more expensive imported car to an Australian manufactured car may change the market share, but overall it will not affect the car industry itself. What concerns us is the attitude of Opposition members who for years and years have helped to sponsor the tax evasion and tax avoidance industry but have done nothing to affect it. Earlier today one of my colleagues pointed out an advertisement in the Sydney Morning Herald. It says: `Learn how to make your money grow this weekend'. Some of the things that will be discussed are what tax shelters are still available, tax planning and share trusts under the new tax package. The discussion will cover what shelters are available and how best to exploit them. Who is leading the charge? Who will open the conference-the Hon. J. J. Carlton, the shadow Federal Treasurer. He will be there sponsoring another seminar which will show to the business people, the wealthy and those who can afford it-- Dr Charlesworth —They support the tax dodgers. Mr SAUNDERSON —Yes, Opposition members support the tax dodgers. The honourable member for Perth is quite right. This is just another example of how they do it. Here they are sponsoring a conference which will show people how to exploit another tax rort and keep the costs on the genuine taxpayers. There can be no justification for it. Their record on this is absolutely appalling. They have a cheek to come here and try to argue that the things we have done and the propositions we have put forward are no good and will have this or that effect. They are really bleating because the people whom they have been protecting are the tax evaders, the people who have been rorting the system, who have not been paying tax and who have been putting the burden on the poor and the PAYE worker. The people who support them are now bleating to them and saying: `This is hurting us because we might actually have to pay tax now'. Opposition members are in here screaming and yelling about their problems because the removal of negative gearing means that some of those people who were fiddling their incomes and were not genuine private investors now might actually have to pay tax on the income they are getting because we have closed off their tax shelter. That has not stopped J. J. Carlton, the shadow Treasurer. He is going to show them some more ways and encourage more of these seminars for people to evade tax. It is a disgrace and a sham when Opposition members come in here and say: `We are genuine. We just do not think this proposition is the right one'. Of course, it is not the right one for them because it is attacking their supporters, those people who do not pay tax and who have been evading tax-the ones Opposition members have been protecting and looking after for seven years. When we came to office the reason there was such a problem with the deficit and a whole range of things was that members opposite had been so busy protecting those people who were avoiding and not paying tax that members opposite were not worried about the income and the deficit. If members opposite had cared more about tax evasion, about having an efficient Taxation Office and about enforcing the laws that applied, there would be a lot more income coming in because a lot more people would be paying tax. People such as Maher and others who were organising all of these schemes would have been caught up a lot quicker and the tax shelters could have been destroyed a lot earlier. We have destroyed those tax shelters and we will continue to destroy them as they come to light. All I can say is that the Opposition's supporters who now for the first time might have to pay tax can take no comfort in the fact that members opposite stand up here bleating, because it will be a long, long time before members opposite are on this side of the chamber and in a position where they can actually make a decision on this. Mr MacKELLAR(Warringah)(4.41) —As the previous speaker, the honourable member for Aston (Mr Saunderson), said when he rose to speak, he was not going to say very much-he certainly did not. What he did say ranged over the whole area of tax, but I thought we were addressing one particular aspect of taxation at the present time. In short reply to the honourable member for Aston, I am surprised that he spent so much time attacking the alleged supporters of the conservative side of politics saying they were all tax cheats. In fact, I believe that, if the honourable member looks at where most evasion occurs in Australia, he will find it is in the black economy, in the cash economy. Of course, the measures introduced by the Government so belatedly have no impact at all on the greatest tax evasion area of them all in Australia, that is, the good supporters of the honourable member for Aston. The honourable member for Aston should not come in here and suggest that it is only the alleged supporters of the Liberal and National parties who are involved in tax avoidance or tax evasion. Today we are beginning the task of considering a whole range of government tax amendments. We all know that we have seen this extraordinary government hesitation and delay in the introduction of these measures. We have been witness to great affirmations and pledges to tax reform. We heard in the chamber today that this is the greatest tax reform in living memory and probably in the history of our time. What a lot of absolute nonsense. I can remember very clearly when the tax summit was on last year and the Treasurer (Mr Keating) with his preferred option C said that it was the thing that we must have and he almost said: `I will resign if it does not come to pass'. The Treasurer was forced to back down, yet he still comes in and says that it is the greatest tax reform of all time. What a lot of nonsense. One thing is absolutely perfectly clear: In the process of hesitation and Cabinet dithering only those proposals which conform with the accord-I refer to the original statement of the accord-will get through. Having failed to persuade the Prime Minister (Mr Hawke) to move away from the accord's dictates on taxation, which become very obvious in the fringe benefits taxes and capital gains tax proposals, the Treasurer has had to search for revenue items which are consistent with the ac- cord. The measure before us, limiting the income tax deduction allowed for interest paid on money borrowed for rental property, demonstrates the predicament in which the Government has managed to get itself, and it really has got itself into yet another major predicament. We have been witness to the grave problem caused by the effects of interest rates on the supply of housing. Members opposite can say that interest rates do not have any impact in this area. Members opposite simply reveal their total ignorance of what actually takes place in the market-place. This measure before us has been ticking away like a time bomb. Intended to be just another proposal aimed at grubbing around for revenue, because the Government had moved away from a strategy of taxation reform designed to produce an equitable taxation system, it was left with shoddy proposals like this. The effect of the proposal striking out at the rental housing investment market is one which hits very hard the ordinary person in the business of having to find rental housing. The measure, as members on this side have consistently stated, positively discourages investment in rental housing. It is inconceivable that any government which has a constructive approach to the housing problem would have brought on this unnecessary measure to complicate the growing sense of community disillusionment in the Government's housing policy. Of course, the mainstream of the housing crisis is a function of the Government's strategy of economic management. The Government has produced a national interest rate crisis by its attempt to float the dollar and at the same time carry a heavy Budget deficit. It was the failure of the Government's economic management that forced it to rely on monetary policy to compensate for the loss of prestige of the Australian economy, as reflected in the heavy fall in the dollar. The dollar had to be propped up, and the only way to do it was to raise interest rates. The Government has therefore been a principal cause of the rise of interest rates to their unprecedentedly high levels. Now we know the sequential problems for housing. Faced with two State elections, in South Australia and Western Australia, the Government took the line that there would be no move by the Government to raise interest rates for housing. A crisis ensued and, by agreement with the banks, the Government agreed to a special system of raising interest rates in order to allow new home buyers to enter the market. The housing loans market had dried up, and the new arrangement was inevitable as a consequence of the Government's mismanagement of the economy. The policy designed to maintain a lower level of real wage rises through the accord allowed, at the same time, a system of payments to pacify the left wing of the Australian Labor Party to induce it to put up with the accord. These payments, made principally through State Labor governments, met the demands of the Left for Government handouts. They made the Budget deficit uncontrollable and, having pushed the deficit to the heights, it has had to rely, as I have said, on monetary policy to control inflation. The result of all that is that the home owner and home buyer already under contract have had to find upwards of $100 a month more for home repayments. Mr Hodgman —How much? Mr MacKELLAR —It is $100 a month more. That is the measure of the sympathy and the economic management of this Government which prides itself on understanding the problems of the little people-$100 a month more. As my colleague the honourable member for Moreton (Mr Donald Cameron) said in his powerful speech this afternoon, it is the little people who suffer the most. What the home owner and home buyer have had given to them in concessions and indexed wage rises has been doubly stripped away in the financial mechanism that the Government has plumped for. The realities, as I say, were brought home to people in the housing market. Rental housing-the particular concern of those who have not sufficient home savings to put up with high interest loans-is at the same time to be dealt this additional blow. The Government claims that the Opposition is wrong in opposing it. We accept tax cuts, the Government complains, but will not accept taxation proposals. Our position is very simple: We have no intention of accepting bad taxation proposals and we would certainly get no thanks from Australians who are seeking rental housing if we were to accept this one. We find the Government today wondering about the un- popularity of its housing proposals showing up in the Bulletin public opinion polls. The Morgan gallup poll is very much in the news today, despite Mr Justice Murphy, because his impact on the Government's standing has not had time to be measured yet. I quote from today's Bulletin: The Bulletin's Morgan Gallup Poll says that- Mr DEPUTY SPEAKER(Mr Blanchard) —Order! I remind the honourable member that he is addressing the Bill. Mr MacKELLAR —Mr Deputy Speaker, I certainly am addressing the Bill because I am talking about housing and the effect of the Government's taxation proposals on housing. Mr DEPUTY SPEAKER —Order! We are talking about housing but not gallup polls, unless the gallup poll is in relation to housing. Mr MacKELLAR —As I quote the Bulletin, I am sure you will understand, Mr Deputy Speaker. The article states: The Bulletin's Morgan Gallup Poll says that in the wake of the Government's deregulation of interest rates, there has been a reversal of Government and Coalition fortunes- I am sure that you would understand, Mr Deputy Speaker, that interest rates do have an impact on housing- . . . with Labor's support plummeting four points to 45 per cent and the Coalition leaping four points to 46 per cent-the best performance since September. If a Federal election had been held last week, the Coalition would have won. That is an interesting measure of the Government's proposal in the housing area and, of course, the housing problem and the Government's political problem are deepened by this legislation. It will not get any better because this legislation has been brought in today. I might add that it is an absolutely disgraceful-- Mr Barry Jones —Mr Deputy Speaker, I raise a point of order. Could the honourable member direct my attention to those sections of the legislation that deal with houses? Mr DEPUTY SPEAKER —There is no point of order. The honourable member can resume his comments. Mr MacKELLAR —The Minister for Science has had a very bad day in finding information. He was caught out in Question Time today and he has now been caught out in relation to the Bills that we are debating. I inform the Minister, because he likes to be informed, that one of the aspects of the Bills we are debating is that of negative gearing, which has a major impact on housing. Mr Barry Jones —Indirect. Mr MacKELLAR —It has a direct impact. There can be no doubt that at some future point we will see a piece of crisis management of the sort we have just witnessed over the housing loans problem. The Government will simply sit on its hands while this legislation bites in. It will find that the rental housing market is going to shrink and that housing rents will skyrocket, as interest rates have done. The consequence will be that the Government will have many of its own supporters, who are relying on rental housing, coming to it for relief. This sort of legislation is not only crassly stupid but also socially cruel in its effects. How cruel and hard-hearted does the Government want to be? To deprive many ordinary workers of the reasonable security of a rental housing market within their range of earning is, one would have thought, the very essence of political imprudence. But the Government got tied into this measure when it was not so obvious to its none too sensitive or intelligent Left that in attacking rental housing through the capital gains tax-that other retardant the Government has now built in-it was hitting the ordinary mainstream battler. In passing, I refer again to the oft-quoted promise of the Prime Minister (Mr Hawke): `We will not have a capital gains tax'. Yet, as part of the taxation package, the Government proposes to bring in a capital gains tax. The Government is waking up now, but it is a bit too late. It has gone for the wrong tax option and the wrong budgetary strategy, and the results are coming home to roost. The Government has seen the gallup poll. Mr Laurie Oakes, that well known commentator, thinks problems of the Minister for Trade (Mr Dawkins) helped to explain the poll. I do not give that kind of weight to the Government's losses. This is a more long term effect which will not show up but, when combined with the problem of Mr Justice Murphy, which I have already mentioned today, will make for a tatty reputation for the Government in dealing with individual crises. Coming on the heels of the Government's capital gains tax and the crisis in housing loans, the destructive force of this measure is apparent. The capital gains tax is already having its desired effect of redirecting commercial investment away from housing. This has been accelerated by the finance markets and the huge interest rates. The fact is that, as a form of saving and income betterment, housing has been a very important source of investment for the small investor. His investment was often in rental housing, partly for current income and partly for capital gain. Not everyone is a Mr Holmes a Court and can shift resources of large dimensions around the economy in such a way that great personal wealth can accumulate-a process which the present taxation system so neatly favours. The assumption that the small provider owning a second home for renting is a drain on the tax system is a preposterous assumption which the Left, as we have heard in debate this afternoon, has assiduously fostered to encourage a sense of dependence on state aid and state benevolence. In striking at the small investor at the same time in the capital gains tax and the measure we are currently discussing, the Government has done much to inhibit the health of a major social asset. This measure touches the heart of what the polls are about-housing. The crisis to come in rental housing will demonstrate its political stupidity and its economic carelessness. It is, as I have said, a socially cruel measure, and the Opposition is acting in the public interest in opposing it. Mr BEDDALL(Rankin)(4.54) —I am pleased to follow the honourable member for Warringah (Mr MacKellar) in this debate. I notice his great interest in Morgan gallup polls. I am sure that he has a great interest in the latest one, which indicates a dramatic fall-of some 9 per cent-in the popularity of the Queensland Premier. If he follows opinion polls, I am sure that he will follow the next set as they come out when the popularity of the Opposition will assume its true proportion of about 41 per cent. I wish to direct my remarks in this cognate debate specifically towards the Taxation Laws Amendment Bill 1986. This Bill is part of the package of taxation reforms announced by the Treasurer (Mr Keating) in July and September 1985. The effect of this legislation is to provide the Australian taxpayer with the fairest system of taxation in living memory. It is worth while briefly to examine the background against which such reforms were deemed necessary. A crisis has developed in our taxation system. In seven years under honourable members opposite, the taxation of personal income became optional for the very wealthy. The taxation burden effectively fell on those in the low and middle incomes. At the beginning of the 1970s, the top rate of income tax applied at the weekly income equivalent of $110 today. In the early 1970s it applied at five times average weekly earnings. Today, it applies at one and a half times that average. The fact is that taxpayers are tired of paying these excessive tax burdens. The whole weight of taxation has fallen on the shoulders of wage and salary earners. This group, which comprises the majority of my electors, has been paying the bulk of taxation measures in this country. Members of this group have no scope for minimising their tax. Their tax is extracted from their incomes each week. They have no access to the smart lawyers and accountants who can acquaint them with a tax avoidance scheme. Under the Labor Government, they do not have a government which will sit idly by and allow tax avoidance and minimisation to continue. The previous Government was totally unable to respond sensitively to protect wage and salary earners from the ravages which the taxation system underwent as a result of taxation minimisation schemes under the policies of the previous Government. In fact, the former Treasurer, now the Leader of the Opposition (Mr Howard), was exposed by the McCabe-Lafranchi report in May 1982. He admitted on 27 June 1982 that the Commissioner of Taxation had asked him as early as May 1978 to have a special law passed against bottom of the harbour schemes. The relevant law was passed years later. The main reason given by the former Treasurer was that there were people in the Government who wondered whether the piece of legislation was necessary. In other words, at a time of serious bleeding in the taxation system when average Australian families were being cut down by high taxation, members of the Liberal and National parties could see nothing wrong with blatant tax avoidance schemes. It is worth noting that, even in Opposition, the Liberal and National parties have not changed their spots. Five times in the Senate they have rejected bottom of the harbour legislation. Their actions on 19 April 1985 cost the law-abiding taxpayers of this country some $270m. This is enough to finance a tax cut of about $44 a year for every taxpayer. I wish also to draw the House's attention to the publicity I received on the back page of the National Times of 21 February this year in relation to an article from a small business newsletter. The point in the article to which I take exception is the allegation that if I had my way small business will be doomed to taxation without respite. I have never supported an unfair tax regime on any sector. However, I proudly admit that I supported every initiative by the Treasurer to stamp out the rorts in the taxation system and support the measures that are contained in this Bill. Mr MacKellar —What is a rort? Mr BEDDALL —It is what honourable members opposite legislated for. Mr MacKellar —Define a rort. Mr BEDDALL —The bottom of the harbour tax scheme. Mr DEPUTY SPEAKER(Mr Blanchard) —The honourable member will address his remarks to the Chair, not to members of the Opposition. Mr BEDDALL —I will, Mr Deputy Speaker. Mr Blunt —This is a personal explanation. Your remarks must be relevant to the debate. Mr BEDDALL —They certainly are. We are talking about taxation measures and about the way the taxation system in this country has been manipulated by not only those opposite but also the people whom they support-in particular, the people who wrote the small business newsletter. I make no apology for saying that all decent Australians should be appalled at suggestions that tax avoidance should be encouraged. I say to the Treasurer that he should direct the Taxation Commissioner's investigations to those people who promote tax avoidance schemes. Those schemes do not help the Australian taxpayer. Many law abiding citizens, particularly those in my electorate who are pay as you earn taxpayers, do not have the opportunity of the associates of those opposite to get involved in tax avoidance schemes. We have talked about many of those matters. In particular, we are addressing in the legislation now before the House matters relating to the negative gearing of housing. Honourable members opposite would do this country a great service if they explained fully to the people involved in the housing industry the benefits of the 4 per cent depreciation. The effect of that 4 per cent depreciation is that people can write off over 25 years the full cost of construction undertaken for rental accommodation. Many of my colleagues have had the opportunity to explain that to their constituents. I understand that in the State of Victoria it has been fully appreciated by people involved in the building sector. The Opposition has even tried to subject the Australian taxpayers to further abuse with its conduct relating to these taxation measures. The Opposition wants the Government to accept the reduction in marginal rates of taxation and it opposes all measures to pay for them. The Leader of the Opposition has said that it would cost only about $700m or $800m and that the Government should find that money somehow. This statement comes on top of the promises of his National Party colleagues to the rural sector which the Minister for Primary Industry (Mr Kerin) has estimated will cost the Australian taxpayer many billions of dollars. I am referring to the people who set up a razor gang which took a year to identify cutbacks in government expenditure of up to $500m. When the cutbacks finally came to fruition, the sum amounted to a mere $200m. This Government has cut back $3 billion from its outlays and tax expenditures, and it stands ready to protect average Australian taxpayers and their families. The most basic way the wrongs of the past can be corrected is through the passage of these Bills. The future of negative gearing is dealt with in one of the Bills. The Government takes the view that the ordinary Australian family should not have to subsidise those wealthy enough to be able to afford more than one home. Under the old system, a person owning a home could place a deposit on another home and pay off that home with the help of renters. The interest rate payable on that home was a tax deduction for that purchaser. This inevitably pushed up the prices of homes for families trying to establish and purchase their own homes. It also meant that the wealthy could walk around the tax system and establish a tax free capital gain for themselves a few years later. The capital gain proposal that this Government hopes to introduce is probably one of the fairest in the Western world. It is much fairer than the capital gains tax introduced in the United States of America. It is geared for inflation. With that taken into account, the capital gains tax will apply only to the true capital gain-that is, the gain in the price of a property less inflation. Previously, there has been an overreliance on taxpayer-funded investment in real estate. In this country, it is essential that investment be geared to industries capable of establishing export earnings for the nation. Negative gearing has brought about the worst features of the tax shelters in Australia. It has participated in the process of ensuring that ordinary taxpayers have shouldered an increasing tax burden. It has sent out a negative indicator to the market that one could actually involve oneself in raising a capital gain through the purchase of properties. People were not making their capital work in their best interests and the best interests of this country. There has been speculation that the end of negative gearing will cause a collapse in the rental market. The quarantining of negative gearing will be completely prospective from 12 July 1985. So there should not be any effect whatsoever on rents for properties which were held before that date. As well as the measure about the quarantining of negative gearing for investment in residential rental property, we have introduced a 4 per cent straight line depreciation allowance on new buildings for residential purposes. Therefore, as I said before, an investor who wants to invest a legitimate level of investor equity in a property and receive a moderate level of appreciation over time will still do very well from investment in the private rental market. After property realisation, for example, if there is a rate of real property appreciation of 2 per cent over a period and the investor has a 50 per cent equity level, he could still get an after tax return of 13.4 per cent for his investment. Surely that is an adequate level of return on funds. It is one that I think the business community will now start to appreciate. Many of the furphies that have been going around about negative gearing have been put out by the Opposition for mischievous purposes. I am sure that members of the business community are starting to realise now that most of the fears that have been put into their minds will not materialise and that the 4 per cent depreciation level introduced by the Treasurer is probably a real benefit that should have been introduced many years ago rather than having the quarantining of negative gearing, which meant that the wrong signals were being sent to the market and the wrong people were investing in real estate. I know of many instances of people owning up to 13 homes, using minimum equity from previous homes as a deposit for a further home and using ordinary working people to pay off those homes. Young families were forced into paying very high rents to pay off a large number of mortgages owned by particular individuals. Many of those individuals gained a benefit over their fellow taxpayers that was not available to the ordinary Australian who did not have such equity in his properties. I thank the House for its attention, and I commend the Bills to the House. Mr RUDDOCK(Dundas)(5.06) —I take this opportunity to address the House on the Taxation Laws Amendment Bill 1986. In specific terms, my comments will be addressed to the parts of the Bill that amend or facilitate the arrangements for self-assessment of income tax. The specific proposals in the explanatory memorandum on the legislation that is before us are: to facilitate ``self-assessment'' of income tax by allowing an assessment to issue based on information contained solely in the income tax return of the taxpayer; to permit, subject to the time limits presently specified in the Act, an assessment to be amended to either increase or decrease the liability of a taxpayer so as to enable a correct assessment to be made; to provide for the payment of interest at a commercial rate by a taxpayer, subject to remission at the Commissioner's discretion, where the taxpayer's return understates the correct liability for tax, an assessment is amended to correct that understatement and the penalty tax provisions do not apply; Those specific provisions have raised comment in the specialist area of the media and they are of concern to a number of individuals in the community who have given consideration to them. For my part, as one of the members of the Opposition's Treasury committee, I was privy to the discussion on the approach that the Opposition should take on this matter. One of the great disappointments to me and to my colleagues was that, as we prepared to discuss these new provisions, we were informed that the Treasurer (Mr Keating) was unwilling to allow officers of the Australian Taxation Office to meet with the committee of Opposition members interested in those matters to outline in detail those very complex and difficult proposals and to explain the way in which the Government and the Commissioner of Taxation intended them to operate. We pressed that matter and, as has been mentioned, I believe, certain correspondence took place between the Opposition's shadow Treasurer, the honourable member for Mackellar (Mr Carlton), and the Treasurer about the merits of the Government's program and the extent to which the Government might be disadvantaged in terms of putting that program in place if its officers were to be charged with the responsibility of briefing the Opposition on those specific proposals. As I understand it, it is a new principle for the Government to refuse to give a briefing in the area of tax proposals. Because of their complexity and detail, a good deal of specialist advice is needed and required. I am particularly disappointed that the Government has taken that approach. I say to the members of the Government that the wheel turns and I think they would be very concerned if they were placed in the same position and briefings were not to be given to them. Quite frankly, it is a pretty poor state of affairs if this Parliament is to be run by the Rafferty's rules of the New South Wales Parliament, where the Opposition is always kept in the dark and never given any insights into the nature of legislation because that is the way in which things are done in that State. That these sorts of principles are being adopted may have something to do with the fact that the Government has a Treasurer who comes from New South Wales. Although differences of opinion may exist, in the area of Commonwealth legislation we are embarking upon a new approach to such matters and the Opposition is not being properly briefed in relation to these taxation proposals. I am particularly pleased at the approach the Opposition has taken. It has foreshadowed an amendment that the self-assessment proposals be put to a Senate committee for review so that at least my colleagues in the Senate may have the benefit of that advice in relation to these questions. I caution Government members who have an interest in this matter to look at a letter in the Australian Financial Review of this week by Robin Speed, a solicitor from Sydney. He is a gentleman whom I regard as having a very good reputation and he is a very competent solicitor. He has outlined in his letter to the Australian Financial Review some of the concerns that he has about the self-assessment proposals. He makes these points as being matters which could well provide a system which is unfair to individual taxpayers and will avoid the safeguards and provisions which must exist in any fair and equitable tax system. He says that there must be: A presumption that a taxpayer is innocent until the contrary is proved, an impartial review of all decisions by the department, and encouragement to make a full disclosure. Anybody who knows anything about the operation of the tax system in this country at present will know that it is extraordinarily difficult, because of the considerable number of people who want reviews, to get those decisions promptly so that justice is done to taxpayers. Mr Speed's letter continues by arguing for: Removal of the suspicion of male fides and the temptation for blackmail or corruption inherent in the existing powers to impose 200 per cent penalties or remit penalties which could bankrupt a business or a family. I am sure that every one of us has come across situations like this; I know that I have in my electorate office. Time and time again I find that people are considerably disadvantaged by having to pay tax in advance while they have their right of review considered in matters that are delayed for many years in many cases and where funds have had to be borrowed to enable those people to exercise that fundamental right to have a decision reviewed. Mr Speed goes on to advocate: The department issuing simple explanations of tax laws that bind the department, and issuing promptly binding rulings on matters that concern taxpayers, and having the capacity and direction to promptly and competently deal with questions and correspondence with taxpayers and their agents. He makes a further point for: Prompt recourse to an independent third party for resolution of any disputes with the department for any exercise by the department of a discretion. The availability of free competent legal and accounting advice to assist the taxpayer with any dispute with the department. Removal of the retrospective application of decisions by the department, courts and Parliament . . . He makes that comment about retrospective legislation which we very much abhor. He goes on to call for: Prohibition of issuing assessment on two or more different taxpayers for the same income. I have come across such situations recently. It is a matter that must be of concern to all members. Mr Speed concludes that there is a need for: Binding the department to the reasons it gives for issuing a disputed assessment. As I have also read a lot of other correspondence in the Press on this matter, I am mindful to make two simple points. Honourable members who want to see a system of self-assessment in place with the provision for penalty to operate at some later period-and it can be any period up to three years for assessments to be reviewed-should be very concerned by the nature of the penalties that might be imposed and by the discretionary provisions as to whether the penalties might be waived. These honourable members should consider their own situation and experience in relation to payment of electorate allowances. One cannot simply put in the amount of the allowance and have it accepted by the Commissioner of Taxation. One will have to vouch for it in future and vouch for it fully. Perhaps honourable members would like to be guided by my experience. On one occasion on which I submitted a return when I had spent in excess of my allowance and I had to vouch for all the expenditure, I found that officers of the Taxation Office made judgments about whether the expenditures that I had incurred were proper and correct. Those officers went through the lists of functions that I had attended as a member of parliament and made some judgments as to whether in the performance of my duties as a parliamentarian it was appropriate for me to be at those functions. They disallowed some of my claims. In one instance a disallowed item was attending testimonial dinners for local police inspectors whom I knew in my electorate. Their view was that it was inappropriate for me to claim those attendances against my electorate allowance. I submit that it was a proper expense and I think most honourable members would agree with me. But if honourable members find in individual cases that some three years later these matters are to be reviewed and they have to vouch for expenditure of their electorate allowance-and penalties are likely to be imposed-this will impact very significantly on each and every member of this House. I submit that honourable members should watch very carefully the nature of the provisions that will be put in place in relation to review and in relation to interest that must be paid because in our case in particular there will be matters that will not be readily understood in the office of the Commissioner. We also need to be satisfied that the Commissioner's own judgment in these matters is reasonable. I wish to mention one case in the area of sales tax and it relates to the way in which the Act is being administered. I do not know whether the department has sufficient staff to administer the Act properly, but I have cases of constituents getting penalty notices for tax that they have paid. One constituent wrote to the Commissioner in Sydney on 28 January outlining his experience with his November sales tax return. He sent a cheque by certified mail-so he had evidence-before the due date. The cheque was dated 17 December and it and the return were posted by certified mail on 18 December. A receipt was issued on 6 January and was received by the firm on 22 January. On the day that the letter was written-that is, 28 January-the cheque still had not been banked. I find that absolutely incredible because the amount involved was more than $4,000. That constituent then received notices for having failed to pay his tax. I think that is unforgivable. We need to be satisfied that the Commissioner of Taxation will have the resources and the capacity to make correct decisions and judgments if he is to have the very considerable power to amend returns on self-assessment matters. These questions relating to the system which is to be introduced should be explored in detail with officers of the department. That would enable my fears to be properly discussed and allayed. I very much regret that the Government has, as a new principle, refused to provide a briefing in this instance on these very new and novel applications of the law. Dr CHARLESWORTH(Perth)(5.18) —I am sure that we all share the concerns of the honourable member for Dundas (Mr Ruddock) for our tax assessments in the future. Clearly in the past decade in this country there has been a significant erosion of the fairness and equity of our tax system. Indeed, with this in mind the Government embarked on a major reform of the system. For some time our taxation system has been based on the principle of progressivity and it is our belief that those who can afford to pay a greater share of the burden should do so. That principle has underpinned our taxation system over that time. In its reform, the Government moved to reduce significantly the marginal rates of taxation and those changes will come into being in the new financial year. On top of that, we propose to crack down on avoidance measures. The Taxation Laws Amendment Bill deals principally with the Government's attack on some tax shelters and regional practices in avoidance measures which presently exist and which are very nice for those who are able to benefit from them. However, they mean that those who do not benefit have to shoulder a much greater percentage of the taxation burden. It is important to note that we are not talking about raising extra revenue for the Government here; we are talking about the yield from these taxes which will be returned to the taxpayer. Opposition members have been claiming that this will bring about the demise of the housing industry. The honourable member for Mayo (Mr Downer) was almost hysterical in his claims and we have noticed over the last couple of weeks that he has suggested similarly that the car industry will suffer from our fringe benefits taxation measures. The honourable member for Gippsland (Mr McGauran) had another approach. He said that he could produce an army of accountants and lawyers who could show us how to avoid the proposed taxation measures. He said that the cash economy would explode. Perhaps he is fortunate to be in a position where he can afford to pay large numbers of lawyers and accountants to minimise his taxation. The principal objective of this legislation, of course, is to provide rules limiting tax deductions for interest incurred in borrowing money to finance rental property investments-the so-called negative gearing. It is this shelter of income in other areas from taxation which has provided those involved in these practices with the opportunity to obtain non-taxable capital benefits. Indeed, the interest repayments were such that it was never intended that these procedures would be profitable. According to the honourable member for Mayo and the honourable member for Warringah (Mr MacKellar), the housing and rental industries will suffer. However, these are the same sorts of bleatings and complaints that we heard with respect to the fringe benefits tax on entertainment. I think it is salutary for us to look back on what occurred with regard to the fringe benefit tax on entertainment expenses or, as it was more commonly known, the ending of the free lunch. It is interesting to look at the ridiculous claims that were made at that time by the Opposition in the light of day and perhaps in the clear light of some realistic statistics. In August 1985, the last full month before the disallowance of deductions on entertainment expenses, 284,000 people were employed in the restaurant and allied industries. In December 1985-this is the latest figure which is available to us-303,000 people were employed in those industries. Indeed, there has been an increase of 19,000 since those measures were introduced in August-September last year. There has been a massive 6.9 per cent increase in employment in the restaurant and allied industries. When we consider that there was a total industry employment increase over that period of 2.3 per cent we can see that the ludicrous claims of our opponents were clearly hyperbolic. It seems that the industry propagandists and the tax bludgers are able to throw up these figures, our opponents opposite swallow them and regurgitate them in this place. Some of the examples of this are very interesting. Senator Messner said that 18,500 jobs would be lost as a result of those changes. The National Restaurant and Catering Association said that 10,500 jobs would be lost. Indeed, our own honourable member for Denison (Mr Hodgman) suggested that 80,000 jobs would be lost as a result of these proposals. Indeed, in the first four months of operation of the fringe benefits proposals we saw an increase in employment of 20,000 people-an increase of almost 7 per cent. Mr Rocher —You are on the wrong Bill, Ric. That is on for debate tomorrow. Dr CHARLESWORTH —If the honourable member had been in this place earlier he probably would have heard me say that the same sorts of arguments are being put forward in respect of the housing industry which is the subject of this legislation. I believe we will have the same sort of results. If, of course, the housing industry was underpinned by a tax shelter, as honourable members opposite seem to suggest, perhaps they would certainly agree with the Government's inclusion in this legislation of a depreciation allowance of 4 per cent per annum with respect to residential income producing buildings where construction commenced or commences after 17 July 1985. This should certainly stimulate the construction of new buildings for rental and housing purposes. I would imagine that, in terms of logic, honourable members opposite would see that there would be an increase in the amount of rental accommodation as a result of this measure. The aim of providing this depreciation allowance is an admirable one. Perhaps it is the sort of allowance that should have existed all along to encourage this industry. However, there clearly are some anomalies. I hope that the Treasurer (Mr Keating) will be able to give me some indication in regard to one anomaly which seems to have surfaced in my electorate. Maybe he will be able to provide an answer to my question. I have raised this matter in the Caucus sub-committee and perhaps he will be able to assist me. A builder from my electorate contacted me some time ago because he believed that he had suffered some commercial disadvantage because of this change. I am sure that the change was not intended to do this. The builder had begun to build a number of units before the change on 17 July 1985. When he had completed the buildings and went about trying to sell them he found that a competitor who had started to build a similar set of units nearby after 17 July was able to claim a 4 per cent depreciation allowance for the buildings he was selling. However, that depreciation allowance was not available for the buildings which were under construction on 17 July. It would seem to me that a small bridging provision could be put in the legislation to enable this matter to be readdressed. I imagine that this would involve very little revenue impost on the government. However, clearly I do not believe that the intent of the legislation is such as to impose that sort of commercial disadvantage on the builder I mentioned. The last part of this legislation which I would like to talk about is that which relates to the Sports Aid Foundation. The gift provisions of the income tax law will be amended by the legislation to give effect to the Government's announcement on 10 December 1985 that gifts to the Sports Aid Foundation will be tax deductible. This proposal was outlined by the Minister for Sport, Recreation and Tourism (Mr John Brown) a year ago when we discussed the Sports Commission Bill in this place. Indeed, sports people throughout Australia have been applauding the announcement ever since. It is recognised that this Government has a commitment to sport which is far and away above that of the Opposition. Indeed, the Government has given consideration to sport which touches the lives of most Australians in unique way. This is a responsible approach by the Government because it encourages the private sector to contribute and supplement that money which is already contributed by the taxpayer to sport in this country. Indeed, I imagine that the Opposition should be supporting this proposal. If one listens to the honourable member for McPherson (Mr White), the shadow Minister for Sport, Recreation and Tourism, one can see that he does agree. However, once again, as with the legislation regarding the Australian Institute of Sport and the Australian Sports Commission, he is agreeing and saying: `It is a good idea and we wish we had done it, but we do not trust you'. Of course, the shadow Minister is not saying that he does not trust the Government. He is saying that he does not trust the board which has already been appointed and which will be running the Sports Aid Foundation. Who are the people the shadow Minister is suggesting cannot be trusted? Who are the people on this board who are going to misappropriate the money or who are, in some way, going to use the money for a purpose other than that for which it is intended? The board is made up of Ted Harris, the Managing Director and Chief Executive of Ampol; Herb Elliott, who is known to all of us as an outstanding Australian; Kerry Packer and Kevan Gosper, who are both company directors and well known Australians and certainly, I would imagine, people of high standing in the business community; and Sir Donald Trescowthick, a company director of Victoria. I think it is worthwhile mentioning that Sir Donald has an admirable and proud record with the Elizabethan Theatre Trust of handling money in a similar way and for a very useful and worthwhile cause. Of course, we have heard it all before. We have heard the Opposition complain: `We don't trust the Minister. We think the Minister will do something scurrilous. We believe this board is not going to do the job'. What members of the Opposition are doing is casting doubts on the integrity of members of the board who are, indeed, very great Australians. The claim of political patronage is absurd. All members of the board have a deep interest in sport. They are well known to the Australian community. They certainly have a great deal of financial expertise and influence in business. All of those things will provide this board with a different complexion to that of the Sports Commission. It will provide the Board with the ability to raise money for sport. Indeed, that is the obvious aim of the Sports Aid Foundation. I do not believe there is any fundamental truth in the suggestion that sponsorship will be replaced by this new form of revenue. Indeed, I believe that this will open new doors for the funding of sport. The objective of the Foundation is principally to direct money to sport. I believe that, with the assistance of the Sports Commission, the Foundation will know the direction that it should be taking and that these objectives will be carried out. However, from the Opposition we have `maybe', `perhaps' and `we do not trust you'. The Minister for Sport, Recreation and Tourism has been pushing for the establishment of the Foundation for some time. The sports people of this country have been applauding his moves. Indeed, I reject the amendment of the honourable member for McPherson because I believe, once again, that it is a case of humbug on the part of the Opposition. I support this legislation. I hope that the Treasurer will be able to provide me with some assurances in regard to the anomaly I have outlined about the depreciation allowance. I believe that if he is able to do so it will tidy up this legislation which is long overdue. The country for a long time has been in need of such legislation. Mr BRAITHWAITE(Dawson)(5.31) —I rise to speak to the Taxation Laws Amendment Bill and the Taxation (Interest on Underpayments) Bill. These Bills are part of a tax package which was widely debated throughout Australia at this time last year and which culminated in a conference in July where we were told by the Treasurer (Mr Keating) that it was the intention of the Government to bring fairness, equity and clarity to taxation law. What we have in the Taxation Laws Amendment Bill are 46 pages designed to circumvent the normal trading practices of the businesses of Australia in order to deny deductions to people. The 46 pages of amendments to the principal Act are very complex, very unfair and inequitable. The great clarion call of the Treasurer this time last year that we had to bring fairness, equity and clarity into the tax law obviously has been defeated. I am talking now only in terms of the two Bills we are debating tonight. However, if we turn to the Bills on the fringe benefits tax which we will be debating tomorrow we see that there are 140 pages of legislation to deny legitimate tax deductions to Australians and to make employers pay tax on employees' benefits. Therefore, I believe that the scenario that the Treasurer was trying to paint has been destroyed in this legislation we are debating tonight, in the legislation we will debate tomorrow and in legislation which already has been before the House for debate. The Taxation Laws Amendment Bill can be categorised into several main areas. The area of negative gearing, that is the area limiting tax deduction claims on interest on rental investment borrowings, represents savings to the Government in 1986-87 of $55m and in 1987-88 of $100m. From 1991 onwards the savings are estimated at $195m. There is also the extension of the system of depreciation which is a cost to the Government immediately of $2m and then a cost of $7m in 1987-88. This is an extension of the 2 per cent depreciation introduced by the Fraser Government in connection with tourist facilities. Also the Bill deals with the alienation of income which meant that once a seven-year alienation period was granted a person could alienate income for that period while maintaining the asset contained in that alienation. The recipient could have it assessed over the period of those seven years or more. The capital cost of that alienation normally was taken up in a lump sum which was not taxable. What this legislation proposes to do-although the Government says that there is no gain in relation to this particular aspect-is to destroy what has been regarded for decades as a legitimate taxation device. The taxation law now takes a new direction in the area of self-assessment. This introduces a three-year rule during which time it is impossible for a person to define an assessment as being concluded or final. One wonders about the implications of this in regard to the liquidation of corporations, the bankruptcy of estates and the finalisation of deceased estates. One wonders just how far and how long those proceedings will be delayed just for the sake of self-assessment. It is a self-assessment which throws a further onus back on to taxpayers, removing it to a large extent from the Australian Taxation Office. I say in connection with the self-assessment that it has hidden dangers not only in what I suggested could be delays in regard to liquidations, bankruptcies and the winding up of estates but also in regard to, I believe, further consequences in relation to the backlog, as we understand it, of the many cases which are before a board of review or which are under objection. We understand that this deferment and opportunity to reassess an assessment over a period of three years could quite well be just the beginning of a whole log of unlisted and undecided taxpayers' claims. I believe that if this is a problem at the moment this taxation proposal will exacerbate it. I refer also to the aspect of interest payable both to and by the taxpayer. Apparently interest payable to the taxpayer in cases where the taxpayer has paid too much tax will be taxable. However, the payment of additional tax assessed to be owed by a taxpayer will not be tax deductible. I would like to ask the Government where the fairness is in the application of a rule that, although it should be common to both sides, obviously will mean that there will be an inequity in regard to the taxpayer? I refer also to the gifts to the Australian Sports Aid Foundation which is subject to an amendment by the Opposition. I believe that matter has been well debated already. I would like now to turn to three aspects of the legislation. One aspect concerns negative gearing, the second aspect concerns self-assessment and the third aspect concerns the pressure that has been placed on tax agents and taxpayers as a consequence of this Bill and other Bills. Clause 11 of the Bill which relates to negative gearing runs into 16 pages. The object of clause 11 is to eliminate the taxation advantages of negatively gearing rent producing properties. As part of the taxation proposal the Government intends to prevent the negative gearing of shares purchased where the company, in which the shares are purchased, is a rental property company for the purposes of the provision. If one goes on through the clause one comes to the proposed new sub-section 82kzc (6) which defines a rental property company, trust or partnership. That proposed new sub-section is intended to define a rental property company, trust or partnership by reference to the proportion that the net rental value of the rental property bears to the net worth of the company, partnership or trust. Where the value is more than 75 per cent of the total net value, the company, partnership or trust will be caught by the provision. The real difficulty arises in applying the provision in determining the net rental value and the net value. Apparently the Commissioner of Taxation is empowered to determine the net rental value of a particular property. This is quite unsatisfactory. It is almost a further discretion being given to the Commissioner. One wonders why-in regard to the complexities of the fringe benefits tax in legislation yet to be debated-if we want to get down to pinpointing problems and having them resolved by legislation this aspect of negative gearing could not be adequately explained through legislation providing an appropriate formula for the guidance of the taxpayer rather than allowing the Commissioner the discretion to adopt his own value. Of course, the net worth of a company is not readily identifiable. In many cases the net worth as determined according to book values may be nominal. Certainly corporations vary as far as their net worth is concerned from those famous $2 companies to those long-established private and public corporations in which the net worth runs into millions of dollars. However, the legislation does not take into account that particular aspect. Again in the case of trust, trustees generally distribute all their income to avoid the maximum marginal tax rate. Again, that is a situation forced on them as a result of previous changes in the Income Tax Assessment Act. Thus in many cases the net worth of a trust could be as little as $20. In all of this there is no regard to the value of goodwill which in some trusts, corporations and partnerships is material. It is always a particularly difficult matter to value. If the Commissioner ignores this very tangible asset of goodwill in assessing the total assets of a company, partnership or trust, the net worth could be nominal. Again, the consequences of this could be quite grave. The difficulty in this area cannot be overestimated. Enactment of the legislation in this form will create significant difficulties for taxpayers and tax agents in assessing the viability of borrowing funds to invest in companies, partnerships or trusts where the tax deductibility of the interest is a relevant consideration, but is also a matter of some dispute and further consideration for the Commissioner. When one takes this aspect of the law in connection with self-assessment it immediately throws up the problem of the ability of the Commissioner to go back on an audit three years from the original self-assessment and reopen the assessment for any purpose he requires. For instance, in making a self-assessment under any of those aspects, the tax agent and also the taxpayer should have the benefit of being able to supply full facts in making that self-determination in what will obviously be in the taxpayer's favour. But in all other respects, if he has made a full and complete disclosure of all relevant items, and makes the self-assessment, it will be three years from that date before anything can be done to assure the taxpayer that the assessment is clear. Essentially, the new system of self-assessment will involve taxpayers lodging returns which will not be scrutinised by an assessor. Thereafter, the Commissioner's auditor will audit the taxpayer and make any adjustments which he or she regards as appropriate. At present, provided the taxpayer makes a full and true disclosure in his return, the Commissioner cannot amend it, except to correct an arithmetical error or a mistake of fact. It is proposed by this legislation to amend section 170, by clause 20 of the Bill to permit the Commissioner to amend a return within three years for any reason. The difficulty created is this: Suppose that a tax agent is preparing a return on behalf of a client who is a transport operator. Apart from the negative gearing aspects that I mentioned earlier, the client buys a secondhand vehicle. He then finds within six months that he has to replace a blown-out motor. In all conscience the tax agent and taxpayer would be able to claim that expense, I believe, as repairs. But there are inferences within the Act which would indicate that the Commissioner can also say that they are initial repairs and thus should be capitalised and the main asset depreciated. This means that for a period of three years the tax agent and taxpayer will be in somewhat of a quandary as to whether what the taxpayer has done, in what he believes to be a full and true disclosure, is actually right or whether he is judged by the Taxation Office to be wrong. This type of thing is now irrelevant. Taxpayers in circumstances such as this must wait for three years to see whether they will be audited and the matter disputed. So it is suggested that the legislation, if it is to be implemented, should take the precaution of suggesting that the taxpayer should be able to elect to have the assessment assessed and to have that particular difficulty resolved, so that all the facts are known. Alternatively, perhaps, the tax agent should seek from the Commissioner a binding ruling with respect to these facts which he believes could be in dispute if an audit arises. It should be understood that in the audit it is quite likely that a heavy penalty will be imposed, and that will only exacerbate the situation. The third area I wish to point out is the further onus placed on taxpayers and also tax agents in this regard. There is a shortage of tax agents and their time is becoming more limited as the priorities of the Taxation Office are raised. I did read in the Sun in Queensland of 26 April, I believe, that the Commissioner, in an address to a tax agents meeting in Tasmania, indicated that the work of tax agents was rather shoddy, that the returns were ill prepared, some of the schedules were missing and further information had to be sought in order to make the final assessment. I do not believe that I should pass a comment on that, because I did not see the full text of the Commissioner's address on that occasion. What I would like to refer to is the other side of the coin, which is represented by the pressures imposed on tax agents through penalties and time commitments due to the introduction of this legislation. In fact, the pressure of lodgment timetables in a normal tax agent's office or a public accountant's office has been unreal for the past 20 years, even during the time when I was practising. The timetables were said to be necessary so that assessments could be made, processed and paid by 30 June. These pressures included the threat of severe penalties. Accountants have had to reorganise their priorities to satisfy these new departmental demands and almost impossible lodgment timetables. The timetables have not been changed to take into account the additional workload when the Taxation Office, through legislation, has insisted upon new initiatives such as the prescribed payments tax and now the type of legislation that is before us today. It is little wonder that, under these pressures which are not recognised by the Office, the lodgment of some returns failed to meet the Office's exacting requirements. Tax agents do not have available to them strike action which is available, possibly, to taxation staff to settle some of their disputes. Tax agents in the past have simply had to cop it or go out of business because of the pressure. As I say, new demands are being made of them. I understand that the Commissioner was not generalising about all tax agents. But I believe there must be a realistic appreciation of the tax agents' problem by this Government and the Tax Commissioner and his officers, particularly when such penalties are being imposed on both the tax agent and taxpayer. Mr McGauran —But they are not going to. Mr BRAITHWAITE —I believe they are not going to. If one talks to any tax lawyer or accountant, he will say that the legislation is so complex, the demands are so unreal, that he does not have the opportunity to service his clients as his duty demands. But I suggest that, if relief is to be given to taxation staff through the self-assessment procedure, it is high time that the Commissioner took a realistic approach with regard to the lodgment of returns, in order to allow tax agents to live and work within the normal work environment of their profession. Mr CHARLES(Isaacs)(5.46) —The Taxation Laws Amendment Bill 1986 and the Taxation (Interest on Underpayments) Bill 1986 are very important. They are part of the overall tax package that the Government is presenting to the Parliament. It has presented part of that package already. Tomorrow some more important pieces of legislation will be considered, and yet more will be introduced over the next few weeks. I would like to address three aspects of the legislation before the House-negative gearing, substantiation and the Australian Sports Aid Foundation. It was interesting to note that the honourable member for Kooyong (Mr Peacock) was present a few moments ago. Unfortunately, he had to leave. I believe he came into the House to hear about the Sports Aid Foundation, a place where he can put his money. I suggest to him that he could do no better than to put some money into the Sports Aid Foundation rather than lose it every Saturday on the Essendon football team, as has been happening recently. Notwithstanding that, the Sports Aid Foundation is a very innovative and worthwhile foundation that has been put forward by the Treasurer (Mr Keating), in conjunction with the Minister for Sport, Recreation and Tourism (Mr John Brown). It should be supported by everyone in this House. It is an effort to put sport on a professional basis, and have private investment go into that foundation that will eventually help sportspeople and the sporting fraternity throughout the country. The amendment proposed by the Opposition, I believe, is airy-fairy. It tries to tie up the Sports Aid Foundation before it even gets going. It shows a complete lack of confidence in the respective members who, as the honourable member for Perth (Dr Charlesworth) mentioned earlier, are notable people within our community. I think it is a rather poor show that the amendment has been proposed by the Opposition. In relation to substantiation, I agree with what the Government has done. But I echo some of the thoughts put forward earlier by the honourable member for Dundas (Mr Ruddock). Obviously we will have to be a little careful as to how all of this comes out in the wash, so to speak, particularly in regard to members of our profession because it is a unique profession. There are no clear-cut guidelines, as the honourable member for Dundas suggested. What is a responsible allocation of funds by a member may not be seen that way by a clerk in the Taxation Office. Unfortunately, there may be some dispute that could come to a head at some stage. I hope it is a long way down the track and not something that will happen again shortly, because I believe the Taxation Office should let things settle down and allow the whole thing to run its course. I would like to tell a little story of some years ago about a member of this House-in fact, a former Minister of this House-who was actually refused an overnight allowance payment by a bureaucrat. To show how fine a line it is, the bureaucrat approached the honourable member and said: `We have got you because you did not go to this capital city on parliamentary business. We believe you went there on party political business, so we have got you. What was your parliamentary business?' This particular honourable member, as the story goes, said: `My dear fellow, I went there on parliamentary business and parliamentary business is my business'. He subsequently received his overnight allowance and the question has never arisen again. In regard to negative gearing, we have had some incredible assertions put forward this afternoon by the Opposition. The honourable member for Mayo (Mr Downer) and the honourable member for Warringah (Mr MacKellar) have been suggesting, if I have read them right, that negative gearing has been the dreaded weapon in the downturn in the housing industry recently. That is absurd in the extreme. I admit that interest rates have been the major cause of that. The Government has addressed that question with a number of decisions announced recently. The proof of that pudding came last week when the Minister for Housing and Construction (Mr West) announced during Question Time an acceleration of the money from the banks going into housing. Subsequently we will see an upsurge of growth and a continuation of strong growth in our housing industry with more homes being built for young Australian couples-in fact, 135,000 this year. The figure was around the 100,000 mark under the previous conservative Government. Notwithstanding that, we have had the assertions by the previous speaker, the honourable member for Dawson (Mr Braithwaite), that the negative gearing proposals are not equitable. As I have said, other honourable members have suggested that it has been the dreaded weapon in the downturn in the housing industry several months ago. Nothing is further from the truth. Negative gearing in its fullest application meant that the vast majority of taxpayers were subsidising to an extraordinary amount a privileged few who were able, especially the big concerns, to operate the negative gearing mechanism. In other words, one could be buying up to half a dozen houses on the market with very little capital and using the taxation laws of the time. It was very legitimate. We are not saying that it was not, but it was a rort in that the general taxpayers, through the taxation system, were subsidising the operations of those entrepreneurs. I do not see how the measures before the House are in any way inequitable. In fact, they bring, as does the entire tax package, more equity and fairness into the system. The whole package is one of the most substantial taxation reforms we have seen in our history, notwithstanding the proposals originally put forward by the Treasurer and eventually rejected. The present proposals are quite revolutionary and, if they are not, why are so many people screaming in so many areas? In fact, in the entertainment area, the recovery by the Government is around $500m a year. Tomorrow we will be looking at motor vehicles with a figure in excess of $300m. Negative gearing involved substantial money, and we are looking at several billion dollars for the fringe benefits tax and the other sorts of things that are before the House now. They were being subsidised in one way or another by the vast majority of taxpayers for a small section of people who were able to use them quite legitimately. We have closed off those loopholes and said: `Fair enough, if you want those benefits you should either pay for them up front or receive them as the vast majority of people do through a salary or other income'. I believe that the measures before the House-in fact, the whole tax package, as we will address other aspects tomorrow, such as the fringe benefits area, which is more controversial-should be supported by everyone in this House as a matter of equity and fairness. The negative gearing aspects are a very important part of that. I support the substantiation, but, as I have said before, we should be careful to ensure that it does not get out of hand. We have all sorts of things occurring via the Australian Taxation Office. I do not believe that that is what is intended or what the Taxation Office intends to do, but there are various scenarios that one could think of whereby we could have the Taxation Office saying across a number of industries that it does not believe that something is a genuine deduction for a particular industry. I do not believe that an accountant who has nothing to do with a particular industry can with authority tell someone within that industry what is or what is not a genuine deduction. That is the only thing I query in respect of keeping an eye on that part of the legislation. I support the legislation before the House, in particular the aspects concerning negative gearing, substantiation and the Australian Sports Aid Foundation. I congratulate the Minister for Sport, Recreation and Tourism, who has been the main force behind that and who is now in the House. He will address aspects of that part of the legislation in the Committee stage when an amendment is moved by the Opposition. It is rather a poor approach by the Opposition. It should have given full support to the eminent people on the Sports Aid Foundation which the Government has put up to enhance the whole sporting industry. I say `industry' quite deliberately because it has become so over the last decade and obviously will continue to be so. We have to start to look a little professional in our approach. The initiation of such a Foundation by the Minister should be appreciated by the people in the sporting industry and by every member of this Parliament. The amendment that will be moved in the Committee stage really shows a complete lack of respect for and knowledge of what is happening within our industry. I completely support the legislation before the House and commend it to all honourable members. Dr HARRY EDWARDS(Berowra)(5.59) —I am glad that the honourable member for Isaacs (Mr Charles) has finished his filibuster. Just before he concluded he was stressing that what the Government is presenting to us is a package of measures, and that these Bills are part of a total package that I would characterise as a rag-bag of measures which are doctrinaire-socialist and `soak the rich' in their thrust. Mr Cobb —That is praising them. Dr HARRY EDWARDS —As the honourable member for Parkes says, that is praising them. They are anti-growth, anti-enterprise and anti-business in effect and are all leading to something of a wimp in respect of the major objective of tax reform, which is a significant reduction in marginal rates of taxation and possibly some increase in thresholds. Mrs Sullivan —It is not reform. Dr HARRY EDWARDS —It is not really reform, as my colleague says. We on this side of the House certainly reserve the right to treat these measures on their merits, one by one, without threat of the Government going away carrying its bat under its arm and not proceeding with any subsequent tax cuts, which it is unlikely to carry through anyhow. In the context of treating the various measures on their merits the one which is primarily before the House today, negative gearing, is certainly opposed by the Opposition. Mr DEPUTY SPEAKER(Mr Rocher) —Order! The time allotted for the second reading stage of the Bill has expired. Question resolved in the affirmative. Bill read a second time. Clauses 1 to 9-by leave-taken together. Mrs SULLIVAN(Moncrieff)(6.02) —I say at the outset that it is an absolute disgrace that the Taxation Laws Amendment Bill has been guillotined and that we are in Committee at all at this stage. This Bill came into the House in April, having been foreshadowed months and months ago. We wait a couple of weeks for its debate and then we are given just a few hours in which to debate it. It is a most profound Bill. For example, it was pointed out in the second reading stage that one of the significant aspects of this Bill is the effect it is having on the life of every average person in this country. The honourable member for Berowra (Dr Harry Edwards), in the course of his speech, referred to some of the provisions as soaking the rich. I attempted to interject on him and indeed correct him and say `soak the average person'. The Bill certainly affects average people, not just rich people. We do not have a large number of rich people in Australia, but we have a large number of people who are already being affected by this Bill. Dr Harry Edwards —A very proper point. Mrs SULLIVAN —I am glad to see that the honourable member for Berowra takes my point. He was so busy making his that he perhaps did not quite catch what I was saying. The thrust of these taxation law amendments and others that the Government is bringing in leads towards some potential general applications that I think would be very unfortunate for this country. In this Bill we have negative gearing under the general heading of taxation laws. We are told we are going to have some legislation relating to the subject of quarantining of off-farm income. In fact, the general principle of income from one enterprise being able to be offset against losses from another enterprise is very much under attack. The effect of that is showing very clearly already. The point is surely that when somebody goes into an exercise such as negative gearing he is forgoing disposable income. Certainly there is some forgoing of income tax as well, but the person who makes that decision cannot have it both ways. He cannot invest, for example, in a rental property and spend the money, so the money is unavailable to him. What he is, in effect, doing is investing in capital. It should also be remembered in relation to this particular so-called tax reform covered by the Taxation Laws Amendment Bill that the rental property that it applies to must still be let at a loss. The person in question is still putting income from another source-labour, another business or whatever-into something which is running at a loss. The attraction in the past has been the benefit of capital investment and also the attraction in the end of a capital gain. It is yet another so-called taxation reform which just grabs together a few items and calls them taxation reform. The impact of the application of this particular proposal and will have a profound effect. The immediate impact is the non-availability of reasonable rent property. In a sense I suppose the subsidisation, if there has been any, has been of rental in Australia. I refer to my own electorate, 60 per cent of which is centred on the Gold Coast. That is an area of great expansion. It is very well known that one major international hotel has opened in recent months and that several more will open in the next 12 months. Mr White —Private enterprise. Mrs SULLIVAN —That is, private enterprise when there was still a bit of incentive in private enterprise. The hotel, Conrad International, was planned when we were in power. That was the incentive. It is a great pity that this Government came to power subsequently. In any event, that hotel alone is employing 2,500 people; that is, 2,500 new jobs on the Gold Coast. Many of the people who are employed are young people who did not originally come from the Gold Coast. Many young people and older people who have come for jobs in that particular hotel have been unable to get rental accommodation. When one looks at the other side of the real estate ledger, there are many homes for sale on the Gold Coast which are not in the luxury class. These homes would have been reasonable rental properties before this particular taxation law change was announced. I am informed by real estate agents that many of them previously were rental properties. Indeed, I live next door to one that was previously a rental property. It has been on the market for several months now. It is empty and unavailable for rental but still available to be sold. There are literally hundreds of modest homes like that which have been taken out of the rental market on the Gold Coast, put on to the property market and still are not selling. Other potential landlords are obviously not attracted to buy as they were previously. Interest rates, of course, compound the problem. Young people cannot afford to buy homes these days because of interest rates. Many people in my electorate come to me telling me that they are about to walk out of homes they went into 12 months ago when they could afford the repayments. Because of increases in interest rates they simply cannot keep body and soul together, and so they leave. Before they attempt to enter into negotiations with their finance company I advise them to take a pretty close look at what rents are these days, because they are so much higher than they were 12 months ago. They are higher because of this move by the Government, compounded by interest rates. Young people cannot afford to buy modest homes any more. Further, higher rents must now be charged because rental properties must now be let at least at break-even point-and preferably at a profit-since the advantages of negative gearing have been lost to new investors. The problem compounds itself on these young people. They have to pay exorbitantly high rents by the standards of 12 months ago, and have even less ability to save to buy their own homes. I got very tired in the debate on the Taxation Laws Amendment Bill of hearing from Government members about how negative gearing was a rort on the taxpayers who were subsidising investors. If anybody was being subsidised, it was people living in rental accommodation. In fact, the first person to subsidise those people was the owner. For every dollar he put in, if he was in the 60c tax bracket, he was certainly subsidised to the extent of 60c out of forgone taxation revenue, but also contribute to the extent of 40c to the tenant in the expectation of a capital gain. Even present owners are selling out because of what they fear a capital gains tax will mean to them. They are simply pulling their money out and putting it where they can earn some income-simple things like bank deposits and so on. Far from being a taxation reform, this is a massive step backwards. It is a classic case of the Australian Labor Party getting off on its own propaganda and not being able to see the effect. The Government will not face the fact that there have been very real impacts on rental accommodation, that it is hurting the people it claims to be interested in-that is, the people who cannot afford to buy homes-and it is hurting the incentive for investment in property. The glut on the property market at the moment certainly has had its effect also on the building industry and on new investment. Mr Chairman, as you are well aware the Opposition is very vigorously opposed to the major sections of this particular Bill as well as other Bills that will come in. I just wanted to speak very briefly on that particular aspect because I think it is pointed. It is part of everyday life in Australia. It has shown in a very short time how misguided a government can be when it believes its own propaganda about tax rorts, and is unwilling to think through the implications for all Australians. Mr ROCHER(Curtin)(6.11) —I am speaking to clauses 1 to 9 and, in particular, clause 1 which refers to the title, the Taxation Laws Amendment Bill. In his second reading speech the Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer (Mr Hurford) said that negative gearing occurred `where, in a particular year, interest on borrowings used to finance rental property investments, exceeds net rental income from investments'. This Bill is designed to bring into force the decision announced in statements made by the Treasurer (Mr Keating) on 17 July and 25 September 1985. If the former date was one of misconception and the latter date one of conception, the gestation period for this little Bill might be thought by its parents, the Australian Council of Trade Unions and the Hawke Government, to be just about right. However, the taxpayers of Australia and those who will bear the cost of supporting this little darling will not be quite so amused. At present section 51 of the parent Act provides that interest to the extent that it is incurred in gaining or producing assessable income or is incurred in carrying on a business for that purpose is an allowable deduction. Until very recently and under this Government virtually all outlays for the purpose of earning assessable income were allowed to be deducted before calculation of each taxpayer's obligation to pay tax was actually determined. As with other measures which were debated cognately earlier today, and with others to come, certain expenses incurred in gaining assessable income are no longer to be available. Thus, one of the basic tenets of taxation practice as we have known it in Australia is to be cast out by this socialist Government. There is no logical reason given for this. However, the Government's White Paper recites some of the dogma which is offered, I might say, as scant justification. There is the claim that interest paid on rental properties is a form of tax avoidance; also, it is argued that allowance of rental property losses occasions what is euphemistically called `a tax revenue loss' of some $175m. I realise that that figure has changed and is changeable depending on the whim of the Treasurer and his advisers at any particular time. In evaluating the so-called tax revenue loss, no account is taken of the offsetting tax revenue which accrues from the yields to revenue out of purchases of bricks and mortar, the incomes from farms and films, and so on, which will be affected adversely by this measure. Instead, in the limited sample cited in the White Paper, there is a deliberate impression given that concessions of this kind are of benefit to, and for exploitation by, only high income individuals. That is an outright deception. The White Paper ignores and makes no effort to estimate investment effects implicit in the business of rent producing activities. The tables on which the White Paper relies, where it refers to negative gearing, are all about individual taxpayers as distinct and separate from corporate taxpayers. These estimates and therefore the additional yields to this big spending Government are therefore grossly understated. We are told by the Government that somehow interest payments which exceed assessable incomes in any one year result in the amorphous unidentified body known as `the general tax paying community' becoming obliged to effectively subsidise the investments of another group of taxpayers. That is one of the lamentable offerings that we are asked to swallow. The next one is a gem. The result, according to the Government, is stated to be `competition for the purchase of residential property between these investors' as has been reflected `in increased prices to the detriment of home buyers'. That is the deception, and that is the gem. Although intended to sound high-minded, such a claim is both patronising and fatuous. Naive as those given reasons are, they suffer from an added defect in that they are not met or matched by the proposed legislation in important ways. The plain fact is that it is not only negative gearing on residential property which will be assailed. In common parlance, rent producing investments would include farms, houses, business premises and offices, factories and industrial premises, parking grounds, warehouses, shops, playgrounds, sports fields, yacht basins, dockyards, hotels, mining leases or tributing agreements. It is important to bear this in mind because the legislation sweeps into its net a number of investments which would not be rent producing in ordinary parlance, with consequent effects in regard to the deductibility of interest. One little example is that interest payable during a year will be a continuing liability. That is the terms of the agreement. But what happens if there is a break in letting because a lease has expired and the owner is looking for another lessee? The same can happen with a shop, perhaps. It might stand vacant, but the interest is accruing all the time. That shop or other premises cannot be let but, for the break in letting, the investment may not have been negatively geared, however it will be as a result of the circumstances I have described by a break in the letting. Let it be clear that this Bill applies to negative gearing undertaken by any individual or incorporated business which is involved in the letting and hiring of immovable property. There is an incorrect belief that it only applies to residential property. It is not only individual taxpayers who are to be disincentived by this particular measure but also bodies corporate. Not all, perhaps not even many companies, let or hire industrial or residential property, but there is a significant number that do. Some companies lease property to subsidiary companies, to sister companies in a group of companies. As with property development and leasing companies and the finance companies that back them, all are already bound to pay tax on their respective taxable incomes. The Government's own White Paper observes that the tax regime for companies involving double taxation of profits and dividends has given birth to the increasing use of trusts, unit trusts and partnerships instead of continued utilisation of company structures. However, here we have yet another disincentive to a wealth creating method of doing business in an area of financial and commercial activity which has hitherto served this country very well, despite the imposts of governments at all levels. Full deductibility for interest paid in the year it is paid shelters some income from tax, as does any other cost of carrying on a business for ultimate profit. What is wrong with that? It is the way of the world since income taxes were invented. Parties to any transaction these days will secure the best after tax result available, and it is about time that the Commissioner of Taxation became aware of that. It is no longer the practice of companies and individuals to look at a deal and say: `Well, that will be our profit and from that profit we will pay our tax'. Companies look at the after tax deal. If normal costs are removed from the schedule of allowable deductions, investors will simply move to another area of economic endeavour. The chances are that in this case it will be to a less productive and employment intensive activity, at least in the short term. Perceived benefits under the Act as it now stands lead to the beneficiary being able to pass on a lower price to some other party or parties. A straightforward example is the leverage lease. One reason leverage leasing is fostered by the New South Wales and other State governments is that rentals are lower than would be the case with normal or straight financing. The situation is precisely the same with negatively geared houses let to tenants. No previous Australian Government has shown itself more prepared than this Hawke socialist Government to use taxation as a tool of economic policy rather than primarily as a means of raising revenue. I will leave the matter there. There are a few other remarks that I want to make if I get a chance. The DEPUTY CHAIRMAN(Mr Millar) —Order! The honourable member's time has expired. Mr CADMAN(Mitchell)(6.21) —I introduce my remarks by quoting from a transcript of the Press conference held by the Treasurer (Mr Keating) on 4 June 1985. He said: I think I can say without fear of contradiction that this is the most comprehensive and ambitious document on taxation ever produced by a government in this country. It's not another study on the taxation system, but rather it's a blueprint for action. It represents a concerted attempt to define and to analyse the Australian taxation system, and it proposes sweeping reforms which would bring fairness, restore incentive, and promote growth. The proposals that we are considering in Committee tonight do not do any of the things that the Treasurer said they do. In fact, when the Treasurer was making that speech he felt, he said, that `the Government wants to grasp the nettle of tax reform because', first, `it is long overdue'. He gave no reason and no explanation. He said nothing to suggest that there is good cause to redress the tax system and gave no reasons why it needed attention. The second reason was that the reform was `urgent', and the third reason was that it was `crucial to a continuing improvement in Australia's living standards'. Since that time Australians' living standards have fallen. Not only have Australians' living standards fallen but also their expectation of any tax relief is quickly vanishing. What the Treasurer did not say in that Press release or in other comments was that the amount of tax relief to be expected by Australians will be roughly equivalent to the rate of inflation. There is no real tax relief; the Government has no real intention of using these grand reforms so carefully presented to the Australian people to give any real or lasting benefit to the Australian taxpayer, whether he be a corporate taxpayer or a private individual. Two issues addressed in the Taxation Laws Amendment Bill which are of interest to me concern the negative gearing and the proposal by some weird manipulation of formulae to make an assessment of what is an allowable deduction for interest charges. Another matter that is of concern to me is the self-assessment provisions. The Government, in proposing the negative gearing restrictions that are placed on investors by this legislation, has made a judgment as to what is an acceptable level of deduction for interest on borrowed money. The Government has already made assessments of what is a reasonable deduction for fringe benefits and entertainment taxes, and now we have another interference by government as to what is acceptable practice. Let me warn the Government that it is attacking not only the base of employment in Australia but also the incentive that business and the community needs in order to generate the activity that will keep the economy moving. These are fallacious assessments of what business should be doing; I refer to what is an allowable deduction and what business should be writing off at the end of each year. I refer the Government to today's housing figures, which clearly show that since the announcement of the negative gearing provisions, coupled with high interest rates, there has been a dramatic downturn in the figures for residential and other building activity. Mr Hodgman —I predicted that last year. Mr CADMAN —No doubt my colleague did predict it. Many joined him, including the Housing Industry Association, the Master Builders Federation of Australia and many others, and they have been proved right. The Government is in fact cutting jobs, cutting investment and cutting the opportunity for families and young couples to move into rental accommodation as a first opportunity for shelter. I cite the seasonally adjusted figures that were presented today by the Commonwealth Statistician. I draw the attention of honourable members to the fact that, in seasonally adjusted terms, residential building approvals for most of 1985 ran at a monthly level of about 13,700. We see the rundown occurring as soon as the announcements about negative gearing were made in October. The rundown has dropped at this point to 10,072 approvals. This is the fourth decline in five months. There has been a 26 per cent drop in approvals and commencements since that time, and the decline is continuing. The Government is gaining the benefits of its decision not for itself and not for the Australian people. Because the Treasurer said `It is urgent, it needs doing, and I am going to create a big impression as I travel around Australia' it went ahead with these actions. Let me deal briefly with the self-assessment processes. I think these are particularly damaging and break new ground in regard to taxation law and taxation processes. The self-assessment provisions allow the Commissioner of Taxation almost unlimited power to investigate and to go back into the previously accepted records of any individual who presents a self-assessment in the payment of his tax. The powers given to the Government are such that seven years ahead, despite the returns on self-assessment being accepted by the Commissioner, the Commissioner can then decide that previous assessments are not right and, on an audit, call up past commitments that he sees a person should be making. The changes that the Commissioner can apply to a person's assessment include changes of law. So if the Government changes the law willy-nilly, as it has in the past, or a board of review decision is made on the interpretation of the law, a back-track process can be undertaken. It is clear in the attachments to this legislation that the Government has given, or is in the process of giving, the Commissioner those powers. I quote to honourable members a comment by the Secretary of the Australian Taxpayers' Association, Mr Eric Risstrom. In his March publication for this year, he says: Canberra selects test cases likely to give answers they want. If it suits them, the decision is applied willy-nilly. If it does not the precedent is easily `distinguished' and is ignored. Heads they win, Tails we lose, are the rules of the tax game. As regularly as clock-work, Canberra announces another crackdown. Administration by threat cannot win in the long run. His headline is `Respect is turning sour'. That is the case in Australia today. On too many occasions the Commissioner has gone back to re-write tax assessments previously made and to force taxpayers to pay additional funds that they did not expect they would have to pay. There must, I believe, be a tighter limitation on the self-assessment provisions so that the Australian Taxation Office has a shorter period in which to seek to vary its previous acceptance of self-assessment. The idea of having a period of seven years in which the Commissioner can make adjustments leads to sloppy and careless administration. There is no doubt that the building up of a seven-year backlog in the Taxation Office can only lead officers of that department to the view that they have seven years to worry about the taxpayer, so why should it matter. The taxpayers of Australia are accustomed to the process whereby, if a return is submitted, that return stands if it is accepted by the Taxation Office. That will not be the case with the proposed self-assessment and substantiation process. I conclude my remarks by quoting Mr Risstrom again, because he has written very strongly about these matters and I believe that he is right. In the article that I have mentioned, he refers to the processes by which charges are levied against taxpayers. He concludes: Taxes and hidden levies are crippling, and the incentive to allow Australia to succeed is being stifled before it starts. . . . Canberra doesn't care a damn any more about taxation fairness. Farmers and others will be kicked in the financial guts while the smooth rhetoric suggests both major parties care about people. I would like to see that changed. I believe that the Opposition's proposal that this matter be sent off to a Senate committee is well warranted. We look forward to the support of the Government for that proposal. The DEPUTY CHAIRMAN(Mr Millar) —Order! The honourable member's time has expired. Before calling the honourable member for Curtin, the Chair points out that, given the rather restricted time limit, considerable latitude has been extended to honourable members but it would not be unhelpful if honourable members, in the course of their speeches, were to mention the question before the Committee. Mr ROCHER(Curtin)(6.32) —Thank you, Mr Millar, for that reminder. The first time I spoke on these clauses, I referred specifically to the title of the Bill. I would have liked to go on then to say that when taxes are minimised or postponed more money becomes available for the generation of even more taxable income. Where the reverse occurs as will happen when this measure becomes law, less money remains in the hands of potential taxpayers for the generation of assessable income. It is this Bill and a whole raft of other Acts like it and in prospect under the Hawke socialist Government which have led the perpetrators to lament that business has gone on strike. Those who make that assertion like to obscure the fact that reduced investment and poor rates of business expansion are largely the product of Government induced uncertainty. It is as simple as that. When we read about the President of the Australian Council of Trade Unions, Mr Crean, accusing business of striking, accusing capital of being on strike, we should also understand that he has a certain vested interest in distracting attention from the real causes. After all, it is this Government, which Mr Crean and his organisation largely control, which laid the foundation for massive uncertainty in the private sector. The type of diversion that the President of the ACTU seeks now to create should not come as a surprise to those who understand that there is little that is original in this world. It happened with the social contract under the Wilson Government in Britain during the 1970s and it is happening in Australia now. The Australian equivalent of the social contract in the United Kingdom is, of course, the prices and incomes accord. Under the accord and in accordance with the demands of the ACTU we see measures of the kind before the Committee which stifle investment and economic endeavour. The predictable response is a claim that there is a strike of capital, as happened in the United Kingdom in the 1970s when that cosy little deal with the trade unions went sour. Just as the prices and incomes accord between big government and even bigger unions has its predictable effects, so will this legislation further dampen the wealth creation processes, with more than an offsetting impact on the Government's tax revenue from the other sources. Mr JOHN BROWN(Parramatta-Minister for Sport, Recreation and Tourism)(6.34) —Mr Millar, in the absence of the Treasurer (Mr Keating) I wish to relate some remarks briefly to clause 4 and to some questions that were raised by the honourable member for Perth (Dr Charlesworth), particularly in the area of building depreciation. This information has been supplied for me by the Treasurer. I wish to read it into the record: The honourable member for Perth raised what he sees as an anomaly in the application of the building depreciation provisions in the Bill. I point out that any concession has to have a date of commencement. In this case, consistent with the existing building depreciation provisions of the law, it is the date on which construction of the building commences. The concession is being made available in respect of new buildings, and the date construction commences is the relevant criterion. The date of acquisition, for example, would not be appropriate. Whatever the date of first application of any concession, there are always situations that fall on either side of the line. I hope that clears up that anomaly for the honourable member for Perth. Clauses agreed to. Clause 10 (Gifts, pensions, &c.). Mr WHITE(McPherson)(6.35) —I foreshadowed in my speech during the second reading debate that I would move an amendment to clause 10. I am pleased to see that the Minister for Sport, Recreation and Tourism (Mr John Brown) is present in the chamber because during my speech I asked for some answers from the Government, and I hope that we will get them. I move: Clause 10, page 3, omit proposed sub-paragraph 78 (1) (a) (lxxxiv), substitute the following sub-paragraph: ``; (lxxxiv) the Australian Sports Aid Foundation, when made for the purposes of the Foundation or for the purposes of a nominated sporting organisation carried on otherwise than for the purposes of profit or gain to the individual members of that organisation to which the Foundation provides the money or the property,''. The purpose of the amendment is to make the point that, while we support the general thrust of the Australian Sports Aid Foundation, we want some guidelines and some reassurances on how it will operate. It is 12 months since the Minister announced that legislation would be introduced to establish tax deductibility for donations to the Sports Aid Foundation. He said then that it would be introduced in a month. It is now 12 months later. I have no doubt there are reasons for that delay. The point I want to make is that surely in those 12 months we could have been given some reasonable guidelines as to how this fund will operate. It is all very well to say that donations to the Sports Aid Foundation will be tax deductible. That is hardly enough to reassure me and hundreds of sporting organisations in the community as to just how it will operate. That is the real point. For some time, I have been asking the Minister's office for guidelines. I was sent a paper which had some vague guidelines in it, but I do not regard it as official. In fact, when it was sent to me I was told that it was not a public document. We want something on the record from the Government to say how the Sports Aid Foundation will operate. We will not take it on trust. The purpose of my amendment is to ensure that money donated through the Sports Aid Foundation will go to the organisation nominated, provided it is a bona fide organisation. I think that is a reasonable request to make. We want to make sure that the Sports Aid Foundation does not take it on itself to direct elsewhere money that has been given to it or through it which is destined for some other organisation. During the second reading debate I also asked for some other guarantees, and I hope they will be forthcoming. One of the other guarantees I asked for was that there would be no deduction for handling charges as the money passes through the Foundation. That is a reasonable request. I have been told verbally that that will not happen. I hope that we can get that reassurance. I have asked that there be no interference in the existing system of direct sponsorship between sponsors and sporting organisations, if they choose to follow that system, as they do now, rather than go through the Sports Aid Foundation. It seems to me and to many other people to be extremely reasonable to request that we get that assurance. I also seek some assurance as to a statement made by the person who I presume is the Chairman of the Sports Aid Foundation Board-that also has not been made public-that much of the money that is given to the Australian Sports Aid Foundation in an unspecified way will be used for the benefit of some of those struggling sports which now do not benefit to any great extent. Those are the four matters that we are asking about. I hope that we will get some reassurance tonight. We want the Sports Aid Foundation to succeed, but it is asking too much of us just to put in a provision about a tax deduction without giving any of the details as to how it will operate. Mr JOHN BROWN(Parramatta-Minister for Sport, Recreation and Tourism)(6.39) —In speaking to the amendment moved by the honourable member for McPherson (Mr White), I shall start by reading some technical advice provided to me by the Treasurer (Mr Keating) that might cast some light on why the Government proposes not to accept the amendment. The Treasurer has stated: Both the amendment and the first guarantee sought, (namely, all donations are to go to the organisation nominated by the donee) are contrary to the concept of a gift, which requires an unfettered passing of property from the donor to the donee. Under the proposed amendment the donor, in requiring that money directed to the ASAF be applied to a specific purpose or organisation, would be fettering the `gift'. Gifts made on the basis of the proposed amendment could also run foul of the gift anti-avoidance provisions contained in section 78a of the Act. Broadly that section provides for gifts to be disallowed in circumstances where the value or benefit of the gift to the recipient is, or is likely to be, less than its true value or where the donor or an associate will obtain a benefit other than the tax saving. For example, a member of a sporting body which planned an end of season trip could, in the absence of such a provision, effectively obtain a taxation deduction for the cost of participating in the trip. While section 78a would operate to deny the deduction in these circumstances, the nature of the proposed amendment is such as to increase the likelihood of such occurrences and therefore increase the possibility of those schemes being undetected. The amendment would further remove any control that the ASAF has to ensure that funds are distributed on an even-handed basis according to need and the Government's priorities. The amendment would authorise deductions to sporting organisations that are (1) not in need of additional funds; and (2) have less need for assistance than other organisations; (3) conduct sporting activities of which the community, or parts of the community, may not approve (for example, those with an unacceptable risk of danger or bloodsports); (4) or are not representative of, or do not make significant contribution to, sporting activities. The Opposition's proposal would also effectively set up the Foundation as an umbrella organisation-that is, one through which otherwise non-deductible gifts could be channelled in order to obtain a deduction. In turn, the amendment highlights the question of what is meant by `sport'. At present, there is no need for a detailed definition of `sport' in the Australian Sports Commission Act 1985 and it is left to the ASC to decide. The amendment, however, removes most of the ASC's control. A detailed definition would be required to ensure that deductions would only be allowable in respect of recognised or serious sporting activities. Additionally, there is no indication of what is meant by `sporting organisation'. Further, an organisation may have both sporting and non-sporting activities so that if it were accepted as a sporting organisation, gifts could be channelled towards non-sporting purposes without losing tax deductible status. Perhaps I could amplify some of those points in relation to the Opposition's amendment and some of the guarantees that honourable members opposite have sought. It is fair to say that the Australian Sports Aid Foundation will not be obliged to accept gifts from anybody designated to any particular organisation unless the Foundation approves the organisation to which that gift is directed. As I pointed out in the technical advice which I have just read, compelling the Foundation to give the donation to the `sporting body' that is specified- Mr White —A bona fide body. Mr JOHN BROWN —A bona fide sporting body that is specified. It would remove any ability that the Foundation has to make a judgment. I can assure the shadow Minister and the House that the people who will run the Australian Sports Aid Foundation are people of the highest estimation by any measurement. Mr Carlton —Appointed by you. Mr JOHN BROWN —If the honourable member for Mackellar wants to criticise those people he may do so. I am quite happy to read into the record the people who are on the Australian Sports Aid Foundation's Federal body. The Chairman is Mr Ted Harris who is the Chief Executive of Ampol Ltd and a most highly respected person. He is also the Chairman of the Sports Commission, the Chairman of the Zoo Board in New South Wales and of the Sydney Entertainment Centre. He is a man who is highly respected in business and in commercial, social and sporting circles. The Vice-President is Sir Donald Trescowthick from Victoria, who is an eminent person in the business world, and a man who brings to the Sports Aid Foundation all the expertise that he has applied to the Elizabethan Trust which has raised money for similar purposes. Other members include Sir Peter Abeles, the Chief Executive of Thomas Nationwide Transport Ltd and the Joint Managing Director of Ansett Transport Industries; Mr Kevan Gosper, the Chief Executive of Shell Co. Australia Limited, former Chairman of the Australian Institute of Sport and former captain of the Australian Olympic athletics team; Mr Herb Elliott, the Chief Executive of Puma Australia Ltd, a man highly respected by everyone in sport; Mr Nick Whitlam, the Managing Director of the State Bank of New South Wales-- Mr Porter —Ha, ha! Mr JOHN BROWN —I am sure that the community's estimation of Mr Whitlam would be far above that of that person on the Opposition benches who just hiccupped. The final member is Mr Kerry Packer, the Chief Executive of Channel 9, who has made a great contribution to sport in Australia in many respects. If members of the Opposition are prepared to suggest that those people would be part of any form of political patronage, they would be flying in the face of fact. Most of those people have a fairly apolitical background; in fact some of them are very closely associated with the Liberal Party of Australia. I hope that Opposition members will not insult prominent people in the community by making stupid interjections. Most people of reasonable mind would believe that these people would bring a great deal of common sense, honesty and veracity to the running of the Sports Aid Foundation. I am sure that they are quite capable of deciding which gifts are acceptable to which organisation. There is really no way in which this proposal could work in any sense if we tied the Foundation down to some compulsory arrangement as is specified in the Opposition's amendment. Let us hear no more of that. One of the other constraints that apply is the necessity for the Australian Sports Commission to ensure that any money channelled through the Foundation to any particular body, specified or otherwise, is audited in exactly the same way as are grants given by the Sports Commission through the sports development fund. This ensures that the money is spent for the purposes for which it is given. I turn to some of the guarantees that have been sought by the Opposition. Opposition members asked for a guarantee that all donations to the Foundation will go to those sporting clubs and organisations which the donor nominates, provided they are bona fide organisations and that there is no arbitrary decision making by the Foundation when someone nominates the recipient of a donation. I think I have already dispelled the Opposition's fears there. There is no way that I could compel members of the Sports Aid Foundation to accept gifts and then make sure that they go to the specified recipient. It will be a matter of judgment for Sports Aid Foundation members as to whether that gift should be received. By the same token, there is no way that a gift offered to the Foundation and specified for some purpose would be directed somewhere else. If foundation members think that it should not go to the specified body, money would of course be returned. There is no way that the Foundation members would have the right or the obligation to do other than what was specified by the donor. Secondly, the Opposition asked for a guarantee that there would be no deductions for handling charges when the money passed through the Sports Aid Foundation. The honourable member for McPherson may rest assured of that. The specified regulations say that there will be no deduction at all for handling charges. Thirdly, the Opposition sought assurance that there would be no interference with the system of direct sponsorship between sponsors and sporting organisations-that is, those donations and sponsors which do not involve the Foundation. I simply point out that there has been a very different method by which firms, corporations and individuals sponsor sporting bodies, often using the section 51 of the tax Act and claiming tax relief under advertisements. No money will attract tax deductibility as a gift to sport unless it is directed through the Sports Aid Foundation, except in the existing situation where corporations or individuals claim tax relief under section 51. In other words, the tax deductibility for contributions to sport, apart from those under section 51, will not apply unless the money is channelled through the Sports Aid Foundation. Mr White —You are not planning to interfere in any way? Mr JOHN BROWN —We are not intending to interfere in any way with the present system of the sponsorship of sport and we would be very silly to do so. I revert to the original question as to whether the Sports Aid Foundation will have some capacity to decide where donations will go once they have been specified. It is quite obvious that people would not be prepared to donate money to a specific sport unless they had the guarantee that that money would go to that specific body. I think that rules out that problem. The fourth guarantee that the honourable member seeks is that money donated to the Foundation for an unspecified purpose would not be used to prop up what are already very rich sports. The honourable member has not only my personal assurance on that but also the assurance of the Chairman of the Sports Aid Foundation, Mr Harris, to whom I think the honourable member issued this request in the first place. The shadow Minister referred to some information with which he was supplied. I think he is referring to material headed `Dear Peter' and dated 23 April. The honourable member referred to some sheets of paper that were included in this material. I would think that these sheets of paper are very official; that they were issued officially on behalf of the Sports Aid Foundation. The honourable member may rest assured that these are the guidelines that will apply to the governing of the Foundation. One particular piece of paper refers to fund raising and donations. I think most of the fears that he has expressed, quite reasonably, are spelt out very clearly there. I can assure him that these are the official regulations which will govern the organisation of the Sports Aid Foundation. However, I think a few of the other remarks that were made deserve a reply. The honourable member spoke of government handouts. Of course, this Government has been more than generous in handing out taxpayers' money to sport-probably at the rate of about 500 per cent more than was handed out by the previous Government. I would like to think that we could get some sort of bipartisan support from the Opposition when we bring to this House Bills that we think are greatly to the advantage of sport. Mr White —If you had said all that 12 months ago you would not have a problem. Mr JOHN BROWN —The honourable member has had it personally from me; he has had it at public forums where I have spoken on this issue; it has been addressed publicly on many occasions. There has been no secret about the conditions which would govern the Australian Sports Aid Foundation. I think it is fair to say that despite the efforts of many knockers, including the honourable member who has written to many sporting organisations asking for their views-- Mr White —To get their views. Mr JOHN BROWN —Well, it surprises me that, having sought their views-and I know what their views were-the honourable member is still putting this forward as some sort of reason for his reluctance to accept. To my knowledge, almost every sporting organisation supports fully the concept of a Sports Aid Foundation. I have responses back from them. Most of the people to whom the honourable member wrote have written back to me with their response. This is an enormous breakthrough for sport in Australia. It is quite inconceivable that amongst all the great sporting nations Australia is the only one in which deductions to sport have not been tax deductible. That Olympic athletes, until 1984, had to run around conducting chook raffles and seeking donations to pay their fares to Olympic Games was an indictment on governments that preceded this one. I am pleased to say that this Government acceded to the Australian Olympic Federation's request with $1.4m of not the Government's money but the Australian taxpayers' money. It seems to be almost inconceivable that for the second time that a sports Bill has come into this House the honourable member is seeking to oppose it. One Bill on sport has been introduced into this House since Federation. The honourable member, to his great disgrace, opposed it. I would not like to relate the private conversation which I had with a former leader of the honourable member's organisation. However, I am sure that he was not very happy with the honourable member's decision to oppose it. Neither was any sporting organisation in Australia. They were appalled that the honourable member sought to oppose that Bill. I am sure that they will be equally appalled if the honourable member seeks to attract from the Australian Democrats some opposition to this Bill. However, I am sure he will not because the Democrats take a more exalted view of sport than he might. The Opposition's record in funding sport over the 31 of the last 37 years in which it sat on the treasury bench is simply appalling. That the honourable member can come in here and lecture this Government for taking an enlightened view about funding for sport to me is almost inconceivable. We reject entirely the Opposition's amendment. However, I hope the honourable member will be decent enough to accept the very honest and very forthright answers what I have given in regard to the honourable member's request for guarantees. Those guarantees are now in Hansard; they are on the public record. I am sure that if he has any sort of reasonable attitude he will accept my guarantees. Mr WHITE(McPherson)(6.55) —Mr Deputy Chairman, I just want to respond briefly. The DEPUTY CHAIRMAN(Mr Millar) —The honourable member has been doing that for the last 10 minutes. Mr WHITE —I accept what the Minister for Sport, Recreation and Tourism (Mr John Brown) says. If the Minister had said that at any time during the last 12 months we would not be here tonight debating this matter. We have been waiting for these guidelines for 12 months. The Minister has referred to sporting organisations. Every sporting organisation that wrote back to me said `We are not opposed to the principle of the Sports Aid Foundation', as we are not, `but we cannot give you a firm commitment one way or the other', as we cannot, `because there are no guidelines in place'. The Minister has had to be dragged screaming to the dispatch box as the Bill goes through to produce some public guidelines as to how this Sports Aid Foundation-- Mr John Brown —You have had this for months. Mr WHITE —I ask the Minister not to hold up the piece of paper in his hand. When it was given to me I was told that it was not a public document. I have respected that advice. Mr John Brown —It is a document. You had it in your hand. Mr WHITE —I have not got it. At the very death knock, when this Bill is going through, the Minister comes here and gives us assurances as to how the Foundation will operate. The Minister started off by giving us the technical explanations from the Treasury. If anything were needed to convince us that guidelines should be in place it is the technical details that the Minister gave us as to why something should happen and why something should not happen. By just saying that, the Minister convinced everyone here that we needed guidelines as to how the Sports Aid Foundation would operate. I accept what the Minister says. I hope that other people do as well. But why did the Minister have to say what he did at the death knock? The Minister talks about bipartisan support. The Minister would have got bipartisan support-we support the principle of the Sports Aid Foundation-if only he had made public some of the assurances that he gave tonight and if only he had given us the guidelines. Finally, let me say this about the board of the Foundation. Why was not the composition of the board, which was announced tonight, made public before? Mr John Brown —Why should it? It does not exist until tonight. Mr WHITE —How many meetings has it had? Mr John Brown —One. Mr WHITE —How can the Minister say it has had a meeting if it does not exist? The Minister should wake up to himself. Does it or does it not exist? Has it had a meeting or has it not? It has had one meeting already. So the Minister cannot claim it does not exist. What has not existed is the fact that the Minister has not made the names of the members of that board public. We are not criticising the members of that board. We are saying that there are too many boards. The Minister has an Australian Sports Commission board of 20 members. Why cannot they run the Sports Aid Foundation? In conclusion, I accept the Minister's outline of how the Foundation is going to operate. I look forward to working with him to see that the Sports Aid Foundation is successful and that it attracts private money into the sporting sector. Mr JOHN BROWN(Parramatta-Minister for Sport, Recreation and Tourism)(6.58) —I should respond to a few things. The Sports Aid Foundation has met once and I will tell the honourable member for McPherson (Mr White) why. The Commonwealth Games Association was very keen to take advantage of the tax deductibility provisions to raise some funds. The board of the Sports Aid Foundation met on one occasion to facilitate that. Of course, the bond system, which has been organised through the stock exchanges, has been quite successful. Something like $25,000 has already passed through the Sports Aid Foundation and been channelled to the Commonwealth Games Association to help with its funding of the team. I think it is fair to say that the honourable member for McPherson indulged in a fair amount of grandstanding. The honourable member has had plenty of time to learn about the guidelines for the Sports Aid Foundation. I have been speaking publicly for 12 months about them. He has had the document in his hands for at least the last fortnight which spells out the guidelines quite specifically. How can one spell out the guidelines before the thing is given birth? What we are seeing tonight under this amendment to the taxation legislation is the birth of the Australian Sports Aid Foundation. The honourable member wants it to have its twenty-first birthday before it has its christening. I have in my hand a Press release issued by the honourable member last night which states: The Opposition hopes that the smaller, less organized sports in Australia will benefit from any money distributed by the Sports Aid Foundation. These sports died of starvation waiting for the people on the other side of the chamber to recognise that they even existed. To Bob Ellicott's great credit, at least honourable members opposite made an attempt and started the Australian Institute of Sport. I ask honourable members opposite what they did for smaller organisations? They died of starvation waiting for honourable members opposite to know they were there. Under this Government such small organisations have been the recipients of about $8m this year. Honourable members opposite should be in here building monuments to this Government-not criticising it. Honourable members have come in here grandstanding about not knowing the guidelines. Even the half-wit who is just walking in, who used to be my shadow Minister-- The DEPUTY CHAIRMAN(Mr Millar) —Order! The Minister is offside. Mr JOHN BROWN —I withdraw that he is a half-wit. Mr Blunt —I ask that the Minister withdraw without qualification. The DEPUTY CHAIRMAN —Order! The Minister has withdrawn. Mr JOHN BROWN —I withdraw in deference to you, Mr Millar. The honourable member made even less of an attempt to be co-operative than the present shadow Minister, the honourable member for McPherson. I am glad to see that there is a reformation tonight and that honourable members opposite are prepared to be co-operative in regard to this venture because sporting organisations will be watching with great interest exactly how the Opposition approaches this task in the next 12 months. So far the record of honourable members opposite is pretty ordinary-if it exists at all. The other statement I should read from the Press release is: The Minister for Sport, Recreation and Tourism has a mania for appointing Boards and Committees. It is a dangerous attitude which implies political patronage . . .I am glad that has been put on the public register. I am sure that that distinguished group of Australians whose names I read out before and the other 20 distinguished Australians who happened to make the Board of the Australian Sports Commission will be very pleased to hear that the honourable member for McPherson is suggesting that they are part of political patronage. I am sure they will be incensed and insulted, as well they should be, by the honourable member's very gratuitous remarks. Amendment negatived. Clause agreed to. Clause 11 (Insertion of a new subdivision). Mr CARLTON(Mackellar)(7.03) —Clause 11 relates to the proposal to abolish deductions on interest, for negative gearing purposes, on rental accommodation. As I made clear in my speech in the second reading debate this morning, the Opposition is opposed to this measure. It notes that this Government first put the squeeze on the low income earners and made it difficult for them to buy houses by its conscious policy of raising interest rates. Having done that, the Government then made it more difficult for such people to secure private rental accommodation through its announcement to disallow negative gearing on residential accommodation and by its announcement to introduce a capital gains tax. The net result of all these measures of the Government was to cause a crisis in the housing industry which had its most severe impact on the low income earners. We object also to clause 11 on the ground that it is a move towards allowing the Government to decide what constitutes a business. If we allowed this kind of measure to go through, bureaucrats would then be deciding what constitutes a business. We could come to the point at which somebody who owns a coffee shop on one side of the road and a petrol station on the other could have those declared separate businesses for the purpose of taxation by the Australian Taxation Office. We are opposed to this measure in principle. We are opposed to it in practice. We deplore the effect that it has had on low income earners in making it virtually impossible, firstly, for them to buy their own homes at reasonable prices with their capacity to repay capital and interest and, secondly, having done that, having made it impossible for such people to secure private rental accommodation at reasonable rents. Therefore, the Opposition will be opposing this clause. It will be voting against it both here and in the Senate. Question put: That clause 11 be agreed to. The Committee divided. (The Deputy Chairman-Mr P. C. Millar) Ayes . . . . . . . . . . . 72 Noes . . . . . . . . . . . 54 —— Majority . . . . . . . . . 18 —— Baldwin, P. J. Jones, BarryBeddall, D. P. Keating, P. J. Bilney, G. N. Kelly, R. J. Blanchard, C. A. Kent, L. Blewett, N. Keogh, L. J. Bowen, Lionel Klugman, R. E. Brown, John Lamb, A. H. Brown, Robert Langmore, J. V. Brumby, J. M. Lee, M. Charles, D. E. Lindsay, E. J. Charlesworth, R. I. McHugh, J. Chynoweth, R. L. McLeay, LeoCleeland, P. R. Maher, M. J. Cohen, B. Martin, S. P. Cunningham, B. T. (Teller) Mayer, H. Dawkins, J. S. Mildren, J. B. Dubois, S. G. Milton, P. Duffy, M. J. Morris, AllanDuncan, P. Morris, PeterEdwards, Ronald Mountford, J. G. Fatin, W. F. O'Keefe, N. P. Fitzgibbon, E. J. O'Neil, L. R. T. Free, R. V. Price, L. R. S. Gayler, J. Punch, G. F. Gear, G. Saunderson, J. Gorman, R. N. J. Scholes, G. G. D. Grace, E. L. Scott, J. L. Griffiths, A. G. Simmons, D. W. Hand, G. L. Snow, J. H. Hayden, W. G. Theophanous, A. C. Hollis, C. Tickner, R. E. Howe, B. L. Uren, T. Humphreys, B. C. (Teller) West, S. J. Jacobi, R. Willis, R. Jakobsen, C. A. Wright, K. W. Jenkins, H. A. Young, M. J. Adermann, A. E. Hodges, J. C. Aldred, K. J. Hodgman, W. M. Beale, J. H. Jull, D. F. Blunt, C. W. Lloyd, B. Braithwaite, R. A. McArthur, F. S. Burr, M. A. McGauran, P. J. Cadman, A. G. MacKellar, M. J. R. Cameron, Donald McVeigh, D. T. Cameron, Ewen (Teller) Macphee, I. M. Cameron, Ian Miles, C. G. Carlton, J. J. Moore, J. C. Cobb, M. R. Peacock, A. S. Coleman, W. P. Porter, J. R. Connolly, D. M. Reith, P. K. Cowan, D. B. Robinson, IanDobie, J. D. M. Rocher, A. C. Downer, A. J. G. Ruddock, P. M. Drummond, P. H. Sharp, J. Edwards, Harry Sinclair, I. McC. Fife, W. C. Slipper, P. N. Fischer, Tim Smith, W. Fisher, Peter Spender, J. M. Goodluck, B. J. Sullivan, K. J. Hall, Steele Watson, DavidHalverson, R. G. Webster, A. P. Hawker, D. P. M. White, P. N. D. Hicks, N. J. (Teller) Wilson, I. B. C. Hurford, C. J. Nehl, G. B. Staples, P. R. Shipton, R. F. Beazley, K. C. Conquest, B. J. Darling, E. E. Tuckey, C. W. Question so resolved in the affirmative. Remainder of Bill-by leave-taken as a whole. Mr CARLTON(Mackellar)(7.13) —Because of the gag that has been put on debate on this important measure, it has not been possible for the Opposition to make all the points that it would have wished to make. I want to make it quite clear, however, before the gag is again applied in a minute and a half, that with regard to the self-assessment provisions, forming clauses 19 to 26 of the Bill, the Opposition will move in the Senate to have these matters referred to a committee so that they can be properly considered. We have grave reservations about various aspects of the self-assessment provisions, as I made clear to the House this morning in my speech during the second reading debate. Those aspects will be taken up by my colleagues in the Senate. We hope that, with the support of the Australian Democrats and the Independent senators, the matter will be referred to a Senate committee for proper consideration. Remainder of Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Mr John Brown)-by leave-read a third time. Consideration resumed from 17 April, on motion by Mr Hurford: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr John Brown) read a third time. Motion (by Mr John Brown) proposed: That the House do now adjourn. Mr PORTER(Barker)(7.16) —Nearly two months ago, I first raised the serious allegations of fraud and corruption of Medicare and the Health Insurance Commission which were brought to light by the Newcastle case of Dr Parker. On 10 March, when the claims were made public, we immediately called for a full inquiry by the Australian Federal Police. Instead, the Minister for Health (Dr Blewett) opted for an in-house inquiry by the Health Insurance Commission. On 14 March, the Minister said that attempts were being made to arrange interviews with the Sydney doctors who had claimed to know how Medicare was being ripped off through fraud and overservicing. We continually expressed our deep concern about the delay and lack of action by the Government in failing to use the full resources of the Commonwealth, including the Federal Police, to pursue these inquiries. The Minister then set about misleading the Parliament as to the claims that were made. He then attempted to denigrate Dr Parker. It was only six weeks later, after continued pressure from the Opposition and after we had sought the assistance of the Director of Public Prosecutions, that the Government actually referred the case to the Federal Police. What was the excuse for the six-week delay? It was exactly the same excuse that had been used previously. Let me refer to the Minister's statement: Continuing difficulties were being encountered in gaining access to some of the individuals referred to in the original allegations. I wonder who those individuals could be. I bet it was the two Sydney doctors, Dr Sidhwani and Dr Haider. Members of the Press could not believe it. They rang me and said: `Is the Minister really saying that the Health Insurance Commission investigators cannot get access to these doctors? For example, we know the whereabouts of Dr Sidhwani. What about Dr Haider?' If the Minister had sought the assistance of the Federal Police, perhaps they could have given him some advice because, as I understand it, a man fitting the same description and using the same name is currently on bail from the Australian Capital Territory criminal court on a charge of malicious injury with intent to do grievous bodily harm. These two doctors who, for six weeks, the Minister has not interviewed, are, of course, the ones who, according to the claims made, would have been able to provide the proof of those claims. The sorts of things they could have provided were files, case notes, protocols of overservicing, and so on. The Minister has probably achieved his goal of frustrating these investigations, because I have no doubt that any proof which was available in this case in the hands of the perpetrators of the Medicare fraud would have been destroyed. The Minister has ensured that the trail is stone cold because he does not want the fatal flaws in the Medicare system to be revealed. He knows that he cannot guarantee the security of information held by the Health Insurance Commission. He knows that he cannot stop the rapid escalation of fraud and overservicing under the current bulk billing arrangements. Therefore, the Minister has set about frustrating these investigations to cover up the flaws in Medicare. He has obtained a six weeks delay. He has ensured that this delay means that very little will be found now by the full Federal Police inquiry. The Minister stands condemned for failing to take appropriate action to prevent this explosion of the cost of Medicare as a result of fraud and overservicing. Mr RONALD EDWARDS(Stirling)(7.21) —Yesterday this House considered the Environment Protection (Impact of Proposals) Amendment Bill 1986 and we were talking about the role of environmental impact statements. I would like to refer to a specific matter which concerns me in my electorate of Stirling and that is a proposal concerning the suburbs of Kurrinyup, Scarborough and Trigg. For some time now there has been a proposal to put a road-that is, Marmion Avenue-through the Kurrinyup-Trigg regional open space. The concern I have is that the data that was collected for this road construction by the local government authority is inadequate and inaccurate data. The Metropolitan Region Planning Authority, when still in existence in Western Australia, put out a report on it through a sub-committee of that Authority. In that report it recommended against the construction of Marmion Avenue. It also said that the database used by the City of Stirling was quite inadequate and would not stand up to any thorough public scrutiny. However, the City of Stirling has persisted in trying to build this road. I might add, incidentally, that the original cost of that road was half a million dollars. It has now blown out to $3.4m. It is still making its demand upon the public purse that this road be constructed. Constituents of mine in the electorate are asking that an alternative road be built-the North Perimeter Highway-at a cost of $2m. This road has been planned since 1962, yet for some reason there has been an excessive effort by the City of Stirling to have Marmion Avenue built. It concerns me at this time that next week in Perth the Australian Heritage Commission is to commence its inquiry into the listing of the Kurrinyup-Trigg dune reserve on the register of the National Estate. At those inquiries it will hear objections from two parties-from one individual and from a Mr Quigley, who represents a traffic action group in the area of North Beach. However, it concerns me that the current manoeuvres by the City of Stirling are designed to try to pre-empt the outcome of the Heritage Commission inquiry. The concern of the Heritage Commission is that it ought to be able to go to this inquiry without there being pressure. In fact, I heard today from the Heritage Commission that it is being threatened and intimidated by the co-ordinator of the coalition for traffic action, Mr Quigley, and receiving a whole series of phone calls in Canberra threatening the normal procedures and the normal matters of inquiry. The question I put before the House is: If this is the case, what vested interests are we having reacted to by the City of Stirling and Mr Quigley? Is there some attempt to distort the proper allocation of public funds? I might also add that the funds proposed to be spent by the State Government on Marmion Avenue have not been approved as part of the Australian land transport program. In fact, they would be funds that would be diverted from another source. The substance of my remarks to the House is that we have a road being proposed by a local authority that has as its basis dubious statistical data; we have a group pressing for that road which is prepared to try to intimidate officers of the Australian Heritage Commission in their normal conduct of an inquiry; and we have another road in my electorate which has been proposed since 1962 and for which we are told that funding has not been provided, yet it is clearly a gazetted road. What we are facing is the misallocation of funds and attempts to use what I would regard as improper and undue influences upon the Australian Heritage Commission. I should also add that I understand that the National Trust in Western Australia has looked at the Kurrinyup-Trigg dune reserve and that it is due to present a report in the near future. It has managed to identify rare and endangered species in that reserve whose habitat would be destroyed if the road were to be constructed. I draw to the attention of the House the fact that the manoeuvres that lie behind this issue deserve clear public scrutiny. I am very concerned that the proper procedures of bodies such as the Australian Heritage Commission are being threatened by people who, on the face of it, seem to have unusual and particularly disturbing vested interests. What I am asking for at this stage is that proper procedures be carried out, that the Heritage Commission conclude its inquiry and that, if there is to be an allocation of public funds, they be spent on the proper gazetted road, which in this case is the North Perimeter Highway. Mr DOBIE(Cook)(7.26) —On 29 April 1986 it was the 216th anniversary of Captain Cook's landing at Kurnell. This is not remarkable in itself, but the interesting thing is that it is the first occasion in those 216 years on which the Royal Australian Navy has acted as host for the commemoration-an annual event at Kurnell for many years. Previously the commemoration has taken the form of a remembrance on the closest Saturday to 29 April, and was run by the State Government through the auspices of the Captain Cook Landing Place Trust, headed for many years by a member of the Holt family, most recently by the Hon. John Holt. Two years ago the State authorities decided that they would no longer organise the commemoration, and this year the RAN took over the task. It was performed with great dignity under the watchful eye and participation of Rear Admiral David Martin, AO, RAN, Flag Officer Naval Support Command. There was a special significance in that it was the first time that HMAS Cook, the Navy's oceanographic research vessel, had visited the electorate of Cook, more particularly, the landing site of the naval hero after whom the ship and the electorate have been named. It was a quaint coincidence that the member for Cook should be on board to watch Commodore A. Cook, RAN, captain HMAS Cook, on her maiden voyage to the electorate of Cook on this day. Having been at the launching of HMAS Cook in Melbourne in 1977, then again at her fitting out a couple of years later, and having unsuccessfully negotiated to have her visit the electorate of Cook on her maiden voyage, it was with great personal satisfaction that I was aboard the vessel when, at last, it voyaged into Botany Bay and docked alongside Kurnell. The events of 29 April were impressive. The Navy had also invited my colleague the honourable member for Barton (Mr Punch), whose electorate covers the waterways of Botany Bay, as well as the President and the Shire Clerk of Sutherland Shire Council, the Headmaster and Captain of James Cook High School, as well as three local children who had won John Holt awards, along with their families, to sail aboard HMAS Cook from Garden Island to Kurnell. I shall not comment on the voyage, apart from observing that certain members of the official party did not find the seagoing adventure as equitable or as pleasurable as they may have been anticipating. However, I am sure they all enjoyed the ceremony on land including the fine addresses delivered by Rear Admiral David Martin and Dr P. Orlovich, PhD, MA, M Lib, Dip Ed, immediate past chairman of the Botany Bay Historic Sites Advisory Committee. There is no doubt that the great number of school children who were present showed a real interest in and appreciation of the ceremony, which gained much from being held on the actual date of Cook's landing and from being organised and supervised by the Royal Australian Navy. It should be pointed out that, in all previous celebrations, the Navy has played a key role. The Navy band has always been present, as has the naval guard of honour. The other Services have been represented but, all in all, it has been very much a Navy-oriented function. It is an event of great significance to the Navy, well beyond the boundaries of the electorate of Cook, and I am of the very strong opinion that the Royal Australian Navy should remain as the organising authority for this commemoration, which celebrates the greatest of navigators, perhaps the greatest the world has ever known. I know that historical societies around Sydney are keen to see that this commemoration, linked as it is so very closely to our history, should continue. There has been talk that perhaps the Sutherland Shire Council could take over the responsibility for the commemoration. For reasons I have already given, I would strongly resist this move and, in so doing, I would stress that I am not criticising the Sutherland Shire Council. Far from it, I believe it does very well. There is no doubt that all future ceremonies will have to have significant naval participation for the ceremonies to have any meaning at all. With the level of naval participation experienced already it is only a small step for the Navy to take over the whole ceremony. I believe it is essential that it does this and, what is more, I am sure it is very important to the Navy to have this as part of its annual calendar as its tribute to the great navigator and explorer, James Cook. Mr LAMB(Streeton)(7.30) —I want to use this opportunity to comment on a letter sent out to senior citizens clubs by a member of the Opposition from Victoria, the honourable member for Casey (Mr Halverson). The letter is obviously part of a campaign by the Opposition. In a pro-forma letter dated 24 April, in his opening paragraph he stated: Whilst I certainly do not wish to cause you or your members any unnecessary anxiety or concern, I believe you should know that the Government is considering imposing a $2.00 fee on pensioners for Pharmaceutical Benefit Scheme drugs which are currently provided free. Despite the honourable member's protestations, it is obvious that this letter is part of a scare campaign, a deliberately deceitful campaign bearing little resemblance to the facts of the situation. The letter pretends that the Government is considering a proposal for a $2 fee per prescription to be paid by pensioners because of, and I quote from the letter: . . . a recommendation made by the Industries Assistance Commission that pensioners be charged a fee. What absolute nonsense! Mr Spender —Madam Speaker, I raise a point of order. It would appear to me that the honourable gentleman is making a charge of impropriety of some kind against the honourable member for Casey. As I understand the Standing Orders, that should not be done. I ask him to withdraw it and for you to rule accordingly. Madam SPEAKER —The Chair does not see any imputation of impropriety. The honourable member for Streeton is alleging what he suggests the honourable member for Casey has done. He is not imputing any improper motives to him, as I hear it, by so doing. I think it is part of the normal political give and take in the House. Mr LAMB —It is unfortunate that a minute of my time on such an important matter has been taken out. It is a deliberate distortion of the facts. The Government cannot be considering such a recommendation because no such recommendation has been made. The Industries Assistance Commission report referred to in the letter is a draft report on the pharmaceutical industry released for discussion and debate in November last year. In the introduction of the section on the draft recommendation, the report actually said: Being draft recommendations, the following are not being submitted to the Government at this stage. Recommendations to the Government will be formulated after the public hearing arranged for the consideration of this draft report. Not being content with this misrepresentation, the honourable member's letter goes on about the actual draft recommendation of a fee for pensioners' prescriptions. He has been most selective in quoting only part of the recommendation. First, there is no mention of a $2 fee, but merely reference to a co-payment in the draft recommendation. Secondly, included in the draft recommendation is a ceiling and the co-payments will actually be off-set by an increase in the weekly rate of pension. The full draft report section is worth quoting. It states: Under the copayments system, pensioners would pay a contribution towards the cost of drugs consumed up to some maximum amount. To compensate them for the introduction of the charge, they could be provided with a supplement to their pension. For example, pensioners could pay $2 per prescription up to a total annual level of for example, $50. Where a pensioner required more than 25 prescriptions in a year, the additional ones would be provided free of charge. Obviously this letter is totally inaccurate and abuses the actual work of the IAC. The letter infers that the Government has accepted or will accept the recommendation of a $2 fee for prescriptions to be paid by pensioners. It suggests that the Government raised the new fee with the States in discussions held with the State standing committees established under the Medicare agreement. That is another inaccurate and misleading statement. Pharmaceutical benefits have nothing to do with Medicare at all. How could it be raised on an agenda; it would be ruled out of order. As I have said, the draft recommendations are not submitted to the Government until after public discussions. The Government has been presented very recently with the final report which will be made public shortly. That report and its recommendations have yet to be considered by the Government. None of its recommendations has been accepted as policy; so the conclusion must be drawn that, like the assets test campaign at the last election, this is a mischievous and inaccurate scare campaign designed to make pensioners, senior citizens, tremble at the knees. When there is no policy these are the scare tactics resorted to. When there is an absence of leadership, these are the scare tactics resorted to. Madam SPEAKER —Order! The honourable member's time has expired. Mr PETER FISHER(Mallee)(7.35) —I raise the serious problem that is facing the Australian citrus industry. The Brazilian concentrate is now entering Australia at a price of some $US800 a tonne compared with some $US1,800 a tonne just last June. As a result of this enormous price drop, Australian growers can expect to get only half of the money this season that they were paid last season. We now see prices ranging between $80 and $100 a tonne, which is well below the growers' costs of production. The Australian Citrus Growers Federation's economic surveys clearly indicate that growers need an average farm gate return of between at least $155 and $175 a tonne for all their citrus production in order to maintain any basis of a profitable operation. Even with the price of $140 a tonne, this does not achieve their objective, which simply proves that the Australian citrus growers cannot hope to compete with the very low labour costs and other production costs applicable in Brazil without adequate tariff protection. The situation that now faces our citrus growers, in an industry which has retained its viability over the last few years and has tended to underpin our horticultural regions, is worse than any situation ever faced since 1975, when similar Brazilian produce flooded the Australian market without tariff protection. I hate to think what will happen if the Minister for Primary Industry (Mr Kerin) is unable to respond to the submissions that are being put before him for assistance to carry the industry through what is possibly a short term problem. The Citrus Growers Federation has asked the Government for urgent tariff assistance to lessen the effect of the price plunge on growers' income from the processing sector. The assistance that is requested would lift tariff protection from the present 45 per cent to 77 per cent and bring the price to $120 a tonne for valencias and between $90 and $95 a tonne for navel oranges. Obviously, the long term solution for the citrus industry rests in that industry's ability to switch the emphasis of its marketing strategy to the achievement of increased sales and returns on and from the export and domestic fresh fruit markets. In other words, if growers are to receive anywhere near an average farm gate return of between $155 and $175 a tonne and if the processing return is to be in the range of $100 to $120 a tonne, returns in excess of $200 a tonne will have to be achieved from the fresh fruit market sales. It is obvious that this change in marketing procedures and marketing patterns cannot be achieved overnight, and the adjustment period in between will be very difficult. Any continuation of the depressed world commodity prices for orange juice concentrate will result in serious economic difficulties for the industry in the 1986 and 1987 season. I ask the Minister for Primary Industry to respond to the appeal that has been made to the Hawke Government by citrus growers for emergency aid following this major crash in fruit juice prices. I understand that the case has already been put before the Minister and will be raised with him again at the citrus industry conference. I simply say to the Government that we cannot afford to let the citrus industry, which is underpinning the horticultural areas and many of our regional towns and cities, particularly in the Murray Valley and the Murrumbidgee Irrigation Area, collapse. I am sure that it has a very bright future. It is still an underproduced industry in this country and I am confident that, if the Government supplies some level of aid, some assistance, the Australian industry will meet the future challenges. Mr HOLLIS(Throsby)(7.40) —Today outside this House there was a protest, and also outside the Indian High Commission there was a protest by a group of people purporting to be protesting about the Tamil involvement in the recent bomb outrage in Sri Lanka where a plane was blown in half at Colombo Airport. No one in his right mind would approve of terrorism. I most certainly do not approve of terrorism and I do not think that anyone in his right mind would, especially terrorism that is taking place more and more in the world today on or against airlines. I must voice my strong disapproval of the claim that the Tamils of Sri Lanka were involved in this latest outrage. There is no evidence that the Tamils were involved in it. There is absolutely no evidence at all, and no Tamil group in Sri Lanka has claimed responsibility for it, despite what the newspapers have said here. Far be it from me to place blame on anyone. I do not want to do that, but we must accept the fact that recent events in Sri Lanka have seen the Tamil cause receive more and more support; more and more support in Sri Lanka itself, more and more support in Australia, and more and more support throughout the world. There is no doubt that the Government of President Jayewardene in Sri Lanka has been under considerable pressure from the world community and from groups such as Law Asia, Amnesty International and many others to stop the persecution of the Tamils. It just so happens, as we have all seen in the past week, that there has been an international conference in Tokyo focusing on terrorism. If one wanted to get world opinion on one's side, what better way to do it than to say that these people were somehow involved in this act of terrorism. As I have said, I am not saying that the Government of Sri Lanka was involved in this outrage, because that would be a very serious claim and I do not want to make it. But it just so happens to be so very convenient that this plane was blown in half at Colombo Airport while the Tokyo conference was in progress. There was also an outrageous claim in the newspapers that Tamil uniforms were found. No Tamil uniforms were found at all, because the Tamils groups do not wear uniforms. So what are these uniforms that are supposed to have been found? I was very disappointed, I must say, to read a statement by the Sri Lankan High Commissioner in Australia claiming in one report that I read that all Tamils in Australia were terrorists. That is an outrageous claim made by a diplomat in this country. I suggest that the High Commissioner talk to some of the Tamils. Some Tamils have been to see me today and over the past couple of days to express their upset and concern that they have all been labelled terrorists. There were some very eminent people among them-university professors, lawyers and doctors-all part of the Tamil community in Australia. I know many of them, as I know the honourable member for Lowe (Mr Maher) also knows many of them. They are not terrorists. For the High Commissioner of Sri Lanka to claim that Tamils are terrorists was quite an outrageous statement. There has been persecution against the Tamil minority in Sri Lanka. It is not a recent thing; it has been going on for many years. It is a difficult and complex problem, as these ethnic problems often are. All right and all wrong is not on one side or on the other side. I think that for it to be claimed that the Tamil minority in Sri Lanka was involved in this latest bomb outrage is indeed an outrageous statement, and I think the Sri Lankan High Commissioner should apologise to the Tamil community in Australia. I will be writing to the Minister for Foreign Affairs (My Hayden) about the statement of the Sri Lankan High Commissioner that `all Tamils in Australian are terrorists'. They are not terrorists; they are people who are endeavouring to do their best to bring peace and harmony to their homeland. It is a cause in which they have my wholehearted support. Dr HARRY EDWARDS(Berowra)(7.44) —On Monday night I took the opportunity to take up the single-minded and erroneous suggestion of the Treasurer (Mr Keating) that the present yawning balance of payments deficit is in some way a legacy of the previous Government. The discussion focused on the very large deficit of 1981-82 of the order of 6 per cent of gross domestic product. I stressed that the fundamental cause of that was the surge in investment by business firms and governments in this country under the sound economic policies of the previous Government. To take up my remarks from that point: Following that large deficit figure of 1981-82, the current account deficit fell back to the order of 4 per cent in 1982-83 and 1983-84-even so, above the typical deficit level of 2 to 3 per cent under the Fraser Government prior to 1981-82. But then it accelerated again to nearly 5 per cent in 1984-85 and, at $13 billion to $14 billion, which it is currently. It will be in the order of 6 per cent this 1985-86 financial year. It is readily acknowledged that over the last two years a significant factor in this has been the deterioration in our terms of trade with the rest of the world. With that accentuating the situation, the latter outcomes to which I referred represent a manifest situation of this country living beyond its means-beyond the real national product available. The most visible and culpable manifestation of that has been the Hawke Government's succession of massive Budget deficits. It was $8 billion in 1983-84. Honourable members opposite, who are trying to interject, should not come at the tripe that that was the legacy of the Fraser Government. It was not. In 1984-85 the deficit was $6.7 billion, when we had all the profligate spending of the 1984 Budget, and it will probably be of the order of $6 billion this year. However, the matter goes wider than that, to the ordinary citizens of this country on an average basis, to the very appropriateness and sustainability of the standard of living generally-nurtured and upheld by the prices and incomes accord, that much heralded trump card of Labor policy but now, at all events, a stumbling block to the effective economic management of the country. That was the starting point of my question last Friday-subject to a certain preceding degree of hilarity. The Treasurer gave a lengthy and erroneous discourse on history but he really did not come to grips with the central issue. The central issue I put then was whether he recognised that it was necessary to do something radical in the wages area or substantially to cut the `social wage' such as by the leaked proposal for a $1.4 billion cut in government spending-if the option of sustained high interest rates discouraging investment and leading to recession is to be avoided. Mr MAHER(Lowe)(7.48) —I raise tonight a problem of noise within the electorate I represent, in particular helicopter noise. For some time now the Department of Aviation has allowed helicopter pilots to operate at 500 feet above the Parramatta River and Sydney Harbour. The problem really arises in the suburbs of Drummoyne and Chiswick, which are under the north-south flight path to Sydney Airport. The residents there are doubly distressed because they have the noise from aircraft taking off and landing at Kingsford-Smith Airport and they also have the noise during daylight hours of helicopters passing by. What really concerns me is that students have approached me and told me that they cannot study during the day in their units or homes because these helicopters-police, television station and private helicopters-are passing and repassing. If they pass at 500 feet they are nearly in line with some of the unit premises that look out on the Parramatta River, particularly up on the third floor. These units are built quite high on the escarpment around the Parramatta River and these people have told me that they cannot talk on the phone and they cannot study, that every time they sit down to read a helicopter goes past and disturbs them, and that they appear to be right outside their balcony windows. I feel sorry for students who cannot study. People who are retired go about their business and perhaps shop, but if a person is confined to a desk and trying to prepare for an examination, I think something should be done. I am calling tonight for the Minister for Aviation (Mr Peter Morris) to remove this nuisance from the area. When I was a member of the State Parliament there was a problem of noise from speed boats on Hen and Chicken Bay. This was a built-up area, and on behalf of the students I took up a cause. A student approached me and asked: `Why should I have to leave my own home at Abbotsford and go to the libraries and be distracted by people when I can study at home better? Why should the noise drive me out?'. I ask the Minister for Aviation: Why should noise stop students from studying in the peace, and quiet enjoyment of their own homes? People in this area now have a problem with aircraft noise. I am looking to the Minister to solve that problem. A report has been made to the Government, and the Government's response is being awaited. That report, presented some time ago by a select committee of this House, raised all the problems of people living in the flight path, such as fear of planes crashing, television flicker and disturbed sleep, particularly in the summer when the windows are open. But helicopter flights are another issue in the area. Helicopter flights are not even recorded any more. They fly at 500 feet. They have to fly that low because the aircraft landing at and taking off from Sydney Airport fly at 1,500 feet over the area. I feel that there is a great element of danger in this situation. There is certainly danger to the health and well-being of the people who have to put up with such noise coming from all directions. This situation came home to me clearly recently when the Department of Aviation very kindly set up a test monitor in Drummoyne Park. I had asked the Department to put another monitoring point for aircraft noise on the north-south flight path into Sydney Airport. There is one monitoring point in Sydenham near the airport and another at Leichhardt Town Hall; there should be another one further out. The Department sent a number of officers who set up a site in Drummoyne from where they tested the noise all day. While we were testing, the noise from the planes was almost exceeded by the noise from the helicopters going backwards and forwards across the bay. When they were crossing it was almost impossible to hear anything. I feel that the people in the units have a very strong case. I believe that the Minister should take action to stop the helicopter operators using this route. I make this request tonight in particular because I have read that the heliport is to be shifted from Darling Harbour to Garden Island. That cannot happen too soon, I am sure, for all the residents of Sydney who are affected by aircraft noise and who only want the peace and quiet of their homes. I refer in particular to the people of Drummoyne, Chiswick and Abbotsford-suburbs that are quiet and very pleasant places to live. These people should not be annoyed and harassed by excessive noise from helicopter operators. Madam SPEAKER —Order! The honourable member's time has expired. Mr HODGMAN(Denison)(7.53) —In this House on the evening of 29 April I complained bitterly that the Prime Minister (Mr Hawke) had still not answered question No. 3248 which I placed on the Notice Paper as long ago as 18 February this year. I set out in my remarks, which are recorded on pages 2705 and 2706 of Hansard, the full text of that very important question and the 11 specific matters which I raised. I said: The Prime Minister is now on notice that he has seven days to answer these questions. If he does not, he will have to face the consequences. The seven days have passed, and the Prime Minister, to his eternal discredit, has still not answered those questions. Mr Hodges —Where is he? Mr HODGMAN —Earlier this evening I went to the Fuehrer bunker to advise of my intention to raise this matter on the adjournment. Mr Maher —Madam Speaker, I take a point of order. The honourable member has referred to the Fuehrer. That is a very offensive term to me. It is a term that refers to Herr Hitler, a madman who did appalling things in Europe. I ask that the reference be withdrawn. Madam SPEAKER —The point of order is upheld. The honourable member will withdraw the term. Mr HODGMAN —I went to the Prime Minister's office-- Madam SPEAKER —The honourable member will withdraw the term. Mr HODGMAN —I withdraw. I went to the Prime Minister's office and conveyed to the Prime Minister, by courtesy of the Government Whip, the message that I was raising this matter on the adjournment tonight. Mr Reith —Why isn't he here? Mr HODGMAN —Exactly. Anybody would have thought he would be here, but the fact is that he is not. Events are about to overtake themselves, because while the seven days have expired, the Fourth Estate-that is, the Press-are on to some of the matters that I wish to raise. I think honourable members will see within the next 36 hours publication of some of the matters which I have raised in this Parliament since February this year. The extraordinary clandestine and dubious relationship between the Prime Minister, the Government and the Australian Labor Party-- Madam SPEAKER —Order! The honourable member will remember that he cannot cast aspersions on or allege impropriety by any member of this House. I suggest that he be very careful in what he says. Mr HODGMAN —I checked all those words in May's Parliamentary Practice and none of them is unparliamentary, Madam Speaker. Madam SPEAKER —It is not the words about which the Chair is reminding the honourable member but that allegations or imputations of impropriety must not be made against a member of this House. Mr HODGMAN —If it pleases you, Madam Speaker. The relationship to which I have referred between the Prime Minister, the Government, the Australian Labor Party and the Westfield Property Trust, its principals and associated companies, including the Boulevard Hotel, is about to be exposed. The Prime Minister might choose not to answer my questions but these matters will be brought to light very substantially in the media. The Westfield scandals will be to this Government what Khemlani was to Whitlam. These scandals relate not just to the Belconnen Mall; they also involve the Sydney connection. They involve taxpayers' funds running into millions of dollars; leases, tenancies and other property dealings in Sydney in relation to the movement of the premises of the Australian Conciliation and Arbitration Commission; the issue of concrete cancer being discovered in a building into which a Commonwealth instrumentality has made a very substantial financial investment; and a number of other matters which will have to be answered. I said in a statement yesterday that the Prime Minister's refusal to answer my 11 specific questions that were placed on the Notice Paper 77 days ago would cost him dearly. The lid on the pot is about to blow off. I have two files which I am more than prepared to make public to any member of the Parliament or any member of the community. One is on the Boulevard Hotel and one is on the Belconnen Mall. I have a 15-page speech on the Westfield scandals-I repeat, scandals-which I am itching to deliver at the first opportunity. The day when Prime Ministers and governments can simply say that they will not answer questions is gone in 1986. These matters involve taxpayers' funds. They involve propriety in government. The matters will not go away. Whilst the Prime Minister and others may choose not to answer my questions, the Press will bring out the truth. Madam SPEAKER —Order! The honourable member's time has expired. Dr BLEWETT(Bonython-Minister for Health)(7.58) —I wish briefly to answer the spurious and splenetic remarks of the honourable member for Barker (Mr Porter) on the so-called Parker case. They are spurious because the accusations relate to a decision that was made 10 days ago by the Health Insurance Commission to refer those issues to the police. It has taken the honourable member for Barker 10 days to whip himself into this state of indignation. I only presume that, because every statement he has issued in the last day on health insurance changes has had major factual inaccuracies, that is the reason for this rather spurious performance tonight; or it may be the fact that the poor man moved a censure motion against me which was the most unreported censure motion in the history of this Parliament. Mr Spender —And one of the most deserved censure motions-- Dr BLEWETT —I will simply say, when the noisy member for North Sydney has stopped his ejaculations-- Mr Spender —Look me in the eye and say that. Dr BLEWETT —The honourable member should check the word in a dictionary. The activities of the Health Insurance Commission from the start have been prompt, open and above board. When the HIC advised that the matter should be referred to the Australian Federal Police that was immediately done. One of the chief reasons that it was referred to the Federal Police was the kind of smear and innuendo campaign which had been waged against the HIC from the beginning of this issue. This very spurious issue was used for innuendo and for other purposes. Mr Porter —You don't believe the allegations. That is the problem. Dr BLEWETT —If the people who originally raised this issue had been seriously concerned, they had real options. They could have gone to the HIC, to the Federal Police or, as they had been advised, to the Joint Committee of Public Accounts. None of these things were done. Mr Porter —That is a lie. Madam SPEAKER —Order! The honourable member for Barker will withdraw that allegation against the Minister. Mr Porter —It is untrue. I withdraw. Dr BLEWETT —It was used simply as an excuse to publicly attack the HIC in ways which have made the investigation extremely difficult. Question resolved in the affirmative. House adjourned at 8 p.m. The following notices were given: Mr Young to move- That Government Business shall take precedence over General Business for this sitting. Dr Blewett to present a Bill for an Act to amend various laws relating to health, and for related purposes. Mr Barry Jones to present a Bill for an Act to provide for the payment of bounties on the production of goods, and for related purposes. The following paper was deemed to have been presented on 7 May 1986: Australian Bureau of Statistics Act-Australian Bureau of Statistics-Proposal for collection of information-1986-No. 4-Survey of Transport and Storage Industries, 1984-85. The following answers to questions were circulated: (Question No. 2055) Mr Blunt asked the Minister representing the Minister for Education, upon notice, on 9 October 1985: (1) What amounts have been paid to Mr Phillip Adams and Mr Rod Cameron, their companies, or principals of their companies, for services rendered to the Minister's Department or authorities under the Minister's control and for what purposes in each case. (2) What amounts have been paid to each of these people or companies for (a) travel allowance, (b) air fares, (c) accommodation costs, (d) hire car expenses and (e) any other expenses incurred. Mr Dawkins —The Minister for Education has provided the following answer to the honourable member's question: (1) A grant of $16,000 under the national allocation for the Participation and Equity Program was made to Lucia Investments Pty Ltd whose principals are Rodney Cameron and Leslie Winton, a company incorporated in the A.C.T. and registered in N.S.W., which trades as ANOP (Australian National Opinion Polls) on 20 December 1984. Funds were provided for the conduct of interviews with Directors-General of Education and other persons, including members of program target groups, to formulate advice on: (a) conducting action research into the awareness of and perceptions of the Participation and Equity Program among members of the program's several target groups; (b) using the results of such action research in developing messages and selecting appropriate media for communication with target groups; (c) setting up `tracking studies' and other evaluatory procedures which would monitor the effectiveness of communications with these groups, and the effects of the program. (2) To date a commitment to the payment of $2,000 has been made to meet the cost of professional fees for the consultants employed by Lucia Investments Pty Ltd. (Question No. 2301) Mr Blunt asked the Minister representing the Minister for Community Services, upon notice, on 12 November 1985: (1) What was the expenditure by the Minister's Department and authorities under the Minister's control on public relations in (a) 1983-84 and (b) 1984-85. (2) What was the nature or subject of the public relations expenditure. (3) Was outside assistance obtained for public relations, if so, (a) who provided the assistance, (b) what payments were made and (c) why was the assistance sought. Mr Howe —The Minister for Community Services has provided the following answer to the honourable member's question: (1) Expenditure on public relations since the Department of Community Services was created on 13 December 1984 to 30 June 1985 (1984-85 financial year) was $74,126.16. (2) Expenditure related to- (i) Publicity for subsidy programs and rehabilitation functions (mainly to publicise Handicapped Persons Week) (ii) The development of a communications strategy and visual identity for the department. (3) (i) No. (ii) Yes. (a) Neilson McCarthy and Partners and Corporate Graphics as a joint consultancy; (b) The quoted cost was $69,930. $67,969.80 was paid in 1984/85 with the balance to be paid on completion; (c) To ensure expert input, which was not available within the department, into the design of a logo and development of an information strategy for the department. (Question No. 2328) Mr Blunt asked the Minister representing the Minister for Industry, Technology and Commerce, upon notice, on 12 November 1985: (1) What was the expenditure by the Minister's Department and authorities under the Minister's control on advertising (other than classified newspaper advertising) by individual subject or program in (a) 1983/84 and (b) 1984/85. (2) Who (a) initiated and (b) conducted each campaign. (3) Why was each campaign necessary. (4) What was the basis of remuneration for each campaign. (5) Was the assistance of the (a) Information Co-ordination Branch or (b) Australian Government Advertising Service obtained. Mr Barry Jones —The Minister for Industry, Technology and Commerce has provided the following answer to the honourable member's question: (1) (a) Department of Industry, Technology and Commerce (DITAC)-$39 849. Australian Customs Service (ACS)-Nil. Industries Assistance Commission (IAC)-$85 332; (b) Department of Industry, Technology and Commerce (DITAC)-$54 968. Australian Customs Service (ACS)-Nil. Industries Assistance Commission (IAC)-$91 847. (2) (a) DITAC and IAC respectively; (b) DITAC and IAC respectively. (3) The Department conducts national Small Business Awards and Publications Programs which are supported by national advertising campaigns. The Commission is required under the Industries Assistance Commission Act to give notice of its inquiries in newspaper advertisements. In addition, advertisements are placed from time to time seeking applications for job vacancies that cannot be filled from within the public service. (4) The Department received quotations from various suppliers of Small Business material. These quotations were obtained in accordance with Finance Regulations. The IAC used the Australian Government Advertising Service contract rates. (5) (a) No; (b) Yes. (Question No. 2329) Mr Blunt asked the Minister representing the Minister for Community Services, upon notice, on 12 November 1985: (1) What was the expenditure by the Minister's Department and authorities under the Minister's control on advertising (other than classified newspaper advertising) by individual subject or program in (a) 1983-84 and (b) 1984-85. (2) Who (a) initiated and (b) conducted each campaign. (3) Why was each campaign necessary. (4) What was the basis of remuneration for each campaign. (5) Was the assistance of the (a) Information Co-ordination Branch or (b) Australian Government Advertising Service obtained. Mr Howe —The Minister for Community Services has provided the following answer to the honourable member's question: (1) Nil. (2) N.A. (3) N.A. (4) N.A. (5) N.A. (Question No. 3100) Mr Blunt asked the Minister representing the Minister for Industry, Technology and Commerce, upon notice, on 29 November 1985: (1) What funds were allocated to the (a) Australian Industrial Research and Development Incentives Board Commencement Grants, (b) Australian Industrial Research and Development Inventives Board Projects Grants, (c) Australian Industrial Research and Development Incentives Board Public Interest Projects and (d) Assistance to Inventors Scheme in (i) 1982-83, (ii) 1983-84, (iii) 1984-85 and (iv) 1985-86. (2) What (a) amount and (b) proportion of funds was specifically allocated in each year for projects to be undertaken in NSW. (3) How and by which body were the funds administered in each year for each scheme. (4) How and by which body were decisions made in each year on the detailed allocation of funds for projects under each scheme. (5) What specific projects were funded under each scheme in each year in the Electoral Division of Richmond. (6) For each project in the Electoral Division of Richmond (a) what was the principal purpose of the grant, (b) which individual or group received the grant, (c) what was the amount of the grant and (d) what evaluation has been made to determine if the grant achieved the original objectives for which it was made. (7) What specific projects were denied funding under each scheme in each year in the Electoral Division of Richmond. (8) For each project denied funding in the Electoral Division of Richmond (a) what was the principal purpose of the grant sought, (b) which individual or group applied for the grant, (c) what was the amount of grant sought and (d) what was the reason for refusing funding for the application. (9) How does funding for projects under these schemes in each year in the Electoral Division of Richmond compare on a per capita basis with funding for projects under the schemes in the Electoral Divisions of (a) Wills, (b) Reid, (c) Parramatta, (d) Robertson, (e) Shortland, (f) Cunningham, (g) Werriwa and (h) Blaxland. (10) How and when were applications sought for grants under each scheme in each year. (11) Was any specific advertising undertaken to alert residents of the Electoral Division of Richmond to the existence of these schemes. (12) Will he ensure that in future comprehensive information concerning grant availability and eligibility under these schemes is drawn to the attention of local government bodies, community groups and residents in the Electoral Division of Richmond; if not, why not. (13) If so, (a) how and (b) when, will the information be provided. Mr Barry Jones —The Minister for Industry, Technology and Commerce has provided the following answer to the honourable member's question: (1)- ($'000) 1982-83 1983-84 1984-85 1985-86 (a) Commencement... 14 300 16 150 17 765 17 400 (b) Project... 34 800 43 245 38 286 38 022 (c) Public Interest... 4 975 8 550 11 400 10 000 Totals... 54 075 67 945 67 451 55 422 (d) Inventors Scheme... 120 145 645 250 (2) The annual appropriation for grant funds is not allocated on a state by state basis. To a large extent the amount of funds allocated to companies in each state are dependent on the source and number and value of grant applications received. Commencement grants are a statutory right and grants will be paid to companies provided that the expenditure outlined in the application meets the eligibility criteria defined in the legislation. Project grants are based on merit and are approved by the Board after assessment and due consideration of the application. The Board's resources are insufficient to enable extraction of statistics for 1982/83 and 1983/84 but the following amounts were paid to NSW companies during 1984/85 COMMENCEMENT GRANTS Australia total... $16,261,722 Paid to NSW companies... $ 6,655,718 % to NSW...40.93% PROJECT GRANTS Australia total... $38,125,969 Paid to NSW companies... $13,133,860 % to NSW...34.45% The amount and proportion of funds provided under the Assistance to Inventors Scheme to assist inventions from NSW inventors is as follows: 1982-83 1983-84 1984-85 1985-86 (a) amount... $25,105 $54,047 $46,056 $37,000 (b) proportion... 20.8% 37.7% 7.1% 14.9% (3) Project Grants and Commencement Grants are administered by the Australian Industrial Research and Development Incentives Board. The Assistance to Inventors Scheme was administered by the Department of Science and Technology prior to 12 December 1984 and by the Department of Industry, Technology and Commerce thereafter in accordance with documented administrative procedures. (4) As previously stated Commencement Grants are a statutory right and the level of grant payment is assessed by the staff assisting the Board after thorough examination of applications to ensure that amounts claimed meet the eligibility criteria of the Incentives Legislation. Project Grants are approved by the Board who use an objective criteria to determine the order of merit of projects referred for their consideration. Grants under the Assistance to Inventors Scheme were allocated by the following bodies in accordance with documented administrative procedures: 1974-October 1981-Australian Inventions Advisory Committee consideration of recommendations from State Inventions Advisory Panels. October 1981-1983-Interim Inventions Advisory Panel consideration of recommendations from State Inventions Advisory Panels. 1983-December 1984-Department of Science and Technology consideration of recommendations from State Inventions Advisory Panels. December 1984-1985-Department of Industry, Technology and Commerce consideration of recommendations from State Inventions Advisory Panels and commissioned feasibility studies. (5) The Board's resources are insufficient to extract this data. However grantee companies are listed in the Board's Annual Report. Mr Blunt may be able to identify the companies located in his electorate. Feasibility study of an invention by Mr Saunders' from Murwillumbah was commissioned under the Assistance to Inventors Scheme in May 1985. (6), (7), (8) & (9) Australian Industrial Research and Development Incentives Scheme: Insufficient resources to extract this data from the Board's records. Assistance to Inventors Scheme: (6)- (a) The purpose of the feasibility study of Mr Saunders' invention is to establish the technical and commercial feasibility and to identify the best strategy to commercialise the invention. (b) Uniquest Limited has been commissioned to prepare the feasibility study. (c) Up to $2,800 has been allocated. (d) The feasibility study has not been completed. (7) Seven inventions where the respective inventor resided in the Electoral Division of Richmond were denied funding under the Assistance to Inventors Scheme between 1982-83 and 1985-86. (8) Each applicant from the Electoral Division of Richmond denied assistance under the Assistance to Inventors Scheme was assessed by the NSW Inventors Advisory Panel as not being eligible for assistance or not being worthy of support. Each such applicant had sought financial and/or management assistance up to $20 000 in developing his invention. (9) No inventions were funded under the Assistance Scheme to Inventors in respect of inventors residing in the Electoral Divisions of Wills, Reid, Shortland, Cunningham, Werriwa and Blaxland between 1982-83 and 1985-86. $400 was provided in 1985-86 in respect of an invention where the respective inventor resides in the Electoral Division of Parramatta. $2 500 and $25 000 were provided in 1984-85 and 1985-86 respectively for development of an invention where the inventor resides in the Electoral Division of Robertson. (10) Companies are generally aware of the Australian Industrial Research Development Incentives Scheme and may submit applications for project grants at any time, however the current Incentives legislation effectively expires on 30 June 1986. Commencement grants relate to expenditure in the previous financial year with the applications being submitted between 1 July and 30 September each year. The Board advertises the scheme on two occasions each year in the major Australian daily newspapers. The Board also take advantage of any publicity opportunities with articles being published in Industry Association magazines, scientific journals etc. Applications under the Assistance to Inventors Scheme were accepted up until the announcement on 9 May 1985 of a moratorium on acceptance of new applications. (11) The Board is not in a position to direct advertising to specific electorates but is continually exploring and taking advantage of avenues of increasing public awareness of the Incentives Scheme. No specific advertisement of the Assistance to Inventors Scheme has been undertaken by bodies administering the Scheme in the Electoral Division of Richmond in the specified years. (12) &(13) Available resources would not allow attention to be given to residents of the Electoral Division of Richmond beyond that outlined in the answer to Question 10. To provide such a personalised service to all Electoral Divisions throughout Australia could not be met without significant increases in the financial and staff resources allocated for administration of the Incentives Scheme. The future of the Assistance to Inventors Scheme is under review. (Question No. 3245) Dr Klugman asked the Minister for Territories, upon notice, on 18 February 1986: (1) Has his attention been drawn to moves in NSW to identify and deal with incompetent teachers. (2) What steps are taken in the ACT on this matter. (3) Can incompetent teachers in the ACT be dismissed. Mr Scholes —The answer to the honourable member's question is as follows: (1) Yes. (2) and (3) Section 35 of the Commonwealth Teaching Service Act provides that an officer shall be taken to have been guilty of misconduct in a number of circumstances including ``if he is inefficient or incompetent for reasons or causes within his own control''. Where after inquiry it is found that an officer has been guilty of misconduct the relevant authority may impose the following punishment: caution or reprimand fine not exceeding $40 reduction in salary, either not grant or not grant for specified period the whole or part of a salary increment that would otherwise be paid, reduce to a lower position and salary, or dismiss from the Service. In addition, cases of inefficiency may be considered under amendments to the Commonwealth Employees (Redeployment and Retirement) Act which took effect from 1 April 1986. In this regard, where a staff member is considered to be inefficient, that is, fails to perform to a satisfactory standard the duties of his or her position, the following range of options are available after appropriate enquiry: initially attempt to resolve such cases in accordance with current personnel practices including counselling, assess work environment, transfer to another job or work area, examine procedures relevant to officer's work, additional training, redeployment in another Department, retirement. (Question No. 3307) Mr Ruddock asked the Prime Minister, upon notice, on 11 March 1986: Has any direction been given by the Government that (a) the Bicentennial flag shall be flown and (b) use of the Australian flag shall be discouraged during 1988. Mr Cohen —The answer to the honourable member's question is as follows: (a) No Government direction has been given that the Bicentennial flag should be flown in 1988. The Australian Bicentennial Authority is encouraging the flying of the Bicentennial flag as a way of expressing involvement and pride in the Bicentennial year. The Authority's guidelines for the use of its flag specify that the Bicentennial flag is not a replacement for the Australian flag. (b) The Government has not given any direction that the use of the Australian flag shall be discouraged during 1988 or at any other time. (Question No. 3308) Mr Ruddock asked the Minister representing the Minister for Community Services, upon notice, on 11 March 1986: (1) Has the Government allocated an additional $2 million for emergency relief expenditure in NSW, if so, what (a) organisations will share the money and (b) is the sum of the grant in each case. (2) What contingency co-operative arrangements have been agreed upon with NSW for the ongoing provision of emergency assistance. Mr Howe —The Minister for Community Services has provided the following answer to the honourable member's question: (1) In late 1985, the Commonwealth and New South Wales Governments agreed to contribute an additional $1 million each on a $1:$1 cost share basis, towards the provision of emergency relief in NSW. (a) and (b)- $ Society of St Vincent de Paul... 580,000 Salvation Army... 264,000 Smith Family... 517,000 Sydney City Mission... 245,000 Careforce... 100,000 Booragul/Bolton Point Community Cottages... 4,000 Hunter Life Education Centre... 5,000 Kurri Kurri Community Housing Assoc... 6,000 Maitland Neighbourhood Centre... 3,000 Newcastle Family Support Scheme... 5,000 Raymond Terrace Neighbourhood Centre... 5,000 Singleton Community Aid... 3,000 St Alban's Community Centre (Aberdare)... 8,000 Byron Bay Community Centre... 1,000 Clarence Valley Ministers Fraternal (Grafton)... 2,000 Lifeline Gold Coast (Tweed Heads)... 2,000 Maclean Emergency Relief Committee... 1,000 Mullumbimby District Community Aid... 1,000 Murwillumbah Community Aid... 3,000 Rosita Blanch Community Tenancy Scheme... 2,000 Seventh Day Adventist Lismore... 12,000 St Joseph's Community Centre... 1,500 Italian Social Welfare Organisation (Wollongong)... 2,000 Pivot Point Neighbourhood Centre (Batemans Bay)... 2,000 Thirroul Neighbourhood Centre... 3,000 Coonamble Neighbourhood and Information Centre... 1,000 Family Workers Bathurst... 5,000 Forbes Interagency... 1,500 Katoomba Neighbourhood Centre... 3,000 Lightning Ridge Community Information Centre... 1,000 Uniting Church (Cobar)... 5,000 Lake Cargellego Health Sisters... 1,000 Albury Community Aid... 15,000 Cootamundra Community Centre... 2,000 Gundagai Community Centre... 2,000 Junee and District Neighbourhood Centre... 1,000 Temora Community Centre... 2,000 Tumut Neighbourhood Centre... 2,000 Sapphire City Youth Committee... 4,000 Burwood Community Aid... 10,000 Concord Community Aid... 10,000 Lifeline (Sydney)... 30,000 Springwood Neighbourhood Centre... 3,000 Helping Hand Mission... 15,000 Toukley Neighbourhood Centre... 2,000 Wyong Neighbourhood Centre... 2,000 Wyong Shire Community... 5,000 The remaining $100,000 has been set aside for distribution to aboriginal agencies. (2) The cost-sharing arrangements were agreed for 1985-86 only as a supplement to the continuing $2.375 million grant to community organisations for emergency relief in NSW. Any continuation of this supplement would be a matter for Budget consideration. (Question No. 3326) Mr Duncan asked the Minister for Primary Industry, upon notice, on 12 March 1986: (1) How was it calculated that the part of the Southern Forest, Tas., to be protected is 51,180 hectares as referred to in his media release of 16 December 1985 concerning the new woodchip agreement in Tasmania. (2) What are the defined boundaries of this area. (3) Is there a map showing the boundaries; if so where is it available. Mr Kerin —The answer to the honourable member's question is as follows: (1) There are two components to the calculations of the area to be protected: (a) 18,900 ha (rounded up to 19,000 ha) comprising high and low quality eucalypt forest in the area referred to as `West of APM' in the `Draft Environmental Impact Statement on Tasmanian Woodchip Exports Beyond 1988' (EIS) (Appendix 9-2). (b) 32,180 ha described as `Protection Forest' within the South-West Conservation Area in the `Forest Management Plan for that part of the APM Concession within the South-West Conservation Area 1983-88' published in 1983 by the Tasmanian Forestry Commission (Table 1, p 6). I should also point out that an additional 33,500 ha of rainforest within these areas will also be afforded protection from export woodchipping operations as part of the Commonwealth's woodchip export licence renewal decision for Tasmania announced on 16 December 1985. (2) and (3) The boundaries for the area known as `West of APM' can be determined from the `Tasmanian Land Map-Recreation Areas and Land Divisions', Edition 1, June 1984, published by Tasmap. A copy of this map was included in the draft EIS. The boundaries depicting `Protection Forest' within the APM Concession Area are given in Map No. 3 in the forest management plan for APM to which I have referred. (Question No. 3694) Mr Rocher asked the Minister for Territories, upon notice, on 9 April 1986: (1) What is the full text of the ACT Schools Authority's equal employment opportunity (EEO) policy. (2) What progress has the EEO Committee of the ACT Schools Authority made on affirmative action strategies and targets for 1985-86. Mr Scholes —The answer to the honourable member's question is as follows: (1) The ACT Schools Authority's Equal Employment Opportunity Policy Statement is as follows: ``The ACT Schools Authority recognises that personnel policies and practices must be directed at ensuring the best possible workforce capable of meeting the educational needs of the student population throughout the Australian Capital Territory. Within the framework of the merit principle the ACT Schools Authority is committed to: (a) policies and practices which do not discriminate against individuals on the basis of political affiliation, race, colour, ethnic origin, social origin, religion, sex, sexual preference, marital status, pregnancy, age, physical or mental disability, or any other unjustified ground; (b) a continuing process of monitoring policies and practices to determine whether they have direct or indirect discriminatory effect on its employees; (c) the introduction of affirmative action programs by which groups seen as disadvantaged may achieve equality of employment opportunity within the Authority.'' With accompanying commentary, the Statement was published in the Authority's Schools Bulletin of 20 September 1984. (2) A draft EEO Program for 1985-86 was published on 17 October 1985 and comments received on it were considered by the Council of the Authority at its meetings in December 1985 and February 1986. Following discussions with the Office of the Public Service Board a revised form of the EEO Program will be considered by the Council at its May meeting. It is expected that this will then be published as the program for the remainder of 1986 and the 1987 school years. Evaluation dates for various activities proposed are spread across that period although an evaluation of progress made will be reported at the end of 1986. (Question No. 3780) Mr Downer asked the Minister for Health, upon notice, on 14 April 1986: What was the cost of producing (a) the pamphlet entitled ``Explaining the New Australia Card'' and (b) other pamphlets and kits designed to inform the Australian public of the merits of the Australia Card. Dr Blewett —The answer to the honourable member's question is as follows: (a) The pamphlet entitled `explaining the New Australia Card' was produced by the Australian Taxation Office and this part of the question should be addressed to my colleague the Treasurer. (b) In relation to other pamphlets and kits designed to inform the Australian public of the merits of the Australia Card, the Health Insurance Commission produced 500,000 pamphlets entitled `Explaining Australia Card' for general public distribution through their offices at a cost of $15,528. (Question No. 1551) Mr Conquest asked the Treasurer, upon notice, on 22 August 1985: What is the overseas debt from borrowings by the Commonwealth Government and Commonwealth statutory authorities at 20 August 1985 and (a) from what sources have the funds been received, (b) which departments or statutory authorities have obtained overseas funds and (c) what amount has each received. Mr Keating —The answer to the honourable member's question is as follows: Information on the aggregate overseas debt of Commonwealth authorities (other than marketing authorities) and government-owned companies as at 30 June, 1985 has been published in Table 111 of the 1985-86 Budget Paper No. 7, `Payments to or for the States, the Northern Territory and Local Government Authorities'. Information on the overseas debt of individual Commonwealth authorities and government-owned companies on that date is set out in Table 1 below. Information is not available to show the sources of subscriptions to the loans but Table 1 shows the overseas indebtedness of authorities classified by currency of denomination of the various borrowings. Table 1 DEBT OF COMMONWEALTH AUTHORITIES AND GOVERNMENT-OWNED COMPANIES REPAYABLE OVERSEAS: 30 JUNE, 1985(a) Authority/Company Currency of Denomination Amount borrowed (millions of units) $A equivalent (b) $m Australian Shipping Commission... $US... 162.0 243.4 # sterling... 19.9 38.7 Japanese yen... 1,089.6 6.6 Australian Postal Commission... French francs... 43.9 7.1 Aussat Pty Ltd... $US... 124.0 186.3 Overseas Telecommunications Commission... $US... 61.7 92.7 # sterling... 17.4 33.9 Deutsche marks... 17.5 8.6 Qantas Airways Ltd... $US... 93.1 139.9 # sterling... 60.8 118.4 Japanese yen... 73,948.0 446.3 Deutschemarks... 114.5 56.4 Netherlands guilder... 81.0 35.4 Australian National Airlines Commission... $US... 161.4 242.5 Australian Telecommunications Commission... $US... 59.0 88.7 Total... (c)1,744.9 (a) Includes debt incurred through non-conventional overseas borrowings such as trade credits and financial leases. (b) Calculated using 30 June, 1985 exchange rates. (c) Differs from total shown in Table 111 of Budget Paper No. 7 due to revisions to data and the exclusion of borrowings undertaken on behalf of certain authorities and government-owned companies by the Commonwealth Government (included in Table 2 below). In addition,overseas borrowings are also undertaken by some Commonwealth statutory marketing authorities. Of these, only the Australian Wheat Board had overseas borrowings at 30 June 1985. These borrowings, which are of an essentially short-term nature and undertaken to make advance payments to growers, amounted to $US1,378 million (or $A2,071 million) at 30 June, 1985 and were drawn from financing facilities established by the Board in Europe and the United States. Information on Commonwealth Government securities redeemable in overseas currencies as at 30 June, 1985 is published in Budget Paper No. 8, Government Securities on Issue at 30 June, 1985 and is summarised in Table 2 below. As for Table 1, the table classifies borrowings by the currency of denomination of each loan. Table 2: SECURITIES OF THE COMMONWEALTH GOVERNMENT REPAYABLE IN OVERSEAS CURRENCIES: 30 JUNE 1985 Currency of denomination Type of loan Amount borrowed (million units) $A Equivalent(a) $m ON ISSUE FOR THE COMMONWEALTH # Stirling... public loans... #198.8 387.0 $US... public loans(b)... $US2158.6 3243.6 loans from Export-Import Bank of the United States(c)... $US1.6 2.4 IBRD loan(d)... $US2.6 4.0 $US2162.9 3250.0 Deutsche marks... public loans... DM2219.0 1092.7 IBRD loan(d)... DM50.9 25.1 other... DM650.0 320.1 DM2919.8 1437.8 Swiss francs... public loans... SF590.0 347.1 other... SF1750.0 1029.5 SF2340.0 1376.6 Netherlands guilders... public loan... DF1600.0 262.0 other... DF1800.0 349.4 DF11400.0 611.4 Japanese yen... public loans... YEN229,800.0 1387.0 other... YEN231,200.0 1395.5 YEN461,000.0 2782.5 Total on issue for the Commonwealth ... 9845.2 ON ISSUE FOR THE STATES # Stirling... other loans... #2.4 4.7 $US... public loans ... $US1.1 1.7 TOTAL on issue for the States... 6.4 TOTAL COMMONWEALTH SECURITIES REDEEMABLE IN OVERSEAS CURRENCIES ... 9851.6 (a) Calculated using 30 June, 1985 exchange rates. (b) Includes borrowings of $US16.2 million on behalf of Qantas Airways Ltd, $US4.65 million on behalf of the Australian National Airlines Commission and $US14.35 million on behalf of the Australian Shipping Commission. (c) Includes borrowing of $US0.151 million on behalf of the Australian National Airlines Commission and of $US1.444 million on behalf of Qantas Airways Ltd. (d) A borrowing from the International Bank for Reconstruction and Development for the Snowy Mountains Hydro-electric Authority. (Question No. 1632) Mr Milton asked the Treasurer, upon notice, on 11 September 1985: When may I expect an answer to question No. 73 which I placed on notice on 22 February 1985. Mr Keating —The answer to the honourable member's question is as follows: I refer the honourable member to the answer provided on 12 March 1986 (see Hansard, pages 1242-1243). (Question No. 1839) Mr Milton asked the Treasurer, upon notice, on 16 September 1985: (1) Has his attention been drawn to an article in the Financial Review of 30 August 1985 on a paper delivered to the recent ANZAAS science conference in Melbourne, by Professor Jane Levine, stating that banks are using electronic funds transfer systems (EFTS) to shift the liability for transaction failures or fraud on to the customer. (2) Is he able to say whether (a) the majority of EFTS contracts make the customer totally liable for transaction failure even if the failure occurs as a result of machine problems, carelessness or negligent conduct by the bank and (b) under the paper transfer of funds system, banks accept a higher proportion of liability; if so, is this due to provisions contained in existing customer protection laws. (3) Will he (a) investigate customer liability in EFTS and (b) implement any necessary protective measures for customers. Mr Keating —The answer to the honourable member's question is as follows: (1) I am aware from newspaper reports of the paper delivered by Professor Jane Levine to the 1985 ANZAAS science conference in Melbourne. (2) and (3) It is the case that, the terms and conditions currently applying to the use of cards used in EFTS transactions include provisions generally placing liability on customers, although there are other aspects of law which also bear on the matter. The complex issue of liability in the areas of unauthorised (fraudulent) transactions and technical malfunctions, including the different legal position for EFT and paper-based transactions, has been examined by the Working Group of Commonwealth officials examining the rights and obligations of the users and providers of electronic funds transfer systems. The Working Group recommended important changes in the relevant terms and conditions applying to EFTS contracts with the objective of introducing, inter alia, a more equitable treatment of card users in respect of liability for system malfunctions and for the unauthorised use of cards. The Government has endorsed the Working Group's recommendations and has asked financial institutions to implement them. There has been a favourable response by the financial industry to the Government request. The Working Group is reviewing in detail financial institutions' progress in implementing the recommendations and will be reporting back to the Government around mid year. The Government will then be in a position to determine whether any further measures are necessary. (Question No. 2566) Mr Milton asked the Treasurer, upon notice, on 19 November 1985: Further to my question No. 1632 placed on notice on 11 September 1985 asking when an answer may be expected to question No. 73 placed on notice on 22 February 1985, will a reply be made before the end of the present period of sittings; if not, why not. Mr Keating —The answer to the honourable member's question is as follows: I refer the honourable member to the answer provided on 12 March 1986 (see Hansard, pages 1242-1243). (Question No. 2567) Mr Burr asked the Minister for Employment and Industrial Relations, upon notice, on 19 November 1985: (1) When preparing the Government's submission for the National Productivity Case in July 1986, are guidelines to be submitted covering the manner in which the proposed occupational superannuation scheme will operate. (2) Will there be any consultation with employers in the implementation of the scheme. (3) Will private assurance companies be involved in the preparation of any guidelines. (4) Will the Government, when presenting its supportive case with the ACTU, consider the less desirable aspects of present industrial superannuation schemes, such as BUS and AUST. Mr Willis —The answer to the honourable member's question is as follows: (1) to (4) As foreshadowed by the Treasurer and me in a joint press release on 4 September 1985, the Government has submitted to the Australian Conciliation and Arbitration Commission that a three per cent increase be granted in the form of contributions to occupational superannuation schemes to provide new or improved benefits. The Government also outlined to the Commission the draft operating standards, announced by the Treasurer and me on 16 December 1985, which superannuation funds will be required to meet to be eligible for the relevant taxation concessions under the Income Tax Assessment Act 1936. The draft standards were developed following consultation with employer and business groups, the ACTU and representatives of the insurance and superannuation industries and deal with such issues as preservation, vesting, security, portability, contributions and control. The Government will finalise the standards after receiving comments from interested bodies, including private assurance companies. To be eligible for the relevant taxation concession, the trust deeds of existing schemes such as BUS and AUST, will require amendments to the extent that their provisions are inconsistent with the standards. (Question No. 2790) Mr Blunt asked the Minister for Sport, Recreation and Tourism, upon notice, on 28 November 1985: (1) Has his attention been drawn to the reconciliation of figures provided by the Secretary of his department in answer to a question asked by Senator Peter Baume during a Senate Estimates Committee D hearing (Senate Hansard, Estimates Committee D, 1 October 1985, page 900). (2) Why are overheads for the Secretariat and Co-ordination Branch of his Department shown in the portfolio program estimates against sport and recreation programs rather than expressed as a total in the corporate services program, when Budget Paper No. 6, page 4, states that expenditures which relate to more than one program but which cannot be attributed from presently available information to each program on an objective and verifiable basis are generally ascribed to corporate services programs. (3) Will he provide a detailed breakdown of the salaries and administrative expenses listed under the corporate services program for his Department on page 160 of Budget Paper No. 6. (4) Will he amend the 5th paragraph of the answer provided to Senate Estimates Committee D by his Departmental Secretary to read ``when the 1985-86 salaries cost of $1.875m and administrative costs of $0.926m for secretariat and co-ordination services are deducted from the sport and recreation program salaries and administrative items, sport and recreation related salaries for the Department drop to $1.065m and administration to $0.098m, representing an actual drop in expenditure of 8.6% for these 2 items alone''. (5) Will he amend the footnote to the first page of his Departmental Secretary's answer to read `1984-85 expenditure for the Secretariat and Co-ordination Branch was $1.798m compared with $2.801m in 1985-86'. (6) Is it a fact that, according to the figures provided by his Departmental Secretary in attachment 2, parts 1 (a) and (b), the total percentage increase in salaries and administration costs for (a) the sport and recreation section of his Department and (b) the Australian Sports Commission (ASC) is at least 14.77%, while expenditure on programs has decreased by at least 18.42%. (7) Will he consider amending his answer to a question without notice (Hansard, 16 September, 1985, page 1007) in which he stated that spread across the total portfolio there has been a decrease in salaries and administration of 8.6% by issuing a statement to the effect that this percentage applies to the sport and recreation section of his Department alone. (8) Is it a fact that Budget estimates predict that between 1984-85 and 1985-86 (a) salaries and administrative costs at the Australian Institute of Sport (AIS) will increase by 39% and (b) total salaries and administrative costs for (i) the Sport and Recreation section of his Department, (ii) and ASC and (iii) the AIS will increase by 32%. (9) Will he provide an explanation, giving details of staff salary increases by grade of employee, as to why salaries for the Secretariat and Co-ordination Branch of his Department are expected to rise by 70%, from $1.105m in 1984-85 to $1.875m in 1985-86, when his answer to question No. 66 (Hansard, 31 May 1985, page 3269) stated that between 1 March 1984 and 21 February 1985 staffing for the Secretariat and Co- ordination Branch declined by 5 full-time positions. (10) Will he provide a detailed break-down, showing the nature of administrative expenses for the (a) sport and recreation section of his Department, (b) ASC and (c) the AIS. (11) Where and when did he emphasise that while a figure of $3.5m had originally been envisaged for the Sports Talent Encouragement Program (STEP), final allocation levels would depend on Budget deliberations, as stated in the 1st paragraph of page 4 of the answer submitted to the Senate Estimates Committee D. (12) Is it a fact that the National Athlete Award Scheme (NAAS) has been abolished: if so, (a) when and (b) on whose decision. (13) Is it a fact that (a) in 1984-85 the NAAS was allocated $700,000 and (b) in 1985-86 its replacement, STEP, has been allocated $400,000. (14) Are more funds to be allocated to STEP in 1985-86; if so what amount does he anticipate will be allocated. (15) Is it a fact that a minimal increase in assistance direct to national sporting associations in 1985-86 was achieved by (a) reducing assistance to parent and professional bodies such as the confederation of Australian Sport and the Australian Sports Medicine Foundation and (b) by cutting out assistance to parent and professional bodies such as the Australian Commonwealth Games Association and the Australian Olympic Foundation. (16) Could the level of direct assistance to national sporting associations in 1985-86 have been maintained if (a) $3.5m had been provided for STEP as promised, (b) the NAAS had not been abolished and (c) the amount made available to assist and encourage our best athletes had not been reduced by $300,000. Mr John Brown —The answer to the honourable member's question is a follows: (1) Yes. (2) I am informed that, as advised to Senate Estimates Committee D, in the preparation of the portfolio program estimates the Department of Finance included overheads for the Secretariat and Co-ordination Branch of the Department, which provides management and other co-ordination services, against the sport and recreation program, rather than spreading the costs across the various program areas or as a total in the corporate services program. I am further advised that this has been a procedure adopted by the Department of finance since program estimates have been prepared for my portfolio notwithstanding the statement at page 4 in Budget Paper No. 6. My Department has requested that this practice be changed for the 1986-87 financial year. (3) In program budgeting terms these figures for the Corporate Services Program are intended to represent all expenditure under salaries and administrative items which are unable to be allocated to a specific program. During the 1985-86 budget year the salaries and administrative expenses for the Secretariat and Co-ordination Branch of my Department should have been shown under the Corporate Services Program on page 160 of Budget Paper No. 6 not under the Sport and Recreation Program on page 158. Also, the figures for the Corporate Services Program on page 160 include the salaries for the National Sports Centre which should have been included under the Sport and Recreation Program item. The 1985-86 Budget Paper No. 6 is an information paper prepared by the Department of Finance with minimum consultation with my Department. For the 1986-87 Budget arrangements have been made for my Department and the Department of Finance to consult closely when the information for Budget Paper No. 6 is being prepared. Consequently the 1985-86 problems with Budget Paper No. 6 should not happen again. (4) The figure of $1.875m mentioned relates to salaries for secretariat and co-ordination services. The figure for administration expenses ($0.926m) was inadvertently omitted from the response. The statement should read: ``When the 1985-86 overheads of $1.875m (salaries) and $0.926m (administrative) for secretariat and co-ordination services are deducted from the Sport and Recreation Program salaries and administration expenses component, sport and recreation related salaries drop to $1.065m and administration to $0.098m representing an actual drop in expenditure of 8.6% in the Sport and Recreation Programs.'' The amendment is underlined. (5) The footnote on the first page of the Secretary's response included amounts for salaries only. To take account of administrative expenses, as the honourable member appears to be doing, it could be amended to read: ``1984-85 expenditure for the Secretariat and Co-ordination Branch was $1.798m compared with the estimate of $2.801m for 1985-86''. The amendment is underlined. (6) The total percentage increase in salaries and administration costs from 1984-85 to 1985-86 for the Sport and Recreation Division of the Department and the Australian Sports Commission combined is 14.77% which takes into account the full year effect, in both staff numbers and administrative costs, of the establishment of the Australian Sports Commission from September 1984. Expenditure on programs, rather than decreasing by 18.42% as suggested, has increased by 13% when both the one-off payment to South Australia of $5 million for the Grand Prix and the adjustment of $5.834m to finalise the former International Standard Sports Facilities Program (now the National Sports Facilities Program) are excluded from the 1984-85 on-going program expenses. (7) Consistent with my response to (4) above, the decrease of 8.6% mentioned in my reply to a question without notice on 16 September relates to the salaries and administrative costs of the Sport and Recreation Division of my Department. That figure was mentioned to highlight the honourable member's misunderstanding of the available data with which he endeavours, mistakenly, to portray this Government as increasing administrative costs for sport and recreation at the expense of program initiatives. (8) (a) Yes. This increase, however, takes account of the opening and staffing of the residential complex at the Australian Institute of Sport. Offsetting savings which resulted from the Institute not having to provide its athletes with off campus accommodation were taken into account in formulating the 1985-86 estimates. (b) Yes. See 8 (a) above. In addition, the full year effect of both staffing and administrative costs of the ASC have been included in the calculations. (9) The salaries component for the Secretariat and Co-ordination Branch has increased disproportionately in 1985-86 due to the full-year effect of the changes brought about by the Administrative Arrangements Order (AAO) of December 1984. The effect of the AAO was to transfer a number of functions to my Department from various Departments which, as a result, required a sufficient expansion of the Secretariat and Co-ordination Branch to enable it to service a Department of around 1400 in lieu of 140. The enhanced functions involved have obviously required a greater input in both human and financial resources. The decline in numbers mentioned in my response of 31 May 1985 related to the period prior to my Department assuming full responsibility for the staff associated with the transferred functions. There were, of course, offsetting savings under the losing Departments. (10)- (a) The requested breakup of administrative expenses for the Sport and Recreation Division of my Department is as follows: 1984-85 Expenditure 1985-86 Estimate t$ $ Travel and Subsistence... 52,087 65,000 Consultants... 32,226 30,000 Incidentals... 1,400 1,000 Expenditure on behalf of the Division on office re-quisites, postage and telephones, computer services, furniture and fittings and office services are centrally funded and, therefore, a detailed breakup is not available. (b) The nature of the administrative expenses for the Australian Sports Commission (ASC) as detailed at page 430 of Budget Paper No. 6. is Actual 1984-85 Estimate 1985-86 $ $ Programs- Assistance to National Organisations... 124,290 6,250,000 Sports Talent Encouragement Plan... 56,870 483,200 Children in Sport... 22,150 430,500 Sports Science... 16,850 150,500 Assistance to Games Preparation... - 500,000 General Administration... 538,996 853,800 Total... 759,156 8,668,000 For expenditure on- Salaries and related expenses... 399,861 649,000 Commission meetings... 44,330 48,000 Committee meetings... 66,638 83,000 Property maintenance and services... - 40,000 Travel and subsistence... 86,088 90,000 Office requisites, printing office equipment, etc.... 41,567 55,000 Postage and communications... 8,521 50,000 Computer services... 16,800 3,000 Consultants... 51,782 80,000 Furniture and fittings... 5,378 30,000 Incidentals... 38,191 40,000 Sports Development Program... - 7,000,000 Assistance to Games Preparation... - 500,000 Operational Expenditure... 759,156 8,668,000 Payments from Consolidated Revenue Fund to the Australian Sports Commission... 759,156 8,668,000 (c) The 1985-86 budget dissection for the Australian Institute of Sport, incorporating both program and administrative expenses, is as follows: Salaries & Payments in the nature of salary... 4,596,500 Scholarships 4... 1,125,500 Competition Program... 1,579,844 Residence... 607,500 National Training Centre... 450,000 Plant & Equipment... 653,771 Subvention... 650,000 Other Travel... 185,000 Recruitment... 85,000 Sports Laboratory... 214,000 Information Centre... 85,152 Board Expenses... 76,800 Professional Services... 133,000 Hire of facilities... 39,250 Promotions & Marketing... 120,000 Satellite Sports... 161,500 Building Fit-out Program... 1,283,500 Other Administrative Costs... 468,920 Total Expenditure... 12,659,337 Less: Income from other sources... 1,659,337 (including cash on hand as at 1.7.85)... Payment from Consolidated Revenue Fund... 11,000,000 (11) The second reading speech on the Australian Sports Commission Bill 1985 in the House of Representatives on 9 May 1985. (12) The National Athlete Award Scheme (NAAS) was replaced by the Sports Talent Encouragement Plan (STEP) as from 26 August 1985. The decision was taken by me and it was based on a recommendation from the ASC. (13) In the 1984-85 financial year $768,500 was expended on the 1985 NAAS program. It is a fact that in 1985-86 $400,000 has been allocated to the 1986 STEP. However, in addition a further $400,000 has been obtained in forward obligation from the 1986-87 Budget for the 1986 STEP. This will bring the total allocated to the 1986 STEP, which is a calendar year program, to $800,000. (14) No. (15) There were minimal increases in assistance to some national sporting organisations and while some were reduced, the increases did not result from reducing assistance to all parent and professional organisations. The only umbrella organisation to receive reduced funding was the Confederation of Australian Sport. The Australian Sports Medicine Federation received increased funding; the Australian Society of Sports Administrators received funding for the first time and the Australian Council for Health Physical Education and Recreation maintained its level. On the other hand both the Australian Olympic Federation and the Australian Commonwealth Games Foundation did not receive any support in 1985-86. While both submitted applications for funding they expressed a willingness, because of overall budgetary constraints, to forego funding in 1985-86. (16) As acknowledged in the previous question and confirmed in the answer to that question the level of direct assistance to national sporting organisations did increase in 1985-86. As indicated earlier, the NAAS has been replaced by the STEP which in fact will be providing increased assistance to athletes in 1986. By bringing the STEP funding in line as a calendar year funding program, the savings in 1985-86 enabled additional funding to be directed to national sporting organisations. (Question No. 3208) Mr Blunt asked the Minister for Social Security, upon notice, on 17 February 1986: (1) Is it a fact that caravan and mobile home residents, where that residence is their principal residence, are considered home owners under the assets test and are therefore subject to the lower assets. (2) Is it a fact that (a) these persons have assets of less value than conventional house residents and (b) conventional house residents may receive a pension while the mobile home residents may lose or not be eligible for a pension under the Government's assets test legislation. (3) Is this an anomaly in the legislation; if so, what action has he taken to remove it. (4) In the view of flaws found in the assets test legislation, is he planning to review the legislation under the review of social security to be conducted by Dr Bettina Cass; if not, why not. Mr Howe —The answer to the honourable member's question is as follows: (1) Yes. As from 1 May, in addition to the value of their home, such persons may have other assets to the value of $75.750 (single) and $108,000 (married couple) before pension commences to be reduced. (2) (a) Statistics showing total assets values for conventional homeowners and caravan or mobile homeowners are not available. (b) In all cases pensioners who own their principal place of residence are subject to the same assets test limits. After the indexation increases in assets test limits on 1 May this year a pensioner homeowner, including a mobile home/caravan owner, would not lose all pension entitlement until the value of assets other than the home reached $127,000 (single) or $193,500 (married couple) (3) No. (4) Retirement income policy and programs comprise one of the three broader subject-areas being examined in the Social Security Review. It is not, however, envisaged that the review will focus on the details of the assets test legislation as this has been, and continues to be, subject to on-going monitoring elsewhere in my Department. (Question No. 3278) Mr Blunt asked the Minister for Social Security, upon notice, on 20 February 1986: (1) Does his Department treat bonus units issued to unit holders in a public unit trust as income; if so, how are they included under the definition of income contained in Section 18 of the Social Security Act. (2) Are bonus shares issued to share holders in public companies treated as income; if not, why not. (3) Is treatment for bonus units different to that for bonus shares; if so, why. Mr Howe —The answer to the honourable member's question is as follows: (1) Instruction issued to officers of the Department of Social Security provide for the value of bonus units in a public unit trust to be treated as income in the assessment of pensions and supporting parent's benefit for 12 months from the date of issue. In the case of unemployment and sickness benefit the value is treated as income in the benefit week that the bonus units are received. The authority for this is the definition of income in sub-section 6 (1) of the Social Security Act. (2) Instructions issued to departmental officers provide for the value of bonus shares issued in lieu of dividends by a public company to be treated in a manner similar to that which applies for bonus units in a public unit trust. However, nothing is brought to account for pension or benefit assessment purposes where the bonus shares amount to a dilution of the capital of the company. (3) See answer to (1) and (2) above. In the case of both bonus units and bonus shares the value of the issue is regarded as income where it essentially represents a return on the investment. (Question No. 3295) Mr Maher asked the Minister for Aviation, upon notice, on 11 March 1986: Was TAA flight 499 from Sydney to Canberra cancelled on 2 January 1986; if so, at what time was the decision made. Mr Peter Morris —The answer to the honourable member's question is as follows: TAA flight 449 from Sydney to Canberra was cancelled on 2 January 1986 due to the unserviceability of a Boeing 727 aircraft. The decision to cancel was made at 2.40 am and arrangements were made to transfer passengers to later flights. (Question No. 3317) Mr Duncan asked the Minister for Employment and Industrial Relations, upon notice, on 11 March 1986: (1) How many fatal accidents occurred in Australian workplaces during 1985. (2) Is he able to say how many (a) fatalities were associated with violations of State or Territory occupational health and safety laws, (b) violations gave rise to prosecutions under State and Territory law and (c) prosecutions gave rise to convictions. (3) Is he able to say what penalties were imposed on convicted offenders. (4) Will he request that offence, prosecution, conviction and penalty items be incorporated in the occupational injury and disease statistics system being developed by the National Occupational Health and Safety Commission. (5) Will he ensure that proposed Commonwealth occupational health and safety legislation will provide for the offence of industrial homicide in cases of employer negligence resulting in the death of a worker. Mr Willis —The answer to the honourable member's question is as follows: (1) The information sought is not available. Despite repeated calls (dating back to the early 1920s) for the development of comprehensive, reliable Australian statistics on occupational fatalities, injuries and diseases, no such statistics exist. Compilation of data from existing systems (eg. workers compensation data) is of limited value because the criteria for inclusion in the various State and Territory systems differ and because the systems do not record all fatalities resulting from occupational accidents. The National Occupational Health and Safety Commission is attempting to remedy this deficiency, and through its Statistics Standing Committee has prepared, and circulated for comment, a discussion paper, ``Occupational Injury and Disease Statistics: Proposals for a Minimum Data Set''. If implemented, proposals set out in the Minimum Data Set discussion paper could do much to improve inter-State comparability of fatalities data derived from workers compensation schemes. (2) and (3) This information is scattered across various State agencies such as labour departments, mines departments, police forces, and courts. Its location, form and accessibility varies greatly from place to place and data pertaining to fatalities are not distinguished from other violations. (4) As mentioned, the National Occupational Health and Safety Commission has released for public comment a discussion paper, ``Occupational Injury and Disease Statistics: Proposals for a Minimum Data Set''. The Commission is seeking at this stage to consult with users and suppliers of occupational health and safety data on, among other things, the feasibility of collection of such data and the utility of such data sets that may be collected. In the light of such consultation, a report will be prepared containing a recommended minimum data set for occupational injuries and diseases, and incorporating standard definitions and coding and classification procedures. (5) The proposed Commonwealth occupational health and safety legislation for areas of Commonwealth jurisdiction will impose duties of care on employers to ensure health and safety at the workplace. Breaches of these duties will be an offence. Circumstances where the negligence of an employer has resulted in the death of a worker in the course of her or his employment would amount to a breach of the employer's duty. (Question No. 3403) Mr Jull asked the Minister for Aviation, upon notice, on 14 March 1986: (1) What provision has been made for the upgrading of arrival facilities for international passengers at Kingsford-Smith Airport, Sydney. (2) Is it a fact that Qantas has proposed a major redevelopment of the Kingsford-Smith terminal to be undertaken by that airline; if so, what were the financial arrangements proposed by Qantas in its submission. (3) Has the proposal been accepted by the Government; if not, why not. (4) How many passengers have died in the holding area at Kingsford-Smith Airport while waiting for processing by immigration and customs officers in (a) 1985 and (b) 1986 to 14 March. Mr Peter Morris —The answer to the honourable member's question is as follows: (1) On 4 February 1986 the PWC heard submissions on a proposal to carry out improvement works to the international terminal facilities at Sydney (Kingsford Smith) Airport. Included in the proposal were a number of items aimed at improving the facilities for arriving passengers. The main items are: Provision of two additional aerobridges and elevated walkways to service aircraft Provision of additional toilets including facilities for disabled passengers and baby care on the concourse enlarging and airconditioning the area for queuing at the primary (immigration/customs) line and removing a ramp in the queuing area enlarging Customs Hall to provide more space and less congestion around the baggage reclaim units provision of larger capacity baggage reclaim units provision of additional toilets and baby care facilities accessible from the Customs Hall provision of a bus bay with associated waiting lounge: this will enable improvements to be made at kerbside for passenger pick up by taxis and private cars. (2) On 11 April 1986 Qantas provided the Department of Aviation with the results of a feasibility study for a temporary terminal designed to provide additional capacity until a new permanent terminal is constructed adjacent to the existing terminal. Qantas has not made a formal approach to the Government or the Department but has indicated that it would expect the Government to fund it. The proposal is currently being considered by the Department. (3) See previous answer. (4) No deaths have occurred during the quoted time periods. (Question No. 3415) Mr Lloyd asked the Minister for Aviation, upon notice, on 14 March 1986: (1) Is it a fact that his Department is (a) continuing a lower priority for the installation of new radar at Sydney Airport than at other airports where there is less congestion and (b) not providing already available computer identity information to air traffic controllers on the position of approaching aircraft; if so, why. Mr Peter Morris —The answer to the honourable member's question is as follows: (1) (a) The upgrading of air traffic control radar display systems at Sydney does not have lower priority than similar upgrading projects planned for other airports. Current proposals are to upgrade the Sydney system at the same time as systems in other centres also in need of upgrading. I understand that unfavourable weather, which affects the available runways and taxiway configurations, is the most likely cause of delay at Sydney, followed closely by noise abatement and wake turbulence procedures. While new radar displays would undoubtedly assist air traffic control, nevertheless, because of the constraints previously mentioned, there would only be a marginal increase in the maximum traffic handling rate of the ATC system. (b) Radar systems provide air traffic controllers with the positions of aircraft. All radar derived position information available in Sydney is displayed to controllers now. One form of radar, known as Secondary Surveillance Radar (SSR), can in addition obtain other information, such as identity, from those aircraft fitted with suitable avionics (ie, SSR transponders). Technical limitations associated with the radar display systems in Sydney have to date prevented the display of identity information on the radar screens. However, a project to enhance this display system to provide identity labels is nearing completion, and is expected to go into service later this year. Sydney controllers will then be able to view all available radar information. (Question No. 3437) Mr Lloyd asked the Minister for Aviation, upon notice, on 19 March 1986: (1) What air travel entitlements are available to (a) George and (b) Victoria Cross holders. (2) When was the entitlement introduced and has it been varied. (3) Is a similar entitlement available to any other award holders. Mr Peter Morris —The answer to the honourable member's question is as follows: (1) Air travel concessions are currently available to all George Cross and Victoria Cross award holders through the Victoria Cross/George Cross (VC/GC) air travel concession scheme. Under this scheme award holders are entitled to six free interstate or intrastate economy air trips a year anywhere in Australia. (2)The previous Government announced in August 1980 its decision to allow limited free air travel for holders of the Victoria Cross and the George Cross, resident in Australia. In October 1982 the former Prime Minister agreed to the extension of air travel concessions to spouses of VC/GC award holders, when travelling with the award holder. This extension was provided: (a) to overcome the inability of award holders to travel because of age and/or infirmity, which usually requires companionship and/or attention (b) to recognise and help in overcoming the extra fares involved in having a companion to travel with them. (3) No similar air fare concessions are available to any other award holders. (Question No. 3445) Mr Lloyd asked the Minister for Aviation, upon notice, on 19 March 1986: Will he permit cost-sharing in private aviation; if not, why not. Mr Peter Morris —The answer to the honourable member's question is as follows: In 1981 the Aviation Industry Advisory Council (AVIAC), of which the Minister for Aviation is Chairman, agreed to the development of an amendment to the Air Navigation Regulations to provide for some form of costs sharing between private pilots and their passengers. However, although various proposals have been presented by the Department for consideration by AVIAC's Committee of Advisers, members have been unable to reach agreement. At the Committee's meeting on 12 December 1985 the Chairman of the Committee of Advisers asked that the Aircraft Owners and Pilots Association, the General Aviation Association and the Royal Federation of Aero Clubs of Australia discuss their views outside the meeting and advise the Department. I understand that they have not yet been able to reach an agreement on this matter. (Question No. 3548) Mr Peacock asked the Minister for Foreign Affairs, upon notice, on 20 March 1986: Is he able to say whether Libya has provided military training and some funding to the Kanak Socialist National Liberation Front even though New Caledonia has no appreciable Muslim population. Mr Hayden —The answer to the honourable member's question is as follows: In late 1984 17 members of the Kanak Socialist National Liberation Front (FLNKS) visited Libya for training. There have been press reports that this training was para-military in nature. In March 1986 some members of the Front Uni de Liberation Kanake (FULK), a faction of the FLNKS, attended a conference of liberation movements in Tripoli. There have been press reports that travel to the conference was funded by Libya. I am unable to confirm these press reports. (Question No. 3552) Mr Peacock asked the Minister for Foreign Affairs, upon notice, on 20 March 1986: Is he able to say whether Colonel Gadaffi has provided training and money to opponents to President Ershad of Bangladesh. Mr Hayden —The answer to the honourable member's question is as follows: I am advised of occasional reports that Libya provides funding for some minor, extremist and fundamentalist Islamic parties in Bangladesh which, along with a large number of parties across the political spectrum, are opposed to the Martial Law Administration in Bangladesh. I am also aware of reports that Libya offers military and/or ideological training to Bangladeshi workers living in Libya, and possibly to a small number specifically recruited personnel. Allegations of Libyan involvement in opposition groups in Bangladesh have been aired in Dhaka from time to time dating from shortly after the Libyan Government extended diplomatic recognition to the new State of Bangladesh in 1974. The Australian Government is unable to confirm the authenticity of these reports. (Question No. 3557) Mr Peacock asked the Minister for Foreign Affairs, upon notice, on 20 March 1986: (1) What are the guidelines for contact between Government Ministers and senior officials of the PLO. Mr Hayden —The answer to the honourable member's question is as follows: (1) The Australian Government maintains its refusal to accord international status to the Palestine Liberation Organisation while it maintains its denial of Israel's right to exist. The Government does acknowledge, however, that the PLO represents the opinion of a significant proportion of the Palestinian people. Accordingly, Australian diplomatic representatives abroad, including Ambassadors, are authorised to have informal contacts with PLO representatives and are thereby able to keep the Government fully informed of developments in the Middle East. In view of the significant role of the PLO, and the need for Australia to maintain a full understanding of developments in the Middle East, particularly while a member of the Security Council, there can be advantage in the Foreign Minister taking the opportunity to speak with senior PLO representatives. For instance, during my attendance at last year's session of the United Nations General Assembly, I met the PLO representative to the United Nations, Mr Terzi, to discuss developments in the Middle East. Such meetings in no way indicate a change of Government attitude towards the PLO. (Question No. 3558) Mr Peacock asked the Minister for Foreign Affairs, upon notice, on 20 March 1986: (1) Did he meet the Palestinian Liberation Organisation representative at the United Nations in November 1985. (2) What statements or explicit actions were made to ensure that recognition of the PLO could not be implied from this meeting. Mr Hayden —The answer to the honourable member's question is as follows: (1) Yes. (2) The Prime Minister, Mr Hawke, made plain in Parliament on 28 November 1985 that my meeting implied no change in the policy of the Government on the matter. He said that `there is no change in the policy and the attitude of the Government to the PLO' (Hansard, p. 3905). The Government's policy is well known, and has been stated on many occasions. In any case, in strict terms the doctrine of `recognition' in international law can have no relevance to the PLO. The doctrine of `recognition' is a legal rule applying only to the acceptance of governments and states. It has no technical meaning if applied to international organisations, or to national liberation movements or their representatives. While a government may have dealings with such entities for a particular purpose, such as accepting the presence of their representatives within national territory or at an international conference, such dealings have no relevance to `recognition' as used in international law. (Question No. 3569) Mr Peacock asked the Minister for Foreign Affairs, upon notice, on 20 March 1986: Further to his reply to my question No. 1715 (Hansard , 30 November 1985, page 4062), has he now seen the New Zealand draft Bill and what representations has the Government made to New Zealand requesting it not to proceed with this anti-nuclear Legislation. Mr Hayden —The answer to the honourable member's question is as follows: Yes, I draw the honourable member's attention to my press release of 10 December on this subject. (Question No. 3575) Mr Peacock asked the Minister for Foreign Affairs, upon notice, on 20 March 1986: (1) What specific programs have been formulated in Australia's overseas aid program which raise the status of women. (2) What amounts have been allocated from the aid budget to women's programs specifically and what (a) are these programs, and (b) percentage of the entire aid budget is spent on these programs. Mr Hayden —The answer to the honourable member's question is as follows: (1) In 1984 the Australian Development Assistance Bureau established the Women in Development Fund to assist in the effective implementation of government aid policy pertaining to women in developing countries. This followed my directive that particular attention should be given to programs which raise the status of women. The purpose of the fund is to stimulate activities of an innovative and catalytic nature which assist the aid program in meeting the needs of women in developing countries. In the field of training aid for example, ADAB has advised all recipient governments that Australian Government policy is to work towards a total trainee intake comprising 50% women. The bureau has also established a Women in Development Task Force with representatives from various areas within the Bureau to assist with the introduction of women in development guidelines for preparation, appraisal and implementation of all development projects funded by the Australian aid program. (2) In 1985-86, the allocation for the women in Development Fund is $500,000. Projects have been funded in the areas of leadership and skills training, sanitation and community health, mother and child health care, income generation plus communication and networking. Expenditure on the Fund represents .05% of the total aid budget for 1985-86. (Question No. 3665) Mr White asked the Minister for Sport, Recreation and Tourism, upon notice, on 8 April 1986: (1) Did Price Waterhouse promise a more detailed report on the efficiency of the Australian Institute of Sport (AIS) financial management than the Internal Audit Review tabled on 28 November 1985; if so, when is the report expected and will it be tabled. (2) What action has (a) he and (b) the AIS Board taken to ensure that public moneys allocated to the AIS are properly used and accounted for. Mr John Brown —The answers to the honourable member's questions are as follows: (1) At the direction of the Chairman of the AIS Board of Management, Price Waterhouse is conducting a continuing examination of the adequacy and efficiency of financial management practices and controls at the Institute in the course of its normal internal audit program. Price Waterhouse will continue to report to the Board as necessary. (2) Subsequent to the 28 November 1985 tabling of the internal Audit Review the AIS Board of Management considered the report at its meeting on 28/29 November 1985 and resolved, inter alia, to: establish an Executive Committee which will monitor and oversight the executive and financial management of the AIS review financial priorities and recast a balanced budget Additionally, legislation to convert the AIS from a public company to a statutory body is a high priority. Conversion of the AIS to a statutory authority will provide for appropriate lines of authority from the Government and greater accountability to the Parliament. (Question No. 3700) Mr Tickner asked the Minister for Social Security, upon notice, on 9 April 1986: (1) What was the level of the aged pension expressed as a percentage of average weekly earnings (a) at 20 March 1986 and (b) when the Government came to office. (2) What action does the Government propose to raise the level of the pension to 25% of average weekly earnings. Mr Howe —The answer to the honourable member's question is as follows: (1) (a) and (b) Average weekly earnings figures for the March quarter 1986 have not yet been released by the Australian Bureau of Statistics. The standard (single) rate of age pension as a percentage of average weekly total earnings of all male employees for the December quarter 1985 (the latest available), the December quarter 1982 and the March quarter 1983 are as follows: % December quarter 1985... 23.7 March quarter 1983... 22.7 December quarter 1982... 22.9 (2) It remains a continuing objective of the Government to raise the standard rate of pension to 25 per cent of male average weekly earnings. The timing of future moves will be dependent on the Government's assessment of the economic capacity of the community and of relative priorities between different areas of need. (Question No. 3735) Mr Tim Fischer asked the Minister representing the Minister for Veterans' Affairs, upon notice, on 10 April 1986: (1) How many Australian war graves are located in each foreign country which has Australian war graves. (2) What payments are made to the Australian War Graves Office for the maintenance and upkeep of overseas Australian war graves. Mr Holding —The Minister for Veterans' Affairs has provided the following answer to the honourable member's question: (1) There are 62,821 Australian war graves in 72 foreign countries: AUSTRALIAN WAR GRAVES OF THE FIRST AND SECOND WORLD WARS, KOREAN AND VIETNAM WARS, INCLUDING MALAYA/MALAYSIAN CONFRONTATION COMMEMORATED IN FOREIGN COUNTRIES Country Number of graves Algeria... 30 Azores... 2 Brazil... 1 Belgium... 8,587 Brunei... 859 Bulgaria... 11 Burma... 1,365 Canada... 115 China... 1 Cyprus... 3 Czechoslovakia... 2 Denmark... 68 Djibouti... 1 Egypt... 3,262 Ethiopia... 2 Faroe Islands... 1 Federal Republic of Germany... 1,267 France... 25,986 Gambia... 2 German Democratic Republic... 243 Ghana... 6 Gibraltar... 20 Greece... 606 Hong Kong... 33 Hungary... 13 Iceland... 5 India... 109 Indonesia... 863 Iran... 3 Iraq... 11 Israel... 507 Italy... 224 Jamaica... 2 Japan... 277 Kenya... 20 Korea... 281 Lebanon... 320 Libya... 856 Malagasy Republic... 1 Malaysia... 87 Malta, G.C.... 229 Morocco... 1 Papua New Guinea... 6,158 Netherlands... 358 New Zealand... 23 Nigeria... 4 Norway... 24 Panama... 3 Poland... 45 Portugal... 1 Romania... 2 Sierra Leone... 44 Singapore... 1,045 Solomon Islands... 6 South Africa... 93 South Yemen... 11 Spain... 8 Sri Lanka... 70 Sudan... 10 Sweden... 9 Switzerland... 10 Syria... 321 Tanzania... 2 Thailand... 1,362 Tunisia... 25 Turkey... 3,161 Uganda... 2 United Kingdom... 3,697 U.S.S.R.... 1 United States of America... 13 Yugoslavia... 27 Zimbabwe... 22 62,821 These figures do not include those names recorded on memorials to the missing, details of which are set out below: AUSTRALIAN CASUALTIES WITH NO KNOWN GRAVE WHO ARE LISTED ON MEMORIALS TO THE MISSING IN FOREIGN COUNTRIES-FIRST AND SECOND WORLD WARS, KOREAN AND VIETNAM WARS, MALAYA/ MALAYSIAN CONFRONTATION Country Number of casualties Belgium... 6,156 Brunei... 2,259 Burma... 2 Canada... 32 Egypt... 658 England... 3,483 France... 12,290 Greece... 331 India... 23 Indonesia... 465 Israel... 240 Japan... 335 Korea... 44 Malta, G.C.... 2,211 Papua New Guinea... 2,236 Singapore... 1,644 Turkey... 4,476 34,885 (2) Payments made in 1984-85 through the Office of Australian War Graves which relate to the maintenance of Australian war graves overseas were: $ Payments to the Commonwealth War Graves Commission... 1,157,188 United Nations Memorial Cemetery, Pusan, Korea... 13,855 Ambon War Cemetery, Indonesia (this cemetery is administered by the Office of Australian War Graves on behalf of the Commonwealth War Graves Commission and all expenses are reimbursed by the Commission each month)... 31,472 NOTE: These figures do not include salaries and administrative expenses of staff employed directly by the Office of Australian War Graves. (Question No. 3777) Mr Downer asked the Minister representing the Minister for Veterans' Affairs, upon notice, on 14 April 1986: What (a) were the amounts paid to and (b) projects undertaken by Mr Phillip Adams and Mr Rod Cameron, their associated companies or principals of those companies, for work on behalf of the Minister's Department or authorities under the Minister's control in (i) 1983-84, (ii) 1984-85 and (iii) 1985-86 to the date of answering this question. Mr Holding —The Minister for Veterans' Affairs has provided the following answer to the honourable member's question: No projects were undertaken by, and no money was paid to, Mr Phillip Adams or Mr Rod Cameron, their associated companies or principals of those companies, on behalf of the Department of Veterans' Affairs or authorities under the Minister's control from 1983-84 to the present date. (Question No. 1614) Mr Braithwaite asked the Treasurer, upon notice, on 10 September 1985: (1) Has his attention been drawn to statements by Senator Walsh that if equity in a property is taken in lieu of wages, there is a prima facie case of tax evasion under a section of the Income Tax Assessment Act. (2) Would the recipient of equity in a farm property `gifted' by a close relative in payment of wages forgone be required to pay income tax on the value of the property in the years in which the property is received. (3) What documentary evidence would be used to determine whether the property was a gifted transfer of capital or a payment in land for past labours. (4) Would statements and evidence provided to the Department of Social Security as part of a pension claim for any other purpose be used as part of the determination process. (5) Is a legal transfer of equity made to a close relative in order to qualify for a pension under the hardship provisions of the assets test taxable in the hands of the recipient, but not taxable when the transfer occurs after the death of the farmer; if so, what action will he take to remove this anomaly. Mr Keating —The answer to the honourable member's question is as follows: (1) to (5) The income tax law operates to tax an employee on all the rewards he gets for his services whether in cash or in kind. Where the reward is paid or given otherwise than in cash the money value of it is liable to tax. If equity in a property was given to an employee in lieu of wages due, the income tax law would require the money value of the equity to be liable to tax in the hands of the employee. There is no evasion of the income tax law involved in such a practice. Evasion would only occur if an employee failed to disclose the receipt of the equity. The real question is whether, in the situations represented by the particular change to the Assets Test, it can be said that `equity in a property has been taken in lieu of wages'. It is commonplace in many family businesses, not only farming businesses, for family members to take from the business as wages a lesser amount than that which might be paid to an arms length employee for the same duties. The purpose of this is to plough back into the business as much money as is possible to build up the business and increase its value. In the event of disposal of the business family members will share in the capital proceeds of sale or, in other cases when the parents retire, the business will be transferred to the family members. It is only in a broad sense that the proceeds of sale paid to family members or the value of property transferred to them in these situations may be said to be a recompense in lieu of wages. In terms of the income tax law it could not be so said. It would be most unlikely for the family entity employer to be under any obligation to pay to family members by way of salary or wages any greater amount than was actually paid to them. Strictly speaking, therefore, the proceeds of sale paid to family members or the value of property transferred to them could not be said to be in lieu of wages due to them. Family type arrangements of this nature do not involve any lessening of the overall tax burden. Year by year the net income of the family business is subject to tax. The fact that family members may take as wages lesser amounts than arms length employees means that the family entity employer obtains a correspondingly lesser income tax deduction for wages-the taxable income of the employer is thereby increased. It may well be that, if family members were to take the same amount of wages as arms length employees, the overall tax paid may be less than it is at present. To tax the proceeds of sale paid to family members or the value of property transferred to them would produce an inequity. To adopt this approach would involve the conclusion that the amounts involved were strictly in lieu of wages. If that is the proper conclusion, the amounts ought to be allowed as income tax deductions to the family entity employer. If the business has been sold or transferred to family members, however, there would be no income against which the family entity employer could offset the deduction. Hitherto the income tax law has not been seen as imposing any income tax liability in these circumstances. Cases may arise, where because of the particular arrangements, there may be a payment or transfer of property in lieu of wages. As a general proposition, however, the existing provisions of the income tax law would not involve the persons concerned in any income tax liability where there is a gift of equity in farming property to close relatives. (Question No. 2041) Dr Klugman asked the Minister for Defence, upon notice, on 10 October 1985: (1) Did a Swedish arms supplier refuse to fulfil a contract to supply arms to Australia during the Vietnam war. (2) What guarantees would Australia have in future, if it accepted a tender for defence equipment from a Swedish supplier. Mr Beazley —The answer to the honourable member's question is as follows: (1) In 1966 the Swedish Government placed an embargo on further shipments of Carl Gustav anti-tank guns and ammunition to Australia on the grounds of Australia's participation in the Vietnam conflict. (2) Since that embargo in 1966, the Swedish Government has acknowledged the requirement for long term support of its defence exports and amended its export legislation accordingly in 1982. In respect of major overseas defence equipment purchases, the Australian Government seeks assurances of long term supply and continued support and to have such assurances in place before finalising source selection. Such an assurance has been received from the Swedish Government. (Question No. 2311) Mr Blunt asked the Minister for Housing and Construction, upon notice, on 12 November 1985: (1) What was the expenditure by the Minister's Department and authorities under the Minister's control on public relations in (a) 1983-84 and (b) 1984-85. (2) What was the nature or subject of the public relations expenditure. (3) Was outside assistance obtained for public relations, if so, (a) who provided the assistance, (b) what payments were made and (c) why was the assistance sought. Mr West —The answer to the honourable member's question is as follows: Department (1) (a) $242,868; (b) $290,542. Housing Loans Insurance Corporation (a) $8,930; (b) $13,192. Snowy Mountains Engineering Corporation (a) Nil; (b) Nil. (2) Public Relations funds were expended in the following categories: Printing Publications Typesetting and Artwork Photographic equipment and consumables Show Exhibits and Displays Film and Video production Promotions and were used to inform the public of various programs, projects and schemes administered by the Department such as: altered conditions and entitlements of the First Home Owners Scheme Commonwealth State Housing Agreement Crisis Accommodation Program and Local Government and Community Housing Program initiatives to revitalise building research through the National Building Technology Centre Trade mission to ASEAN countries (3) In the case of my Department, yes. (a) While a range of private supply companies supplied assistance with: printing publications typesetting and artwork supply of materials for displays no consultants were engaged for Public Relations activities. (b) Payments for the assistance provided were made on a normal fee for service basis. (c) Assistance was sought when skills or equipment were not available in the Department (Question No. 2696) Mr Ruddock asked the Minister of Trade, upon notice, on 25 November 1985: (1) Has the Minister's attention been drawn to an advertisement in the Australian of 30 October 1985 in support of the Builders Labourers Federation, in which it was stated that the advertisement was supported the (a) Abortion Counselling Service, (b) ACOA Rank and File Committee in Defence of Trade Union Rights, (c) ACT Shelter, (d) ACT Squatters Union (e) ACT Youth Accommodation Group, (f) ACT Youth Forum, (g) Beryl Women's Refuge, (h) Campaign against Repression in the Pacific Area, (i) Canberra and South East Region Environment Centre, (j) Canberra Youth Refuge, (k) Chile Solidarity Committee, (l) Committee for Human Rights and Democracy in Turkey, (m) Committee in Solidarity with Central America, (n) Interchange Community Youth Support Scheme, (o) Jobless Action, (p) Jobline, (q) National Landrights Now Committee, (r) Photo Access, (s) Philippine Action Support Group, (t) Rape Crisis Centre, (u) Reachout, (v) Schools Against the Bomb, (w) Southern Africa Support Campaign of Australia, (x) Soweto Mobilisation Committee, (y) Students Against Apartheid, (z) Staff of Public Radio 2XX, (za) Toora-Single Women's Shelter, (zb) Women Against Racism and (zc) Trade Union Rights Committee. (2) Do any of the listed organisations receive financial support or grants from the Minister's Department or any statutory authority responsible to the Minister. (3) If so, has the Minister's Department or statutory authority received or searched the ACT Corporate Affairs Commission register for annual financial accounts and balance sheets of each organisation receiving funds. (4) Is each grant conditional upon (a) the submission of audited annual accounts and balance sheets and (b) a commitment to use the funds for the purpose for which the grant was made. (5) Does each grant permit use of funds contributed for political advertisements; if not, what checks have been made or will be made to ensure that the advertisement was not paid from grant funds. (6) Has each organisation receiving funds evidenced a capacity to raise money either in the past or in the year in question for its own purposes. (7) Have further applications for financial support been received or are likely to be received from each organisation; if so, will a check be made to ensure that the conditions of earlier grants have been honoured. Mr Dawkins —The answer to the honourable member's question is as follows: (1) Yes. (2) No. (3) to (6) In view of the answer to part (2), parts (3) to (6) are not applicable. (7) No. (Question No. 3150) Mr Coleman asked the Minister representing the Minister for Education, upon notice, on 12 February 1986: (1) Has the Minister's attention been drawn to moves to establish a close relationship between La Trobe University and the University of Central America, Managua, Nicaragua? (2) Is the Minister able to say what the nature of the contracts has been? Mr Dawkins —The Minister for Education has provided the following answer to the honourable member's questions: (1) and (2) My attention had not been drawn to any moves to establish a close relationship between La Trobe University and the University of Central America in Nicaragua. Australian universities are, of course, self-governing institutions and are largely responsible for the conduct of their own affairs. Consistent with their role as members of the international community of scholarship, it is not unusual for universities in this country to seek to establish appropriate links with their overseas counterparts. Accordingly I would expect individual members of the academic staff of La Trobe's Institute of Latin American Studies to have an interest in a range of countries in Latin America to the extent that contacts would be sought and made with universities in those countries. Where such developments occur, I would not expect to be advised of individual cases. (Question No. 3311) Mr Sharp asked the Minister for Defence, upon notice, on 11 March 1986: (1) What was the budget allocation for defence in each of the years 1978-79 to 1984-85. (2) What was the allocation to the permanent forces of the (a) Army, (b) RAN and (c) RAAF in each of those years. Mr Beazley —The answer to the honourable member's question is as follows: (1) The Budget allocation for Defence in the years 1978-79 to 1984-85 were: 1978-79-$2,500.942m 1979-80-$2,857.000m 1980-81-$3,431.355m 1981-82-$4,011.833m 1982-83-$4,512.257m 1983-84-$5,169.850m 1984-85-$5,760.205m These allocations exclude provisions for prospective Wage and Salary increases. (2) The identified allocations for the permanent forces of the three Services were: ARMY Allocation RAN Allocation RAAF Allocation $m $m $m 1978-79... 720.224 673.801 668.724 1979-80... 761.894 836.049 701.672 1980-81... 903.184 1,031.820 842.263 1981-82... 1,107.097 1,141.130 1,090.248 1982-83... 1,269.346 1,066.703 1,342.905 1983-84... 1,317.664 1,170.262 1,850.906 1984-85... 1,453.663 1,237.746 2,218.754 The above allocation figures represent the identified allocations to each Service Office, less pay and allowances for the respective reserve forces. It is not possible to readily separate elements of expenditure other than reserve pay from overall Service Office allocations. Some allocations made to a particular Service Office cover the management by that Service of a common activity-e.g. Army manages the central provisioning of pharmaceutical supplies for all three Services. Other allocations with implications for one or more of the Services may be managed by Defence Central (e.g. the DISCON communications project) or other departments, (e.g. furniture removals by the Department of Local Government and Administrative Services). (Question No. 3334) Mr Coleman asked the Minister for Foreign Affairs, upon notice, on 12 March: (1) What was the expenditure, to the date of answering this question, on advertisements related to the International Year of Peace in (a) print, (b) radio, and (c) television media. (2) What is the proposed expenditure on advertising for the International Year of Peace program in each of those media. Mr Hayden —The answer to the honourable member's question is as follows: (1) The expenditure to date of this answer is: $ (a) Print:... Production... 49,901.00 Media Placements... 50,266.00 Total... 100,167.00 (b) Radio:... Production... 11,442.00 Media Placements... Nil Total... 11,442.00 (c) Television:... Production... 49,448.00 Media Placements... 127,602.00 Total... 177,050.00 (2) Proposed expenditure on advertising for the International Year of Peace program, including expenditure to date, is: $ (a) Print:... Production... 149,705.00 Media Placements... 150,798.00 Total... 300,503.00 (b) Radio:... Production... 11,442.00 Media Placements... Nil Total... 11,442.00 (c) Television:... Production... 148,345.00 Media Placements... 319,005.00 Total... 467,350.00 (Question No. 3381) Mr Braithwaite asked the Minister for Trade, upon notice, on 13 March 1986: Has the Australian Trade Commission's ability to advertise positions been dependent on gazettal of regulations relating to the Merit Protection Act or any other legal or administrative impediment; if so, when will the impediments be overcome. Mr Dawkins —The answer to the honourable member's question is as follows: The Australian Trade Commission's ability to advertise vacancies is not dependent on gazettal of regulations relating to the Merit Protection (Australian Government Employees) Act. The Managing Director of the Commission, by a Determination dated 28th February 1986, prescribed the Merit Protection Review Agency to hear and determine appeals lodged against promotions within the Commission. There are no legal or administrative impediments affecting the Commission's ability to advertise vacancies or to employ or promote staff. (Question No. 3555) Mr Peacock asked the Minister for Foreign Affairs, upon notice, on 20 March 1986: What recent representation has the Government made concerning the use of torture against Iranian citizens by the Government of Iran. Mr Hayden —The answer to the honourable member's question is as follows: The Secretary of the Department of Foreign Affairs, Dr Harris, raised Australian concerns about human rights in Iran with the Iranian First Deputy Foreign Minister, Mr Ali Mohammad Besherati, in Canberra on 21 August 1985. Dr Harris urged Iranian cooperation with the Special Representative of the Commission on Human Rights, and told Mr Besherati that Australia hoped Iran would cooperate with the Commission during its 1986 session. As at past sessions, Australia co-sponsored the resolution on human rights in Iran at the 42nd Session of the Commission on human rights in March 1986. That resolution expressed deep concern about `specific and detailed allegations of grave human rights violations . . . and in particular those related to the right to Life; the right to freedom from torture or cruel, inhuman or degrading treatment or punishment . . .'. The Australian delegation had hoped that a text could be negotiated which would ensure Iranian cooperation with the Commission and prepare the way for acceptance by the Iranian Government of a visit to Iran by the Special Representative to investigate allegations of human rights abuses. Negotiations in which Australia played an active part were not successful and Iran has declared that the resolution adopted is unacceptable. It remains to be seen whether an investigation along the lines of that which Australia would like to see will take place. (Question No. 3556) Mr Peacock asked the Minister for Foreign Affairs, upon notice, on 20 March 1986: Is he able to say whether the methods of torture used in Iran include (a) mock executions, (b) blindfolding, (c) solitary confinement, (d) beating on the soles of the prisoners' feet and (e) kicking, beating and other forms of physical abuse which results in permanent injuries including damaged kidneys. Mr Hayden —The answer to the honourable member's question is as follows: While I am unable to confirm their substance, I am aware of reports of human rights abuses in Iran. The reports have been prepared by organisations such as Amnesty International, and indicate that methods of torture have been practised in Iran. An investigation of alleged abuses of human rights would be the primary objective of a visit by the special Representative of the Commission on Human Rights (see my answer to Question No. 3555). It remains my hope that the Iranian Government will agree to cooperate with the Special Representative. (Question No. 3608) Mr Peacock asked the Minister for Foreign Affairs, upon notice, on 20 March 1986: What sum was spent by the Australia-Japan Foundation to publish Blanche D'Alpuget's Bob Hawke-A Biography in Japanese, in Japan under the Foundation's publication program. Mr Hayden —The answer to the honourable member's question is as follows: $12,000. (Question No. 3609) Mr Peacock asked the Minister for Foreign Affairs, upon notice, on 20 March 1986: (1) Was $20,072 spent by the Australia-Japan Foundation on a visit to Japan by Australian trade union officials from the Vehicle Builders Employees' Federation of Australia, the Electrical Trade Union of Australia, the Australasian Society of Engineers and the Printing and Kindred Industries Union of Australia, during 1984-85. (2) Was a report made by the union officials involved on their examination of union structures, labour-management relations and issues affecting industry and the workforce in Japan which might have relevance to Australia; if so, is it available for public scrutiny. Mr Hayden —The answers to the honourable member's questions are as follows: (1) Yes. (2) Yes. (Question No. 3610) Mr Peacock asked the Minister for Foreign Affairs, upon notice, on 20 March 1986: Which unions participated in the four delegations previous to 1984-85 visiting Japan under the auspices of the Australia-Japan Foundation. Mr Hayden —The answer to the honourable member's question is as follows: The first delegation (1982-83) consisted of representatives of the Waterside Workers' Federation of Australia and of the Merchant Service Guild of Australia. The second delegation (1982-83) consisted of representatives of the Australian Workers Union, the Electrical Trades Union of Australia, the NSW Amalgamated Metals, Foundry and Shipwrights' Union and the Federated Mining Mechanics Association of Australia. The third delegation (1983-84) consisted of representatives of the Federated Clerks' Union, the Woolbrokers Association of Australia, the Australian Insurance Employees Union and the Australian Bank Employees Union. The fourth delegation (1983-84) consisted of representatives of the Federated Rubber and Allied Workers' Union of Australia, the Australian Boot Trade Employees' Federation and the Australian Textile Workers' Union. (Question No. 3611) Mr Peacock asked the Minister for Foreign Affairs, upon notice, on 20 March 1986: What sum did the ACTU contribute to the cost of the 1984-85 trip to Japan by Australian trade union officials as part of an Australia-Japan Foundation organised visit. Mr Hayden —The answer to the honourable member's question is as follows: The ACTU did not make any contribution. (Question No. 3745) Mr Hawker asked the Minister for Defence, upon notice, on 11 April 1986: (1) Did his Department inform the Victorian Government that the RAAF was dropping live bombs at Dutson Downs prior to 14 February 1986; if so, when. Mr Beazley —The answer to the honourable member's question is as follows: (1) Yes, on 3 February 1986 an officer of the Victorian Premier's Department telephoned Air Force Office querying the RAAF's usage of the Dutson bombing Range in relation to the size of bombs dropped. The officer was advised that 500lb bombs had been dropped there. Also, following a further request for information to Air Force Office, the Victorian Premier's Department was verbally advised on 11 February 1986 that 500 lb and 2000lb high explosive bombs and 25lb and 5kg practice bombs had been, and would continue to be, dropped on the range. This information was confirmed in writing by my office on 14 February 1986. (Question No. 3784) Mr Moore asked the Minister representing the Minister for Veterans' Affairs, upon notice, on 14 April 1986: (1) Has the Government ceased allowing war veterans to have anti-scratch lamina applied to plastic lenses in their glasses; if so, (a) why and (b) when was the decision made. (2) What sum was saved by the decision. (3) Is it a fact that (a) war veterans who need to wear thicker and heavier lenses frequently choose to have their spectacles fitted with plastic lenses and (b) without the anti-scratch lamina plastic lenses will inevitably be severely scratched within a few months by even the most careful spectacle wearer. Mr Holding —The Minister for Veterans' Affairs has provided the following answer to the honourable member's question: (1) The Government has not ceased allowing Veterans to have anti-scratch lamina (quartz coating) applied to plastic spectacle lenses. Lens treatment of this nature is available to Veterans at the expense of the Department if their work situation demands it and prior approval is obtained. (2) Not applicable. (3) (a) Veterans who need to wear thicker lenses are frequently advised to wear high grade optical plastic lenses. (b) The Department has no evidence to support the suggestion that without quartz coating these lenses become severely scratched within a few months. With proper care and cleaning they can be expected to last as long as glass lenses. (Question No. 3786) Mr Hollis asked the Minister for Foreign Affairs, upon notice, on 15 April 1986: (1) Did (a) Canada, (b) Finland, (c) France, (d) India, (e) Japan, (f) Norway, (g) the Republic of Korea and (h) the USSR announce at UNESCO Headquarters in January 1986 that they would be making new voluntary contributions to the International Program for the Development of Communication. (2) Has the Government given consideration to making a voluntary contribution to the Program; if so, when and with what results. (3) What was the (a) nature, (b) extent and (c) results of Australian offers of assistance to the Program since its inception. Mr Hayden —The answer to the honourable member's question is as follows: (1) Yes. (2) Although there have been informal discussions among some agencies, the Government has not given formal consideration to making a voluntary contribution to the International Program for the Development of Communication (IPDC). (3) Australia has not offered direct assistance to the IPDC. In 1981 Australia offered $200,000 to help to establish a Pacific Regional News Service (PRNS). Discussions were held with UNESCO on funding that part of the project that would not be covered by Australia, possibly through the IPDC. Australia's offer has not been taken up, partly because other sponsors could not be found. The PRNS therefore has not been established.